T 
\=>n. 


THE  LIBRARY 

OF 

THE  UNIVERSITY 
OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 


A  TREATISE  ON  THE  LAW  OF 

Inheritance  Taxation 

WITH   STATUTES  AND   FORMS 


THIRD    EDITION 

Revised  and  Enlarged 


BY 

LAFAYETTE    B.   GLEASON 

» \ 
Attorney  for  State  Tax  Commission  for  New  York  City 

AND 

ALEXANDER   OTIS 

of  the  New  York  City  Bar 
(Specialist   in  Inheritance  Taxation) 


ALBANY  AND  NEW  YORK  CITY 
MATTHEW   BENDER   &    COMPANY 


COPYRIGHT,  1917 
BY  MATTHEW  BENDER  &  COMPANY 

INCORPORATED 


COPYRIGHT,  1919 
BY  MATTHEW  BENDER  &  COMPANY 

INCORPORATED 


COPYRIGHT,  1922 
BY  MATTHEW  BENDER  &  COMPANY 

INCORPORATED 

r 


Second  Printing 


INTRODUCTION 

TO 

THIRD  EDITION 


Since  the  Second  edition  of  this  work  was  published  in  the 
fall  of  1919  the  pressure  of  post  war  conditions  has  been 
reflected  in  the  general  increase  of  inheritance  taxation 
throughout  the  Union.  Thirty-four  states  and  the  Federal 
government  have  materially  amended  their  statutes. 

In  ten  of  these  states  entirely  new  statutes  have  been  en- 
acted. In  New  York  a  Tax  Commission  has  been  created,  and 
an  entirely  new  set  of  forms  promulgated.  Not  only  has  the 
Federal  Act  been  changed  in  many  important  particulars,  but 
the  Estate  Tax  department  has  issued  an  entirely  new  set  of 
rules  and  regulations  under  the  new  act.  These  changes 
render  the  second  edition  practically  obsolete  as  far  as  the 
statute  law  is  concerned.  A  resume  of  the  new  statutes  and 
important  amendments  follows : 

Alabama — No  inheritance  tax. 

Arizona — 1921 — New  statute  enacted  increasing  rates  and 
reducing  exemptions. 

Arkansas — No  amendments. 

California — 1921 — New  statute  altering  and  increasing 
rates. 

Colorado — 1921 — New  statute  altering  and  increasing  rates. 

Connecticut — 1921 — New  statute  increasing  rates. 

Delaware — No  change. 

Florida — No  inheritance  tax. 

Georgia — 1919  and  1921 — New  statute  increasing  rates. 

Idaho — No  change. 

[iii] 


7297 


IV  INHERITANCE  TAXATION 

Illinois — 1921 — Amendments  materially  increasing  rates. 

Indiana — 1921 — New  statute  increasing  rates  and  altering 
exemptions. 

Iowa — 1921 — Amendment   taxing  direct  heirs;   until   that 
year  this  state  taxed  aliens  and  collaterals  only. 

Kansas — No  change. 

Kentucky — 1920 — Amendments  as  to  procedure. 

Louisiana — 1920 — Amendment  as  to  lien  of  tax. 

Maine — 1919 — New  statute,   1921,   amendments   providing 
for  composition  of  tax  by  attorney  general. 

Maryland — No  change. 

Massachusetts — Amendments    increasing    rates    1920   and 
1922. 

Michigan. — No  change. 

Minnesota — Amendment    1919    confining    charitable    and 
religious  exemptions  to  institutions  within  the  state. 

Mississippi — No  change. 

Missouri — 1921 — Amendments  as  to  procedure. 
Montana — 1921 — New  statute  increasing  rates. 
Nebraska — 1921 — Amendment  as  to  lien  of  tax. 
Nevada — No  change. 

New  Hampshire — 1921 — Amendment  imposing  flat  tax  of 
2%  on  nonresident  transfers. 

New    Jersey — 1922 — Amendments    materially    increasing 
rates. 

New  Mexico — Amendment  increasing  rates. 

New  York — 1921 — New  statute  creating  Tax  Commission. 
1922 — Amendments  increasing  taxation  of  nonresidents. 

North  Carolina — 1921 — New  statute. 

North  Dakota — 1921 — Amendment  exempting  intangibles  of 
nonresidents. 

Ohio — 1920 — Amendments  as  to  procedure. 


INTRODUCTION  TO  THIRD  EDITION  v 

Oklahoma — 1921 — Amendment  as  to  procedure. 
Oregon — 1921 — Amendment  as  to  procedure. 

Pennsylvania — Amendment  1921  increasing  rate  as  to  col- 
laterals and  strangers  to  10%. 

Rhode  Island — 1920 — Amendment  as  to  payment  of  interest. 

South  Carolina — 1922 — New  statute  for  the  first  time  tax- 
ing inheritances. 

South  Dakota — No  change. 

Tennessee — 1921 — Amendment  repealing  tax  on  life  insur- 
ance policies. 

Texas,  Utah,  Vermont — No  change. 

Virginia — 1920 — Amendments  as  to  procedure.  1922 — 
Amendment  imposing  a  flat  tax  of  2%  on  nonresident 
transfers. 

Washington-r-1921. — Amendment  as  to  exemptions. 
West  Virginia — 1921 — Amendment  increasing  rates. 

Wisconsin — 1921 — Amendments  increasing  rates  and  alter- 
ing exemptions. 

Wyoming — 1921 — New  statute. 

United  States — New  statute  1921,  new  rules  and  regulations 
1922. 

General  Trend  of  Legislation. 

The  general  trend  of  legislation  is  to  increase  the  rates  of 
tax  and  extend  taxes  on  transfers  by  nonresident  decedents. 

In  Wisconsin  the  tax  on  bequests  to  collaterals  and  strangers 
above  $100,000  in  value  has  been  increased  to  32%  and  on 
bequests  of  over  $500,000  to  40%.  In  Illinois  such  bequests 
in  excess  of  $200,000  are  taxed  30%.  A  proposition  to  tax 
estates  of  over  $10,000,000  50%  passed  the  U.  S.  Senate,  but 
was  finally  defeated. 

The  proportional  taxation  of  nonresident  estates,  prorating 
deductions  and  exemptions  as  well  as  assets,  and  proportion- 
ing the  assets  within  the  state  to  the  total  assets,  is  rapidly 


Vi  INHERITANCE  TAXATION 

coming  into  favor  and  has  been  adopted  by  several  states, 
including  New  York,  New  Jersey  and  Wisconsin. 

Prior  to  1917  there  were  eighteen  states  that  taxed  only  the 
real  estate  or  tangibles  of  nonresident  decedents.  Now  there 
are  only  eight  states  that  do  not  tax  the  transfers  of  stock  in 
domestic  corporations  by  such  decedents. 

In  1917  five  states,  Alabama,  Florida,  South  Carolina,  New 
Mexico  and  Mississippi  had  enacted  no  inheritance  tax 
statute.  In  1922  Alabama  and  Florida  alone  have  failed  to 
enact  such  statutes. 

In  1917  seven  states  taxed  transfers  to  collaterals  and 
strangers  only.  In  1922  Maryland  and  Texas  are  the  only 
states  that  do  not  tax  transfers  to  direct  heirs. 

The  Federal  Tax  was  first  imposed  in  1916.  In  1920  the 
Federal  receipts  from  this  source  were  one  hundred  and  three 
millions  as  compared  with  about  sixty-five  millions  from  all 
the  state  inheritance  taxes  combined. 

In  1913  there  was  no  Federal  tax  and  the  inheritance  taxes 
levied  by  all  the  states  combined  amounted  to  only  twenty- 
seven  millions. 

Under  the  increased  rates  and  more  stringent  enforcement 
of  the  inheritance  tax  laws  the  total  inheritance  taxes  col- 
lected in  1922  will  probably  exceed  two  hundred  millions. 

These  facts  make  necessary  an  up  to  date  compendium  of 
the  statutes  and  decisions  which  it  is  the  province  of  this  work 
to  furnish. 

Changes  in  New  York. 

Since  the  Second  edition  of  this  work  the  entire  process  of 
collecting  the  New  York  transfer  tax  has  been  remodeled  and 
changed  for  the  better  by  the  creation  of  the  New  York  State 
Tax  Commission,  pursuant  to  Chapter  476,  L.  1921.  As  a 
result  procedure  has  been  expedited  and  economies  effected 
in  every  branch  of  the  department. 

Important  amendments  to  the  statute  were  adopted  by  the 
Legislature  of  1922  at  the  instance  of  the  Commission.  The 
effect  of  these  amendments  is  set  forth  in  the  following  letter 
from  the  President  of  the  Tax  Commission,  written  at  the 
request  of  the  authors : 


INTRODUCTION  TO  THIBD  EDITION 


STATE  TAX  COMMISSION 
WALTER  W.  LAW,  JR.,  PRESIDENT 
JOHN  J.  MERRILL, 
WALTER  H.  KNAPP 


STATE  OF  NEW  YORK 

J 


TAX  DEPARTMENT 

ALBANY  May  11,  1922 

Messrs.  Gleason  &  Otis, 
New  York  City 

Dear  Sirs: 

The  Legislature  of  1922  made  three  amendments  to 
the  transfer  tax  law  which  are  chapters  430,  432 
and  433  of  the  Laws  of  1922.  These  may  be  generally 
described  as  follows: 

Chapter  430  includes  a  number  of  amendments  to 
§  220  of  the  tax  law,  the  most  important  of  which 
are  as  follows: 

(a)  A  provision  including  as  taxable  the  shares 
of  joint  stock  companies  or  associations  and 
subscription  rights  to  corporations,  joint 
stock  companies  or  associations  or  banks. 

(b)  A  change  in  the  form  of  the  provision  which 
is  intended  to  reach  the  securities  of 
foreign  corporations  formed  for  the  purpose 
of  holding  New  York  real  estate,  which  is 
intended  to  make  the  statute  more  clear. 

(c)  A  provision  to  include  the  good  will  in  a  New 
York  business  of  a  nonresident  decedent. 


INHERITANCE  TAXATION 

(d)  A  provision  which  is  intended  to  reach  prop- 

erty left  in  trust  with  a  power  of  revocation 
in  the  trustor,  and  which  would  be  nontaxable 
under  the  Bowers  decision  (195  A.  D.  548; 
affd.  231  N.  Y.  613)  and  the  Cochran  decision 
(N.  Y.  Law  Journal,  Nov.  14,  1921). 

(e)  A  provision  making  taxable  property  left  sub- 
ject to  a  power  to  be  exercised  by  a  nonresi- 
dent, the  tax  to  be  due  at  the  time  the  power 
is  exercised  and  to  be  based  upon  the  value 
of  the  property  at  the  time  of  the  death  of 
the  donor. 

There  are  other  amendments  included  in  the  act 
which  are  intended  to  clarify  the  meaning  of  the 
section. 

Chapter  432  adds  §  221-c  to  the  tax  law  which  de- 
scribes the  manner  of  computing  the  tax  on  property 
left  by  a  nonresident  and  which  is  taxable  in  this 
state.  The  amendment  provides  that  only  a  propor- 
tionate part  of  the  debts  due  New  York  creditors 
and  of  the  exemptions  allowed  to  legatees  shall  be 
deducted,  instead  of  the  entire  amount  of  such 
items  as  the  statute  has  been  administered  in  the 
past. 

Chapter  433  adds  .a  new  section  to  the  tax  law  to 
be  known  as  §  221-d  and  provides  an  optional  commu- 
tation of  the  transfer  tax  in  case  of  nonresident 
estates.  This  is  intended  to  provide  an  expeditious 
and  simple  manner  by  which  nonresident  estates  can 
avoid  the  more  lengthy  procedure  of  ascertaining 
the  amount  of  the  tax  which  has  been  followed  in 
such  cases  heretofore. 

Yours  faithfully, 

WALTER  W.  LAW,  Jr. , 
President,  State  Tax  Commission. 


INTRODUCTION  TO  THIRD  EDITION  jx 

The  New  York  Forms. 

The  creation  of  the  Tax  Commission  and  the  many  changes 
in  procedure  incident  thereto  as  well  as  numerous  changes  in 
the  body  of  the  statute  have  necessitated  an  entirely  new  set 
of  forms  of  procedure.  The  forms  given  in  the  prior  editions 
of  this  work  were  adopted  from  the  late  Judge  McElroy's 
excellent  work  on  inheritance  taxation,  but  these  have  now 
become  obsolete  and  cannot  be  relied  upon  by  the  practitioner. 
For  example  the  procedure  as  to  the  taxation  of  nonresident 
estates  has  been  entirely  changed  and  the  new  rules  for  com- 
puting that  tax,  or  for  computing  it  on  the  2%  basis,  require 
the  use  of  the  new  forms  which  have  been  prepared  by  the 
department  and  will  be  found  in  their  proper  place  in  the 
present  edition. 

The  Federal  Act. 

The  Federal  Eevenue  Act  of  1921,  effective  November  23, 
1921,  substantially  re-enacts  the  statute  of  1918,  effective 
February  24,  1919,  but  with  numerous  minor  changes,  not 
affecting  the  rates  of  tax.  Following  is  a  summary  of  the 
more  important  changes: 

Sec.  401.  Adds  to  the  military  exemptions  an  exemption  of 
all  estates  of  soldiers,  sailors  or  marines  dying  from  injuries 
received  or  disease  contracted  while  in  the  line  of  duty  dur- 
ing the  late  war,  whether  in  the  ranks  of  the  union  forces  or 
of  a  foreign  ally. 

Sec.  402d.  Taxes  joint  tenants  and  entireties  to  the  extent 
of  one-half  the  value  of  the  property  where  their  interest  is 
not  otherwise  disclosed. 

Sec.  406e.  Extends  the  time  of  payment  before  interest 
begins  to  accrue  from  one  year  and  180  days  to  one  year  and 
six  calendar  months. 

Life  insurance  policies  are  not  taxed  in  the  case  of  a  non- 
resident decedent  and  there  are  various  other  minor  changes 
in  regard  to  the  taxation  of  nonresident  estates. 

If  the  tax  is  not  fixed  and  determined  within  one  year  after 
the  executor  files  his  return  in  proper  form  his  personal  lia- 
bility ceases. 


x  INHERITANCE  TAXATION 

Federal  Rules  and  Regulations. 

The  Federal  Rules  and  Regulations  of  1919  were  published 
in  the  second  edition.  They  were  amended  in  slight  details 
January,  1921,  but  an  entirely  new  set  of  such  rules  and  regu- 
lations was  approved  and  promulgated  in  June,  1922.  They 
are  given  in  full  in  the  present  edition. 

Over  Three  Hundred  New  Citations. 

Over  three  hundred  citations  in  inheritance  tax  cases  ap- 
pear in  the  present  edition  of  this  work  that  were  not  included 
in  the  prior  editions,  many  of  them  are  of  very  recent  date 
and  contribute  largely  to  the  body  of  law  already  accumulated 
on  this  subject.  The  total  number  of  inheritance  tax  deci- 
sions in  the  various  jurisdictions  now  approximates  2,000. 
The  plan  adopted  in  the  first  two  editions  of  arranging  the 
table  of  cases  by  states  has  found  general  favor  and  has  been 
preserved.  It  enables  an  attorney  to  ascertain  at  a  glance 
what  authorities  there  are  in  his  own  state.  This  is  prac- 
ticable in  every  state  but  New  York. 

The  litigations  on  this  subject  in  New  York  exceed  all  the 
other  jurisdictions.  In  the  first  edition  there  were  three  times 
as  many  decisions  in  New  York  as  in  all  the  other  jurisdic- 
tions combined.  As  inheritance  taxation  has  increased  in  the 
other  states  the  result  is  reflected  in  the  authorities.  In  the 
present  edition  the  decisions  in  New  York  are  nearly  equaled 
by  the  total  of  all  the  other  jurisdictions  combined. 

The  Syllabus. 

It  has  also  been  deemed  wise  to  preserve  the  syllabus  of 
the  two  former  editions  and  arrange  the  new  matter  under 
the  former  classification.  This  divides  the  subject  under  six 
main  subdivisions:  I.  The  Tax;  II.  The  Transfer;  III.  The 
Parties;  IV.  The  Property;  V.  Procedure,  and  VI.  The 
Statutes.  These  are  supplemented  by  an  appendix  giving  the 
statutes  of  all  the  states ;  forms,  list  of  corporations  and  list 
of  officials  to  be  addressed  by  nonresident  attorneys. 

Necessity  for  a  New  Edition. 

Since  the  publication  of  the  first  edition  of  this  work  in 
1917  no  other  book  on  the  subject  covering  the  entire  field 


INTRODUCTION  TO  THIRD  EDITION  xj 

has  been  published.  In  the  five  years  that  have  elapsed 
nearly  every  statute  has  been  substantially  amended  and 
there  have  been  between  seven  and  eight  hundred  decisions 
of  the  courts  of  the  various  jurisdictions. 

In  these  litigations  the  prior  editions  of  Gleason  &  Otis 
have  been  frequently  cited  in  the  briefs  of  counsel  and  the 
work  has  not  infrequently  been  referred  to  as  authority  by 
the  courts.  Among  the  important  decisions  in  which  this 
work  has  been  cited  by  the  courts  the  following  may  be 
mentioned : 

Hazard  v.  Bliss  (Khode  Island),  779  Atlantic  469. 

Staiar's  Admr.  v.  Commonwealth  (Kentucky),  239  S.  W.  40. 

Posey  et  al.  v.  Commonwealth,  123  Va.  551 ;  96  S.  E.  771. 

Central  Union  Trust  Co.  v.  State  (Kansas),  202  Pac.  853. 

Commonwealth  v.  Herbert,  127  Va.  291 ;  103  S.  E.  645. 

Withers  v.  Jones  Exrs.,  126  Va.  500;  102  S.  E.  68. 

Inman's  Estate  (Oregon),  199  Pac.  615. 

Ferguson's  Estate,  113  Wash.  598;  194  Pac.  771. 

Yet  it  must  be  confessed  that  even  the  second  edition  is  now 
practically  obsolete,  and  there  has  been  a  general  request  from 
estate  attorneys  for  a  third  edition  bringing  the  whole  matter 
down  to  date. 

The  favor  with  which  former  editions  have  been  received 
would  seem  to  justify  the  undertaking. 

LAFAYETTE  B.  GLEASON, 
ALEXANDEK  OTIS, 

August,  1922. 


TABLE  OF  CONTENTS 


PAGfc 

Introduction  to  Third  Edition iii 

Syllabus xv 

Table  of  Cases: 

a.  New    York    xxvii 

b.  Other  States,  arranged  alphabetically li 

Part       I  —  The  Tax   3 

Part     II  —  The   Transfer    84 

Part  III  —  The  Parties    208 

Part    IV  —  The    Property    300 

Part      V  —  The   Procedure    396 

Part    VI  —  The  Statutes   522 

The  Federal  Act  and  Regulations 539 

The  New  York   Statute 695 

Appendix 769 

List  of  Inheritance  Tax  Officials 771 

List  of  Corporations,  Where  Incorporated 775 

New    York    Forms 787 

State  Statutes  in  Alphabetical  Order,  including  Forms  in  Many  Instances. .  .  813 

Index 1157 

[xiii] 


SYLLABUS 


PART  I  —  THE  TAX  PAGE 

FUNDAMENTAL  PRINCIPLES 3 

1.  Definition 8 

2.  Origin 3 

3.  Theory 4 

4.  Extension  of  Legislative  Power 6 

5.  A  Distinct  Department  of  Jurisprudence 6 

6.  Trend  of  Recent  Authorities 7 

A.  Not  a  Tax  on  Property  but  on  the  Eight  to  Receive  and  Inherit  It 8 

1.  Review  of  the  Authorities 9 

2.  The  Privilege  Taxed 16 

3.  Practical  Applications  of  the  Rule 20 

a.  Not  a  Direct  Tax  to  be  Apportioned  among  the  States 20 

b.  Rules  as  to  Uniformity  and  Equality  Modified 20 

c.  Power  to  Levy  not  Included  in  Municipal  Charters 21 

d.  Property  Otherwise  Exempt  must  be  Included 21 

e.  Construction  of  Contracts 22 

f .  Personality  of  Resident  Taxed,  though  in  Foreign  Jurisdiction ...  22 

g.  Intangibles  of  Non-resident  within  the  Jurisdiction  Taxable 24 

h.  Double   Taxation 25 

B.  The  Transfer  Takes  Place  at  Death 27 

1.  Vested  Right  of  the  State 28 

2.  Renunciation  by  Legatee 31 

3.  Law  in  Force  at  Date  of  Proceedings  Controls  Procedure  Only 32 

4.  Rate  Fixed  at  Death  Cannot  be  Increased 33 

5.  Rights  Vested  Prior  to  Death  Cannot  be  Taxed 33 

6.  Gains  or  Losses  During  Administration 34 

7.  Exceptions  to  the  Rule 36 

a.  By  Nature  of  the  Transfer 36 

b.  By  Statute 37 

C.  Classifications 39 

1.  By  Domicile 41 

2.  By  Relationship 42 

3.  By  amount  of  Property  Transferred 43 

a.  Where  the  Tax  is  on  the  Right  to  Receive 43 

b.  Where  the  Tax  is  on  the  Right  to  Transfer 44 

4.  By  the  Kind  of  Property  Transferred 45 

a.  Real  and   Personal 45 

b.  Tangibles  and  Intangibles 46 

c.  Other  Property  Distinctions 47 


xvi  INHERITANCE   TAXATION 

C.  Classifications  —  Continued  I?AGE 

5.  By  Payment  of  Other  Taxes 49 

6.  By  the  Kind  of  Transfer 50 

D.  General  Rules  of  Construction 50 

1.  Strict  or  Liberal 50 

2.  Exemptions 52 

3.  Retroactive  or  Prospective 54 

4.  Statutes  Held  Invalid 57 

5.  Statutes  Sustained  under  the  Fourteenth  Amendment 59 

6.  Notice  and  a  Hearing 61 

7.  Copied  or  Adopted  Statutes 62 

8.  Practical  Construction 63 

9.  Arbitrary    or    Conh'scatory    Rates 69 

10.  Public  Purpose 65 

11.  Amendment 66 

12.  Repeal 67 

a.  Saving  Clauses 67 

b.  By  Implication 69 

c.  Incidental   Effects 70 

13.  Unconstitutional    Statutes 71 

14.  Other  General  Rules 71 

E.  Conflict   of   Laws 72 

1.  Jurisdiction 72 

2.  Devolution  Controlled  by  Foreign  Laws 74 

3.  Full  Faith  and  Credit 74 

4.  Proof  of  Foreign  Laws 75 

5.  As  to  Sister  States 76 

6.  As  against  Aliens  Protected  by  Treaties 77 

7.  Reciprocal   Provisions 81 

PART  II  — THE  TRANSFER 

A.  Transfers  by  Will  and  Intestacy 84 

1.  Testamentary  Provisions  which  may  Affect  the  Tax 84 

a.  What  a  Testator  Cannot  Do 85 

b.  What  He  Can  Do 86 

2.  Transfers  Pursuant  to  Agreements  to  Make  a  Will 87 

a.  Where  the  Agreement  is  Violated 87 

b.  Where  the  Agreement  is  Performed 89 

c.  Antenuptial  Agreements 90 

d.  Mutual  Wills 92 

e.  Partnership  Agreements 94 

3.  Compromise  Agreement  between  Heirs  and  Devisees 94 

4.  Payment  of  Debt  by  Will 98 

5.  As  Affected  by  Statute 100 

6.  Transfers  by  Intestate  Law 101 

a.  As  to  Real  Estate 101 

b.  As  to  Personal  Property 102 

B.  Gifts 104 

1.  Valid  and  Invalid 105 

a.  Burden  of  Proof  is  on  Donee 105 


SYLLABUS 

B.  Gif te  —  Continued  PAGE 

b.  There  Must  be  a  Present  Intent  to  Give 105 

c.  There  Must  be  Delivery  of  the  Thing  Given 106 

d.  Delivery  to  an  Agent 107 

(1)  To  Agent  of  Donor 107 

(2)  To  Agent  of  Donee 108 

e.  Symbolical  Delivery 109 

f .  Ee-Delivery  by  Donee  to  Donor 109 

g.  Power  of  Revocation Ill 

h.  Stock  Transfer  Stamps 113 

i.  Consideration 113 

2.  Gifts  Causa  Mortis 113 

3.  Gifts  in  Contemplation  of  Death 114 

a.  Nature  of  the  Contemplation 114 

b.  Advanced  Age  alone  Insufficient 119 

c.  Statutory  Time  Limit 123 

d.  Tax  Accrues  at  Date  of  Gift 123 

4.  Gifts  take  Effect  at  or  after  Death 126 

a.  Trust  Deed  Reserving  Income  to  Donor 127 

b.  Where  Part  of  the  Income  is  Reserved 131 

c.  Where  the  Life  Use  is  Waived 132 

d.  Reservation  of  Power  to  Revoke 132 

C.  Consideration  as  Affecting  Testamentary  Transfers 138 

1.  Where  the  Transaction  is  Completed  Inter  Vivos 140 

2.  Where  the  Contract  is  Executory 143 

3.  The  Consideration  must  be  Adequate 152 

4.  Burden  of  Proof 156 

D.  Life  Insurance 157 

1.  Nature  of  the  Contract 160 

2.  No  Title  to  Fund  in  Assured 160 

3.  The  Insurance  Company  Pays  the  Taxes 161 

a.  State  Taxes 161 

b.  Federal  Taxes 161 

4.  Proceeds  Taxable  as  Inheritance  when  Payable  to  Estate 162 

5.  Where  Payable  to  Beneficiary  not  Taxable 169 

6.  Construction  of  Policies 169 

7.  Statutory  Provisions 171 

E.  Power  of  Appointment 171 

1.  The  Common  Law  Rule 171 

2.  The  Statutory  Rule ,173 

3.  The  New  York  Rule 173 

4.  The  Massachusetts  Rule 174 

5.  Development  of  the  New  York  Rule 176 

6.  Construction  of  Wills 177 

7.  Where  Power  is  Exercised  by  Deed 178 

8.  Questions  of  Residence 180 

F.  Common  Law  Transfers 182 

1.  Dower 182 

2.  Tenancy  by  the  Curtesy 185 

3.  Marital  Right 186 


xviii  INHERITANCE   TAXATION 

F.  Common  Law  Transfers  —  Continued  PAGE 

4.  Tenancies  by  the  Entirety 187 

a.  Not  Taxable  as  an  Inheritance 187 

b.  Nature  of  the  Estate 188 

c.  How  Created 190 

d.  How  Terminated 190 

e.  Effect  of  Taxing  Statute 193 

5.  Joint  Tenancy 193 

a.  Not  Generally  Taxable 193 

b.  Where  Succession  is  Specifically  Taxed 195 

c.  Construction  of  the  Statute 196 

(1)  When  Revocable 201 

(2)  Where  Joint  Depositors  Equal  Contributors 201 

(3)  Deposits  in  Foreign  State 201 

(4)  Trust  Accounts  Not  Taxable 201 

6.  Escheat 202 

G.  Civil  Law  Transfers 203 

1.  Taxable 203 

2.  Not  Taxable 204 

3.  Gains  Acquired  in  Foreign  Country  Exempt 204 

4.  Gains  Acquired  in  this  Country  Taxable 205 

PART  III  — THE  PARTIES 

A.  The  Decedent 208 

1.  Residence  and  Domicile  Synonymous 209 

2.  Rules  as  to  Domicile 210 

3.  Application  of  the  Rules 211 

a.  Factum  Without  Animus 211 

b.  Animus  Without  Factum 212 

c.  Animus  With  Factum 213 

d.  As  to  a  Married  Woman 214 

e.  As  to  a  Widow 214 

f.  As  to  an  Army  Officer 215 

g.  The  Burden  of  Proof 216 

h.  Construction  as  Affected  by  Statute 217 

B.  The  Beneficiaries  —  Generally 219 

1.  As  to  Domicile 219 

a.  Resident  Beneficiaries  of  Non-Resident  Decedent 219 

b.  Where  Both  Testator  and  Beneficiary  Are  Non-Residents 219 

2.  Relationship  to  Decedent 221 

a.  Grandchildren 221 

b.  Step-Children 221 

c.  Illegitimate  Children 222 

d.  Adopted  Children 222 

(1)  Adoption  by  Formal  Act 222 

(2)  Mutually  Acknowledged  Children 223 

e.  Effect  of  Adoption 225 

f .  Other  Relationships 226 

3.  Effect  of  Divorce 227 

4.  Personal  Exemptions 227 


SYLLABUS 

B.  The  Beneficiaries  —  Generally  —  Continued  PAGE 

5.  Exemptions  to  Charities 229 

a.  Charter  Powers  the  Test 230 

b.  Purposes  Must  be  Brought  Within  the  Language  of  the  Statute. .  234 

c.  Bequests  Held  Exempt 238 

d.  Bequests  Held  Taxable 239 

C.  Heirs  and  Legatees 241 

1.  Heirs  of  Real  Estate 241 

a.  Lien  of  the  Tax 241 

b.  Partition 243 

c.  Equitable  Conversion 244 

d.  Sale  to  Pay  the  Tax 245 

e.  When  Charged  With  a  Legacy 245 

f .  As  to  Aliens 245 

2.  Legatees  of  Personal  Property 245 

a.  Renunciation  and  Assignment 245 

b.  Legacy  Impressed  With  a  Trust 246 

c.  Lapsed  Legacies 247 

3.  While  the  Legacy  is  in  Custodia  Legis 249 

4.  From  What  Fund  Payable 250 

D.  Life  Estates  and  Remainders 252 

1.  Life  Estates 252 

a.  Fund  from  Which  the  Tax  is  Payable 252 

b.  Charged  With  an  Annuity 254 

c.  Power  to  Invade  Principal 255 

d.  The  New  York  Rule 256 

e.  With  Power  of  Appointment 259 

f .  Tax  Assessed  on  Theoretical,  Not  Actual  Value 260 

2.  Remainders 261 

a.  The  Law  in  Force  at  Death  of  Testator  Governs 262 

b.  Vested  Remainders  Not  Taxable  When  Testator  Died  Before  the 

Statute 262 

c.  Taxation  Postponed  Until  Remainderman  Gets  Possession 263 

d.  Presently  Taxable 263 

e.  When  Beneficiary  is  Uncertain 264 

f .  Highest  Possible  Rate 266 

g.  Maximum  and  Minimum  Rate 271 

h.  Where  Amount  of  Remainder  is  Uncertain 272 

i.  Under  Powers  of  Appointment 273 

j.  Taxation  at  Full  Undiminished  Value 276 

E.  Computations 277 

1.  The  Basis  of  Calculation 277 

a.  Mortality  Tables  and  Interest  Rate 277 

b.  Compound  Interest  Rule 280 

c.  Present  Worth  Rule 281 

d.  The  Law  of  Discount 281 

e.  Law  of  the  Chance  of  Death 282 

f.  Rule  of  the  Chance  of  Death,  as  Affecting  Present  Worth 282 

g.  Rule  for  Calculating  Present  Value  of  Life  Estates 282 

2.  Tables  for  Computing  the  Present  Worth  of  Annuities 283 

a.  Actuaries  Combined  Table  at  4% 285 


XX  INHERITANCE   TAXATION 

E.  Computations  —  Continued  PAGE 

b.  Actuaries  Combined  Table  at  5% 286 

c.  American  Experience  Table  at  4% 287 

d.  American  Experience  Table  at  5% 288 

e.  Carlisle  Table  at  5% 289 

f .  Carlisle  Table  at  6% 290 

g.  American  Experience  Table  of  Mortality 291 

3.  How  to  Use  the  Tables 292 

a.  The  Necessary  Factors 292 

b.  Ascertaining  the  Value 292 

4.  Application  to  the  Problems  of  Inheritance  Taxation 292 


PART  IV  —  THE  PROPERTY 

WHAT  is  INCLUDED 299 

A.  As  to  Situs 300 

1.  Real  Estate 300 

a.  Taxable  only  Where  Located 300 

b.  No  Equitable  Conversion 301 

c.  Land  Contracts 303 

d.  Leases 304 

2.  Tangibles 305 

3.  Mortgages,  Bonds  and  Commercial  Paper 300 

a.  Situs  at  Domicile  of  Owner 306 

b.  Where  the  Land  Lies 307 

c.  Where  Physically  Present 308 

d.  "Transient"  or  "Habitual"  Presence 310 

e.  Where  Held  by  an  Agent 311 

4.  Corporate  Stock 312 

a.  Of  Domestic  Corporations 312 

b.  Foreign  Corporations  Owning  Property  Within  the  State 314 

c.  Foreign  Corporations  Not  Owning  Property  Within  the  State. . . .  315 

d.  Apportionment  of  Corporate  Property 316 

e.  Pledged  Securities 316 

5.  Other  Choses  in  Action 321 

a.  Bank  Deposits 321 

b.  Debts 322 

c.  Life  Insurance 323 

d.  Seat  in  the  Stock  Exchange 324 

e.  Interest  of  Non-Resident  in  Estate  of  Deceased  Non-Resident. . . .  324 

f .  Partnership  Interest 324 

B.  As  to  Value 327 

1.  Where  the  Value  at  Death  Cannot  be  Ascertained 327 

2.  Real  Estate 330 

3.  Tangibles 333 

a.  Pictures 333 

b.  Furniture 333 

c.  Jewelry 334 

4.  Notes,  Mortgages  and  other  Obligations 335 


SYLLABUS 

B.  As  to  Value  —  Continued  PAGE 

5.  Stocks 337 

a.  Active  Securities 337 

b.  Inactive  Securities 339 

c.  Closely  Held  Stocks 339 

6.  Bonds 345 

7.  Pledged  Securities 345 

a.  As  to  the  Non-Resident  Pledger 345 

b.  As  to  the  Pledgee 347 

8.  Partnerships 347 

9.  Good  Will 351 

a.  A  Taxable  Asset 351 

b.  Rules  for  Computation 353 

c.  Number  of  Years '  Purchase 354 

d.  When  the  Profits  are  Speculative 361 

e.  When  no  Profits  are  Shown 362 

C.  Deductions 366 

1.  Mortgages 367 

2.  Debts 368 

a.  Liability  on  Mortgage  Bond 368 

b.  Repairs  to  Real  Estate 368 

c.  Debts  Paid  by  Will 369 

d.  Doubtful  Claims 370 

3.  Funeral  and  Burial  Expenses 371 

4.  Administration  Expenses  and  Counsel  Fees 372 

5.  Discount  on  Legacy 373 

6.  Expenses  of  Litigation 374 

a.  Where  to  Conserve  the  Estate 374 

b.  Disputes  Among  the  Beneficiaries 374 

7.  Taxes 375 

a.  Other  Inheritance  Taxes 375 

b.  General  Taxes  and  Assessments 377 

c.  Income  Taxes 378 

8.  Commissions 379 

a.  To  Executors 379 

b.  To  Trustees 381 

c.  On  Sale  of  Real  Estate 383 

9.  Family  Allowance 383 

10.  Proportional  Taxation  of  Non-Resident  Estates 384 

11.  Pro  Rating  Debts 385 

a.  When  the  Local  Debts  Exceed  the  Local  Assets 386 

b.  When  there  are  Local  Assets  and  no  Legal  Debts 387 

c.  When  Local  Debts  are  Paid  with  Foreign  Assets 387 

d»  When  there  are  both  Local  and  Foreign  Debts  and  Assets 388 

e.  As  to  Partnerships 389 

12.  Marshaling  Assets  to  Reduce  Tax 391 

a.  When  the  Executor  can  do  so 391 

b.  When  he  cannot.  .  392 


INHERITANCE   TAXATION 

PART  V  —  PROCEDURE  PAGE 

A.  Preliminaries 396 

1.  Motions  to  Exempt 397 

2.  In  Case  of  Nonresidents 400 

a.  Affidavit  Prior  to  April  1,  1922 401 

b.  Affidavit  Under  Proportional  Tax 405 

c.  Commutation  of  Tax 409 

3.  The  Safe  Deposit  Box 409 

a.  Comptroller  May   Inspect 409 

b.  May  Not  Impose  Arbitrary  Conditions 410 

c.  Consent  for  Transfer  of  Funds 411 

d.  Property  Belonging  to  Another 412 

4.  Inventory 413 

a.  Must  be  Filed  by  Executor 413 

b.  Form  of  Affidavit    414 

c.  Preparation  of  Inventory 421 

d.  Form  of  Inventory  429 

B.  Proceedings  Before  Appraiser    435 

1.  Appraisers 436 

a.  Appointment   and   Removal    436 

b.  Powers  and  Duties  437 

2.  Notice 440 

a.  Notice  is  Jurisdictional  440 

b.  Notice  by  Mail  Sufficient 442 

e.  Where  Notice  is  Impossible 443 

d.  Presumption  of  Notice    444 

3.  Hearings 444 

a.  Informal  Upon  Affidavits   444 

b.  Burden  of  Proof   445 

c.  Witnesses 446 

d.  Personal  Transactions  with  Deceased 448 

e.  Corporate  Books    449 

f .  Objections 449 

g.  Proof  of  Foreign  Law 451 

4.  Report 452 

a.  What  It  Should  Contain 452 

b.  What  It  Must  Show 453 

c.  Where  Taxation  is  Suspended 454 

d.  Form  of  Report 455 

C.  Proceedings  on  Appeal   460 

1.  Jurisdiction   of   Probate   Court 460 

a.  Effect   of   Probate   Decree 460 

b.  Decree  of  Distribution    463 

c.  Jurisdiction  of  the  Tax  Proceedings 464 

2.  Assessment  of  the  Tax 465 

a.  The  Judge  Acts  as  Taxing  Officer 465 

b.  The  Taxing  Order    467 

c.  Report  May  be  Remitted  to  Appraiser 468 

d.  Forms  of  Taxing  Order 469 

(1)  Where  There  are  no  Contingent  Remainders 469 

(2)  Present  Taxation  of  Contingent  Remainders 470 

e.  Effect  of  Decree  Assessing  Tax 474 


SYLLABUS  xxiii 

C.  Proceedings  on  Appeal  —  Continued  PAGE 

3.  Appeal   to  the  Surrogate 475 

a.  Notice  of  Appeal   475 

b.  Form  of  Notice   477 

4.  Determination   by  Surrogate    481 

a.  Hearings  on  Appeal   481 

b.  On  Motions  to  Exempt 483 

c.  Order  Remitting  Report    483 

d.  Supplemental  Report  of  Appraiser 486 

e.  Second   Taxing  Order    487 

f .  Notice  of  Appeal  from  Second  Taxing  Order 488 

g.  Taxing  Order  Upon  Second  Appeal 490 

h.  Notice  of  Appeal  to  Appellate  Division 491 

5.  Before  the  Appellate  Courts 492 

a.  Who   May  Appeal    492 

b.  Order  Appealed  From   494 

c.  Service  of  Notice  of  Appeal 496 

d.  Papers  on  Appeal    496 

e.  Costs 497 

f .  Appeals  to  Court  of  Appeals 498 

g.  To  Supreme  Court  of  United  States 498 

D.  Subsequent  Proceedings    499 

1.  Motions  to  Modify  Decree 499 

a.  Where  There  Was  a  Mistake  of  Fact 500 

b.  Where  There  Was  Lack  of  Jurisdiction 501 

c.  May  Not  Correct  an  Error  of  Law 503 

d.  .Laches 505 

e.  Bad    Faith    506 

f .  Statute  of  Limitations    507 

2.  Motions  to  Remit  Penalty 509 

3.  Mandamus 511 

a.  When  Writ   Allowed    511 

b.  When  Refused   513 

4.  Proceedings  to  Collect  Delinquent  Taxes 514 

5.  Personal  Liability  of  Executor  or  Administrator 515 

6.  Personal  Liability  of  Beneficiaries 517 

7.  Compromise  Agreements    518 

8.  Application  of   Tax  Money 519 

9.  Interest 519 

10.  Discount  .  519 


PART  VI  —  THE  STATUTES 

A.  General  Review  of  the  State  Statutes 522 

1.  Wherein  They  Agree   522 

a.  Transfers  by  Will  and  Intestacy 522 

b.  Transfers  in   Avoidance    522 

c.  Common  Law  Transfers    523 

d.  Powers  of  Appointment 523 

e.  Life    Estates    .  524 


INHERITANCE   TAXATION 

A.  General  Review  of  the  State  Statutes  —  Continued  PAGE 

f .  Remainders 524 

g.  Executors  and  Their  Duties 525 

h.  Appraisal 526 

i.  Valuation 526 

j.  Interest,  Discount   and  Penalty 527 

k.  Banks  and  Trust  Companies 531 

1.  The  Interest  Taxed   531 

2.  Wherein  They  Differ   532 

a.  Collaterals  and  Strangers  Only 532 

b.  Nonresident   Decedents    532 

c.  Tangibles  and  Intangibles    533 

d.  Reciprocal   Statutes    533 

e.  Double  Taxation    534 

3.  As  Producers  of  Revenue 535 

a.  The  Rate    535 

b.  Exemptions 536 

c.  Facts  as  to   Revenue 537 

B.  The  Federal  Statute 539 

1.  History  and  Development 539 

a.  Revolutionary  War  Tax  1797  to  1802 540 

b.  Civil  War  Tax  1862  to  1870 540 

c.  Spanish  War  Tax  1898  to  1902 540 

2.  The  Act  of  1916  and  Amendments 542 

a.  Constitutionality   Sustained    542 

b.  Construction  by  Federal  Courts 546 

c.  Construction  by   State  Courts 548 

d.  Ultimate  Repeal  Probable   556 

3.  Rates  of  Tax  558 

a.  Under  Act  of  September  8,   1916 558 

b.  Under  Amendment  of  March  3,  1917 559 

c.  Additional  War  Tax  after  October  3,  1917 559 

d.  Tabulation  of  Rates    559 

4.  Act  of  1916    560 

5.  Amendment  of  March  3,   1917 567 

6.  Amendment  of  October  3,  1917 568 

7.  Statute   of   1918 569 

8.  Statute   of    1921 578 

9.  Regulations  Under  1921  Statute 590 

C.  The  New  York  Statute 695 

1.  History   and   Development    695 

a.  Frequent   Changes   695 

b.  List  of  the  Statutes 695 

c.  The  First  Statutes  Taxing  Only  Collaterals 697 

d.  The  Act  of  1892  Taxing  Direct  Inheritances 697 

e.  The  Act  of  1896 — Powers  of  Appointment 698 

f .  Amendment  of   1899 — Highest   Rate 700 

g.  Act  of  1905 — Real  Estate  Added 700 

2.  The  Present  Act  and  Its  Amendments 701 

a.  The  Original  Statute  of  1909 701 

b.  The  "Reign  of  Terror  Act" 701 


SYLLABUS 

C.  The  New  York  Statute  —  Continued  PAGE 

c.  A  Eadital  Change  in  Theory  as  to  the  Transfer  Taxed 702 

d.  The  Amendments  of  1911 — Tangibles  and  Intangibles 703 

e.  The  Tax  Extended  to  Curtesy 704 

f.  Maximum  and  Minimum  Rates 704 

3.  The  Problem  as  the  Property  of  Nonresidents 705 

a.  The  Previous  Policy  of  the  State 705 

b.  Real  Estate  of  Corporations 705 

c.  Copartnership  Assets    706 

d.  Capital  Invested  in  Business 707 

e.  Attempt  to  Define  a  Resident 710 

f.  Distinction  Between  Tangibles  and  Intangibles  Abolished 713 

4.  Recent  Amendments   713 

a.  Exemptions 713 

b.  Joint  Estates   714 

c.  Tenancy  by  the  Entirety 715 

d.  Computations 715 

e.  The  New  Rates  and  Exemptions 715 

f.  Minor  Amendments  of  1917,  1918  and  1919 719 

g.  Amendments  of  1921  and  1922 720 

5.  Additional  Tax  on  Investments  (Repealed  by  ch.  644,  L.  1920) 721 

a.  The  Statute    722 

b.  Held  Unconstitutional  by  the  Lower  Courts 724 

c.  Act  Sustained  by  the  Court  of  Appeals 725 

d.  Questions   of  Construction    732 

(1)  As  to  Personal  Property  Assessment 732 

(2)  As  to  Exemptions 734 

(3)  Bonds  secured  by  Mortgages 734 

6.  Text  of  the  New  York  Statute,  with  Amendments  to  Date 735 


TABLE  OF  CASES  ARRANGED  RY  STATES 


[References  are  to  pages} 

NEW  YORK* 

A  PAGE 

Abbett,  29  Misc.  567,  61  Supp.  1067 164 

Abraham,  151  App.  Div.  441,  135  Supp.  891 28,  32 

Achelis,  N.  Y.  L.  J.,  March  9,  1912 340 

Adams  v.  Anderson,  23  Misc.  705,  53  Supp.  141 102 

Adee  v.  Campbell,  79  N.  Y.  52 104 

Adsit  v.  Adsit,  2  Johns.  Ch.  448. . ; 183 

;£tna  Ins.  Co.  v.  Mayor,  etc.,  153  N.  Y.  331,  47  N.  E.  593 502 

Agnew,  N.  Y.  L.  J.,  Dec.  13,  1913 132 

Ahrens,  N.  Y.  L.  J.,  May  10,  1913 446 

Albany  County  Sav.  Bk.  v.  McCarty,  149  N.  Y.  71 186 

Albrecht,  136  N.  Y.  91,  32  N.  E.  632 188 

Albright,  93  Misc.  388,  156  Supp.  821 239 

Allen,  76  Misc.  88,  136  Supp.  327 239 

Althause,  63  App.  Div.  252,  71  Supp.  445;  aff.  168  N.  Y.  670,  61  N.  E.  1127. .  305 

Altman,  87  Misc.  256,  149  Supp.  601 232 

Ambrosius  v.  Ambrosius,  167  App.  Div.  244,  152  Supp.  562 451 

Ames,  141  Supp.  793 316 

Ames  v.  Duryea,  6  Lans.  155 ;  aff.  61  N.  Y.  609 216 

Amherst  College  v.  Eitch,  151  N.  Y.  282,  45  N.  E.  876 475 

Amsinck,  155  Supp.  1089 368 

Anderson,  N.  Y.  L.  J.,  Dec.  20,  1916 333 

Andrews,  N.  Y.  L.  J.,  Feb.  21,  1912 187 

Anthony,  40  Misc.  497,  82  Supp.  789 350 

Armstrong,  N.  Y.  L.  J.,  Feb.  20,  1912 250 

Arnett,  49  Hun  299,  2  Supp.  428 442 

Arnold,  114  App.  Div.  244,  99  Supp.  704 330,  422,  465 

Arnot,  145  App.  Div.  708;  aff.  203  N.  Y.  627 52,  238 

Asche  v.  Asche,  113  N.  Y.  232,  21  N.  E.  70 184 

Astor  v.  Mayor,  62  N.  Y.  567 729 

Astor,  137  App.  Div.  922,  122  Supp.  1121 469 

Atterbury,  N.  Y.  L.  J.,  March  25,  1913 132 

Augsbury  v.  Shirtliff,  180  N.  Y.  138,  72  N.  E.  927 107 

Austin,  109  Misc.  584,  180  Supp.  502 734 


Following  New  York,  the  different  States  are  arranged  alphabetically. 

[xxvii] 


XXViii  INHERITANCE   TAXATION 

B  PAGE 

Babcock,  115  N.  Y.  450,  22  N.  E.  263 377,  422 

Babcock,  37  Misc.  445,  75  Supp.  926;  aff.  81  App.  Div.  645,  81  Supp.  1117 255 

Bach,  147  Supp.  229 344,  449 

Backhouse,  110  App.  Div.  737,  96  Supp.  466;  aff.  185  N.  Y.  544,  77  N.  E. 

1181 176,  441,  502 

Bacon,  126  N.  Y.  mem 129 

Badger,  N.  Y.  L.  J.,  June  8,  1912 505 

Bain,  104  Misc.  508 214 

Baird,  126  App.  Div.  439,  110  Supp.  708 384 

Baker,  38  Misc.  151,  77  Supp.  170 437,  468 

Baker,  67  Misc.  360,  124  Supp.  827 303 

Baker,  83  App.  Div.  530,  82  Supp.  390;  aff.  178  N.  Y.  575,  70  N.  E.  1094. ...   142 

147,  191 

Balch,  93  Misc.  419,  156  Supp.  1006;  aff.  175  App.  Div.  933 214 

Baldwin,  N.  Y.  L.  J.,  August  21,  1912 375 

Ball,  161  App.  Div.  79,  146  Supp.  499 47,  113,  353,  360,  450 

Balleis,  144  N.  Y.  132 240 

Barber  v.  Brundage,  50  App.  Div.  123,  63  Supp.  347;  aff.  169  N.  Y.  368 101 

Barbey,  114  Supp.  725 183 

Barbour,  185  App.  Div.  445,  173  Supp.  276;  aff.  226  N.  Y.  mem 711 

Barnaby,  104  Mass.  362,  171  Supp.  989 222,  716 

Barnes,  83  Misc.  272,  114  Supp.  794 439 

Barnes  v.  Underwood,  47  N.  Y.  351 187 

Barney  v.  Pike,  94  App.  Div.  199,  87  Supp.  1038 350 

Barnum,  129  App.  Div.  418,  114  Supp.  33 331,  483,  503 

Barrett,  132  App.  Div.  134,  116  Supp.  736 248 

Barry,  62  Misc.  456,  116  Supp.  798 104 

Bartlett,  4  Misc.  380,  25  Supp.  990 369,  424 

Bartow,  30  Misc.  27,  62  Supp.  1000 244 

Bass,  57  Misc.  531,  109  Supp.  1084 253 

Baucus  v.  Stover,  24  Hun  109 384 

Baudouine,  5  App.  Div.  622,  39  Supp.  1121 331,  368 

Baumgrass  v.  Baumgrass,  5  Misc.  8,  24  Supp.  767 257 

Baylies,  148  Supp.  912 385 

Beach,  154  N.  Y.  242,  48  N.  E.  516 222 

Beakes  Dairy  Co.  v.  Berns,  128  App.  Div.  137,  112  Supp.  529 112 

Beal,  167  App.  Div.  916,  151  Supp.  1103;  aff.  215  N.  Y.  620 130 

Bean  v.  Flint,  138  App.  Div.  846,  204  N.  Y.  153,  97  N.  E.  490 451 

Beaver  v.  Beaver,  117  N.  Y.  421,  22  N.  E.  940 105 

Becker,  26  Misc.  633,  57  Supp.  940 556 

Beckhardt,  N.  Y.  L.  J.,  June  7,  1913 186 

Beekman,  252  N.  Y.  365,  134  N.  E.  183 231 

Belden,  189  App.  Div.  417,  179  Supp.  406 706,  733 

Bell,  94  Misc.  552,  158  Supp.  142 446 

Bell  v.  Warn,  4  Hun  406 257 

Bender,  182  Supp.  217 201 

Bender,  44  Misc.  79,  89  Supp.  731 221 

Benjamin,  155  App.  Div.  233,  139  Supp.  1091 29 

Benson,  99  Misc.  222,  164  Supp.  933 226 


TABLE  OF  CASES  CITED 

PAGE 

Bennett,  N.  Y.  L.  J.,  October  24,  1906;  aff.  120  App.  Div.  904,  105  Supp. 

1107.  .  .  .  r 321 

Bennington,  67  Misc.  363,  124  Supp.  829 369 

Bentley,  31  Misc.  656,  66  Supp.  95 482 

Bernard,  89  Misc.  705,  152  Supp.  716 202 

Berry,  29  Misc.  230,  51  Supp.  1132 367 

Bertles  v.  Noonan,  92  N.  Y.  152 190 

Beyer,  190  App.  Div.  802,  180  Supp.  396 153 

Bierstadt,  178  App.  Div.  836,  166  Supp.  168 375,  548,  549 

Bigelow,  177  Supp.  847 201 

Billor  v.  Loundes,  2  Dem.  590 258 

Billingsly,  1  State  Dept.  Eep.  569 471 

Bingham,  86  Misc.  566,  148  Supp.  918 254 

Bird,  11  Supp.  895,  2  Con.  376 373 

Birdsall,  22  Misc.  180,  49  Supp.  450;  aff.  43  App.  Div.  624,  60  Supp.  1133..  139 

428,  446 

Bishop,  82  App.  Div.  112,  81  Supp.  474 315,  413,  448 

Bishop,  111  App.  Div.  545,  97  Supp.  1098;  appeal  dismissed,  188  N.  Y.  635, 

81  N.  E.  1159 483 

Bishop  v.  S.  L.  E.  O.  of  M.  A.,  112  N.  Y.  627 170 

Black,  5  Supp.  452 371 

Blackstone,  69  App.  Div.  127,  74  Supp.  508;  aff.  171  N.  Y.  682,  64  N.  E. 

1118 27 

Bloss,  100  Misc.  643,  166  Supp.  1005 183 

Blumenthal,  101  Misc.  83 211 

Blun,  176  App.  Div.  189,  160  Supp.  731 256,  382 

Blynn,  160  Supp.  730 255 

Bodman,  100  Misc.  390 349 

Bogert,  25  Misc.  466,  35  Supp.  751 474 

Bolin,  136  N.  Y.  177,  32  N.  E.  626 105,  108 

Bolles,  67  Misc.  40,  124  Supp.  620 379 

Bolton,  35  Misc.  688,  72  Supp.  430 442,  453 

Bolton,  210  N.  Y.  618,  104  N.  E.  1127 223 

Bolton  v.  Schreiver,  135  N.  Y.  65,  31  N.  E.  1001 i . . .  461 

Boon  v.  Moss,  70  N.  Y.  465 360 

Borden,  95  Misc.  453,  159  Supp.  346 94,  348 

Boschert,  107  Misc.  697,  177  Supp.  567 303 

Bostwick,  160  N.  Y.  489,  55  N.  E.  208 128,  130,  132,  133,  149,  154 

Bowers,  195  App.  Div.  548;  aff.  231  N.  Y.  613,  132  N.  E.  910 133,  134 

Boyle,  92  Misc.  143,  156  Supp.  173 500 

Brady,  N.  Y.  L.  J.,  February  5,  1913 497 

Brandreth,  169  N.  Y.  437,  62  N.  E.  563 110,  111,  147,  149,  342 

Brennan,  92  Misc.  423,  157  Supp.  141 112 

Brenner,  170  N.  Y.  185,  63  N.  E.  133 71 

Brez,  172  N.  Y.  609,  64  N.  E.  958 178,  263 

Bridgeport  Sav.  Bk.  v.  Feitner,  191  N.  Y.  88 .'  47 

Brooks,  105  Misc.  159,  174  Supp.  765 > 214 

Brooks,  32  Supp.  176 173 

Bronson,  150  N.  Y.  1,  44  N.  E.  707 307,  309 

Brower,  N.  Y.  L.  J.,  July  15,  1913 .'  511 

Brown,  86  Misc.  187,  149  Supp.  138;  aff.  167  App.  Div.  912,  151  Supp.  1106. .  106 


XXX  INHERITANCE   TAXATION 

PAGE 

Browne,  127  App.  Div.  941,  111  Supp.  1111;   aff.  95  N.  Y.  522,  88  N.  E. 

1115 388,  498 

Brown  v.  Lawrence  Park  Realty  Co.,  133  App.  Div.  153,  118  Supp.  132 243 

Bruce,  59  Supp.  1083 504 

Bruce  v.  Griscom,  9  Hun  280 ;  aff.  70  N.  Y.  612 369 

Brundage,  31  App.  Div.  348,  52  Supp.  362 71,  378,  428,  448,  450 

Brush,  Isabel,  N.  Y.  L.  J.,  April  26,  1917 177 

Brush,  John  T.,  N.  Y.  L.  J.,  August  14,  1915 362 

Buchanan,  184  App.  Div.  237,  171  Supp.  708 200 

Buckham,  N.  Y.  L.  J.,  January  10,  1912 276 

Bucki,  172  App.  Div.  455,  158  Supp.  657 276 

Buckingham,  106  App.  Div.  13,  94  Supp.  130 273,  508 

Bunce,  222  N.  Y.  31 716,  719 

Burden,  47  Misc.  329,  95  Supp.  972 321 

Burgess,  204  N.  Y.  265,  97  N.  E.  591 273 

Burgheimer,  91  Misc.  468,  154  Supp.  943 93,  149,  150 

Burhans,  100  Misc.  646,  166  Supp.  1027 99,  140 

Burke  v.  Valentine,  52  Barb.  422 187 

Burnham,  112  Misc.  560,  183  Supp.  539 239 

Burr,  16  Misc.  89,  38  Supp.  811 321 

Burr  v.  Palmer,  53  App.  Div.  358,  65  Supp.  1056 378 

Bushnell,  73  App.  Div.  325,  77  Supp.  4;  aff.  172  N.  Y.  649,  65  N.  E.  1115..  313 

Butler,  58  Hun  400,  12  Supp.  201;  aff.  136  N.  Y.  649,  32  N.  E.  1016. . .  .224,  428 

Butler  v.  Johnson,  111  N.  Y.  204,  18  N.  E.  643 427 

Butterfield,  161  App.  Div.  506,  146  Supp.  671 ;  aff.  211  N.  Y.  395 102 

Byron  v.  Byron,  124  App.  Div.  320,  119  Supp.  41 184 

c 

Cadwalader,  96  Misc.  407,  160  Supp.  523 382 

Cager,  111  N.  Y.  343,  18  N.  E.  866 263,  439 

Cahen,  N.  Y.  L.  J.,  August  6,  1915 110 

Caldwell,  107  Misc.  316,  176  Supp.  425 352 

Caiman,  100  App.  Div.  517,  91  Supp.  1095 368 

Cameron,  97  App.  Div.  436,  89  Supp.  977;   aff.  181  N.  Y.  560,   74  N.  E. 

1115 437,  500 

Campbell,  50  Misc.  485 500 

Campbell  v.  Beaumont,  91  N.  Y.  464 256 

Canda,  197  App.  Div.  597 180 

Canfield,  96  Misc.  119,  159  Supp.  735 306,  333 

Capron,  10  Supp.  23 224 

Carey,  197  App.  Div.  566 454 

Carnagie,  191  Supp.   753 193 

Gary,  N.  Y.  L.  J.,  January  20,  1914 236 

Casey  v.  McGowan,  50  Misc.  426,  100  Supp.  536 184 

Cash,  186  Supp.  246 234 

Caswell,  N.  Y.  L.  J.,  April  24,  1914 132 

Catlin  v.  Trustees  of  Trinity  College,  113  N.  Y.  133,  20  N.  E.  864 240 

Chadwick,  N.  Y.  L.  J.,  June  23,  1917 507 

Chamberlayne  on  ' '  Evidence  " 444 

Chambers,  155  Supp.  153 337,  339 

Chambers,  N.  Y.  L.  J.,  January  21,  1912 447 

Champney  v.  Blanchard,  39  N.  Y.  11 109 


TABLE  OF  CASES  CITED  xxx{ 

PAGE 

Chapman,  61  Misc.  593,  115  Supp.  981;  aff.  199  N.  Y.  562,  93  N.  E.  1118 176 

Chapman,  133  App.  Div.  337,  117  Supp.  679 175 

Chappell,  151  App.  Div.  774,  136  Supp.  271 339 

Chase,  112  Misc.  684,  183  Supp.  638 193 

Chauncey,  168  Supp.  1019 32,  246 

Church,  176  App.  Div.  910 47,  113,  450 

Church,  80  Misc.  447,  142  Supp.  284 182 

Church  of  Transfiguration  v.  Niles,  86  Hun  221,  33  Supp.  944 237 

City  of  Rochester  v.  Bloss,  185  N.  Y.  42 73 

Clark,  N.  Y.  L.  J.,  February  9,  1912 327,  347,  389 

Clark,  40  Hun  233 186 

Clark,  163  Supp.  972 340 

Clarke,  39  Misc.  73,  78  Supp.  869 273 

Clarkson,  149  Supp.  32 515 

Cleveland,  158  Supp.  1099;  aff.  171  App.  Div.  908,  155  Supp.  1098 113,  451 

Clinch,  180  N.  Y.  300,  73  N.  E.  35 246,  249,  305,  329,  390 

Clinton  v.  Hope  Ins.  Co.,  45  N.  Y.  454 169 

Gloss  v.  Eldert,  30  App.  Div.  338,  51  Supp.  881 184 

Cochrane,  117  Misc.  18,  190  Supp.  895 134 

Cogswell,  4  Dem.    (Sur.)   248 39 

Cohen,  170  Supp.  156 151,  359 

Collard,  161  Supp.  455 382 

Collins,  104  App.  Div.  184,  93  Supp.  342 62,  397,  497 

Collins  v.  Eussell,  184  N.  Y.  74,  76  N.  E.  731 186 

Colorado  v.  Harbeck,  232  N.  Y.  71,  133  N.  E.  357 72',  75,  209 

Columbia  Bank  v.  Equitable  L.  Assn.,  79  App.  Div.  601,  80  Supp.  428 160 

Connolly,  38  Misc.  466,  77  Supp.  1032 475 

Coogan,  27  Misc.  563,  59  Supp.  Ill;  aff.  162  N.  Y.  613,  57  N.  E.  1107. .  .503,  511 

Cook,  50  Misc.  487,  100  Supp.  628;  aff.  187  N.  Y.  253,  79  N.  E.  991 95,  223 

246,  344 

Cook,  125  App.  Div.  114,  109  Supp.  417;  aff.  194  N.  Y.  400,  87  N.  E.  786 495 

Cooksey,  182  N.  Y.  92,  74  N.  E.  880 176 

Cooley,  186  N.  Y.  220,  78  N.  E.  939 25,  316 

Corbett,  171  N.  Y.  516,  64  N.  E.  209 698 

Cornell,  66  App.  Div.  167,  73  Supp.  32;  mod.  170  N.  Y.  423,  63  N.  E.  445. ..  110 

111,  128,  147,  149,  154,  493,  494 

Corning,  3  Misc.  160,  23  Supp.  285 310 

Cortelyou  v.  Lansing,  2  Caines  Cases,  200 317 

Cory,  177  App.  Div.  871,  164  Supp.  956;  aff.  221  N.  Y.  612 92,  143,  348 

Costello,  189  N.  Y.  288,  82  N.  E.  139 437,  495 

Coutts,  N.  Y.  L.  J.,  December  15,  1914 229 

Cowan,  N.  Y.  L.  J.,  July  24,  1913 130 

Cowie,  49  App.  Div.  612,  63  Supp.  608 483 

Craig,  181  N.  Y.  551,  74  N.  E.  1116 141 

Grain,  98  Misc.  496,  164  Supp.  751 383 

Crary,  31  Misc.  72,  64  Supp.  566 337 

Crawford,  85  Misc.  283,  147  Supp.  234 394,  449,  475 

Crawford,  113  N.  Y.  366,  21  N.  E.  142 106 

Crerand,  N.  Y.  L.  J.,  June  30,  1914 354 

Crerar,  56  App.  Div.  479,  67  Supp.  795 455,  474 

Crittenton,  N.  Y.  L.  J.,  April  5,  1911 238 


INHERITANCE   TAXATION 

PAGE 

Crosby,  85  Misc.  679,  148  Supp.  1045 214 

Cruger,  54  App.  Div.  405,  66  Supp.  636;  aff.  166  N.  Y.  602,  59  N.  E.  1121 149 

Crusius,  N.  Y.  L.  J.,  February  26,  1914 112,  412 

Cullom,  76  Hun  610,  27  Supp.  1105;  aff.  145  N.  Y.  593,  40  N.  E.  163 21 

Cummings,  187  Supp.  921 124 

Cummings,  142  App.  Div.  377,  127  Supp.  109 75 

Curry,  N.  Y.  L.  J.,  May  27,  1914 132 

Curtice,  111  App.  Div.  230,  97  Supp.  444;  aff.  185  N.  Y.  543,  77  N.  E.  1184. .  340 

Curtis,  31  Misc.  83,  64  Supp.  574 324 

Curtis,  142  N.  Y.  219,  36  N.  E.  887 263 

Curtiss,  9  App.  Div.  285,  37  Supp.  586,  41  Supp.  1111 380 

Gushing,  40  Misc.  505,  82  Supp.  795 313 

D 

Dalsimer,  167  App.  Div.  365,  153  Supp.  58;  aff.  217  N.  Y.  608 193,  494,  714 

Daly,  34  Misc.  148,  69  Supp.  494 444 

Daly,  79  Misc.  586,  141  Supp.  199;  aff.  215  N.  Y.  mem 51,  235,  240 

Daly,  100  App.  Div.  373,  91  Supp.  858;  aff.  182  N.  Y.  524,  74  N.  E.  1116.  .100,  322 

Daly,  N.  Y.  L.  J.,  July  28,  1916 328,  362 

Dammert  v.  Osborne,  141  N.  Y.  564,  35  N.  E.  1088 22 

Dana,  164  App.  Div.  45,  149  Supp.  417;  aff.  214  N.  Y.  710 37,  132 

139,  147,  149,  195 

Dana,  215  N.  Y.  461,  109  N.  E.  557 112,  130,  132,  154,  228 

Daniell,  40  Misc.  29 140 

Darrow  v.  Calkins,  154  N.  Y.  503,  49  N.  E.  61 324 

Davenport,  67  App.  Div.  191,  73  Supp.  653;  aff.  172  N.  Y.  454,  65  N.  E. 

275 103,  104 

Davis,  91  Hun  53,  36  Supp.  822 278 

Davis,  98  App.  Div.  546,  90  Supp.  244;  rev.  184  N.  Y.  299,  77  N.  E.  259.  .428,  446 

Davis,  149  N.  Y.  539,  44  N.  E.  185 32,  66,  329,  397,  476,  477 

Day,  86  Misc.  131,  149  Supp.  221 254 

De  Cordova,  199  App.  Div.  492,  192  Supp.  11 474 

Dee,  148  Supp.  423;  aff.  161  App.  Div.  881,  145  Supp.  1120;  aff.  210  N.  Y. 

625 114,  116 

De  Graaf,  24  Misc.  147,  53  Supp.  591 182,  367,  510 

Dehnhardt,  N.  Y.  L.  J.,  April  7,  1916 718 

Delafield,  N.  Y.  L.  J.,  January  24,  1916 345 

Delafield,  109  Misc.  342,  179  Supp.  762 499 

De  Lamar,  118  Misc.  127,  192  Supp.  412 230 

Delano,  176  N.  Y.  486,  68  N.  E.  871 173,  178 

Demarest,  157  Supp.  653 342 

Demers,  41  Misc.  470,  24  Supp.  1109 143 

De  Peyster,  210  N.  Y.  216 231,  232,  240 

DeSala,  N.  Y.  L.  J.,  July  20,  1912 482 

Deutsch,  107  App.  Div.  192,  95  Supp.  65 52 

Devlin  v.  Greenwich  Bank,  125  N.  Y.  756,  26  N.  E.  744 446 

De  Voe,  107  App.  Div.  245,  94  Supp.  1129 104 

DeWollf,  N.  Y.  L.  J.,  February  24,  1913 469 

Dickey,  N.  Y.  L.  J.,  June  1,  1922 94,  351 

Dickey,  174  App.  Div.  467,  160  Supp.  646 27fi 

Dimon,  82  App.  Div.  107,  81  Supp.  428 371,  427,  454 

Dingman,  66  App.  Div.  228,  72  Supp.  694 517 


TABLE  OF  CASES  CITED  XXxiU 

PAGE 

Dobson,  73  Misc.  170,  132  Supp.  472 151 

Dolbeer,  226  N.  Y.  623 192,  199 

Dormitzer,  N.  Y.  L.  J.,  February  6,  1913 369 

Doty  v.  Wilson,  47  N.  Y.  580 105 

Douglass,  171  Supp.  950 554 

Douglass  v.  Hazen,  8  App.  Div.  27,  40  Supp.  1012 258 

Downey,  182  Supp.  223 224 

Dows,  167  N.  Y.  227,  60  N.  E.  439 34,  173,  178,  200,  700 

Drake,  94  Misc.  70,  157  Supp.  270 460 

Dreyfous,  18  Supp.  767,  28  Abb.  N.  C.  27 28 

Dryer  v.  Eeisman,  136  App.  Div.  796 101 

DuBois,  163  Supp.  668 325,  351 

Dudley,  N.  Y.  L.  J.,  March  4,  1913 469 

Duell  v.  Glynn,  191  N.  Y..357,  84  N.  E.  282 514 

Duff,  114  Misc.  309,  186  Supp.  259 173 

Duffy,  127  App.  Div.  74,  111  Supp.  77 Ill 

Dun,  40  Misc.  509,  82  Supp.  802 360 

Dunham  v.  City  Trust  Co.,  115  App.  Div.  584,  101  Supp.  87 ;  aff.  193  N.  Y. 

642,  86  N.  E.  1123 411 

Dunne,  N.  Y.  L.  J.,  May  25,  1914 122 

Dunning,  48  Misc.  482,  96  Supp.  1110 102 

Dupuy  v.  Wurtz,  53  N.  Y.  556 210 

Duryea,  128  App.  Div.  205,  112  Supp.  611 226 

Dusenberry,  2  State  Dept.  Eep.  501 325 

Dwight,  Edmund,  N.  Y.  L.  J.,  October  8,  1911;  aff.  149  App.  Div.  912,  133 

Supp.  1119  131,  132 

Dwight,.  J.  H.  B.,  N.  Y.  L.  J.,  January  19,  1915 511 

Dwight  v.  Gibb,  150  App.  Div.  573,  135  Supp.  431 102 

E 

Earle,  74  App.  Div.  458,  77  Supp.  503 453,  500 

Early,  107  Misc.  425,  176  Supp.  575 454 

Eaton,  55  Misc.  472,  62  Supp.  1026 497 

Eaton,  79  Misc.  69,  140  Supp.  601 702 

Ebbetts,  43  Misc.  575,  89  Supp.  544 103 

Edgerton,  35  App.  Div.  125,  54  Supp.  700;  aff.  158  N.  Y.  671,  52  N.  E. 

1124 113,  140,  371,  425 

Edson,  38  App.  Div.  19,  56  Supp.  409;  aff.  159  N.  Y.  568,  54  N.  E.  1092 246 

Edson  v.  Parsons,  85  Hun  263,  32  Supp.  1036;  aff.  155  N.  Y.  555,  50  N.  E. 

265 92 

Edwards,  85  Hun  436,  ^  Supp.  901 ;  aff.  146  N.  Y.  380,  41  N.  E.  89 97 

Egerton,  170  Supp.  222 198 

Einstein,  114  Misc.  452,  186  Supp.  931 158 

Eldridge,  29  Misc.  734,  62  Supp.  1026 193 

Electro  Tint  Co.  v.  Amer.  Hand  Co.,  130  App.  Div.  561,  115  Supp.  34 452 

Elletson,  75  Misc.  582,  136  Supp.  455 702 

Elting,  78  Misc.  692,  140  Supp.  238 167,  168,  323 

Ely,  157  App.  Div.  658,  142  Supp.  714 455 

Ely,  149  Supp.  90 132,  375 

Embury,  20  Misc.  75,  45  Supp.  821 ;  aff.  19  App.  Div.  214,  45  Supp.  881,  154 

N.  Y.  746,  49  N.  E.  1096 72,  370,  396 


XXxiv  INHERITANCE   TAXATION 

PAGE 

Eno,  N.  Y.  L.  J.,  April  24,  1913 276 

Enos,  61  Misc.  594 370 

Enston,  113  N.  Y.  174,  21  N.  E.  87 50,  66,  445 

Erbeling  v.  Erbeling,  61  Misc.  537,  115  Supp.  894 369 

Ermann,  169  Supp.  207 519 

Escoriaza,  N.  Y.  L.  J.,  November  15,  1914 139 

Everett,  3  State  Dept.  Rep.  450 471 

F 

Fairchild  v.  Fairehild,  64  N.  Y.  471 , 350 

Falk,  102  Misc.  504,  169  Supp.  203 234,  236 

Fay,  25  Misc.  468,  55  Supp.  749 167 

Fayerweather,  143  N.  Y.  114,  38  N.  E.  278 50 

Fearing,  138  App.  Div.  881,  123  Supp.  396;  aff.  200  N.  Y.  340,  93  N.  E. 

956 180,  306 

Field,  36  Misc.  279,  73  Supp.  512 273 

Field,  71  Misc.  396,  130  Supp.  195;  aff.  147  App.  Div.  927,  131  Supp.  1114. . .  239 
First  National  Bank  v.  Broadway  National  Bank,  156  N.  Y.  459,  51  N.  E. 

398 452 

Fisch,  34  Misc.  146,  69  Supp.  493 446 

Fitch,  160  N.  Y.  87,  54  N.  E.  701 464 

Fitzgibbon,  106  Misc.  130,  173  Supp.  898 122 

Flautauer  v.  Loser,  211  N.  Y.  16 461 

Fleming,  48  Misc.  589,  98  Supp.  306 102 

Flurscheim,  N.  Y.  L.  J.,  June  6,  1919 355 

Flurscheim,  107  Misc.  470,  176  Supp.  694 372 

Flynn,  117  Misc.  90,  190  Supp.  905 135 

Foster,  N.  Y.  L.  J.,  January  16,  1916;  aff.  174  App.  Div.  864 183 

Francis,  N.  Y.  L.  J.,  August  12,  1913;  aff.  163  App.  Div.  957,  148  Supp.  1116.  412 
Francis,  121  App.  Div.  129,  105  Supp.  643;  aff.  189  N.  Y.  554,  82  N.  E. 

1126 52,  240 

Fraser,  92  N.  Y.  239 184 

Frazer  v.  People,  6  Dem.  174,  3  Supp.  134 514 

Frazier,  N.  Y.  L.  J.,  March  28,  1912 181 

Freedman  v.  Freedman,  4  Redf .  211 381 

Freund,  143  App.  Div.  335,  128  Supp.  48;  aff.  202  N.  Y.  556,  95  N.  E. 

1129 378,  422. 

Frick,  116  Misc.  488 711 

Friedlander,  N.  Y.  L.  J.,  March  8,  1911 427 

Froelich,  N.  Y.  L.  J.,  April  30,  1913 468 

Froment,  N.  Y.  L.  J.,  November  29,  1916 441 

Frost,  N.  Y.  L.  J.,  May  1,  1914 344 

Fuhrmann  v.  Von  Pustau,  126  App.  Div.  629,  111  Supp.  34 390 

Fuller,  62  App.  Div.  428,  71  Supp.  40 426,  467,  482 

Fulton,  30  Misc.  70 499 

Furnald,  187  Supp.  921;  aff.  196  App.  Div.  933;  aff.  232  N.  Y.  mem.,  177 

N.  W.  579 124 

6 

Gale,  83  Misc.  686,  145  Supp.  301 331,  444 

Gannon  v.  McGuire,  160  N.  Y.  476,  55  N.  E.  7 105> 


TABLE  OF  CASES  CITED 


XXXV 


PAGE 

Gans,  N.  Y.  L.  J.,  April  13,  1912 250 

Garcia,  101  Misc.  387,  183  App.  Div.  712,  170  Supp.  780 36,  37,  127,  229 

Garland,  88  App.  Div.  380,  84  Supp.  630 698 

Garvey  v.  Clifford,  114  App.  Div.  193,  99  Supp.  555 112 

Gates,  117  Misc.  800,  191  Supp.  757 214 

Gates,  170  Supp.  299 501 

Gegan  v.  Union  Trust  Co.,  198  N.  Y.  541,  92  N.  E.  1085 106 

Gibbs,  60  Misc.  645,  113  Supp.  939 482 

Gibbes,  84  App.  Div.  510,  83  Supp.  53;  aff.  176  N.  Y.  565,  68  N.  E.  1117 309 

Libert,  176  App.  Div.  850,  163  Supp.  974 332,  336 

Gibson,  N.  Y.  L.  J.,  March  3,  1914 132 

Gibson,  157  N.  Y.  680,  58  N.  E.  1090 426,  518,  549 

Gihon,  169  N.  Y.  443,  62  N.  E.  561 13,  86,  250,  374,  375,  497 

Gilkinson  v.  Third  Ave.  E.  R.  Co.,  47  App.  Div.  472,  63  Supp.  792 109 

Gilsey,  N.  Y.  L.  J.,  March  10,  1914 482 

Glendinning,  68  App.  Div.  125,  74  Supp.  190 324 

Godley  v.  Crandall  &  Godley  Co.,  153  App.  Div.  697,  139  Supp.  236 360 

Golden,  N.  Y.  L.  J.,  January  31,  1914 510 

Goldenberg,  187  App.  Div.  692,  176  Supp.  201 87,  262,  454 

Goodrich  v.  Rochester  Trust  and  S.  D.  Co.,  173  App.  Div.  577,  160  Supp.  454. .  518 

Gordon,  186  N.  Y.  471,  79  N.  E.  722 163 

Gordon,  172  N.  Y.  25,  64  N.  E.  753 182 

Gould,  19  App.  Div.  352,  46  Supp.  506;  mod.  156  N.  Y.  423,  51  N.  E.  287 89 

99,  336,  370,  372,  448,  449 

Granfield,  79  Misc.  374,  140  Supp.  922 255,  264 

Grant,  86  Hun  617,  16  Supp.  716 258,  259 

Grant,   83   Misc.   257,    144   Supp.  567;    aff.   166   App.   Div.   921,    151    Supp. 

1119 216,  440,  461 

Graves,  171  N.  Y.  40 239 

Gray  v.  Gray,  5  App.  Div.  132,  39  Supp.  57 182 

Green,  153  N.  Y.  223,  47  N.  E.  292 Ill,  129,  141,  153,  219 

Green,  144  App.  Div.  232,  129  Supp.  54 186 

Green,  184  App.  Div.  376,  192  App.  Div.  30 ;  rev.  231  N.  Y.  237,  131  N.  E. 

900 446,  708 

Green,  Hettie  R.,  99  Misc.  582;  aff.  179  App.  Div.  890 215,  218,  450,  711 

Greene  (C.  S.),  183  Supp.  138 345 

Greenwood  v.  Holbrook,  111  N.  Y.  465,  18  N.  E.  711 94 

Gregan  v.  Union  Trust  Co.,  198  N.  Y.  541,  92  N.  E.  1085 106 

Greim,  183  Supp.  149 193 

Griggs,  163  Supp.  1096 510 

Griswold  v.  Griswold,  4  Bradf.  216 378 

Griswold  v.  Sawyer,  125  N.  Y.  411,  26  N.  E.  468 170 

Grosvenor,  124  App.  Div.  331,  108  Supp.  926,  126  App.  Div.  953,  111  Supp. 

1121 ;  aff.  193  N.  Y.  652,  86  N.  E.  1124 388 

Guggenheim,  189  N.  Y.  561,  82  N.  E.  1127 263 

Guggenheim,  N.  Y.  L.  J.,  July  29,  1916 347 

Gulick,  N.  Y.  L.  J.,  March  20,  1914 273 

Guitera,  113  Misc.  196,  184  Supp.  190 239,  377 

Gumbinner,  92  Misc.  104,  155  Supp.  188 306 


XXXVi  INHERITANCE   TAXATION 

H  PAGE 

Haekett,  14  Misc.  282,  35  Supp.  1051 514 

Hadley,  43  Misc.  579,  89  Supp.  545 103 

Haight,  152  App.  Div.  228,  136  Supp.  557 176 

Haggerty,  128  App.  Div.  479,  112  Supp.  1017;  aff.  194  N.  Y.  550,  87  N.  E. 

1120 17(5 

Haley,  89  Misc.  22,  152  Supp.  732 718 

Hall,  54  Hun  637,  7  Supp.  595 512 

Hall,  36  Misc.  618,  73  Supp.  1124 261 

Halle,  103  Misc.  661,  170  Supp.  898 150,  351,  354 

Hallenbeck,  231  N.  Y.  409,  132  N.  E.  131 317,  320,  345 

Halligan,  82  Misc.  30,  143  Supp.  676 112 

Hallock,  42  Misc.  493,  87  Supp.  255 .' 301 

Hamilton,  100  Misc.  61 348 

Hamilton,  148  N.  Y.  310,  42  N.  E.  717 241 

Hamlin,  185  App.  Div.  183;  aff.  226  N.  Y.  407 18,  553,  554 

Hamlin  v.  Smith,  72  App.  Div.  601,  76  Supp.  258 427 

Hanford,  113  App.  Div.  894;  aff.  186  N.  Y.  547 512 

Harbeck,  161  N.  Y.  211,  55  N.  E.  850 34,  172,  699 

Hardner,  124  App.  Div.  77 221 

Harkness,  183  App.  Div.  396,  170  Supp.  1024 217 

Harris  v.  Clark,  3  N.  Y.  93 106 

Harris  v.  Murray,  28  N.  Y.  547 390 

Hart,  98  Misc.  515,  162  Supp.  716;  rev.  179  App.  Div.  29,  166  Supp.  188; 

aff.  222  N.  Y.  660 ' 443 

Hartley  v.  Eagle  Ins.  Co.,  222  N.  Y.  178 278 

Hatch  v.  Bassett,  52  N.  Y.  359 257 

Hathaway,  103  Misc.  360,  171  Supp.  190 266,  275 

Hathaway,  27  Misc.  474 465 

Hauser,  166  Supp.  1079 198 

Havemeyer,  32  Misc.  416,  66  Supp.  722 346 

Hawes,  162  App.  Div.  173,  147  Supp.  329 ;  aff.  221  N.  Y.  613 133 

Hayes  v.  Meyer,  35  N.  Y.  226 390 

Hazzard,  228  N.  Y.  26,  126  N.  E.  345 35,  376 

Head,  N.  Y.  L.  J.,  December  22,  1911 468 

Heaton  on  Surrogates '  Courts 165,  216,  257 

Hearn,  N.  Y.  L.  J.,  July,  1917 364 

Hearn,  182  Supp.  363 355 

Hellman,  174  N.  Y.  254,  66  N.  E.  809 324,  361 

Hellman,  172  Supp.  671 ;  aff.  226  N.  Y.  702 150,  348,  351,  354 

Hemmerich  v.  Union  Dime  S.  I.,  205  N.  Y.  366,  98  N.  E.  499 105 

Henderson,  157  N.  Y.  423,  52  N.  E.  183 501 

Hendricks,  3  Supp.  281 453 

Hendricks,  163  App.  Div.  413,  148  Supp.  511 ;  aff.  214  N.  Y.  663 110 

Hermann!,  N.  Y.  L.  J.,  January   16,   1915;   aff.  168  App.  Div.  mem.,   153 

Supp.  1119  

Hernandez,  172  App.  Div.  467,  159  Supp.  59 ;  aff.  219  N.  Y.  mem 205 

213,  461,  494 

Herrman,  110  Misc.  475,  180  Supp.  509 355 

Hess,   110  App.   Div.   476,    96   Supp.    990;    aff.   187   N.   Y.    554,   80    N.    E. 

1111..  H3,  140 


TABLE  OF  CASES  CITED  XXXVii 

PAGE 

Hewitt,  181  N.  Y.  547,  74  N.  E.  1118 35,  322,  423 

Higgins,  N.  Y.  L.  J.,  December  16,  1914 238 

Higgins,  55  Misc.  175,  106  Supp.  465 239 

Hiles  v.  Fisher,  144  N.  Y.  306,  39  N.  E.  337 188 

Hillman,  116  App.  Div.  186 310 

Hinrichs,  148  Supp.  912 186 

Hirsch,  83  Misc.  681,  145  Supp.  305 369 

Hirschbuerg,  N.  Y.  L.  J.,  November  20,  1914 .- 354 

Hitchins,  43  Misc.  485,  89  Supp.  472;  aff.  181  N.  Y.  553,  73  N.  E.  1118 262 

Hiteman,  110  Misc.  617,  180  Supp.  880 239 

Hodges,  86  Misc.  367;  aff.  215  N.  Y.  447,  109  N.  E.  559 37,  123,  127 

128,  154,  228,  397,  714 

Hoffman,  42  Misc.  90,  85  Supp.  1082 377 

Hoffman,  143  N.  Y.  327,  38  N.  E.  311 263,  698 

Hoffman,  161  App.  Div.  836,  146  Supp.  898;  aff.  212  N.  Y.  604 176 

Hogg,  156  App.  Div.  301,  141  Supp.  119. . . 229 

Holly  v.  Gibbons,  176  N.  Y.  520,  68  N.  E.  889 427 

Holmes  v.  Eoper,  141  N.  Y.  64,  36  N.  E.  180 106 

Holt,  N.  Y.  L.  J.,  March  16,  1912 704 

Hoople,  179  N.  Y.  308,  73  N.  E.  229 508 

Horler,  97  Misc.  587,  161  Supp.  957 189 

Horn,  39  Misc.  133,  78  Supp.  979 164 

Horstman  v.  Flege,  172  N.  Y.  384,  65  N.  E.  202 183 

Horton,  217  N.  Y.  363,  111  N.  E.  1066 74,  461 

Hosack,  39  Misc.  130,  78  Supp.  983 276 

Houdayer,  150  N.  Y.  37,  44  N.  E.  718 26,  307,  309,  322,  498 

Houseman,  182  App.  Div.  37 113 

Howard,  54  Hun  305,  7  Supp.  594 512 

Howard,  94  Misc.  560,  157  Supp.  1114 241 

Howe,  86  App.  Div.  286,  83  Supp.  825;  aff.  176  N.  Y.  570,  68  N.  E.  1118 273 

Howe,  112  N.  Y.  100,  19  N.  E.  513 697 

Howell,  34  Misc.  40,  69  Supp.  505 239 

Rowland,  109  Misc.  169,  178  Supp.  368 256 

Hoyt,  86  Misc.  696,  149  Supp.  91 132>,  375 

Hoyt,  44  Misc.  76,  89  Supp.  744 253 

Hubbard,  199  App.  Div.  356 347 

Hubbard,  103  Misc.  125,  169  Supp.  325 330,  454,  518 

Huber,  86  App.  Div.  458,  83  Supp.  769 265,  517 

Huber  v.  Case,  93  App.  Div.  479,  87  Supp.  663 350 

Hughes  v.  Golden,  44  Misc.  128,  89  Supp.  765 243 

Hull,  111  App.  Div.  322,  97  Supp.  701;  aff.  186  N.  Y.  586,  79  N.  E.  1107 181 

Hull,  109  App.  Div.  248,  95  Supp.  819 436,  438,  468 

Hulse,  15  Supp.  770 140 

Hunt,  97  Misc.  233,  160  Supp.  1115 331 

Hunt  v.  Hunt,  72  N.  Y.  217 215 

Hunt  v.  Kingston,  3  Misc.  309,  23  Supp.  352 102 

Hurcomb,  36  Misc.  755,  74  Supp.  475 319,  346 

Hutchinson,  105  App.  Div.  487,  94  Supp.  354 255 

Hutter,  N.  Y.  L.  J.,  December  3,  1914;  aff.  167  App.  Div.  930,  152  Supp. 

1119 373 

Hutton,  176  App.  Div.  217,  160  Supp.  223;  aff.  220  N.  Y.  210 270,  479,  700 


XXXVili  INHERITANCE    TAXATION 

PAGE 

Hyde,  218  N.  Y.  55 483 

Hyman,  N.  Y.  L.  J.,  May  22,  1914 342 

Hynes  v.  McDermot,  82  N.  Y.  41 380 

I 

Irish,  28  Misc.  467 375 

Irwin,  36  Misc.  277,  73  Supp.  415 475 

Isham  v.  N.  Y.  Assn.  for  Poor,  177  N.  Y.  218,  69  N.  E.  367 251,  492 

J 

Jackson  v.  Tailer,  41  Misc.  36;  aff.  96  App.  Div.  626,  184  N.  Y.  603 251 

James,  144  N.  Y.  6,  38  N.  E.  961 25,  315,  391 

Janda  v.  Bohemian  E.  C.  TL,  71  App.  Div.  150,  75  Supp.  656 170 

Jay  v.  Kirkpatrick,  26  Misc.  550 422 

Johnson,  37  Mise.  542,  75  Supp.  1046 482,  504 

Jones,  54  Misc.  202,  105  Supp.  932 67,  502 

Jones,  28  Misc.  356,  59  Supp.  983,  69  App.  Div.  237,  74  Supp.  702,  172  N.  Y. 

575,  65  N.  E.  570 344,  353 

Joseph  v.  Herzog,  198  N.  Y.  456,  92  N.  E.  103 389 

Jourdan,  151  App.  Div.  8,  135  Supp.  172;  rev.  (on  dissenting  opinion  below) 

206  N.  Y.  653 702 

E 

Kahn,  N.  Y.  L.  J.,  March  16,  1912 424 

Keahon,  60  Misc.  508,  113  Supp.  926 353,  361 

Kearney,  N.  Y.  L.  J.,  May  4,  1905 103 

Keefe,  164  N.  Y.  352 422,  498 

Keenan,  22  St.  Eep.  79,  5  Supp.  200 437 

Keeney,  194  N.  Y.  281,  87  N.  E.  428;  aff.  222  U.  S.  525 36,  50,  58,  129 

141,  147,  148,  149,  200 

Kelly,  115  Misc.  357 198 

Kelly,  29  Mise.  169,  60  Supp.  1005 238,  468 

Kelsey  v.  Church,  112  App.  Div.  408,  98  Supp.  535 437,  512 

Kemp,  7  App.  Div.  609,  40  Supp.  1144;  aff.  151  N.  Y.  619,  45  N.  E.  1132.  .331,  368 

Kene,  8  Misc.  102,  29  Supp.  1078 367 

Kennedy,  20  Misc.  531,  46  Supp.  906 385,  452 

Kennedy,  93  App.  Div.  27,  86  Supp.  1024 263 

Kennedy,  David,  113  App.  Div.  4,  99  Supp.  72 413,  445,  446,  448 

Kennedy,  155  Supp.  192 339 

Kennedy,  J.  S.,  N.  Y.  L.  J.,  March  8,  1911 340 

Kennedy,  Thos.  J.,  N.  Y.  L.  J.,  August  11,  1915 372 

Kent,  186  Supp.  669 734 

Kent 's  Commentaries  20,  106 

Keough,  42  Misc.  387,  86  Supp.  807 384 

Kernochan,  104  N.  Y.  618,  11  N.  E.  149 424 

Kettle  v.  Baxter,  50  Misc.  428,  100  Supp.  529 225 

Keys,  N.  Y.  L.  J.,  March  5,  1912 183 

Kidd,  188  N.  Y.  274,  80  N.  E.  924 87,  89,  143,  147 

Kieth,  114  Misc.  86,  185  Supp.  911 386,  446 

Kimbel  v.  Kimbel,  14  App.  Div.  570,  43  Supp.  900 182 

Kimberly,  150  N.  Y.  90,  44  N.  E.  945 247,  439 

King,  217  N.  Y.  358,  111  N.  E.  1060 177,  221 


TABLE  OF  OASES  CITED  XXxix 

PAGE 

King,  71  App.  Div.  581,  76  Supp.  220;  aff.  172  N.  Y.  616,  64  N.  E.  1122 386 

388,  390 

King,  51  Misc.  375,  101  Supp.  279 106 

Kings  County  Trust  Co.,  69  Misc.  531,  127  Supp.  879 380,  426 

Kingsland,  118  Misc.  525,  193  Supp.  638 335 

Kip,  N.  Y.  L.  J.,  March  28,  1912 702 

Kirtland,  94  Misc.  58,  157  Supp.  378 225,  389 

Kissel,  65  Misc.  443,  121  Supp.  1088;   aff.   142  App.  Div.   134,   127   Supp. 

1127 181 

Kitching  v.  Shear,  26  Misc.  436 242 

Klatzl,  216  N.  Y.  83,  110  N.  E.  181 188,  189,  191 

Klauber,  N.  Y.  L.  J.,  May  17,  1913;  aff.  171  App.  Div.  908,  218  N.  Y.  607. ..   363 

Knabe,  N.  Y.  L.  J.,  February  2,  1916 183 

Knoedler,  140  N.  Y.  377,  35  N.  E.  601 160,  163,  299 

Kolb,  114  Misc.  361,  186  Supp.  670 201 

Konvalinka  v.  Schlegel,  104  N.  Y.  125,  9  N.  E.  868 182 

Kubler,  N.  Y.  L.  J.,  August  6,  1915 516 

Kucielski,  144  App.  Div.  100,  128  Supp.  768 21,  240 

L 

LaFarge,  149  Supp.  535 385 

Laidlaw,  176  Supp.  885 343 

Lake,  112  Misc.  681,  183  Supp.  335;  aff.  194  App.  Div.  967;  aff.  232  N.  Y. 

mem.,  134  N.  E.  546 706 

Lane,  157  App.  Div.  694,  142  Supp.  788 29 

Lane,  39  Misc.  522,  80  Supp.  381 445 

Langdon,  153  N.  Y.  6,  46  N.  E.  1034 263 

Lansing,  31  Misc.  148,  64  Supp.  1125 468,  474 

Lansing,  182  K  Y.  238,  74  N.  E.  882 173,  175,  192,  699 

Lawrence,  N.  Y.  L.  J.,  February  15,  1913 446 

Lawrence,  96  App.  Div.  29,  88  Supp.  1028 455 

Lawson,  N.  Y.  L.  J.,  January  3,  1914 277 

Laytin  v.  Davidson,  95  N.  Y.  263 383 

Leask,  130  App.  Div.  898,  197  N.  Y.  193,  90  N.  E.  652 225 

Leask  v.  Hoagland,  64  N.  Y.  159 369 

Leeds,  N.  Y.  L.  J.,  June  2,  1914 97 

Leeds,  N.  Y.  L.  J.,  April  23,  1913 228 

Le  Fevre,  233  N.  Y.  138 236,  734 

Leggett,  N.  Y.  L.  J.,  January  13,  1911 4 

Leggett  v.  Stevens,  77  App.  Div.  612,  79  Supp.  289 258 

Lehr  v.  Jones,  74  App.  Div.  54,  77  Supp.  213 105 

Leopold,  35  Misc.  369,  71  Supp.  1032 31° 

Leuff,  1  State  Dept.  Rep.  567 471 

Levy,  N.  Y.  L.  J.,  May  15,  1907;  aff.  122  App.  Div.  919,  107  Supp.  1134. ...   370 

Lewis,  129  App.  Div.  908,  194  N.  Y.  550,  88  N.  E.  1124 176 

Lewis  v.  Smith,  9  N.  Y.  502 l 

Lewis  v.  State,  96  N.  Y.  71 508 

Lewisohn,  107  Misc.  582,  177  Supp.  799 519 

Lewisohn,  171  Supp.  958 275 

Liboldt,  102  App.  Div.  29,  92  Supp.  175 3 

Lincoln,  114  Misc.  45,  185  Supp.  574 354 


xl  INHERITANCE   TAXATION 

PAGE 

Lind,  132  App.  Div.  321,  117  Supp.  49;  aff.  196  N.  Y.  570,  90  N.  E.  1161 203 

Linley,  N.  -Y.  L.  J.,  February  19,  1914 : 476 

Liss,  39  Misc.  123,  78  Supp.  969 371,  378 

Livingston,  1  App.  Div.  568,  37  Supp.  463 331,  367 

Locke  v.  State,  140  N.  Y.  480,  35  N.  E.  476 508 

Loeb,  167  App.  Div.  588,  152  Supp.  879 232,  235 

Loeb,  N.  Y.  L.  J.,  January  13,  1914 332 

Loewi,  75  Misc.  57,  134  Supp.  679 108,  446 

Logan  v.  Whitley,  129  App.  Div.  666,  114  Supp.  255 142 

Lord,  112  Misc.  304,  183  Supp.  131 377 

Lord,  111  App.  Div.  152,  97  Supp.  553;  aff.  186  N.  Y.  549,  79  N.  E.  1110.. 273,  396 

Lorillard  v.  People,  6  Dem.  268 300 

Loster,  N.  Y.  L.  J.,  July  19,  1913 468 

Lovell,  107  Misc.  214,  177  Supp.  458 516 

Lowenfeld,  N.  Y.  L.  J.,  June  27,  1916 327 

Lowndes,  60  Misc.  506,  113  Supp.  1114 465 

Lowry,  89  Misc.  226,  85  Supp.  924 483,  504 

Ludeke,  N.  Y.  L.  J.,  January  30,  1914 706 

Ludlow,  4  Misc.  594,  25  Supp.  989 371 

Lydig,  113  Misc.  542 201 

Lydig,  191  App.  Div.  117,  180  Supp.  843 211 

Lynn,  34  Misc.  681,  70  Supp.  730 439 

Lyon;  144  App.  Div.  104,  128  Supp.  1004 238 

Lyon  (Edmund),  233  N.  Y.  208 7,  191 

Lyon,  116  Misc.  640,  191  Supp.  260 465 

Lyon,  117  Misc.  189 711 

Me 

McAvoy,  112  App.  Div.  377,  98  Supp.  437 240 

McCaddon,  181  Supp.  584 481 

McCarthy,  5  Misc.  276,  25  Supp.  987 514 

McCartin,  N.  Y.  L.  J.,  December  5,  1913 238 

McClusky  v.  Cromwell,  11  N.  Y.  593 51 

McCormick,  206  N.  Y.  100,  99  N.  E.  177. 235 

McCullough,  N.  Y.  L.  J.,  October  27,  1914 212 

McDougall,  141  N.  Y.  21 258,  259 

McDowell,  217  N.  Y.  454 233 

McElroy  on  the  "Transfer  Tax  Law" 331,  412,  453 

McEwan,  51  Misc.  455,  101  Supp.  733 391 

McFarlane  v.  McFarlane,  82  Hun  238,  31  Supp.  272. 350 

McGarvey,  6  Dem.  145 226 

McGee,  N.  Y.  L.  J.,  February  7,  1913;   aff.  160  App.  Div.  890,  144  Supp. 

1127 518 

McGovern,  N.  Y.  L.  J.,  March  26,  1903 103 

McGruer  v.  Abbott,  47  App.  Div.  191,  62  Supp.  123 496 

MeGuire  v.  Murphy,  107  App.  Div.  104,  94  Supp.  1005 109 

McKelway,  221  N.  Y.  15,  116  N.  E.  348 54,  171,  188,  192,  196 

McKinley,  166   Supp.  1081 325 

McLean,  N.  Y.  L.  J.,  July  18,  1914;  170  Supp.  224 273,  275 

McMillan,  126  App.  Div.  155,  110  Supp.  622 102 

McMullen,  199  App.  Div.  393,  192-  Supp.  49 72,  220,  706 


TABLE  OF  CASES  CITED  xjj 

PAGE 

McMullen,  92  Misc.  637,  157  Supp.  655 342 

McMurray,  96  App.  Div.  128,  89  Supp.  71 428 

McPherson,  104  N.  Y.  306,  10  N.  E.  685 41,  47,  61,  440,  727 

M 

Maguire,  99  Misc.  466 200 

Mahlstedt,  67  App.  Div.  176,  73  Supp.  818;  aff.  171  N.  Y.  652,  63  N.  E. 

1119 116 

Majot,  199  N.  Y.  29,  92  N.  E.  402 205 

Malcolmson,  N.  Y.  L.  J.,  June  20,  1912 340 

Manning,  169  N.  Y.  449,  62  N.  E.  565 476,  477 

Maresi,  74  App.  Div.  76,  77  Supp.  76 254,  367,  378 

Marks,  40  Misc.  507,  82  Supp.  803 375 

Marsh,  5  Misc.  428,  26  Supp.  718 102 

Marshing,  N.  Y.  L.  J.,  March  6,  1907 517 

Martin,  173  App.  Div.  1,  158  Supp.  915;  appeal  dismissed  219  N.  Y.  557, 

114  N.  E.  1071 209,  211,  498 

Martinez,  160  Supp.  1121 183 

Marx,  117  App.  Div.  890,  103  Supp.  446 517 

Mason,  120  App.  Div.  738,  105  Supp.  667;  aff.  sub  nom.  Naylor,  189  N.  Y. 

556,  82  N.  E.  1129 262,  475 

Mason,  69  Misc.  280,  126  Supp.  998 718 

Masters  v.  Brooks,  132  App.  Div.  975 '. 351 

Masury,  28  App.  Div.  580 ;  aff.  159  N.  Y.  532,  53  N.  E.  1127 133 

Mather,  90  App.  Div.  382,  85  Supp.  657;  aff.  179  N.  Y.  526,  71  N.  E.  1134.. 32,  504 

Matthews  v.  Brooklyn  Sav.  Bank,  208  N.  Y.  508,  102  N.  E.  520 Ill 

Maverick,  135  App.  Div.  44,  119  Supp.  914;  aff.  198  N.  Y.  618,  92  N.  E. 

1084 371,  425 

Mayhon,  177  Supp.  747 454 

Menagh  v.  Whitehall,  52  N.  Y.  146 324 

Mergentime,  129  App.  Div.  367,  113  Supp.  948;  aff.  195  N.  Y.  572,  88  N.  E. 

1125 52,  232,  238 

Merriam,  141  N.  Y.  479,  36  N.  E.  505 ;  aff.  163  U.  S.  625,  16  Sup.  Ct.  Eep. 

1073 21,  240 

Merritt,  155  App.  Div.  228,  140  Supp.  13 32,  226 

Meserole,  98  Misc.  105,  162  Supp.  414 132,  228,  262 

Meyer,  83  App.  Div.  381,  82  Supp.  329 28 

Meyer,  209  N.  Y.  386,  103  N.  E.  713 35,  331,  517 

Meyer,  N.  Y.  L.  J.,  January  31,  1914 511 

Meyer,  117  Misc.  511,  192  Supp.  717 706 

Michaelis,  N.  Y.  L.  J.,  August  11,  1915 369 

Middleworth  v.  Ordway,  191  N.  Y.  404,  84  N.  E.  291 92 

Miller,  229  N.  Y.  618 24° 

Miller,  109  Misc.  267,  178  Supp.  554 135,  239 

Miller,  77  App.  Div.  473,  78  Supp.  930 139 

Miller,  110  N.  Y.  216,  18  N.  E.  139 54,  444 

Miller  v.  Miller,  91  N.  Y.  315 101 

Mills,  86  App.  Div.  555,  67  Supp.  956;  aff.  177  N.  Y.  562,  69  N.  E.  1127..  .85,  244 

Mills,  172  App.  Div.  530,  158  Supp.  1100;  aff.  219  N.  Y.  mem 108,  113 

122,  451,  483 
Millward,  6  Misc.  425,  27  Supp.  286 371 


_**-•    • 


INHERITANCE  TAXATION 

PAGE 

Milne,  76  Hun  328,  27  Supp.  727 697 

Mitchell,  180  Supp  874 386 

Mitchell,  N.  Y.  L.  J.,  March  9,  1912 448 

Mitchell,  N.  Y.  L.  J.,  November  22,  1913 177 

Mock,  113  App.  Div.  913,  49  Misc.  283 698 

Moebus,  178  App.  Div.  709,  165*  Supp.  887 191 

Moench,  39  Misc.  480,  80  Supp.  222 55 

Moller  v.  Lincoln,  S.  D.  Co.,  174  App.  Div.  458 410 

Montieth,  27  Misc.  163,  58  Supp.  379 503 

Moore,  90  Hun  62,  35  Supp.  782 66,  509 

Moore,  97  Misc.  238,  162  Supp.  213 334,  359 

Morgan,  Annie  C.,  164  App.  Div.  854,  149  Supp.  1022;  aff.  215  N.  Y. 

mem 441,  503 

Morgan,  Annie  T.,  36  Misc.  753,  74  Supp.  478 454 

Morgan,  Geo.,  150  N.  Y.  35,  44  N.  E.  1126 308,  310 

Morgan,  95  Misc.  451,  159  Supp.  105 212 

Morgan  v.  Cowie,  49  App.  Div.  612,  63  Supp.  608 428 

Morgan  v.  Warner,  45  App.  Div.  424,  60  Supp.  963;  aff.  162  N.  Y.  612, 

57  N.  E.  1118  369,  439 

Morss,  85  Misc.  676,  149  Supp.  41 455 

Moses,  138  App.  Div.  525,  123  Supp.  443 231,  239 

Moulton,  11  Misc.  694,  33  Supp.  578 225 

Mowry,  114  App.  Div.  904,  100  Supp.  1131 475 

Mullon,  74  Hun  358,  26  Supp.  683 353 

Murphy,  32  App.  Div.  627,  53  Supp.  1110;  aff.  157  N.  Y.  679,  51  N.  E. 

1092 331,  367 

Murphy,  4  Misc.  230,  25  Supp.  107 247 

Murray,  92  Misc.  100,  155  Supp.  185 86,  95 

Mutual  Life  Ins.  Co.  v.  Nicholas,  144  App.  Div.  95,  128  Supp.  902 451 

Myers,  N.  Y.  L.  J.,  November  22,  1913 251 

N 

Naylor,  189  N.  Y.  556,  82  N.  E.  1129 475 

Neher,  95  Misc.  68,  158  Supp.  454 255 

Neustadter,  N.  Y.  L.  J.,  August  16,  1913 236 

Newcomb,  71  App.  Div.  606,  76  Supp.  222;  aff.  172  N.  Y.  608,  64  N.  E. 

1123 313,  424 

Newcomb,  192  N.  Y.  238,  84  N.  E.  950 210 

Newman,  91  Misc.  200,  154  Supp.  1107 344,  447 

Nichol,  91  Hun  134,  36  Supp.  538 224 

Nichols,  60  Misc.  299,  113  Supp.  277 103 

Niles,  N.  Y.  L.  J.,  January  5,  1912 704 

Niven,  29  Misc.  550,  61  Supp.  956 503 

Norton,  96  Misc.  152,  159  Supp.  619 ;  aff.  175  App.  Div.  981,  162  Supp.  1133. .  216 

0 

O 'Berry,  91  App.  Div.  3,  86  Supp.  269;  aff.  179  N.  Y.  285,  72  N.  E.  109.  .262,  502 

O'Connell,  33  App.  Div.  483 105 

O'Donohue,  181  Supp.  911 380 

O'Donohue,  44  App.  Div.  186,  59  Supp.  1087,  60  Supp.  690 436 

Offerman,  25  App.  Div.  94,  48  Supp.  993 301,  303,  331,  367 


TABLE  OF  CASES  CITED 

PAGE 

Ogden,  170  Supp.  630 266,  708 

Ogsbury,  7  App.  Div.  71,  39  Supp.  987 130 

Olcott  v.  Baldwin,  190  N.  Y.  90,  82  N.  E.  748 383 

O  'Neil,  91  N.  Y.  593 51 

Ormiston,  N.  Y.  L.  J.,  August  14,  1915 363 

Orvis,  173  App.  Div.  1,  166  Supp.  126;  aff.  223  N.  Y.  1,  119,  N.  E.  88.  .144,  148 

200,  348 

Otis,  103  Misc.  665 ;  aff.  190  App.  Div.  577,  229  N.  Y.  517 733 

Ottman,  166  Supp.  1078 353,  455 

Overheiser  v.  Lackey,  207  N.  Y.  229 193 

P 

Page,  N.  Y.  L.  J.,  April  13,  1912 322 

Page,  39  Misc.  220,  79  Supp.  382 101 

Palm,  148  Supp.  1044 . 112 

Palmer,  John,  117  App.  Div.  360,  102  Supp.  236 108,  445,  446 

Palmer,  Potter,  183  N.  Y.  238,  76  N.  E.  16 316 

Palmer,  S.  A.  L.,  33  App.  Div.  307,  53  Supp.  847;  aff.  158  N.  Y.  669,  52 

N.  E.  1125  238 

Pancost,  89  Misc.  110,  152  Supp.  724 343 

Park,  8  Misc.  550,  29  Supp.  1081 512 

Parker,  226  N.  Y.  260 266 

Parmenter  v.  State,  135  N.  Y.  154,  31  N.  E.  1035 508 

Parsons,  39  Misc.  126,  78  Supp.  975 258 

Parsons,  51  Misc.  370,  101  Supp.  430,  117  App.  Div.  321,  102  Supp.  168 166 

323,  346 

Paterno,  182  App.  Div.  478,  169  Supp.  765 330,  337 

Patterson,  146  N.  Y.  327,  40  N.  E.  990 462 

Patterson,  146  App.  Div..  286,  130  Supp.  970;  aff.  204  N.  Y.  677 130 

Paul,  165  Supp.  413 ;  aff.  181  App.  Div.  932 450 

Pearsall,  149  Supp.  36 514 

Peck,  53  Misc.  535,  109  Supp.  1083 102 

Peck,  149  App.  Div.  912,  133  Supp.  1136 445 

Peck,  2  Connoly  201,  9  Supp.  465 373 

Pell,  171  N.  Y.  48,  63  N.  E.  789 33,  38,  171,  192,  262,  699 

Penfold,  W.  H.,  216  N.  Y.  171,  110  N.  E.  499 376 

Penf old,  Josephine,  216  N.  Y.  163,  110  N.  E.  497 35,  191,  327 

People  v.  Coleman,  107  N.  Y.  541,  14  N.  E.  431 338 

People  v.  Dennison,  84  N.  Y.  272 508 

People  v.  Draper,  15  N.  Y.  451 729 

People  ex  rel.  Eismann  v.  Eonner,  185  N.  Y.  285 40,  47,  179 

People  ex  rel.  Farrington  v.  Meusching,  187  N.  Y.  10 41 

People  ex  rel.  Hatch  v.  Eeardon,  184  N.  Y.  531 40,  47,  179,  315 

People  ex  rel.  Lown  v.  Cook,  158  App.  Div.  74,  142  Supp.  692;  aff.  209 

N.  Y.  578  510,  513 

People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35,  106  Supp.  956 436,  438,  439 

People  ex  rel.  McNeile  v.  Glynn,  128  App.  Div.  257,  112  Supp.  695 436 

People  ex  rel.  Met.  Tax  Comrs.,  174  N.  Y.  417 47,  729 

People  ex  rel.  Eipley  v.  Williams,  69  Misc.  402,  127  Supp.  749 513 

People  ex  rel.  Trust  Co.  v.  Travis,  107  Misc.  377,  176  Supp.  765;  aff.  191  App. 

Div.   129,   180  Supp.   659 511 


xliv  INHERITANCE  TAXATION 

PAGE 

People  ex  rel.  U.  S.  A.  P.  P.  Co.  v.  Knight,  174  N.  Y.  475,  67  N.  E.  65 21 

People  v.  Feitner,  167  N.  Y.  1,  60  N.  E.  265. 161,  323 

People  v.  Mercantile  S.  D.  Co.,  159  App.  Div.  98,  143  Supp.  849 409 

People  v.  Pelham,  215  N.  Y.  374 728 

People  v.  Prout,  53  Hun  541,  6  Supp.  457 509 

People  v.  Koberts,  159  N.  Y.  70,  53  N.  E.  685 353 

People  v.  State  Tax  Commission,  174  App.  Div.  320,  160  Supp.  854 306 

Perry,  129  App.  Div.  587,  114  Supp.  246 105 

Peters,  69  App.  Div.  465,  74  Supp.  1028 439 

Pettit,  65  App.  Div.  30,  72  Supp.  469;  aff.  171  N.  Y.  654,  63  N.  E.  1121 38 

Phalen  v.  U.  S.  Trust  Co.,  186  N.  Y.  178,  78  N.  E.  943 88 

Phelps,  118  Misc.  405,  193  Supp.  399 337 

Phipps,  77  Hun  325,  28  Supp.  330;  aff.  143  N.  Y.  641,  37  N.  E.  823 249 

Pitou,  79  Misc.  384,  140  Supp.  919 340 

Platt,  8  Misc.  144,  29  Supp.  396 511 

Plum,  37  Misc.  466,  75  Supp.  740 266 

Polhemus,  84  Misc.  332,  145  Supp.  1107 142 

Porter,  67  Misc.  19,  124  Supp.  676;  aff.  148  App.  Div.  896,  132  Supp.  1143..  385 

386,  388,  389 

Post,  85  App.  Div.  611,  82  Supp.  1079 495 

Post,  5  App.  ui\.  113,  38  Supp.  977 481 

Post,  96  Misc.  531 256 

Potter,  51  App.  Div.  512,  64  Supp.  1013 173 

Potter,  139  App.  Div.  905,  124  Supp.  1126;  aff.  199  N.  Y.  561,  93  N.  E.  378. .  260 

Powell  v.  Waldron,  89  N.  Y.  328 323 

Prentiss,  N.  Y.  L.  J.,  December  2,  1916 368 

Preston,  108  Misc.  535,  178  Supp.  447 499 

Preston,  75  App.  Div.  250,  78  Supp.  91 309 

Preston  v.  Fitch,  137  N.  Y.  41,  33  N.  E.  77 324 

Price,  62  Misc.  149,  116  Supp.  283 116 

Price,  McCormick  Co.,  69  App.  Div.  37,  74  Supp.  624 390 

Prime,  136  N.  Y.  347,  32  N.  Y.  1091 71,  238 

Probst,  40  Misc.  431,  82  Supp.  396. 350 

Proctor,  41  Misc.  79,  83  Supp.  643 337,  447 

Prote,  54  Misc.  495,  104  Supp.  301 102 

Purdy,  24  Misc.  301,  53  Supp.  735 426 

Pulitzer,  N.  Y.  L.  J.,  December  10,  1912 360 

Pullman,  46  App.  Div.  574,  62  Supp.  395 316,  346 

R 

Eadford,   168   Supp.   1099 208 

Kaimbouville,  N.  Y.  L.  J.,  July  27,  1916 389 

Ealeigh,  75  Misc.  55,  134  Supp.  684 451 

Kamsdill,  190  N.  Y.  492,  83  N.  E.  584 28,  392 

Bay,  13  Misc.  480,  35  Supp.  481 226 

Eead,  204  N.  Y.  672 509 

Eeardon,  182   Supp.   218    201 

Redmond,  190  App.  Div.  180,  179  Supp.  307 500 

Eeed,  98  Misc.  102,  162  Supp.  412 97,  374 

Eees,  208  N.   Y.   590 344 

Eeeves  on  Eeal  Property,  Vol.  II,  p.  689 187 


TABLE  OF  CASES  CITED  XJV 

PAGE 

Reimer,  107  Misc.  322,  176  Supp.  430 151 

Reinhardt  v.  Reinhardt,  134  App.  Div.  440,  119  Supp.  285 389 

Reiss,  110  Misc.  482',  180  Supp.  876 386,  733 

Remsen  v.  Wheeler,  105  N.  Y.  573,  12  N.  E.  564 396 

Reynolds,  97  Misc.  555,  163  Supp.  803 476 

Rhoades,  109  Misc.  406,  178  Supp.  782 380 

Rhoades,  120  App.  Div.  822;  aff.  190  N.  Y.  425,  83  N.  E.  1130 163 

Rice,  56  App.  Div.  253,  61  Supp.  911,  68  Supp.  1147 371,  454,  474 

Richards,  182  App.  Div.  572 ;  aff.  226  N.  Y.  mem 706 

Ridden  v.  Thrall,  125  N.  Y.  572,  26  N.  E.  627 113 

Riemann,  42  Misc.  648,  87  Supp.  731 182 

Riley,  86  Misc.  628,  148  Supp.  623 212 

Ripka,  118  Misc.  351 316 

Ripley,  122  App.  Div.  419,  106  Supp.  844;  aff.  192  N.  Y.  536,  84  N.  E.  1120. .  177 

Robins  v.  McClure,  100  N.  Y.  328,  3  N.  E.  663 186 

Robinson,  37  Misc.  336,  75  Supp.  490 380 

Robinson,  80  Misc.  458,  142  Supp.  456;  aff.  212  N.  Y.  548 236 

Rockefeller,  177  App.  Div.  786,  165  Supp.  154;  aff.  223  N.  Y.  563 53,  231 

476,  483 

Rockwell  v.  Gregory,  4  Hun  606 101 

Roebuck,  79  Misc.  589,  140  Supp.  1107 222 

Roeck,  111  Misc.  509,  183  Supp.  776 92 

Roessle  v.  Roessle,  81  Misc.  558,  142  Supp.  984 184 

Rogers,  71  App.  Div.  461,  75  Supp.  835;  aff.  172  N.  Y.  617,  64  N.  E.  1125.100,  173 

Rogers,  149  Supp.  462 256 

Rogers,  83  App.  Div.  642,  82  Supp.  1113;  aff.  N.  Y.  L.  J.,  January  24,  1903. .  213 

Romaine,  127  N.  Y.  80 310 

Rook,  98  Misc.  544,  164  Supp.  742 411 

Roos,  90  Misc.  521,  154  Supp.  939 344 

Roosevelt,  143  N.  Y.  120,  38  N.  E.  281 262 

Rosenbaum,  N.  Y.  L.  J.,  August  7,  1913 305 

Rosenberg,  N.  Y.  L.  J.,  May  9,  1908,  114  Supp.  726 359 

Rosendahl,  40  Misc.  542,  82  Supp.  992 698 

Rothf eld,  N.  Y.  L.  J.,  January  4,  1914 397 

Rothschild,  86  Misc.  364,  148  Supp.  368 213 

Rothschild,  63  Misc.  615,  118  Supp.  654 426 

Rowe,  103  Misc.  Ill,   170  Supp.  742 29,  103 

Rudolph,  92  Misc.  347,  156  Supp.  825 112 

Runcie,  36  Misc.  607,  73  Supp.  1120 257 

Rundel,  179  App.  Div.  978 116 

Russell,  168  N.  Y.  169,  61  N.  E.  166 187 

Russell,  N.  Y.  L.  J.,  June  1,  1914 132 

Russell,  148  Supp.  272 380 

Russell  v.  McCall,  141  N.  Y.  437,  36  N.  E.  498 324 

Rutherford,  88  Misc.  414,  150  Supp.  734 212 

Ryan,  3  Supp.  136 55,  67 

s 

Sandahl,  171  Supp.  959 351 

St.  John  v.  Andrews  Institute,  191  N.  Y.  254,  83  N.  E.  981 237 

Sanf ord,  66  Misc.  395,  123  Supp.  284 374 


INHERITANCE  TAXATION 

PAGE 

Sanf ord  v.  Jackson,  10  Paige  266 182 

Sauer,  89  Misc.  105,  151  Supp.  465 101 

Saunders,  86  Misc.  582,  149  Supp.  461 497 

Saunders,  77  Misc.  54,  137  Supp.  438;  aff.  211  N.  Y.  541 235,  383,  426 

Savage  v.  Burnham,  17  N.  Y.  561 184 

Savage  v.  O'Neil,  44  N.  Y.  298 380 

Schell  v.  Plumb,  54  N.  Y.  292 278 

Schermerhorn,  38  App.  Div.  350,  57  Supp.  26 474 

Schermerhorn,  N.  Y.  L.  J.,  June  26,  1913 132 

Schmidt,  39  Misc.  77,  78  Supp.  879 441 

Schumacher,  N.  Y.  L.  J.,  March  13,  1914 482 

Schumacher,  N.  Y.  L.  J.,  July  29,  1914 510 

Schmoll,  191  App.  Div.  435,  181  Supp.  542;  aff.  230  N.  Y.  559,  130  N.  E. 

893 91 

Sehutz  v.  Morette,  146  N.  Y.  137,  40  N.  E.  780 427 

Schwarz,  156  App.  Div.  931,  141  Supp.  349 ;  aff.  209  N.  Y.  mem 702 

Scott,  208  N.  Y.  602 501 

Scrimgeour,  80  App.  Div.  388,  80  Supp.  636;  aff.  175  N.  Y.  507,  67  N.  E. 

1089 468,  501 

Seabury  v.  Bowen,  3  Bradf .  207 378 

Seaman,  147  N.  Y.  69,  41  N.  E.  401 28,  192,  263 

Seaver,  63  App.  Div.  283,  71  Supp.  544 173,  465 

Secor  v.  Tradesmen 's  National  Bank,  92  App.  Div.  241 324 

Seligman,  170  App.  Div.  837,  156  Supp.  648;  aff.  219  N.  Y.  141 276 

Seymour,  144  App.  Div.  151,  128  Supp.  775 496 

Sharer,  36  Misc.  502,  73  Supp.  1057 107,  449 

Shearson,  174  App.  Div.  866 ;  aff.  220  N.  Y.  584 265,  474 

Sheppard,  189  App.  Div.  370,  179  Supp.  409 734 

Sherar,  25  Misc.  138,  54  Supp.  930 500 

Sheridan  v.  Tucker,  145  App.  Div.  145,  129  Supp.  18 451 

Sherill  v.  Christ  Church,  121  N.  Y.  701,  25  N.  E.  50 55 

Sherman,  153  N.  Y.  1,  46  N.  E.  1032 21 

Sherman,  179  App.  Div.  497;  aff.  222  N.  Y.  540 375,  549 

Sherwell,  125  N.  Y.  376,  26  N.  E.  464 16 

Shields,  68  Misc.  264,  124  Supp.  1003 426 

Silkman,  121  App.  Div.  202,  105  Supp.  872 353,  354,  361,  365 

Silliman,  79  App.  Div.  98,  80  Supp.  336;  aff.  175  N.  Y.  513,  67  N.  E. 

1090 426,  502 

Simmons,  N.  Y.  L.  J.,  June  14,  1912 470 

Simon  v.  Etgen,  213  N.  Y.  589 448 

Simpson  v.  Jersey  City  Contracting  Co.,  165  N.  Y.  193 315,  317 

Skinner,  45  Misc.  559,  92  Supp.  972;  mod.  106  App.  Div.  217,  94  Supp. 

144 149,  151,  327,  329,  368,  427,  505,  511 

Slater  v.  Slater,  175  N.  Y.  143,  67  N.  E.  224 360 

Sloane,  154  N.  Y.  107,  47  N.  E.  978 32 

Slosson,  87  Misc.  517,  149  Supp.  797;  aff.  168  App.  Div.  891,  152  Supp. 

690;  rev.  216  N.  Y.  79,  110  N.  E.  166 100,  177,  259 

Smith,  85  Misc.  636,  149  Supp.  24 250 

Smith,  Albert  D.,  N.  Y.  L.  J.,  March  4,  1914 706 

Smith,  E.  H.,  40  App.  Div.  480,  58  Supp.  128 469 

Smith,  E.  H.,  71  App.  Div.  602,  76  Supp.  185 342 


TABLE  OF  CASES  CITED 

PAGE 

Smith,  Johnathan,  150  App.  Div.  805,  135  Supp.  240 262 

Smith,  Julia  A.,  77  Hun  134 238 

Smith,  W.  A.,  80  Misc.  140,  141  Supp.  798 86 

Smith  v.  Browning,  171  App.  Div.  279,  157  Supp.  71;  rev.  225  N.  Y.  358 242 

Smith  v.  Cornell,  111  N.  Y.  554,  19  N.  E.  271 378 

Smith  v.  Kearney,  2  Bart.  Ch.  533 369 

Sobel,  191  Supp.  677 183 

Solley  v.  Westcott,  43  Misc.  188,  88  Supp.  297 256 

Soltau,  116  Misc.  257 477 

Somerville,   20    Supp.    76 106 

Sondheim,  69  App.  Div.  5,  74  Supp.  510 436,  495 

Spaulding,  49  App.  Div.  541,  63  Supp.  694;  aff.  163  N.  Y.  607,  57  N.  E. 

1124 , 113,  116,  139 

Spencer,  190  N.  Y.  517,  83  N.  E.  1132,  193  N.  Y.  613 176 

Spingarn,  96  Misc.  141,  159  Supp.  605;  rev.  175  App.  Div.  806,  162  Supp. 

695 272,  467,  471 

Starbuck,  53  Misc.  156,  116  Supp.  1030;  aff.  201  N.  Y.  531,  94  N.  E.  1098. . 

185,  191 

State  v.  Kings  County,  125  N.  Y.  312 71 

Steele,  98  Misc.  180,  162  Supp.  718 373,  378,  383 

Steinwender,  172  App.  Div.  871,  158  Supp.  779;  aff.  121  N.  Y.  mem 474,  495 

Stelz  v.  Shreck,  128  N.  Y.  263,  28  N.  E.  510 190 

Sterry,  N.  Y.  L.  J.,  April  30,  1912 250 

Stewart,  131  N.  Y.  274,  30  N.  E.  184 52,  263,  396 

Stickney,  185  N.  Y.  107,  77  N.  E.  993 498 

Stiger,  7  Misc.  268,  28  Supp.  163 244 

Stiles,  64  Misc.  658,  120  Supp.  714 384 

Stilwell,  34  Supp.  1123 224 

Stockwell,  158  Supp.  320 97 

Stone,  56  Misc.  247,  107  Supp.  385 476 

Stone,  N.  Y.  L.  J.,  February  18,  1911 445 

Strail,  195  N.  Y.  575 241 

Strang,  117  App.  Div.  796,  102  Supp.  1062 55,  241 

Straus,  N.  Y.  L.  J.,  October  9,  1911 350 

Strobel,  39  Supp.  169 ;  aff.  5  App.  Div.  621 81 

Stuart  v.  Palmer,  74  N.  Y.  188 396 

Stuyvesant,  72  Misc.  295,  131  Supp.  197 183 

Sudds,  32  Misc.  182,  66  Supp.  231 516 

Sullivan,  94  Misc.  529,  159  Supp.  616 103 

Supple,  186  Supp.  560 94 

Sutton,  3  App.  Div.  208,  38  Supp.  277;  aff.  149  N.  Y.  618,  44  N.  E.  1128 

301,  303,  330,  367,  422 

Swarthout  v.  Eanier,  143  N.  Y.  499 259 

Swift,  137  N.  Y.  77,  32  N.  E.  1096 85,  300,  301,  422,  453 

T 

Telfeyan,  N.  Y.  L.  J.,  January  31,  1917 236 

Teller,  178  App.  Div.  450,  165  Supp.  517;  appeal  dismissed  223  N.  Y.  565.. 

198,  199,  498 

Terry,  218  N.  Y.  218,  112  N.  E.  931 269,  272,  277 

Terry  v.  Hector  St.  S.  Church,  79  App.  Div.  527,  81  Supp.  119 259 


Xlviii  INHERITANCE  TAXATION 

PAGE 

Thayer,  193  N.  Y.  430,  86  N.  E.  462 316 

Thomas,  3  Misc.  388,  24  Supp.  713 324 

Thomas,  33  Misc.  729,  68  Supp.  1116 186 

Thomas,  39  Misc.  223,  79  Supp.  571 426 

Thomas  v.  Wolf  ord,  49  Hun  145,  1  Supp.  610 258 

Thompson,  57  App.  Div.  317,  68  Supp.  18 439,  482 

Thompson,   81  Misc.  86 449 

Thompson,  85  Misc.  291,  147  Supp.  157,  167  App.  Div.  356,  153  Supp.  164; 

aff.  217  N.  Y.  609 127,  193,  447,  714 

Thompson,   14  St.  Eep.   487 67 

Thome,  44  App.  Div.  8,  60  Supp.  419;  appeal  dismissed  162  N.  Y.  238 

113,  140,  498 

Thrall,  157  N.  Y.  46,  51  N.  E.  411 374 

Thurber  v.  Townsend,  22  N.  Y.  517 186 

Tiedemann  on  Real  Property,  2d  ed.,  §  237 187 

Tilden  v.  Green,  130  N.  Y.  29,  28  N.  E.  880 232 

Tiffany,  143  N.  Y.  327,  128  Supp.  106;  aff.  202  N.  Y.  550 307,  309 

Tilley,  166  App.  Div.  240,  151  Supp.  79;  aff.  215  N.  Y.  702 193,  714 

Tillinghast,  Louise,  94  Misc.  50,  157  Supp.  382;  aff.  184  App.  Div.  886 275 

Tillinghast,  William  H.,   94  Misc.   76,   157   Supp.   379;    aff.   184   App.   Div. 

886 275,  511 

Title  Guarantee  and  Trust  Co.,   81   Misc.   106,   142   Supp.  1070;    mod.    159 

App.  Div.  803  229 

Tollman,  104  Misc.  696,  172  Supp.  294 709 

Tompkins,  N.  Y.  L.  J.,  August  11,  1913 274 

Tompkins  v.  Fanton,  3  Dem.  4 258 

Tompkins  v.  Leary,  134  App.  Div.  14 446 

Totten,  179  N.  Y.  112,  71  N.  E.  748 Ill 

Townsend,  215  N.  Y.  442 235,  446,  505 

Tracy,  86  Supp.  1024 476 

Tracy,  179  N.  Y.  501,  72  N.  E.  519 254 

Travis,  19  Misc.  393,  44  Supp.  349 489 

Trelease,  49  Misc.  207,  96  Supp.  318;  aff.  115  App.  Div.  645 259 

Tremberger,  N.  Y.  L.  J.,  October  3,  1913 367 

Tucker,  108  Misc.  425,  178  Supp.  446 509 

Tucker,  27  Misc.  616,  59  Supp.  699 274 

Tuigg,  15  Supp.  548,  2>  Connoly  633 369 

Turner,  82  Misc.  25,  143  Supp.  692 447 

Tuttle,  N.  Y.  L.  J.,  June  9,  1914 382 

Twenty-Third  Street  Baptist  Church,  117  N.  Y.  601,  23  N.  E.  177 106 

Tyson,  113  Misc.  306,  184  Supp.  398 352,  709 

u 

Ullmann,  137  N.  Y.  403,  33  N.  E.  480 437,  439 

Ulrici,  111  Misc.  55,  182  Supp.  516 352,  445 

Underbill,  20  Supp.  134,  2  Connoly  462 373 

TJnger  v.  Loewi,  116  Misc.  628,  191  Supp.  38 230 

U.  S.  Trust  Co.,  117  App.  Div.  178,  102  Supp.  271;  aff.  189  N.  Y.  500, 

81  N.  E.  1177 Ill 

U.  S.  Trust  Co.  v.  Hart,  150  App.  Div.  413,  135  Supp.  81 ;  aff.  208  N.  Y.  617, 

102  N.  E.  1115  211 

Upjohn,  108  Misc.  495,  178  Supp.  686 700 


TABLE  OF  CASES  CITED  XJ1X 

PAGE 

V 

Valentine,  147  Supp.  231 340 

Valentine,  88  Misc.  397,  150  Supp.  732 471 

Valentine,  M.  A.,  N.  Y.  L.  J.,  June  22,  1915 . .  468 

Valentine,  163  App.  Div.  843,  147  Supp.  1146 342 

Vallance  v.  Bauseh,  28  Barb.  633 187 

Van  Blaricum  v.  Larson,  146  App.  Div.  278,  130  Supp.  925;  aff.  205  N.  Y. 

355 184 

Van  Brocklen  v.  Smeallie,  140  N.  Y.  70,  35  N.  E.  415 350 

Van  Cott,  180  App.  Div.  814,  168  Supp.  95 124,  127,  153 

Vanderbilt,  50  App.  Div.  246,  63  Supp.  1079;  aff.  163  N.  Y.  597,  57  N.  E. 

1127 173,  178,  197 

Vanderbilt,  68  App.  Div.  27,  74  Supp.  450 426 

Vanderbilt,  172  N.  Y.  69,  64  N.  E.  782 13,  200,  203,  263 

Vanderbilt  (A.  G.),  184  App.  Div.  661 ;  aff.  226  N.  Y.  mem 91 

Vanderbilt  (G.  W.),  104  Misc.  511,  175  Supp.  863 331,  367 

Van  Dermoor,  42  Hun  326 169 

Van  Deusen,  118  Misc.  212 202 

Van  Kleeck,  121  N.  Y.  701,  25  N.  E.  50 54 

Vanneck,  175  App.  Div.  363,  161  Supp.  893 274,  382 

Van  Nest,  N.  Y.  L.  J.,  November  8,  1913;  aff.  168  App.  Div.  mem 503 

Van  Pelt,  63  Misc.  616,  118  Supp.  65 3f9 

Van  Ranken,  110  Misc.  84,  179  Supp.  752 202 

Van  Rensselaer,  N.  Y.  L.  J.,  October  11,  1912 380 

Vassar,  127  N.  Y.  1,  27  N.  E.  394 34,  423 

Vernon  v.  Vernon,  53  N.  Y.  351 184 

Victor,  160  App.  Div.  32,  144  Supp.  918 495 

Vinot,  7  Supp.  517 371 

Vivanti,  63  Misc.  618,  118  Supp.  680;  rev.  138  App.  Div.  281,  122  Supp. 

954;  appeal  dismissed  204  N.  Y.  513 348,  353,  361,  498 

Vivanti  (second  appeal),  146  App.  Div.  942,  131  Supp.  1148;  aff.  206  N.  Y. 

656 76,  183,  304 

Von  Au  v.  Magenheimer,  115  App.  Div.  84,  100  Supp.  659 355,  361 

Von  Au  v.  Magenheimer  (second  appeal),  126  App.  Div.  257,  110  Supp. 

629 366 

Von  Bernuth,  103  Misc.  521,  171  Supp.  764 438,  733 

Von  Post,  35  Misc.  367,  71  Supp.  1039 508 

Voorhees,  165  Supp.  537 709 

Voorhees,  200  App.  Div.  259,  193  Supp.  168 134,  158,  169 

W 

Wadd  v.  Hazelton,  137  N.  Y.  215,  33  N.  E.  143 108 

Wadheim  v.  Hancock,  8  Misc.  506,  28  Supp.  766 186 

Wadsworth,  198  App.  Div.  483 116 

Wadsworth,  166  Supp.  716 446 

Wagener,  143  App.  Div.  286,  128  Supp.  164 29 

Wall,  105  App.  Div.  643,  94  Supp.  1166 309 

Wallace,  71  App.  Div.  284,  75  Supp.  838 440 

Wallace,  149  Supp.  354 350 

Wallace,  28  Misc.  603,  59  Supp.  1084 503 


1  INHERITANCE  TAXATION 

PAGE 

Walworth,  66  App.  Div.  171,  72  Supp.  984 173 

Warden,  94  Misc.  563,  157  Supp.  1111 182 

Warner  v.  Fourth  National  Bank,  115  N.  Y.  251,  22  N.  E.  172 317 

Warren,  62  Misc.  444,  116  Supp.  1034 177 

Washbourne,  190  App.  Div.  940,  180  Supp.  501 ;  aff.  229  N.  Y.  518 734 

Washburn  on  Eeal  Estate,  8th  ed.,  Vol.  I,  p.  529 187 

Watson,  171  N.  Y.  256,  63  N.  E.  1109 231 

Watson,  226  N.  Y.  384,  123  N.  E.  758 7,  40,  47,  732 

Weatherbee,  157  Supp.  652 342 

Weatherbee,  N.  Y.  L.  J.,  November  5,  1913 351 

Webber,  151  App.  Div.  539,  136  Supp.  83 36,  133 

Weed,  10  Misc.  628,  32  Supp.  777 515 

Weeks  v.  Kraft,  147  App.  Div.  403,  132  Supp.  228 436,  437 

Weiler,  122  Supp.  608;  aff.  139  App.  Div.  905,  124  Supp.  1133 182,  191 

Weimann,  179  Supp.  190 380 

Weissbach,  111  Misc.  501,  183  Supp.  771 201,  476 

Wendel,  223  N.  Y.  433,  119  N.  E.  877 178,  274 

Weston  v.  Goodrich,  86  Hun  194,  33  Supp.  382 467 

Westura,  152  N.  Y.  93,  46  N.  E.  315.  .327,  329,  372,  374,  388,  426,  454,  477,  483 

Wheeler,  1  Misc.  450,  22  Supp.  1075 224 

Wheeler,  115  App.  Div.  616,  100  Supp.  1044 221 

Wheelright  v.  Ehodes,  28  Hun  57 381 

White,  116  App.  Div.  183 448 

White,  118  App.  Div.  169,  103  Supp.  688 231,  232,  240 

White,  208  N.  Y.  64,  101  N.  E.  793 13,  30,  200,  261,  727 

Whitewright,  87  Misc.  34,  89  Misc.  97,  151  Supp.  241 437,  443 

Whiting,  150  N.  Y.  27,  44  N.  E.  715 208,  305 

Whiting,  69  Misc.  526,  127  Supp.  960 ;  aff.  200  N.  Y.  520 448 

Wilbour,  107  Misc.  315,  176  Supp.  228 240 

Wilcox,   118  Supp.  254 245,  505 

Wille,  111  Misc.  61,  182  Supp.  366 201,  734 

Williams,  31  App.  Div.  617,  52  Supp.  710 384 

Williams,  N.  Y.  L.  J.,  October  2,  1914 379 

Williams  v.  Guile,  117  N.  Y.  343,  22  N.  E.  1071 116 

Williams  v.  Whedon,  109  N.  Y.  333,  16  N.  E.  365 347,  385 

WiUets,  119  App.  Div.  119,  100  Supp.  850,  104  Supp.  1150;  aff.  190  N.  Y. 

527,  83  N.  E.  1134 332,  501 

Willmer,   75  Misc.  62,   134  Supp.  686;   aff.  153  App.   Div.   804,   138   Supp. 

649 316,  342 

Wing,    190    Supp.    908 134 

Winters,  21  Misc.  552,  48  Supp.  1097 440 

Winthrop,  164  App.  Div.  898,  148  Supp.  1151;  aff.  214  N.  Y.  712 228 

Wintjen,  99  Misc.  471,  165  Supp.  927 198 

Wise,  84  Misc.  663,  146  Supp.  789;  rev.  165  App.  Div.  420,  150  Supp.  782. ..  214 

Wittmann,  112  Misc.  168,  182  Supp.  535 375 

Wolcott,  94  Misc.  73,  157  Supp.  268 303 

Wolfe,  66  Hun  389,  21  Supp.  515 67 

Wolfe,  137  N.  Y.  205,  33  N.  E.  156 441,  455,  475 

Wolfe,  23  Misc.  439,  52  Supp.  415 238 

Wolfe,  89  App.  Div.  349,  85  Supp.  949;  aff.  179  N.  Y.  599,  72  N.  E.  1152. . 

31,  95,  245 


TABLE  OF  CASES  CITED  jj 

PAGE 

Wood,  91  App.  Div.  3,  86  Supp.  269 512 

Wood,  68  Misc.  267,  123  Supp.  574 243 

Wood,  40  Misc.  155,  81  Supp.  511 .369 

Woolsey,  N.  Y.  L.  J.,  June  5,  1915 239 

Woolsey,  19  Abb.  N.  C.  232 226 

Wormser,  36  Misc.  434,  73  Supp.  748 371 

Wormser,  51  App.  Div.  441,  64  Supp.  897 350,  476,  510 

Wormser,  102  Misc.  501,  169  Supp.  206 193 

Wright,  89  Misc.  108,  151  Supp.  378 497 

Wright,  214  N.  Y.  714,  108  N.  E.  1112 67,  68,  265,  313 

Wunsch,  N.  Y.  L.  J.,  January  24,  1913 469 

Y 

Yerkes,  N.  Y.  L.  J.,  December  5,  1912 386 

Yung  v.  Blake,  163  App.  Div.  501,  148  Supp.  557 186 

z 

Zborowski,  84  Misc.  342,  145  Supp.  1101;  rev.  213  N.  Y.  109 237,  256,  264 

267,  474 

Zefita,  167  N.  Y.  280,  60  N.  E.  598 249,  324,  330 

Ziegler,  168  App.  Div.  735,  154  Supp.  652 ;  aff.  218  N.  Y.  544 382 

Zimmerman,  110  Misc.  295,  180  Supp.  508 734 

Zitlsperger,  170  App.  Div.  615,  156  Supp.  571 270 

Zortlein  v.  Bram  et  al.,  100  N.  Y.  12,  2  N.  E.  388 190 


ARKANSAS 

Clarkson,  125  Ark.  381,  188  S.  W.  834 312 

McDaniel  v.  Byrkett,  120  Ark.  295,  179  S.  W.  491 182 

McDaniel  v.  Hearn,  120  Ark.  288,  179  S.  W.  337 227 

State  v.  Bolwinn's  Estate,  141  Ark.  481,  217  S.  W.  464 492 

State  v.  Branch,  132  Ark.  138,  200  S.  W.  809 442 

State  v.  Handline,  100  Ark.  175,  139  S.  W.  1112 9 

State  v.  Lane,  134  Ark.  71,  203  S.  W.  17 182 

State  ex  rel.  McDaniel  v.  Gugan,  124  Ark.  584,  187  S.  W.  918 178 

CALIFORNIA 

Abstract  and  Title  Guarantee  Co.  v.  State,  173  Cal.  691,  161  Pac.  264.. 117,  155 

Becker  v.  Nye,  8  Cal.  Dec.  129 513 

Bowen,  94  Pac.  1055 67 

Brix,  181  Cal.  667,  186  Pac.  135 37,  152 

Bull,  153  Cal.  715,  96  Pac.  366 52 

Campbell's  Estate,  143  Cal.  623,  77  Pac.  634 42 

Chambers  v.  Gallagher,  177  Cal.  704,  171  Pac.  931 70,  507 

Chambers  v.  Gibb,  61  Cal.  Dec.  790,  198  Pae.  1032 125 

Chambers  v.  Gibson,  178  Cal.  416,  173  Pac.  752 508 

Chambers  v.  Hathaway,  200  Pac.  931 211 

Chambers  v.  Lamb,  199  Pac.  33 204 

Chambers  v.  Mumford,  201  Pac.  588 , 209,  323 

Chesney,  1  Cal.  App.  30,  81  Pac.  679 373 


Hi  INHERITANCE  TAXATION 

PAGE 

Connelly  v.  San  Francisco,  164  Cal.  101,  127  Pae.  934 125 

Cross  v.  Superior  Court,  2  Cal.  App.  342,  83  Pac.  815 514 

Damon,  10  Cal.  App.  542,  102  Pac.  684 58 

Felton's  Estate,  176  Cal.  663,  169  Pac.  392 37,  57,  123,  125,  155,  340 

Fiske's  Estate,  178  Cal.  116,  172  Pac.  390 230 

Fair,  128  Cal.  607,  61  Pac.  184 307,  310 

Gurnsey's  Estate,  177  Cal.  211,  170  Pac.  402 198 

Hancock  v.  Boss,  50  Cal.  Dec.  304 447 

Harkness,  54  Cal.  Dec.  602,  54  Cal.  Dec.  810,  169  Pac.  78 500 

Haskins  (Cal.),  149  Pac.  576 440 

Hite,  159  Cal.  392,  113  Pac.  1072 35 

Hodges,  50  Cal.  Dec.  15 24 

Hunt  v.  Wicht,  174  Cal.  205,  162  Pac.  639 37,  57,  125 

Johnson,  139  Cal.  532,  73  Pac.  424 42,     76 

Kelly  v.  Woolsey,  177  Cal.  325,  170  Pac.  837 126 

Kennedy,  157  Cal.  517,  108  Pae.  280 32,  185 

Koyn  's  Estate,  189  Pac.  409 182 

Lander,  6  Cal.  App.  744,  93  Pac.  202 67,  463 

Mahoney,  133  Cal.  180,  65  Pac.  389 76 

Marshall's  Estate,  42  Cal.  App.  683,  184  Pac.  43 221 

McCahill,  171  Cal.  482,  153  Pac.  930 » 307,  310,  464 

McDougald  v.  Boyd,  172  Cal.  753,  159  Pac.  168 156,  193,  194 

McDougald  v.  Low,  164  Cal.  107,  127  Pac.  1027 313,  387 

McDougald  v.  First  Fed.  Trust  Co.  (Cal.),  199  Pac.  11 203 

McDougald  v.  Wulzen,  34  Cal.  App.  31,  166  Pac.  1033 122,  474 

Miller's  Estate,  184  Cal.  674,  195  Pac.  413 376 

Minor's  Estate,    180   Cal.   291 115 

Moffitt,  153  Cal.  359,  95  Pac.  653,  1025 203 

Murphy,  182  Cal.  740,  190  Pac.  46 36,  176 

Nickel  v.  State,  179  Cal.  120,  175  Pac.  641 37,  157,  243 

Pauson's  Estate,  199  Pac.  331 119 

People  v.  Bemis,  189  Pac.  32 19,  376 

Potter's  Estate,  63  Cal.  Dec.  141,  204  Pac.  826 33,  125 

Pryor  v.  Winter,  147  Cal.  554,  82  Pac.  202 71 

Eeynolds,  169  Cal.  600,  147  Pac.  268 114,  119,  154 

Rossi,  49  Cal.  Dec.  60 97 

San  Diego  County  v.  Schwartz,  145  Cal.  49,  78  Pac.  231 69 

Spreckles,  30  Cal.  App.  363,  158  Pac.  549 114,  120 

Stamford,  126  Cal.  112,  54  Pac.  259,  58  Pac.  462 30,  55,  58,  67,  237,  397 

Stewart's  Estate,  174  Cal.  547,  163  Pac.  902. 185 

Trippet  v.  State,  149  Cal.  521,  86  Pac.  1084 62,  67,  397,  440 

Williams,  23  Cal.  App.  285,  137  Pac.  1067 377 

Wilmerding,  117  Cal.  281,  49  Pae.  181 9 

Winchester,  140  Cal.  468,  74  Pac.  10 223 

Wirringer  v.  Morgan,  12  Cal.  App.  26,  106  Pac.  426 58,  222 

Woodard,  153  Cal.  39,  94  Pac.  242 32 

COLORADO 

Brown  v.  Elder,  32  Colo.  527,  77  Pac.  853 10 

County  Court  v.  Watson,  51  Colo.  405,  118  Pac.  974 436 

Germania  Life  Ins.  Co.  v.  Ross-Lewin,  24  Colo.  43,  51  Pac.  488 63 


PAGE 

Magnes,  32  Colo.  527,  77  Pac.  853 16 

Macky,  45  Colo.  316,  101  Pac.  334 16,  IS 

People  v.  Koenig,  37  Colo.  283,  85  Pac.  1129 72 

People  v.  Eice,  40  Colo.  508,  91  Pac.  33 98 

Ee  Inheritance  Tax,  23  Colo.  492,  48  Pac.  535 16 

Walker  v.  People,  64  Colo.  143,  171  Pac.  747 10 

CONNECTICUT 

Bishop  v.  Bishop,  81  Conn.  509,  71  A.  583 252 

Bridgeport  Land  Co.,  77  Conn.  657,  60  A.  662- 422 

Corbin  v.  Amer.  Indus.  Bank,  95  Conn.  50,  110  A.  459 240 

Corbin  v.  Baldwin,  92  Conn.  99,  101  A.  834 10,  17,  53,  235,  376,  377 

Corbin  v.  Townshend,  92  Conn.  501,  103  A.  647 551 

Curtis  v.  Corbin,  93  Conn.  648,  107  A.  17 51 

Gallup,  76  Conn.  617,  57  A.  699 300,  516 

Hopkins,  77  Conn.  644,  60  A.  657 10,  17,  23,  413,  515 

Nettleton,  76  Conn.  235,  56  A.  565 16 

Eobertson  v.  Wilcox,  36  Conn.  426 319 

Sherman  v.  Moore,  89  Conn.  190,  93  A.  241 251 

Warner  v.  Corbin,  91  Conn.  532,  100  A.  354 330 

FLORIDA 

Pace  v.  Pace,  19  Fla.  438 I70 

GEORGIA 

Martin  v.  Pollock,  144  Ga.  605,  87  S.  E.  793 440 

Farkas  v.  Smith,  147  Ga.  573,  94  S.  E.  1016 7,  10,     62 

Parish  v.  Adams,  95  S.  E.  749 515 

IDAHO 

Kohny  v.  Dunbar,  121  Pac.  544 204 

State  v.  Dunlap,  28  Idaho  784,  156  Pac.  1141 315 

ILLINOIS 

Adams  v.  Akelund,  168  111.  632,  48  N.  E.  544 78,     81 

Ayres  v.  Chicago  Title  and  Trust  Co.,  187  111.  42,  58  N.  E.  318 265 

Benton,  234  111.  366,  84  N.  E.  1026 117 

Billings  v.  People,  189  111.  472,  59  N.  E.  798 ;  aff.  188  U.  S.  97 1 

Connell  v.  Crosby,  210  111.  380,  71  N.  E.  350 67,  85,  185,  244,  301,  374,  5 

Davis  v.  Upson,  230  111.  327,  82  N.  E.  824 208 

Graves,  242  111.  212,  89  N.  E.  978 95 

Hanberg  v.  Morgan,  263  111.  616,  105  N.  E.  720 327,  442,  514 

Haward  v.  Pavey,  128  111.  430,  21  N.  E.  503 244 

Kingman's  Estate,  220  111.   563 55 

Kochersperger  v.  Drake,  167  111.  122,  47  N.  E.  321 10 


liV  INHERITANCE   TAXATION 

PAGE 

Lorenz  v.  Weller,  267  HI.  230,  108  N.  E.  306 516 

Merrifield  v.  People,  212  HI.  400,  72  N.  E.  446 114,  115 

National  S.  D.  Co.  v.  Stead,  250  111.  584,  95  N.  E.  973 30,  410 

North  Trust  Co.  v.  Buck,  263  111.  222,  104  N.  E.  1114 22 

Oakman  v.  Small,  282  111.  360,  118  N.  E.  775 72,  219,  314,  460,  518 

People  v.  Baldwin,  287  111.  87 241,  519 

People  v.  Ballans,  294  111.  551,  128  N.  E.  542 372,  376 

People  v.  Bauder,  271  HI.  446,  111  N.  E.  598 85 

People  v.  Blair,  276  111.  623,  115  N.  E.  28 314,  322 

People  v.  Burkhalter,  247  111.  600,  93  N.  E.  379 119 

People  v.  Byrd,  253  111.  223 266 

People  v.  Camp,  286  111.  511 266 

People  v.  Carpenter,  264  111.  400,  106  N.  E.  302 62 

People  v.  Cuyler,  276  111.  72,  114  N.  E.  494 314 

People  v.  Banks,  289  111.  542 118 

People  v.  Dennett,  276  HI.  43,  114  N.  E.  493 314 

People  v.  Donohue,  276  111.  88,  114  N.  E.  513 ; 266 

People  v.  Field,  248  HI.  147 92,  185 

People  v.  Forsyth,  273  HI.  141,  112  N.  E.  378 185 

People  v.  Freese,  267  111.  164,  107  N.  E.  857 256 

People  v.  Gerlaugh  (111.),  134  N.  E.  175 266 

People  v.  Griffith,  245  111.  532,  92  N.  E.  313 50,  219,  311,  313,  315 

People  v.  Kellogg,  268  111.  489,  109  N.  E.  304 237,  300,  443 

People  v.  Kelly,  218  111.  509,  75  N.  E.  1038 116,  131 

People  v.  Lefens,  269  111.  472,  109  N.  E.  965 449 

People  v.  Lowenstein,  284  111.  126 263,  266 

People  v.  McCormick,  208  111.  437,  70  N.  E.  350 55,  252 

People  v.  Moir,  207  111.  180,  69  N.  E.  905 209,  211 

People  v.  Nelms,  241  111.  571,  89  N.  E.  683 185 

People  v.  Northern  Trust  Co.,  266  111.  139,  107  N.  E.  190 493 

People  v.  Northern  Trust  Co.,  289  111.  475,  124  N.  E.  662 62,  134 

People  v.  Orendorf,  262  111.  245,  104  N.  E.  656 142 

People  v.  Passfield,  284  111.  450,  120  N.  E.  286 376 

People  v.  Penniston,  262  111.  191 337 

People  v.  Phelps,  78  111.  147 170 

People  v.  Porter,  287  111.  401,  123  N.  E.  59 120 

People  v.  Raymond,  188  111.  454,  59  N.  E.  7 512 

People  v.  Richardson,  269  111.  275,  109  N.  E.  1033 202 

People  v.  Schaefer,  266  HI.  334,  107  N.  E.  617 247 

People  v.  Shaffer,  291  111.  142,  125  N.  E.  887 135,  448 

People  v.  Sholem,  244  111.  502,  91  N.  E.  704 327,  413 

People  v.  Starring,  274  111.  289,  113  N.  E.  627 266,  474 

People  v.  Tatge,  267  111.  634 371 

People  v.  Taverner,  300  111.  373,  133  N.  E.  211 120 

People  v.  Union  Trust  Co.,  255  111.  168,  99  N.  E.  377 75,  92,  515 

People  v.  Western  Seaman's  Society,  87  111.  246 229 

Provident  Hospital  v.  People,  198  111.  495,  64  N.  E.  1031 54,     67 

Rosenthal  v.  People,  211  HI.  306,  71  N.  E.  1121 115,  118 

Speed,  216  111.  23,  74  N.  E.  806;  aff.  203  U.  S.  553,  27  S.  Ct.  Rep.  171 229 

Ullmann,  263  111.  528,  105  N.  E.  292 50 

Walker  v.  People,  192  111.  106,  61  N.  E.  489 337,  338 


TABLE  OF  CASES  CITED  Jv 

INDIANA  PAGE 

Conway's  Estate,  120  N.  E.  717 10,  51,  115 

Crittenberger  v.  State,  62  Ind.  App.  151,  114  N.  E.  225 492 

Crittenberger  v.  State  Savings  and  Trust  Co.,  189  Ind.  411,  127  N.  E.  552..  10,  -40 

Nation  v.  Green,  188  Ind.  697,  123  N.  E.  163 242,  516 

Nye  v.  Grand  Lodge  A.  O.  U.  W.,  9  Ind.  App.  131,  36  N.  E.  429 160 

State  v.  Calumet  Trust  and  Savings  Bank,  125  N.  E.  200 19,  376 

State  v.  Smith,  158  Ind.  543 21 

Wilson  v.  Donaldson,  117  Ind.  356,  20  N.  E.  250 71 

IOWA 

Adams,  167  la.  382,  149  N.  W.  531 312 

Anderson,  166  la.  617,  147  N.  W.  1078 ;  aff.  245  U.  S.  170 78 

Bell,  150  la.  725,  130  N.  W.  798 140 

Brown,  113  la.  351,  85  N.  W.  617 193 

Brown  v.  Daly,  172  la.  379,  154  N.  W.  602 78 

Brown  v.  Guilford,  181  la.  897,  165  N.  W.  182 127,  132 

Cedar  Rapids  Gas  Co.  v.  Cedar  Rapids,  144  la.  246,  120  N.  W.  966 352 

Crawford,  148  la.  60,  126  N.  W.  774 229 

Culver,  145  la.  1,  123  N.  W.  743 314 

Eddy  v.  Short,  190  la.  1375,  179  N.  W.  818 241 

Ferry  v.  Campbell,  110  la.  290,  81  N.  W.  604 55,  56,  61,  62,  440 

Gill,  79  la.  296,  44  N.  W.  553 78 

Gilbertson  v.  Ballard,  125  la.  420,  101  N.  W.  108 54 

Gilbertson  v.  McAuley,  117  la.  522,  91  N.  W.  788 718 

Gilbertson  v.  Oliver,  129  la.  568,  105  N.  W.  1002 307 

Hamilton  v.  McNeill,  150  la.  470,  129  N.  W.  480 227 

Herriot  v.  Bacon,  110  la.  342,  81  N.  W.  701 718 

Herriot  v.  Potter,  115  la.  645,  89  N.  W.  91 39 

Hewitt  v.  Rankin,  41  la.  39 325 

Hoyt  v.  Keegan,  167  N.  W.  521 321 

Hulett,  121  la.  423,  96  N.  W.  592 248 

Kennedy,  154  la.  460,  135  N.  W.  53 78 

Kite's  Estate,  187  N.  W.  585 27,     64 

Knutson  v.  Vidders,  126  la.  511,  102  N.  W.  433 193 

Lacy  v.  State  Treasurer,  152  la.  477,  132  N.  W.  843 39,     54 

Lamb  v.  Morrow,  140  la.  89,  117  N.  W.  1118 130,  132 

Lewis  v.  Brown,  182  la.  738,  166  N.  W.  99 126 

Marvin  v.  Marvin,  59  la.  699,  13  N.  W.  851 227 

McGhee  v.  State,  105  la.  9,  74  N.  W.  695 10,  330 

McKeown  v.  Brown,  167  la.  489,  149  N.  W.  593 78 

Montgomery  v.  Gilbertson,  134  la.  291,  111  N.  W.  964 39 

Morrow  v.  Depper,  153  la.  341,  133  N.  W.  729 55 

Morrow  v.  Durant,  140  la.  437,  118  N.  W.  781 372 

Morrow  v.  Smith,  145  la.  514,  124  N.  W.  316 239 

Moynihan,  172  la.  571,  151  N.  W.  504 78 

Peterson,  166  N.  W.  168 230 

Peterson's  Estate,  168  la.  511,  151  N.  W.  66 79 

Sanford'a  Estate,  188  la.  833,  175  N.  W.  506 302,  376 

Spangler,  148  la.  333,  127  N.  W.  625 54,  238 


Ivi  INHERITANCE  TAXATION 

PAGE 

State  v.  Goetleman  's  Estate,  185  N.  W.  468 226 

State  ex  rel.  Hoyt  v.  Wyman,  190  la.  1280,  181  N.  W.  472 70 

Stone,  132  la.  136,  109  N.  W.  455 95,  245,  413 

Weaver  v.  State,  110  la.  328,  81  N.  W.  603 305 

Wells,  142  la.  255,  120  N.  W.  713 95 

Welander  v.  Hoyt,  178  la.  972,  176  N.  W.  954 80,  81 

Western  Securities  Co.  v.  Atlee,  168  la.  650,  151  N.  W.  56 326 

Wieting  v.  Morrow,  151  la.  590,  132  N.  W.  193 16 

KANSAS 

Central  Union  Trust  Co.  v.  State,  202  Pac.  853 376 

Life  Ins.  v.  Hill,  51  Kan.  636,  33  Pac.  300 161 

Nelson  v.  Schoonhover,  89  Kan.  779,  132  Pac.  1183 88 

State  v.  A.,  T.  &  St.  F.  B.  Co.,  99  Kan.  831,  163  Pac.  157 71 

State  v.  Davis,  88  Kan.  849,  129  Pac.  1197 25 

State  v.  Dixon,  90  Kan.  594,  135  Pac.  568 507 

State  v.  Gerhard,  99  Kan.  462,  162  Pac.  1149 89,  507 

State  v.  Mollier,  96  Kan.  514,  152  Pac.  771 89,  100,  370 

State  v.  Nagel,  100  Kan.  495,  164  Pac.  1073 507 

State  v.  U.  S.  Trust  Co.  of  N.  Y.,  99  Kan.  841,  163  Pac.  156 172 

KENTUCKY 

Allen  v.  McElroy,  130  Ky.  Ill,  113  S.  W.  66 64 

Barrett  v.  Continental  Realty  Co.,  130  Ky.  109,  114  S.  W.  750 464 

Booth  v.  Commonwealth,  130  Ky.  88,  113  S.  W.  61 11,     39 

Commonwealth  v.  Bingham's  Admr.,  220  S.  W.  727 509 

Commonwealth  v.  Fenley,  189  Ky.  480,  225  S.  W.  154 51,  226 

Commonwealth  v.  Gaulbert,  134  Ky.  157,  119  S.  W.  779 373 

Commonwealth  v.  McCauley's  Executor,  166  Ky.  450,  179  S.  W.  411 34,     36 

Commonwealth  v.  Peebles,  134  Ky.  121,  119  S.  W.  774 24,  220 

Commonwealth  v.  Stoll,  132  Ky.  234,  114  S.  W.  279,  116  S.  W.  687 178 

Connor  v.  Parsley,  192  Ky.  827,  234  S.  W.  932 62 

De  Witt  v.  Comm.,  184  Ky.  437,  212  S.  W.  437 56 

Ewald's  Executor  v.  City  of  Louisville,  189  S.  W.  458 312 

Kenton  Ins.  Co.  v.  Covingtou,  86  Ky.  213 161 

Leavell  v.  Arnold,  131  Ky.  426,  115  S.  W.  232 16,  229 

Mandel  v.  Fidelity  Trust  Co.,  128  Ky.  239,  107  S.  W.  775 242,  245 

Richter  v.  Commonwealth,  180  Ky.  4,  201  S.  W.  456 517 

Sevier's  Exrs.  v.  Commonwealth,  181  Ky.  49,  203  S.  W.  1070 330,  492 

Staiar's  Admr.  v.  Commonwealth,  239  S.  W.  40 209 

Vogt  v.  City  of  Louisville,  173  Ky.  119 230 

Winn  v.  Schenck,  33  Ky.  L.  Rep.  615,  110  S.  W.  827 172 

LOUISIANA 

Abadie,  118  La.  708,  43  So.  306 50 

Amat,  18  La.  Ann.  403 78 

Arnaud  v.  Arnaud,  3  La.  Ann.  337 16 

Baker,  55  So.  714 204 


PAGE 
22 

339 
51 


TABLE  OF  CASES  CITED  Ivii 

Becker,  118  La.  Rep.  1056 

Coleman,  85  So.  43 

Crusius,  19  La.  Ann.  369 

D'Auquin,  9  La.  Ann.  400 

Dean,  33  La.  Ann.  867 *^ 

Fallen,  144  La.  299,  80  So.  544 

Fell,  119  La.  Ann.  1037,  44  So.  879 ™ 

Frain,  141  La.  932',  75  So.  847 fiq      70 

Frigalo,  123  La.  71,  48  So.  652 by>     ™ 

Gheens,  88  So.  253 

Harrow,  140  La.  570,  73  So.  683 

Kohn,  115  La.  71,  38  So.  898 •••••• 

Lew,  115  La.  377,  39  So.  37 ;  aff.  203  U.  S.  543,  27  Sup.  Ct.  174 JJ1 

Marsal,  118  La.  Ann.  212,  42  So.  778 

Page,  89  So.  876 

Pargoud,  13  La.  Ann.  367 

Pizzati,  141  La.  Rep.  645 

Popp,  146  La.  464,  83  So.  765 • 

Prevost,  12  La.  Ann.  577;  aff.  19  How.  1 •  •  •     °" 

Pritchard,  118  La.  Ann.  836,  43  So.  537 4y>     JJ|J 

Quessart  v.  Canouge,  3  La.  560 

Rabasse,  49  La.  Ann.  1405,  22  So.  767 «j 

Ribet,  141  La.  572,  75  So.  414 

Rixner,  18  La.  Ann.  552,  19  So.  597 

Sala,  50  La.  Ann.  1009,  24  So.  674 ^ 

Schaffer,  13  La.  Ann.  113 ' _  ' 

Stauffer,  119  La.  Ann.  66,  43  So.  928 >>  ^* 

Weber,  79  La.  Ann.  1491 •  •  •  •  _' '  '  _'       ' 

Westfeld,  122  La.  Ann.  836,  48  So.  281 49,  50,  57,  3 

MAINE 

OQ 

Lambard,  88  Me.  587,  34  A.  530 • 

Luques,  114  Me.  235,  95  A.  1021 : i"  Yl      4S 

State  v.  Hamlin,  86  Me.  495,  30  A.  76 105 

Whiting  et  al.  v.  Farnsworth,  108  Me.  384 

MARYLAND 

Citizens'  Bank  v.  Sharp,  53  Md.  521 ~_ 

Fisher  v.  State,  106  Md.  104,  66  A.  661 "j 

Gallard  v.  Winans,  111  Md.  434,  74  A.  26 J'jJ 

Helser  v.  State,  128  Md.  228,  97  A.  539 '55    518 

Montague  v.  State,  27  Md.  481 ' 

Owings  v.  State,  22  Md.  116 

Smith  v.  State,  134  Md.  473,  107  A.  255 ^ 

Spencer  v.  Negro  Dennis,  8  Gill  (Md.)  314 y  • 

State  v.  Dalrymple,  70  Md.  294,  17  A.  82 u> 

State  v.  S.  D.  &  T.  Co.  of  Baltimore,  103  A.  435 

Tyson  v.  State,  28  Md.  577 ' „ _      " 

Wingert  v.  State,  125  Md.  536,  94  A.  166 66i>  * 


Iviii  INHERITANCE  TAXATION 

MASSACHUSETTS 

Atty.-Gen.  v.  Barney,  211  Mass.  134,  97  N.  E.  750 63 

Atty.-Gen.  v.  Clark,  222  Mass.  291,  110  N.  E.  299 193,  195 

Atty.-Gen.  v.  Rafferty,  209  Mass.  321,  95  N.  E.  747 .'  463 

Atty.-Gen.  v.  Roche,  219  Mass.  601,  107  N.  E.  667 442 

Atty.-Gen.  v.  Skehill,  217  Mass.  364,  104  N.  E.  748 514 

Atty.-Gen.  v.  Stone,  209  Mass.  186,  95  N.  E.  395 463 

Atty.-Gen.  v.  Thorpe,  119  N.  E.  171 .   175 

Batt  v.  Treasurer,  209  Mass.  459,  95  N.  E.  854 96,  241 

Bliss  v.  Bliss,  221  Mass.  201,  109  N.  E.  148 si,  308 

Bradford  v.  Storey,  189  Mass.  104,  75  N.  E.  256 .'  508 

Bretton  v.  Fox,  100  Mass.  234 64 

Bride  v.  Clark,  161  Mass.  130 76 

Burnham  v.  Treasurer,  212  Mass.  165,  98  N.  E.  603 175,  700 

Callahan  v.  Woodridge,  171  Mass.  595 393 

Clark  v.  Swartzenberg,  162  Mass.  98,  38  N.  E.  17 170 

Clark  v.  Treasurer,  218  Mass.  292,  105  N.  E.  1055 90,  180 

Crocker  v.  Shaw,  174  Mass.  266,  54  N.  E.  549 .'  137 

Gushing  v.  Aylwin,  12  Mete.  169 137 

Custance  v.  Bradshaw,  4  Hare  315 302 

Dana  v.  Dana,  226  Mass.  297,  115  N.  E.  818 18 

Dana  v.  Treasurer,  227  Mass.  562,  116  N.  E.  941 220,  327 

Dow  v.  Abbott,  197  Mass.  283,  84  N.  E.  96 247 

Electric  Welding  Co.  v.  Prince,  200  Mass.  368 76 

Ely  v.  James,  123  Mass.  36 76 

Emmons  v.  Shaw,  171  Mass.  410,  50  N.  E.  1033 172 

Essex  v.  Brooks,  164  Mass.  79,  41  N.  E.  119 239 

First  Universalist  Society  v.  Bradford,  185  Mass.  310,  70  N.  E.  204 238 

Flagg  v.  Bradford,  181  Mass.  315 508 

Frothingham  v.  Shaw,  175  Mass.  59,  55  N.  E.  623 23 

Gardner  v.  Burrill,  225  Mass.  355,  114  N.  E.  617 181 

Greves  v.  Shaw,  173  Mass.  205,  53  N.  E.  372 24,  220,  304,  313,  393 

Hackett  v.  Potter,  135  Mass.  349 76 

Hill  v.  Atty.-Gen.,  118  N.  E.  891 259 

Hill  v.  Treasurer,  227  Mass.  331,  116  N.  E.  509 32 

Hooper  v.  Bradford,  178  Mass.  95,  59  N.  E.  678 302,  393,  413 

Hooper  v.  Shaw,  176  Mass.  190,  57  N.  E.  361 551 

Howe  v.  Howe,  179  Mass.  546,  61  N.  E.  225 260,  302 

Hutchins  v.  State  Bank,  12  Mete.  421 23 

Kingsbury  v.  Chapin,  196  Mass.  533,  82  N.  E.  700 28,  302,  316,  393 

Kinney  v.  Stevens,  207  Mass.  368,  93  N.  E.  586 307 

Kline  v.  Baker,  99  Mass.  254 75,  452 

Little  v.  Newburyport,  210  Mass.  414,  96  N.  E.  1032 239 

Loring  v.  Gardner,  221  Mass.  571,  109  N.  E.  1032 239 

Loring  v.  Gardner,  221  Mass.  571,  109  N.  E.  635 251 

McCurdy  v.  MeCurdy,  197  Mass.  248,  83  N.  E.  881 85,  244,  301,  302,  308 

Martin  v.  Gage,  147  Mass.  204,  17  N.  E.  310 23 

Minot  v.  Treasurer,  207  Mass.  588,  93  N.  E.  973 174,  700 

Minot  v.  Winthrop,  162  Mass.  113,  38  N.  E.  512 12,  44,  136,  229,  252 

Minton  v.  Burrill,  229  Mass.  140,  118  N.  E.  274 278,  518 

Moore  v.  Treasurer,  237  Mass.  254,  129  N.  E.  364 263 


TABLE  OF  CASES  CITED  1JX 

PAGK 

Nashua  Savings  Bank  v.  Abbott,  181  Mass.  531,  63  N.  E.  1058 323 

New  England  Trust  Co.  v.  Abbott,  205  Mass.  279,  91  N.  E.  379 130,  137 

Old  Col.  Trust  Co.  v.  Burrell,  131  N.  E.  321 376,  377 

Palmer  v.  Treasurer,  222  Mass.  263,  110  N.  E.  283 187 

Parkhurst  v.  Burrill,  228  Mass.  196,  117  N.  E.  39 53,  234 

Peabody  v.  Treasurer,  215  Mass.  129,  102  N.  E.  435 304 

Pierce  v.  Stevens,  205  Mass.  219,  91  N.  E.  319 241 

Plunkett  v.  Old  Colony  Trust  Co.,  233  Mass.  471,  124  N.  E.  265 553 

Eichardson  v.  Lane,  126  N.  E.  44 90 

Eice  v.  Bradford,  180  Mass.  545,  63  N.  E.  7 241 

Saltonstall  v.  Sanders,  93  Mass.  446 231 

Sessions  v.  Moseley,  4  Gush.  87 107 

Shoe  &  Leather  Nat'l  Bk.  v.  Wood,  142  Mass.  563 76 

Smith  v.  Sherman,  4  Gush.  408 23 

State  St.  Trust  Co.  v.  Treasurer,  209  Mass.  373,  95  N.  E.  851 115,  156 

Stevens  v.  Bradford,  185  Mass.  439,  70  N.  E.  425 38,     51 

Tyler  v.  Treasurer,  226  Mass.  306,  115  N.  E.  300 63,  165 

Ufford  v.  Spaulding,  156  Mass.  65 76 

Walker  v.  Treasurer,  221  Mass.  600,  109  N.  E.  647 180 

Welch  v.  Burrill,  223  Mass.  87,  111  N.  E.  774 72 

Welch  v.  Treasurer,  217  Mass.  348,  104  N.  E.  726 135 

Whitney  v.  Tax  Commission,  234  Mass.  188,  125  N.  E.  187 481 

MICHIGAN 

Chambee  v.  Durf  ee,  100  Mich.  112,  58  N.  W.  661 16,  58,     66 

Fox,  154  Mich.  5,  171  N.  W.  558 16,     42 

Merriam,  147  Mich.  630,  111  N.  W.  196 308 

Miller  v.  McLaughlin,  141  Mich.  425,  104  N.  W.  777 34,  38,     62 

Port  Huron  v.  Wright,  150  Mich.  279,  114  N.  W.  76 348 

Eogers,  149  Mich.  305,  112  N.  W.  931 308,  321 

Bust's  Estate,  213  Mich.  138,  182  N.  W.  82 305 

Stanton,  142  Mich.  491,  105  N.  W.  1122 25,  303 

Stelwagen  v.  Durfee,  130  Mich.  166,  89  N.  W.  728 718 

Union  Trust  Co.  v.  Durfee,  125  Mich.  487,  84  N.  W.  1101 12,  44,  53,     58 

62,  66,  71,  278,  466 
Weller  v.  Wheelock,  155  Mich.  698,  118  N.  W.  609 242 

MINNESOTA 

Basting  v.  Probate  Court,  101  Minn.  485,  112  N.  W.  878 264,  277 

Basting  v.  Probate  Court,  132  Minn.  104,  155  N.  W.  1077 262,  264,  277 

Boutin's  Estate,  182  N.  W.  990 64 

Drew  v.  Tift,  79  Minn.  175,  81  N.  W.  839 16,  46,  58 

Graff  v.  Probate  Court,  128  Minn.  371,  150  N.  W.  1094 308,  322 

Meldrum's  Estate,  183  N.  W.  835 260 

Murphy's  Estate,  146  Minn.  410,  179  N.  W.  728 185 

Nicolette  Bank  v.  City  Bank,  38  Minn.  85,  35  N.  W.  577 63 

Schulz  v.  Cit.  M.  L.  Ins.  Co.,  59  Minn.  308,  61  N.  W.  331 170 

Smith  v.  Hennepin  Cty.,  139  Minn.  210,  166  N.  W.  125 376 

State  v.  Bazille,  97  Minn.  11,  106  N.  W.  93 12,  51,  5.8 

State  v.  Gorman,  40  Minn.  232,  41  N.  W.  948 58,  64 


}x  INHERITANCE   TAXATION 

PAGi 

State  ex  rel.  Haley  v.  Probate  Court,  100  Minn.  192,  110  N.  W.  865 263 

State  v.  Harvey,  90  Minn.  150,  95  N.  W.  764 58 

State  v.  Hennepin  Cty.,  137  Minn.  238,  163  N.  W.  285 185 

State  v.  Hennepin  Cty.,  166  N.  W.  165 550 

State  v.  Probate  Court,  112  Minn.  279,  128  N.  W.  18 372,  381 

State  v.  Probate  Court,  124  Minn.  508,  145  N.  W.  390 181 

State  v.  Probate  Court,  St.  Louis  County,  136  Minn.  342,  162  N.  W.  459 266 

State  v.  Probate  Court,  138  Minn.  307,  164  N.  W.  365 371 

State  v.  Probate  Court,  Ramsay  County,  145  Minn.  155,  176  N.  W.  493. .  .303,  330 

State  v.  Vance,  97  Minn.  532,  106  N.  W.  98 44,  50 

Thome's  Estate,  145  Minn.  412,  177  N.  W.  638 304 

Thorson's  Estate,  185  N.  W.  508 98 

Tozer  v.  Probate  Court,  102  Minn.  268,  113  N.  W.  888 33,  36,  71 

MISSISSIPPI 

Josselyn  v.  Stone,  28  Miss.  753 507 

MISSOURI 

Cupples'  Estate,  272  Mo.  465,  199  S.  W.  556 12,  223 

Luminous  Medicine  Co.  v.  Leighenhein,  145  Mo.  368,  47  S.  W.  10 65 

Pratt  v.  Miller,  109  Mo.  78,  18  S.  W.  965 63 

State  v.  Henderson,  160  Mo.  190,  60  S.  W.  109 65,  519 

State  v.  Merchants'  Exchange  M.  B.  S.,  72  Mo.  146 160 

State  v.  Switzler,  143  Mo.  287,  45  S.  W.  245 42,  44,  58,     65 

State  ex  rel.  McClintock  v.  Guinotte,  275  Mo.  28,  204  S.  W.  806 7,     13 

Wilhelmi  v.  Wade,  65  Mo.  39 ' 242,  518 

MONTANA 

Blackburn,  51  Mont.  234,  152  Pac.  31 185 

Fratt's  Estate,  199  Pac.  711 263 

Gelsthorpe  v.  Furnell,  20  Mont.  299,  51  Pac.  267 13,  38 

Hinds  v.  Wilcox,  22  Mont.  4,  55  Pac.  355 299,  300 

Satte's  Estate,  59  Mont.  220,  195  Pac.  1033 498 

Stadler  v.  First  National  Bank,  22  Mont.  190,  56  Pac.  Ill 63 

State  v.  District  Court,  41  Mont.  357,  109  Pac.  438 61,  62,  69,  437,  441 

Tuohy,  35  Mont.  431,  90  Pac.  170 22,  36 

NEBRASKA 

Dodge  County  v.  Burns,  131  N.  W.  932 303 

Douglass  County  v.  Kountze,  84  Neb.  506,  121  N.  W.  593 Ill,  130,  313 

Hopeman's  Estate,  167  Neb.  792 492 

Sandford,  90  Neb.  410,  133  N.  W.  870 96 

Sandford,  91  Neb.  752,  137  N.  W.  864 182 

State  v.  Lancaster,  4  Neb.  537 16 

State  v.  Vinsonhaler,  94  Neb.  675,  144  N.  W.  248 13 

Strahan,  93  Neb.  828,  142  N.  W.  678 185 

NEVADA 

Nickel  v.  State,  43  Nev.  12,  185  Pac.  565 37,     72 

Williams,  40  Nev.  241,  161  Pac.  741 204 


TABLE  OF  CASES  CITED  ^Q 

NEW  HAMPSHIRE  PAG^ 

Carter  v.  Craig,  77  N.  H.  200,  90  A.  598 89,  100 

Carter  v.  Eaton,  75  K  H.  560,  78  A.  643 238 

Carter  v.  Whitcomb,  74  N.  H.  482,  69  A.  779 39,  238,  240 

Christie 's  Estate,  101  A.  64 388 

Curry  v.  Spencer,  61  N.  H.  624 16,  58,     66 

Gardner  v.  Carter,  74  N.  H.  507,  69  A.  939 316 

Kingsbury  v.  Bazeley,  75  N.  H.  13,  70  A.  916 85,  252 

Mann  v.  Carter,  74  N.  H.  345,  68  A.  130 13,  26,  62,  321 

Thompson  v.  Kidder,  74  N.  H.  89,  65  A.  392 16,     39 


NEW  JERSEY 

Alfred  University  v.  Hancock,  69  N.  J.  Eq.  470,  46  A.  178 229 

Archibald  v.  Maurath,  92  N.  J.  Eq.  357,  113  A.  6 242,  515 

Astor  v.  State,  25  N.  J.  Eq.  303,  72  A.  78 496 

Bottomley's  Estate,  92  N.  J.  Eq.  202,  111  A.  605 141 

Bugbee  v.  Roebling,  94  N.  J.  L.  438,  111  A.  29 376 

Campbell  v.  Supreme  Conclave  I.  O.  H.,  66  N.  J.  L.  274,  49  A.  550 160 

Carr  v.  Edwards,  84  N.  J.  L.  667,  87  A.  132 25 

Carter  v.  Bugbee,  91  N.  J.  L.  438,  103  A.  818 127,  129 

Christie's  Estate,  101  A.  64 381 

Dixon  v.  Russell,  78  N.  J.  L.  296,  73  A.  51 312 

Eastwood  v.  Russell,  81  N.  J.  L.  672,  81  A.  108 71 

Gopsill,  77  N.  J.  Eq.  215,  77  A.  793 52 

Grossman  v.  Hancock,  58  N.  J.  L.  139,  32  A.  689 58 

Hartmann,  70  N.  J.  Eq.  664,  62  A.  560 13,  26,     36 

Herbert  v.  Mechanics  B.  &  L.  Assn.,  14  N.  J.  Eq.  497. 318 

Hill  v.  Bugbee,  91  N.  J.  L.  451,  103  A.  861 79 

Hoyt  v.  Hancock,  65  N.  J.  Eq.  688,  55  A.  1004 172 

Kountze's  Estate,  115  A.  93 385 

Lawyer's  Title  Co.  v.  Comptroller,  85  N.  J.  Eq.  481,  95  A.  1003 385 

Luydom  v.  Voorhees,  58  N.  J.  Eq.  157,  43  A.  4 248 

McCrea  v.  Yule,  68  N.  J.  L.  465,  53  A.  210 318 

Macmillar  v.  Bugbee,  115  A.  341 346 

Maxwell  v.  Edwards,  89  N.  J.  L.  446,  99  A.  138 21 

Mechanic's  B.  &  L.  v.  Conover,  14  N.  J.  Eq.  2-19;  rev.  17  N.  J.  Eq.  497 318 

Meisel  v.  Merchants  Nat'l  Bk.,  85  N.  J.  L.  253,  88  A.  1067 318 

Neilson  v.  Russell,  76  N.  J.  L.  655,  71  A.  286 18,  62 

Roebling's  Estate,  89  N.  J.  Eq.  163,  104  A.  295 550 

Rothschild,  71  N.  J.  Eq.  210,  63  A.  615;  aff.  72  N.  J.  Eq.  425,  65  A.  1118. ...  100 

Sawter  v.  Schoenthal,  83  N.  J.  L.  499,  83  A.  1004 71 

Security  Trust  Co.  as  Exr.  of  Morse  v.  Edwards,  90  N.  J.  L.  558,  101  A.  384. .  317 

Security  Trust  Co.  v.  Edwards,  90  N.  J.  L.  579,  101  A.  383 271 

Senff  v.  Edwards,  85  N.  J.  L.  67,  88  A.  1026 271 

State  v.  N.  Y.  Meeting  of  Friends,  61  N.  J.  Eq.  620,  48  A.  227 52 

State  v.  Parker,  34  N.  J.  L.  479 161 

Stengel  v.  Edwards,  98  A.  424 266 

Tilford  v.  Dickinson,  79  N.  J.  L.  302,  75  A.  574 54 


INHERITANCE  TAXATION 

PAGE 

Title  Guarantee  &  Trust  Co.  v.  Lohrke,  102  A.  660 253 

Van  Ripper  v.  Heffenheimer,  17  N.  J.  L.  49 58 

Wolff  v.  Comptroller,  90  N.  J.  Eq.  221 127 

NEW  YORK 

For  New  York,  see  page  xxvii 

NOETH  CAROLINA 

Atty.-Gen.  v.  Allen,  59  N.  C.  144 373 

Atty.-Gen.  v.  Pierce,  59  N.  C.  240 300 

Alvany  v.  Powell,  55  N.  C.  51 24 

Baptist  Female  University,  132  N.  C.  476,  44  S.  E.  47 301 

Barringer  v.  Cowan,  55  N.  C.  486 229 

Baughm,  172  N.  C.  170,  90  S.  E.  203 266 

Corporation  Com'rs  v.  Dunn,  174  N.  C.  679,  94  S.  E.  481 185 

Gout  v.  Zimmerman,  5  N.  C.  440 '. 215 

Hunter  v.  Busted,  45  N.  C.  141 515 

Kramer  v.  Old,  119  N.  C.  1,  25  S.  E.  813 353 

Morris,  138  N.  C.  259,  50  S.  E.  682 14,  413 

Pullen  v.  Commissioners,  66  N.  C.  361 16,     64 

State  v.  Brevard,  62  N.  C.  141 518 

State  v.  Brim,  57  N.  C.  300 219,  518 

State  v.  Scales,  172  N.  C.  915,  90  S.  E.  439 51 

NORTH  DAKOTA 

Moody  v.  Hagen,  36  N.  Dak.  471,  162  N.  W.  604 SO 

Strauss  v.  Costello,  29  N.  Dak.  215,  150  N.  W.  8, 1 513 

OHIO 

Bates,  7  Ohio  N.  P.  625 227 

Chamberlain  v.  Stecher,  78  Ohio  St.  271,  85  N.  E.  526 516 

Eury  v.  State,  72  Ohio  St.  448,  74  N.  E.  650 39,     54 

Friend  v.  Levy,  76  Ohio  St.  26,  80  N.  E.  1036 52,  58,     68 

Haggerty  v.  State,  55  Ohio  St.  613,  45  N.  E.  1046 139 

Hooper,  4  Ohio  N.  P.  186 380 

Hostetter  v.  State,  26  Ohio  Circuit  702 54,  56,  62,  440 

Humphreys  v.  State,  70  Ohio  St.  67,  70  N.  E.  957 16,  229 

Ormsby,  7  Ohio  N.  P.  542 226 

Re  Inheritance  Tax,  7  Ohio  N.  P.  547 228 

Speers,  4  Ohio  N.  P.  238 321 

State  v.  Ferris,  53  Ohio  St.  314,  41  N.  E.  579 14,  19,  44,     58 

State  v.  Guilbert,  70  Ohio  St.  229,  71  N.  E.  636 44 

OKLAHOMA 

Harkness'  Estate,  204  Pac.  911 16,     72 

Pitman  v.  State,  158  Pac.  1137 511 


TABLE  OF  CASES  CITED 

OREGON  PAGE 

Clark's  Estate,  100  Ore.  20,  195  Pac.  370 20 

Inman's  Estate,  199  Pac.  615 376 

PENNSYLVANIA 

Allen,  9  Pa.  Co.  Ct.  328 515 

Appeal  of  Commonwealth,  127  Pa.  St.  435,  17  A.  1094 252 

Avery,  34  Pa.  St.  304 182 

Banks,  5  Pa.  Co.  Ct.  614 510 

Belcher,  211  Pa.  St.  615,  61  A.  252 62 

Bittinger,  129  Pa.  St.  338,  18  A.  132 219 

Brown,  208  Pa.  St.  161,  57  A.  360 254 

Butcher's  Estate,  266  Pa.  St.  479,  110  A.  163 221 

Chamberlain,  257  Pa.  St.  113,  101  A.  314 302 

Clapper  v.  Frederick,  199  Pa.  St.  609,  49  A.  218 108 

Close,  260  Pa.  296,  103  A.  822 371 

Coleman,  159  Pa.  St.  231,  70  A.  579 244 

Commonwealth  v.  Ferguson,  137  Pa.  595,  20  A.  870 222 

Commonwealth  v.  Henderson,  172  Pa.  St.  135,  33  A.  368 223 

Commonwealth  v.  Kuhn,  2  Pa.  Co.  Ct.  248 109 

Commonwealth  v.  Nancrede,  32  Pa.  St.  289 ..'...  222 

Commonwealth  v.  Powell,  51  Pa.  St.  438 226 

Commonwealth  v.  Randall,  225  Pa.  St.  197,  73  A.  1104 42 

Commonwealth  v.  Sharpless,  2  Chest  Co.  (Pa.)  246 247 

Commonwealth  v.  Smith,  20  Pa.  St.  100 300 

Conwell,  5  Pa.  Co.  Ct.  368 152 

Cope,  191  Pa.  St.  1,  43  A.  79 16,  57 

Dalrymple,  215  Pa.  St.  367,  64  A.  54 301 

De  Bourbon,  211  Pa.  St.  623,  61  A.  244 252 

De  Witt's  Estate,  266  Pa.  St.  458,  109  A.  699 305 

Dick's  Estate,  116  A.  549 72 

Duffield,  12  Pa.  St.  277 181 

Finnen,  196  Pa.  St.  72,  46  A.  269 36,  250 

Fleck,  35  Pitts.  L.  J.  (Pa.)  67 371 

Frank,  9  Pa.  Co.  Ct.  662 246 

Freedley,  21  Pa.  St.  33 443 

Galbraith  v.  Commonwealth,  14  Pa.  St.  258 55 

Gibbons,  16  Phila.  218,  13  W.  N.  C.  99 99 

Goldstein,  14  W.  N.  C.  176 261 

Grim  v.  School  District,  57  Pa.  St.  433 21 

Hale,  161  Pa.  St.  161,  28  A.  1071 244 

Handley,  181  Pa.  St.  339,  37  A.  587 301,  302,  493 

Hawley,  214  Pa.  St.  525,  63  A.  1021 98 

Hildebrand,  261  Pa.  112,  104  A.  711 185 

Holbrook,  3  Pa.  Co.  Ct.  245 85 

Hood,  21  Pa.  St.  106 219 

Hostetter's  Estate,  261  Pa.  193,  109  A.  920 209 

Howell,  147  Pa.  St.  164,  23  A.  403 718 

Jackson  v.  Myers,  257  Pa.  104,  101  A.  341 374,  367 

Kerr,  159  Pa.  St.  512,  28  A.  354 97 


}xiv  INHERITANCE  TAXATION 

PAGE 

Knight,  261  Pa.  537,  104  A.  765 376,  552 

Lauman,  131  Pa.  St.  346,  18  A.  900 247 

Lea,  194  Pa.  St.  524,  45  A.  337 245 

Lewis,  203  Pa.  St.  211,  52  A.  205 25 

Line,  155  Pa.  St.  378,  26  A.  728 37,  54,  130,  137,  374 

Lucerne  County  v.  Morgan,  263  Pa.  St.  458,  107  A.  17 515 

McCormick,  15  Pa.  Co.  Ct.  621 141 

McDowell  v.  Addams,  51  Pa.  St.  438 52 

McKeen  v.  Northampton  County,  49  Pa.  St.  519 25 

Marr,  240  Pa.  St.  38,  87  A.  621 300 

Mavis,  14  Pa.  Co.  Ct.  171 449 

Moneypenny,  181  Pa.  St.  389,  27  A.  539 443 

Mellon,  114  Pa.  St.  564,  8  A.  183 244 

Miller  v.  Commonwealth,  111  Pa.  St.  321,  2  A.  492 301 

Milliken,  206  Pa.  St.  149,  55  A.  853 249,  324 

Morgan  v.  Reel,  213  Pa.  90,  62  A.  253 222 

Nieman,  131  Pa.  St.  346,  18  A.  90 256 

N.  W.  M.  A.  Assn.  v.  Jones,  154  Pa.  St.  99,  26  A.  253 170 

Orcutt,  97  Pa.  St.  179 307 

Packer,  246  Pa.  St.  133,  92  A.  75 52 

Parke,  3  Pa.  Dist.  196 247 

Pepper,  159  Pa.  St.  508,  28  A.  353 98 

Provident  Trust  Co.  v.  Durham,  212  Pa.  St.  68,  61  A.  636 161 

Quin,  3  Phila.  340 99 

Rambo  's  Estate,  266  Pa.  St.  520,  109  A.  671 301 

Randall,  225  Pa.  St.  197,  73  A.  1109. 221 

Reisch  v.  Commonwealth,  106  Pa.  St.  521 130,  131 

Russ  v.  Commonwealth,  210  Pa.  St.  544,  60  A.  169 71 

Schoenberger,  221  Pa.  St.  112,  70  A.  579 244 

Seibert,  110  Pa.  St.  324,  1  A.  346 130 

Short,  16  Pa.  St.  63 38 

Small,  151  Pa.  St.  1,  25  A.  23 325 

Small,  11  Pa.  Co.  Ct.  1 246 

Smith,  261  Pa.  51,  104  A.  492 474 

Stringer  v.  Commonwealth,  26  Pa.  St.  429 422 

Strode,  52  Pa.  St.  181 16 

Taber,  257  Pa.  St.  205,  101  A.  311 98 

Thomson,  12  Phila.  36 518 

Tyson's  Appeal,  10  Pa.  St.  220 99 

Van  Biel,  257  Pa.  155,  101  A.  834 377 

Vanuxem,  212  Pa.  St.  315,  61  A.  876 301 

Vogle,  1  Pa.  Co.  Ct.  352 166 

Waugh,  78  Pa.  St.  436 149 

VTilliamson,  153  Pa.  St.  508,  26  A.  246 34,  301 

Wright,  38  Pa.  St.  507 Ill 


RHODE  ISLAND 

Hazard  v.  Bliss,  113  A.  469 36,  376 

O'Connor,  21  R,  I.  465,  44  A.  591 63 


TABLE  OF  CASES  CITED  ]xv 

SOUTH   DAKOTA  PAGE 

Kueter's  Estate,  187  N.  W.  625 117 

McKennan,  25  S.  Dak.  369,  126  N.  W.  611 14,  21,  44,     64 

TENNESSEE 

Bailey  v.  Drane,  96  Tenn.  16,  33  S.  W.  573 70 

Bailey  v.  Henry,  143  S.  W.  1124 69,     72 

Crenshaw  v.  Moore,  124  Tenn.  528,  137  S.  W.  924 185 

English  v.  Crenshaw,  120  Tenn.  531,  110  S.  W.  210 95 

Harrison  v.  Johnston,  109  Tenn.  245,  70  S.  W.  414 252 

Knox  v.  Emerson,  123  Tenn.  409,  131  S.  W.  972 18,  51,     84 

McLemore  v.  Raines'  Estate,  131  Tenn.  637,  176  S.  W.  109 263 

Memphis  Trust  Co.  v.  Speed,  114  Tenn.  677,  88  S.  W.  321 387,  389,  391 

Miller  v.  Wolfe,  115  Tenn.  234,  89  S.  W.  398 508 

Shelton  v.  Campbell,  109  Tenn.  690,  72  S.  W.  112 510 

State  v.  Alston,  94  Tenn.  674,  30  S.  W.  750 14,  39,     42 

State  v.  Branham,  228  S.  W.  58 43 

State  v.  Shepardson,  141  Tenn.  474,  212  S.  W.  101 66 

State  v.  Temple,  142  Tenn.  166,  220  S.  W.  1084 228 

Zickler  v.  Union  Bank  and  Trust  Co.,  104  Tenn.  277,  57  S.  W.  341 70 

TEXAS 

State  ex  rel.  Walton  v.  Yturria,  204  S.  W.  315 223 

UTAH 

Bullen,  47  Utah  96,  151  Pac.  533 15,  182 

Dixon  v.  Eiekerts,  26  Utah  215,  72  Pac.  947 39,  718 

Hone 's  Estate,  56  Utah  92,  166  Pae.  990 19 

Larson  v.  McMiller,  56  Utah  84,  189  Pae.  579 15,  51,  395 

State  v.  Simms,  173  Pac.  964 182 

VERMONT 

Curtis,  88  Vt.  445,  92  A.  965 54 

Hickok,  78  Vt.  259,  62  A.  724 52,  229 

Howard,  80  Vt.  489,  68  A.  513 51,  67,  69 

Joslyn,  76  Vt.  88,  56  A.  281 15,  16 

Meadon,  81  Vt.  490,  70  A.  579 81 

VIRGINIA 

Commonwealth  v.  Carter,  126  Va.  469,  102  S.  E.  58 19 

Comm.  v.  Herbert,  127  Va.  291,  103  S.  E.  645 54 

Commonwealth  v.  Patterson,  127  Va.  14,  102  S.  E.  589 19 

Commonwealth  v.  Wellford,  114  Va.  372,  76  S.  E.  917 33 

Cornett's  Exrs.  v.  Commonwealth,  127  Va.  640,  105  S.  E.  230 21,  52 

Eyre  v.  Jacob,  14  Gratt.  422 15,  42 

Fox  v.  Commonwealth,  16  Gratt.  1 70 

Heth  v.  Commonwealth,  126  Va.  493,  102  S.  E.  66 28 

Miller  v.  Commonwealth,  27  Gratt.  110 229 


INHERITANCE   TAXATION 

PAGE 

Peters  v.  Lynchburg,  76  Va.  797 16 

Posey  et  al.  v.  Commonwealth,  123  Va.  551,  96  S.  E.  771 7 

Schoolfield  v.  Lynchburg,  78  Va.  366 16,  21 

Withers  v.  Jones'  Exrs.,  102   S.  E.   68 372: 

Wytheville  v.  Johnson,  108  Va.  589,  62  S.  E.  328 21 

WASHINGTON 

Clark,  37  Wash.  671,  80  Pac.  267 75 

Corbon's  Estate,  107  Wash.  424,  181  Pac.  910 20 

Duncan's  Estate,  113  Wash.  165,  193  Pae.  694 234 

Farrell's  Estate,  112  Wash.  231,  192  Pac.  10 227 

Ferguson's  Estate,  113  Wash.  598,  194  Pac.  771 35 

Foss'  Estate,  114  Wash.  681,  196  Pac.  10 52 

Lambrecht's  Estate,  42  Wash.  645,  192  Pac.  1018 368 

Lotzgesell,  62  Wash.  352,  113  Pac.  1105 518 

Maynes '  Estate,  204  Pac.  596 239 

State  v.  Clark,  30  Wash.  439,  71  Pac.  20 16,     42 

Stixrud,  58  Wash.  339,  109  Pac.  343 78,     80 

Weller 's  Estate,  113  Wash.  699,  194  Pac.  541 227 

White  v.  Tax  Commissioners,  42  Wash.  360,  84  Pac.  831 15,  18,     84 

WISCONSIN 

Allis'  Estate,  174  Wis.  527,  184  N.  W.  381 158 

Beals  v.  State,  139  Wis.  544,  121  N.  W.  347 15,     39 

Black  v.  State,  113  Wis.  205,  89  N.  W.  522 45,  58,     '32 

Carter,  169  Wis.  89,  166  N.  W.  657 385 

Dessert,  154  Wis.  370,  142  N.  W.  647 119 

Ebeling,  169  Wis.  432 123 

Larsen  v.  Johnson,  78  Wis.  300,  47  N.  W.  615 257 

Matthew 's  Estate,  74  Wis.  220,  182  N.  W.  744 372 

Montague  v.  State,  163  Wis.  58,  157  N.  W.  508 175 

Nunnemacher  v.  State,  129  Wis.  190,  108  N.  W.  627 40,  466 

Smith  v.  State,  161  Wis.  588,  155  N.  W.  509 185 

State  v.  Bullen,  143  Wis.  512,  128  N.  W.  109;  aff.  240  U.  S.  625 Ill,  130 

137,  138,  166,  413 

State  v.  Carpenter,  129  Wis.  180,  108  N.  W.  641 449 

State  ex  rel.  Hickox  v.  Widule,  163  N.  W.  648 379 

State  ex  rel.  Kempsmith  v.  Widule,  161  Wis.  389,  154  N.  W.  695 261,  378 

State  v.  Mann,  76  Wis.  469,  45  N.  W.  526 58,  64,     66 

State  v.  Pabst,  139  Wis.  561,  121  N.  W.  351 114,  117,  341,  509 

State  v.  Thompson,  154  Wis.  320,  142  N.  W.  647 116,  119 

State  ex  rel.  Wisconsin  Trust  Co.  v.  Widule,  164  Wis.  56 379 

Stephenson,  171  Wis.  452,  177  N.  W.  579 124,  135,  303 

Week,  169  Wis.  316 376 

WYOMING 

Wyoming  Coal  Co.  v.  State,  15  Wyo.  97,  87  Pac.  377 63 


TABLE  OF  CASES  CITED 

UNITED  STATES 

Ayer  &  Lord  Co.  v.  Kentucky,  202  U.  S.  409,  26  S.  Ct.  Eep.  679 305 

Amoskey  Sv.  Bk.  v.  Purdy,  231  U.  S.  373 47 

American  Sugar  Refining  Co.  v.  Louisiana,  179  U.  S.  89 728 

Baltic  Mining  Co.  v.  Commonwealth,  231  TJ.  S.  68 61 

Baltzer  v.  North  Carolina,  161  U.  S.  240 508 

Beers  v.  Arkansas,  20  How.  527 508 

Beers  v.  Glynn,  211  U.  S.  477 46,  396 

Bell  Gap  E.  E.  Co.  v.  Penn,  134  U.  S.  232 61 

Billings  v.  Illinois,  188  U.  S.  97 185 

Blackstone  v.  Miller,  188  U.  S.  189,  23  S.  Ct.  Eep.  277 6,  26,  27,  209,  322 

Blair  v.  Herold,  150  Fed.  199 ;  aff.  158  Fed.  804 139 

Board  of  Education  v.  Illinois,  203  U.  S.  553,  27  S.  Ct.  Rep.  171 41,  53 

Brown  v.  Kinney,  137  Fed.  1018 541 

Brune  v.  Smith,  Fed.  Gas.  2053 252 

Sullen  v.  Wisconsin,  240  U.  S.  625,  36  S.  Ct.  Rep.  473 22 

Carpenter  v.  Pennsylvania,  17  How.  456 16,  38 

Cahen  v.  Brewster,  203  U.  S.  543,  27  S.  Ct.  Rep.  174 38,  49,  54 

Campbell  v.  California,  200  U.  S.  87,  26  S.  Ct.  Rep.  182 70 

Chanler  v.  Kelsey,  205  U.  S.  466,  27  S.  Ct.  Rep.  550 175,  178 

Clapp  v.  Mason,  94  U.  S.  589 68 

Cornell  Steamboat  Co.  v.  Schmer,  235  U.  S.  549 61 

Dale  v.  Pattison,  234  U.  S.  399,  34  S.  Ct.  Eep.  785 318 

Dana  v.  Dana,  250  U.  S.  220 498 

Darnell  &  Son  Co.  v.  Memphis,  208  U.  S.  113,  28  S.  Ct.  Eep.  413 545 

Delaware  E.  E.  Tax  Cases,  18  Wall.  206 61 

Des  Moines  Gas  Co.  v.  Des  Moines,  199  Fed.  204 356 

Duus  v.  Brown,  245  U.  S.  176,  38  S.  Ct.  Eep.  Ill 79,  81 

Eidman  v.  Martinez,  184  U.  S.  578,  22  S.  Ct.  Eep.  515 50 

Flint  v.  Stone  Tracy  Co.,  220  U.  S.  107 59,  61 

Frederickson  v.  Louisiana,  64  U.  S.  445,  16  Law  Ed.  577 78 

Frost  v.  Wenie,  157  U.  S.  46 69 

Foreign  Held  Bonds,  15  Wall.  300 306 

Oeofry  v.  Riggs,  133  TJ.  S.  258,  10  S.  Ct.  Rep.  295 78 

Oreiner  v.  Lewellyn,  66  Law  Ed.  381,  —  U.  S.  — 21,  548 

Hamilton  Co.  v.  Mass,  6  Wall.  632 60 

Hamilton  v.  Rathbone,  175  U.  S.  414 299 

Hanley  v.  Kansas  City  Ry.  Co.,  187  U.  S.  617 61 

Hatch  v.  Reardon,  204  U.  S.  152 49 

Hawley  v.  Maiden,  232  U.  S.  1,  34  S.  Ct.  Rep.  201 312 

Heberton  v.  McClain,  135  Fed.  226 541 

Henry  v.  United  States,  251  U.  S.  393 262 

Herold  v.  Shanley,  146  Fed.  20,  76  C.  C.  A.  478 265,  541 

Home  Ins.  Co.  v.  New  York,  134  U.  S.  599 60 

Horn  Silver  Mining  Co.  v.  New  York,  143  U.  S.  305 61 

Kahen  v.  Herold,  147  Fed.  575;   aff.  86  C.  C.  A.   598,   159   Fed.  608,   163 

Fed.  947  505 

Keeney  v.  New  York,  222  U.  S.  525,  32  S.  Ct.  Eep.  105 36,  60,  61,  130,  179 

Kerr  v.  Goldsborough,  150  Fed.  289,  80  C.  C.  A.  177 222,  223 

Kerz  v.  Woodman,  218  U.  S.  205,  30  S.  Ct.  Eep.  631 71 

King  V.  Eidman,  128  Fed.  815 22G 


Ixviii  INHERITANCE  TAXATION 

PAGE 

Kintzing  v.  Hutchinson,  Fed.  Gas.  7834 323 

Kirtland  v.  Hotehkiss,  100  U.  S.  491 61 

Knowlton  v.  Moore,  178  U.  S.  41,  20  S.  Ct.  Rep.  747 6,  18,  19,  20,  28,  44,     64 

545,  549,  713 

Knox  v.  McElligott,  66  Law  Ed.  468,  —  U.  S.  — 7,  548 

Mager  v.  Grima,  17  How.  490 59 

Maine  v.  Grand  Trunk  Ry.  Co.,  142  U.  S.  217 61 

Magoun  v.  Illinois  Trust  Co.,  170  U.  S.  283,  18  S.  Ct.  Rep.  594. .  .16,  40,  44,     59 

Mason  v.  Sargent,  104  U.  S.  689 68 

Maxwell  v.  Bugbee,  250  U.  S.  525 73,  74,  76,  384 

Meriwether  v.  Garrett,  102  U.  S.  472 73 

Michigan  Central  Ry.  Co.  v.  Powers,  201  U.  S.  245 61 

Moffit  v.  Kelly,  218  U.  S.  400 175 

Moore  v.  Puckgaber,  184  U.  S.  593,  22  S.  Ct.  Rep.  521 213 

Murdock  v.  Ward,  178  U.  S.  139,  20  S.  Ct.  Rep.  775 21 

National  S.  D.  Co.  v.  Stead,  232  U.  S.  58,  34  S.  Ct.  Rep.  209 410 

New  York  Trust  Co.  v.  Lisner,  256  U.  S.  345,  65  Law  Ed.  620 7,  17,  20,  375 

379,  542 

N.  W.  Life  Ins.  Co.  v.  Wisconsin,  247  U.  S.  132 728 

Norton  v.  Selby  County,  118  U.  S.  425,  6  S.  Ct.  Rep.  1121 502 

Orr  v.  Gilman,  183  U.  S.  278,  22  S.  Ct.  Rep.  213 34,  60,  179 

Quid  v.  Washington  Hospital,  95  U.  S.  303 232 

Page  v.  Edmunds,  187  U.  S.  596,  23  S.  Ct.  Rep.  200 323 

Page  v.  Rives,  Fed.  Cas.  No.  10,666,  1  Hughes  287 98 

Peterson  v.  Iowa,  245  U.  S.  170,  38  S.  Ct.  Rep.  109 79,     80 

Plummer  v.  Coler,  178  U.  S.  115,  20  S.  Ct.  Rep.  829 16,  21,     59 

Prentiss  v.  Eisner,  260  Fed.  589 379,  546 

Prevost  v.  Greneaux,  19  How.  1 80 

Railroad  Co.  v.  Alabama,  101  U.  S.  832 508 

Railroad  Co.  v.  Tennessee,  101  U.  S.  337 508 

Ransom  v.  United  States,  70  Fed.  Cas.  11574 90 

Ritter  v.  Mutual  L.  Ins.  Co.,  169  U.  S.  139,  18  S.  Ct.  Rep.  300 160 

Scholey  v.  Rew,  90  U.  S.  331,  23  Wall.  331 42,  243 

Schwab  v.  Doyle,  66  Law  Ed.  461,  —  U.  S.  — 7,  54,  547 

Scudder  v.  Comptroller,  175  U.  S.  32,  20  S.  Ct.  Rep.  26 496,  499 

Sherman  v.  United  States,  178  U.  S.  150,  20  S.  Ct.  Rep.  779 505 

Simpson  v.  United  States,  252  U.  S.  547 262,  278 

Smith  v.  Reeves,  178  U.  S.  436 508 

Snyder  v.  Brettman,  190  U.  S.  249,  23  S.  Ct.  Rep.  803 16,  208 

Society  for  Savings  v.  Coite,  6  Wall.  594 60 

State  v.  Stall,  17  Wall.  425 69 

Stickney  v.  Kelsey,  209  U.  S.  419,  28  S.  Ct.  Rep.  508 498,  499 

Sturges  v.  United  States,  117  U.  S.  363,  6  S.  Ct.  Rep.  767 68 

Tilt  v.  Kelsey,  207  U.  S.  43,  28  S.  Ct.  Rep.  1 74,  76,  461,  463,  499 

Trust  Co.  v.  Wardell,  66  Law  Ed.  464,  —  U.  S.  — 547 

Union  Mutual  v.  Stevens,  19  Fed.  671 160 

U.  S.  v.  Banks,  17  Fed.  322 152 

U.  S.  v.  Field,  255  U.  S.  257,  41  S.  Ct.  Rep.  256 7,  66,  126,  172,  547 

U.  S.  v.  Hazard,  8  Fed.  380 68 

U.  S.  v.  Kelly,  27  Fed.  542 518 

U.  S.  v.  Kelly,  28  Fed.  845 68 

U.  S.  v.  Lee  Yen  Tai,  185  U.  S.  213 78 


TABLE  OF  CASES  CITED 


Ixix 


PAGE 

U.  S.  v.  Morris,  27  Fed.  341 50 

U.  S.  v.  N.  Y.  Ins.  &  Trust  Co.,  Fed.  Cas.  15873 68 

U.  S.  v.  Perkins,  163  U.  S.  625,  16  S.  Ct.  Eep.  1073 15 

U.  S.  v.  Eankin,  8  Fed.  872 68 

U.  S.  v.  Tappan,  Fed.  Cas.  16431 518 

U.  S.  v.  Trucks,  27  Fed.  541 518 

U.  S.  v.  Tynen,  11  Wall.  88 69 

Vanderbilt  v.  Eidman,  196  U.  S.  480,  25  S.  Ct.  Eep.  331 541 

Wallace  v.  Myers,  38  Fed.  184 21 

Watson  v.  State  Comptroller,  254  U.  S.  122 48 

Welton  v.  Missouri,  91  U.  S.  275 '. 545 

Wheeler  v.  Sohmer,  233  U.  S.  434 307,  309 

Wilcox  v.  Consolidated  Gas  Co.,  212  U.  S.  19,  53  Law  Ed.  382,  29  S.  Ct. 

Eep.    192    352 

Wisconsin  and  M.  Ey.  Co.  v.  Powers,  191  U.  S.  379 60 

Wood  v.  U.  S.,  16  Pet.  342 60 

Yazoo  and  Miss.  Ey.  Co.  v.  Adams,  180  U.  S.  1,  21  S.  Ct.  Eep.  240 53 

ENGLAND 

Atty.  Gen.  v.  Campbell,  L.  E.  5  H.  L.  524,  41  L.  J.  Ch.  611 24 

Atty.  Gen.  v.  Holbrook,  12  Price  407,  3  Y.  &  J.  114 98 

Atty.  Gen.  v.  Hubbuck,  13  Q.  B.  D.  275,  53  L.  J.  Q.  B.  146,  50  L.  T.  Eep. 

N.  S.  374  305 

Austin  v.  Boys,  27  L.  J.  Ch.  714 353 

Blackstone  's  Commentaries  4,  5 

Coggs  v.  Bernard,  2  Ld.  Eaym.  909 346 

Chatfield  v.  Berchtoldt,  L.  E.  7  Ch.  192,  41  L.  J.  Ch.  255,  26  L.  T.  Eep. 

N.  S.  267  24 

Cullen  v.  Atty.  Gen.,  L.  E.  1  H.  L.  190,  144  L.  T.  Eep.  N.  S.  44 246 

Dalhousie  v.  M'Doual,  7  C.  &  F.  817 215 

Dalrymple  v.  Dalrymple,  2  Hogg  Con.  63 214 

De  Hoghton,  1  Ch.  855,  65  L.  J.  Ch.  528,  74  L.  T.  Eep.  N.  S.  297 252 

De  Lancey,  L.  E.  5  Exch.  102,  39  L.  J.  Exch.  76,  22  L.  T.  Eep.  N.  S.  239 301 

Dufour  v.  Ferraro,  Hargrave's  Jurid.  Arg.  304 88 

Edwards  v.  Freeman,  2  P.  Wms.  422 5 

Hyde  v.  Hyde,  1  P.  &  D.  130 214 

Jackson  v.  Forbes,  2  Cromp.  &  J.  382,  1  L.  J.  Exch.  159 219 

Kenlis  v.  Hodgson,  2  Ch.  458,  64  L.  J.  Ch.  585,  72  L.  T.  Eep.  N.  S.  866 301 

Lyte  et  Ux.  v.  Peny,  Easter  Term,  23  Hen.  VIII 107 

Mellersch  v.  Keen,  28  Beav.  453 355,  361 

Morris  v.  Livie,  11  L.  J.  Ch.  172,  1  Y.  &  Coll.  380,  20  Eng.  Ch.  380 98 

Page  v.  Eatliffe,  75  L.  T.  Eep.  371 354,  355,  361 

Scott,  1  Q.  B.  228,  70  L.  J.  Q.  B.  N.  S.  66 249 

Thompson  v.  Advocate  General,  12  01.  &  F.  1 16,  18,  208 

Turner  v.  Martin,  7  DeG.  N.  &  G.  429 89 

Warrander  v.  Warrander,  2  C.  &  F.  488 215 

Wilson  v.  Williams,  29  L.  E.  Ir.  176 352 

Wallace  v.  Atty.  Gen.,  L.  E.  1  Che.  1 50 

Yelverton  v.  Yelverton,  1  Sw.  &  Tr.  574 215 


INHERITANCE   TAXATION 


PART  I-  THE  TAX 

PAGE 

FUNDAMENTAL  PBINCIPLES    3 

1.  Definition 8 

2.  Origin 3 

3.  Theory 4 

4.  Extension   of   Legislative   Power ^ 6 

5.  A  Distinct  Department  of  Jurisprudence 6 

6.  Trend  of  Recent  Authorities 7 

A.  Not  a  Tax  on  Property  but  on  the  Right  to  Transmit  and  Inherit  It 8 

1.  Review  of  the  Authorities 9 

2.  The    Privilege    Taxed 16 

3.  Practical  Applications  of  the  Rule 20 

a.  Not  a  Direct  Tax  to  be  Apportioned  among  the  States 20 

b.  Rules  as  to  Uniformity  and  Equality  Modified 20 

c.  Power  to  Levy  not  Included  in  Municipal  Charters 21 

d.  Property  Otherwise  Exempt  must  be  Included 21 

e.  Construction  of  Contracts 22 

f .  Personality  of  Resident  Taxed,  though  in  Foreign  Jurisdiction ...  22 

g.  Intangibles  of  Non-resident  within  the  Jurisdiction  Taxable 24 

h.  Double   Taxation    25 

B.  The  Transfer  Takes  Place  at  Death 27 

1.  Vested  Right  of  the  State . ! 28 

2.  Renunciation    by    Legatee 31 

3.  Law  in  Force  at  Date  of  Proceedings  Controls  Procedure  Only 32 

4.  Rate  Fixed  at  Death  Cannot  be  Increased 33 

5.  Rights  Vested  Prior  to  Death  Cannot  be  Taxed 33 

6.  Gains  or  Losses  During  Administration 34 

7.  Exceptions    to    the    Rule 36 

a.  By  Nature  of  the  Transfer 36 

b.  By   Statute    37 

C.  Classifications 39 

1.  By    Domicile 41 

2.  By   Relationship 42 

3.  By  Amount  of  Property  Transferred 43 

a.  Where  the  Tax  is  on  the  Right  to  Receive 43 

b.  Where  the  Tax  is  on  the  Right  to  Transfer 44 

4.  By  the  Kind  of  Property  Transferred 45 


2  INHERITANCE     TAXATION 

C.  Classifications — Continued.  PAGE 

a.  Real    and    Personal 45 

b.  Tangibles    and    Intangibles 46 

c.  Other    Property    Distinctions 47 

5.  By  Payment  of  Other  Taxes 49 

6.  By  the  Kind  of  Transfer 50 

D.  General  Rules  of  Construction 50 

1.  Strict    or    Liberal 50 

2.  Exemptions 52 

3.  Retroactive  or  Prospective 54 

4.  Statutes  Held  Invalid 57 

5.  Statutes  Sustained  under  the  Fourteenth  Amendment 59 

6.  Notice  and  a  Hearing 61 

7.  Copied   or   Adopted   Statutes 62 

8.  Practical    Construction 63 

9.  Arbitrary    or   Confiscatory    Rates 69 

10.  Public   Purposes 65 

11.  Amendment 66 

12.  Repeal 67 

a.  Saving  Clauses 67 

b.  By    Implication 69 

c.  Incidental  Effects 70 

13.  Unconstitutional    Statutes 71 

14.  Other    General    Rules 71 

E.  Conflict    of    Laws 72 

1.  Jurisdiction 72 

2.  Devolution  Controlled  by  Foreign  Laws 74 

3.  Full  Faith  and  Credit 74 

4.  Proof  of   Foreign  Laws 75 

5.  As  to   Sister   States 76 

6.  As  against  Aliens  Protected  by  Treaties 77 

7.  Reciprocal    Provisions 81 


PART  I  —  THE  TAX 


PARTI  — THE  TAX 


FUNDAMENTAL  PRINCIPLES. 

1.  Definition. 

While  the  generic  term  "Inheritance  Taxation"  is  used  for 
convenience  it  is  strictly  speaking  inaccurate.  For  example 
the  Federal  Estate  Tax  is  not  a  tax  on  inheritances  but  an 
impost  upon  estates,  levied  before  anything  reaches  the  bene- 
ficiary. Theoretically  this  tax  is  on  the  transfer  from  the 
dead  to  the  living  imposed  upon  the  right  of  the  decedent  to 
transmit  his  property  and  not  upon  the  right  of  the  beneficiary 
'to  receive  it.  As  the  tax  is  on  the  transfer  the  term  used  in 
the  New  York  statute  "Transfer  tax"  would  seem  to  be 
more  apt. 

"A  tax  levied  upon  any  form  of  donative  transfer  from  the 
dead  to  the  living,  or  by  the  living  in  contemplation  of  or 
effective  at  death,"  would  seem  to  cover  the  various  taxes  im- 
posed by  the  states  of  the  Union  and  the  Federal  Government 
under  the  general  subject  of  Inheritance  Taxation. 

2.  Origin. 

Inheritance  Taxation  has  been  one  of  the  sources  of  revenue 
for  the  support  of  government  from  the  most  ancient  times. 
It  is  said  that  it  was  employed  by  the  Ptolomies  in  Egypt, 
and  Gibbon  describes  its  introduction  into  the  Eoman  polity 
by  Augustus.  It  was  levied  for  the  support  of  the  Roman 
army  under  the  name  of  "vicessima  hereditatum  et  lega- 
torum." 

1  Gibbon's  Eome,  133. 

"There  is  evidence  that  Egypt  had  some  sort  of  an  in- 
heritance tax  at  this  time  (654-616  B.  C.),  of  which  the  rate 
was  probably  not  less  than  a  tenth,  and  from  which  even  direct 
heirs  were  not  exempt.  A  papyrus  has  been  found  which 
relates  that  a  certain  Hermias  was  sentenced  to  pay  a  heavy 


4  INHERITANCE    TAXATION 

penalty  for  failing  to  pay  the  tax  on  succeeding  to  his  father 's 
house.  Another  inscription  records  a  sale  of  property  by  an 
old  man  to  his  sons  at  a  nominal  price,  apparently  for  the 
purpose  of  evading  the  inheritance  tax." 

West  on  "Inheritance  Tax,"  p.  11. 

Inheritance  taxes  were  introduced  in  England  in  1780. 
Under  different  names  the  tax  is  now  a  source  of  revenue 
in  almost  every  civilized  country.  It  exists  in  Great 
Britain,  France,  Germany,  Switzerland,  the  Netherlands,  Bel- 
gium, Sweden,  Norway,  Denmark,  Austria-Hungary,  Italy, 
and  nearly  all  of  the  other  European  countries,  and  is  most 
highly  developed  in  the  Australian  states.  In  the  Austra- 
lasian colonies  succession  duties  are  among  the  chief  source 
of  revenue;  and  in  some  cases  heavy  progressive  taxes  have 
been  imposed,  not  from  fiscal  considerations  alone,  but  also 
for  the  purpose  of  breaking  up  large  estates. 

Taxation  of  inheritances  in  this  country  has  progressed  in 
the  last  ten  years  at  a  surprising  ratio.  In  1913  the  total 
amount  of  revenue  derived  from  this  source  by  all  the  states 
was  about  $27,000,000.  At  the  present  writing  the  total 
amount  raised  annually  by  the  states  and  the  Federal  Govern- 
ment from  this  source  averages  between  $160,000,000  and 
$200,000,000.  The  rates  of  the  Federal  Government  on  large 
estates  and  several  of  the  states  run  as  high  as  25%  and  30%. 
Double  and  triple  taxation  is  the  rule  rather  than  the  excep- 
tion and  the  taxes  have  become  extremely  burdensome. 

3.  Theory. 

Fundamentally  the  tax  rests  upon  the  proposition  that  a 
man  cannot  take  with  him  into  the  world  beyond,  the  posses- 
sions he  has  acquired  here.  When  he  dies  those  possessions 
become  the  property  of  the  State  or  of  such  persons  as  the 
laws  of  the  State  may  direct. 

Descent  is  a  creature  of  statute,  and  not  a  natural  right. 
(2  Blackstone's  Com.,  pp.  10,  11,  12,  13.)  At  common  law, 
prior  to  the  Statute  of  Distribution  in  England  (22  and  23 
Car.  11),  descent  of  personal  property  could  hardly  be  recog- 
nized, and  even  after  the  statute  requiring  administration  to 
be  granted,  the  administrator,  after  the  payment  of  the  debts 


PART  I  —  THE  TAX  5 

and  funeral  expenses  of  the  deceased,  was  entitled  to  retain 
to  himself  the  residue  of  his  effects,  the  court  holding  that 
there  was  no  power  to  compel  a  distribution. 

2  Bl.  Com.  515. 

Edwards  v.  Freeman,  2  P.  Wms.  442. 

State  v.  Hamlin,  86  Me.  495 ;  30  A.  76. 

As  Mr.  Blackstone  states  the  theory:  "All  property  must 
therefore  cease  upon  death,  considering  men  as  absolute  indi- 
viduals, and  unconnected  with  civil  society :  for,  then,  by  the 
principles  before  established,  the  next  immediate  occupant 
would  acquire  a  right  in  all  that  the  deceased  possessed.  But 
as,  under  civilized  governments,  which  are  calculated  for  the 
peace  of  mankind,  such  a  constitution  would  be  productive  of 
endless  disturbances,  the  universal  law  of  almost  every  na- 
tion (which  is  a  kind  of  secondary  law  of  nature)  has  either 
given  the  dying  person  a  power  of  continuing  his  property, 
by  disposing  of  his  possessions  by  will ;  or,  in  case  he  neglects 
to  dispose  of  it,  or  is  not  permitted  to  make  any  disposition  at 
all,  the  municipal  law  of  the  country  then  steps  in,  and  declares 
who  shall  be  the  successor,  representative,  or  heir  of  the  de- 
ceased; that  is,  who  alone  shall  have  a  right  to  enter  upon 
this  vacant  possession,  in  order  to  avoid  that  confusion  which 
its  becoming  again  common  would  occasion.  And  further,  in 
case  no  testament  be  permitted  by  the  law,  or  none  be  made, 
and  no  heir  can  be  found  so  qualified  as  the  law  requires,  still, 
to  prevent  the  robust  title  of  occupancy  from  again  taking 
place,  the  doctrine  of  escheats  is  adopted  in  almost  every 
country;  whereby  the  sovereign  of  the  State,  and  those  who 
claim  under  his  authority,  are  the  ultimate  heirs,  and  suc- 
ceed to  those  inheritances  to  which  no  other  title  can  be 
formed. ' ' 

In  civil  law  countries  the  "natural  right"  of  children  to  re- 
ceive an  inheritance  from  their  parents  is  recognized.  By  the 
Code  Napoleon,  gifts  of  property,  whether  by  acts  inter  vivos 
or  by  will,  must  not  exceed  one-half  the  estate  if  the  testator 
leave  but  one  child ;  one-third  if  he  leaves  two  children ;  one- 
fourth  if  he  leaves  three  or  more.  If  he  have  no  children,  but 
leaves  ancestors,  both  in  the  paternal  and  maternal  line,  he 
may  give  away  but  one-half  of  his  property,  and  but  three- 


6  INHERITANCE    TAXATION 

fourths  if  he  have  ancestors  in  but  one  line.  By  the  law  of 
Italy,  one-half  a  testator's  property  must  be  distributed 
equally  among  all  his  children;  the  other  half  he  may  leave 
to  his  eldest  son  or  to  whomsoever  he  pleases.  Similar  restric- 
tions upon  the  power  of  disposition  by  will  are  found  in  the 
codes  of  other  continental  countries,  as  well  as  in  the  State  of 
Louisiana.  Though  the  general  consent  of  the  most  enlight- 
ened nations  has,  from  the  earliest  historical  period,  recog- 
nized a  natural  right  in  children  to  inherit  the  property  of 
their  parents,  there  is  no  legal  principle  to  prevent  the  Legis- 
lature from  taking  away  or  limiting  the  right  of  testamentary 
disposition  or  imposing  such  conditions  upon  its  exercise  as 
it  may  deem  conducive  to  public  good. 

4.  Extension  of  Legislative  Power. 

But  the  power  to  tax  inheritances  does  not  rest  upon  this 
theory  alone.  The  United  States  Government  imposes  them, 
and  yet  Congress  has  no  power  to  control  the  devolution  of 
estates,  nor  to  confiscate  them  upon  the  death  of  the  owner; 
neither  has  one  State  the  power  to  regulate  the  succession  of 
citizens  of  other  States  as  to  property  of  those  citizens  within 
its  jurisdiction,  and  yet  nearly  all  the  States  tax  the  devolu- 
tion of  such  property.  The  right  of  the  United  States  Govern- 
ment to  impose  such  taxes  rests  therefore  upon  its  power  to 
levy  excise  duties  and  imposts. 

Knowlton  v.  Moore,  178  U.  S.  41 ;  20  S.  Ct.  Eep.  747. 

The  tax  imposed  by  the  States  upon  the  property  of  non- 
resident decedents  within  their  jurisdiction  is  founded  upon 
that  jurisdiction,  while  the  devolution  of  the  property  is  regu- 
lated by  the  laws  of  the  State  of  domicile. 

Blackstone  v.  Miller,  188  U.  S.  189;  23  S.  Ct.  Eep.  277. 

5.  A  Distinct  Department  of  Jurisprudence. 

Inheritance  taxation  has  come  to  be  a  distinct  department 
of  jurisprudence.  Although  it  is  purely  statutory,  and  the 
statutes  vary  with  the  forty-nine  jurisdictions  of  the  United 
States  enacting  them,  they  are  based  upon  fundamental  doc- 
trines which  are  peculiar  to  this  subject. 

Both  the  States  and  the  Federal  Government  now  look  to 
this  form  of  taxation  for  a  substantial  revenue,  and  a  text- 


PART  I  — THE  TAX  7 

book  on  the  subject  "kept  up  to  date"  is  essential  to  every 
law  library. 

The  task,  first  undertaken  by  this  work,  is  to  collect  the 
statutes  and  decisions  and  codify  them  into  a  consistent  body 
of  law. 

6.  Trend  of  Recent  Authorities. 

The  legislation  and  litigation  of  the  last  few  years  has 
altered  and  developed  the  law  on  this  subject ;  but  the  general 
trend  has  been  to  sustain  the  power  of  Congress  and  the  State 
Legislatures. 

The  constitutionality  of  the  Federal  Act  has  been  definitely 
sustained  by  the  U.  S.  Supreme  Court. 

New  York  Trust  Co.  v.  Eisner,  256  U.  S.  345 ;  65  Law.  Ed.  620. 

"It  is  well  settled  that  the  power  of  the  State  to  impose 
such  taxes  is  unlimited,"  remarks  the  Supreme  Court  of  Vir- 
ginia sustaining  the  graded  rates  under  the  1916  Statute  of 
that  State.  (Citing  Gleason  &  Otis,  1st  ed.,  p.  3.) 

Posey  et  al.  v.  Commonwealth,  123  Va.  551 ;  96  S.  E.  771. 

The  statutes  of  Missouri  and  Georgia  were  sustained  as 
constitutional. 

State  ex  rel.  v.  Guinotte,  275  Mo.  928 ;  204  S.  W.  806. 
Farkas  v.  Smith,  147  Ga.  563 ;  94  S.  E.  1016. 

On  the  other  hand  there  are  signs  that  the  courts  are  begin- 
ning to  seek  for  limits  to  this  drastic  power.  New  York  has 
held  that  tenancies  by  the  entirety  cannot  be  £axed  retro- 
actively on  the  death  of  the  husband  or  wife. 

Matter  of  Lyon,  233  N.  Y.  208. 

The  U.  S.  Supreme  Court  has  held  that  the  statute  of  1916 
does  not  retroactively  tax  Powers  of  Appointment,  Gifts  in 
Contemplation  of  Death  or  Joint  Tenancies. 

U.  S.  v.  Field,  255  U.  S.  257;  41  S.  Ct.  Rep.  256. 
Schwab  v.  Doyle,  66  Law  Ed.  461 ;  —  U.  S.  — . 
Knox  v.  McElligott,  66  Law  Ed.  468 ;  —  U.  S.  — . 

The  New  York  act  taxing  inheritances  an  additional  5% 
where  personal  taxes  had  not  been  paid  on  securities  during 
life  was  sustained  by  the  Court  of  Appeals  by  a  vote  of  four 
to  three  and  the  statute  was  thereafter  promptly  repealed. 

Matter  of  Watson,  226  N.  Y.  384;  123  N.  E.  758. 


g  INHERITANCE   TAXATION 

TWO  CARDINAL  DOCTRINES. 

Inheritance  taxation  involves  two  cardinal  doctrines  th:.l 
should  be  thoroughly  grasped  at  the  outset.  There  is  hardly 
a  litigation  in  all  the  thousands  of  controversies  that  have 
arisen  over  such  taxation  that  does  not  involve  one  or  both 
of  them. 

They  are: 

(a)  That  the  tax  is  not  a  property  tax;  but  an  excise 
or  impost  upon  the  right  to  transmit  property  at  death; 
or  upon  the  right  to  succeed  to  it  from  the  dead. 

(b)  That  the  tax  accrues  because  of  and  at  the  death 
of  the  owner;  that  the  rights  and  liabilities  of  the  State 
and  the  beneficiaries  date  from  that  event;  and  that  the 
value  of  the  property  transmitted  or  received,  which 
measures  the  value  of  the  inheritance,  is  taken  at  that 
date. 

This  general  rule  is  subject  to  certain  exceptions,  consid- 
ered later,  such  as  deeds  reserving  a  life  use,  without  power  of 
revocation,  and  gifts  in  contemplation  of  death. 

A.— NOT  A  TAX  ON  PROPERTY  BUT  ON  THE  RIGHT  TO 
TRANSMIT  AND  INHERIT  IT. 

If  an  inheritance  tax  is  construed  as  a  tax  upon  the  prop- 
erty of  a  decedent,  such  a  tax  necessarily  violates  the  uni- 
versal constitutional  requirements  that  taxation  shall  be  equal 
in  its  burdens  and  uniform  in  its  application. 

No  just  property  tax  could  be  levied  that  was  unequal  and 
not  uniform. 

No  just  inheritance  tax  could  be  imposed  that  did  not  make 
exemptions  to  the  widow  and  the  orphan  or  that  taxed  their 
patrimony  equally  with  the  succession  of  distant  relatives  and 
strangers. 

An  annual  tax  levy  that  assessed  Farmer  Jones,  on  one  side 
of  the  street,  at  2%,  and  Farmer  Eobinson,  on  the  other  side 
of  the  street,  at  5%  of  the  value  of  their  respective  farms, 
would  obviously  be  unjust,  tyrannical,  oppressive  and  intoler- 
able. 

But  if  Farmer  Jones  leaves  his  farm  to  his  widow  and  his 


PART  I  — THE  TAX  9 

son,  and  Farmer  Robinson  devises  his  acres  to  cousins  in 
Norway,  a  tax  on  the  transfer  by  Jones  at  2%  and  on  that  by 
Robinson  at  5%  is  recognized  as  just  and  equitable. 

Moreover,  it  is  generally  thought  that  a  fortunate  youth  who 
inherits  a  sum  sufficient  to  class  him  with  the  "idle  rich" 
should  pay  more,  proportionately,  for  the  privilege  than  the 
son  of  the  poor  man  who  merely  gets  a  fair  start  in  life  as 
the  result  of  his  father's  industry  and  solicitude  and  his 
mother's  life-long  sacrifices  and  economies. 

While  these  considerations  are  applicable  to  the  taxation 
of  inheritances  they  are  fundamentally  obnoxious  to  the  prin- 
ciples of  ordinary  taxation — hence  the  vital  importance  of  the 
initial  proposition  that  such  taxes  are  not  levied  upon  prop- 
erty, but  upon  the  right  to  transmit  and  inherit  it. 

1.  Review  of  the  Authorities. 

The  leading  cases  in  all  the  States  deal  with  the  problem 
and  arrive  at  a  nearly  unanimous  view ;  but  to  apply  it  as  we 
must  throughout  this  treatise  a  review  of  these  authorities 
is  necessary. 

Arkansas. — "Being  a  statute  taxing  privileges  and  not 
property  it  does  not  conflict  with  the  uniformity  provisions. 
It  but  divides  the  value  of  estates  passing  to  certain  classes 
of  persons  into  certain  amounts,  a  reasonable  classification 
for  the  purpose  of  laying  or  levying  a  progressive  inheritance 
tax." 

State  v.  Handline,  100  Ark.  175;  139  S.  W.  1112. 

California. — "The  tax  thus  imposed  is  in  the  nature  of  an 
excise  tax  or  a  tax  upon  the  right  of  succession.  The  right  of 
inheritance  including  the  designation  of  heirs  and  the  pro- 
portions which  the  several  heirs  shall  receive  as  well  as  the 
right  of  testamentary  disposition  are  entirely  matters  of 
statutory  enactment  and  within  the  control  of  the  Legis- 
lature." 

Wilmerding's  Estate,  117  Cal.  281;  49  Pac.  181. 

Colorado. — "As  the  tax  is  not  on  property  but  on  the  right 
of  succession,  the  State  may  tax  privileges,  discriminate  be- 


10  INHERITANCE    TAXATION 

tween  relatives  and  grant  exemptions ;  and  it  is  not  precluded 
from  this  power  by  the  provision  of  the  respective  State  con- 
stitutions regarding  uniformity  of  taxation." 

Brown  v.  Elder,  32  Colo.  527;  77  Pac.  853. 
Walker  v.  People,  64  Colo.  143;  171  Pac.  747. 

Connecticut. — "Our  succession  tax  is  computed  with  refer- 
ence to  the  whole  beneficial  value  of  the  succession  which 
passes  by  force  of  our  law." 

Hopkins  Appeal,  77  Conn.  644;  60  A.  657. 

"The  tax  is  not  on  property,  but  death  duties  are  levied  in 
the  course  of  the  settlement  of  estates  as  an  incident  to  the 
devolution  of  title." 

Corbin  v.  Baldwin,  92  Conn.  99 ;  101  A.  834. 

Georgia. — "It  is  an  excise  on  the  transfer  of  property." 

Farkas  v.  Smith,  147  Ga.  563;  44  S.  E.  1016. 

Illinois. — ' '  The  broad  principle  presented  is  that  the  Legis- 
lature may  create  new  classes  of  property  with  reference  to 
estates  under  which  they  may  regulate  the  right  to  inherit  or 
devise  and  take  under  devise,  and  such  right  existing  such 
classes  may  be  created,  and  as  created  may  be  uniform,  and 
the  assessment  by  valuation  when  declared  to  operate  equally 
on  the  right  of  succession  to  such  classes  is  not  a  violation  of 
the  constitution." 

Kochersperger  v.  Drake,  167  111.  122;  47  N.  E.  321. 

Indiana. — "Strictly  speaking,  an  inheritance  tax  is  not  a 
tax  on  property,  but  on  the  right  of  succession  or  transfer  of 
property  or  some  beneficial  interest  therein." 

Conway's  Estate   (Ind.),  120  N.  E.   717. 

Crittenberger  v.  State  Savings  and  Trust  Co.,  189  Ind.  411,  127  N.  E.  552. 

Iowa. — "It  is  not  a  tax  upon  property  as  that  phrase  is 
ordinarily  understood;  but  a  tax  upon  the  succession,  upon 
the  privilege  of  succeeding  to  the  estate  of  the  decedent." 

McGhee  v.  State,  105  la.  9 ;  74  N.  W.  695. 

Kentucky. — "As  the  privilege  or  right  to  take  property  by 
inheritance  or  devise  is  not  a  natural  or  inherent  right  of  per- 
sons, but  is  a  creation  of  the  law,  it  is  subject  to  regulation 


PART  I  —  THE  TAX  ]_]_ 

by  statute,  and  the  imposition  of  the  tax  as  incident  to  the 
right  is  authorized  under  our  governmental  system  when  not 
expressly  forbidden  by  the  constitution." 

Booth  v.  Commonwealth,  130  Ky.  88 ;  113  S.  W.  61. 

Louisiana. — "It  is  not  a  tax  on  property  but  a  bonus  or 
premium  exacted  by  the  sovereign  on  the  transmission  of  an 
estate,  the  amount  being  measured  by  the  value  of  the 
property. ' ' 

Succession  of  Kohn,  115  La.  71 ;  38  So.  898. 

Maine. — "The  constitution  guarantees  to  the  citizen  the 
right  of  acquiring,  possessing  and  protecting  property,  but  the 
guarantee  ceases  to  operate  at  the  death  of  the  possessor. 
There  is  no  provision  of  our  constitution  or  that  of  the  United 
States  which  secures  the  right  to  any  one  to  contract  or  dis- 
pose of  his  property  after  his  death,  nor  the  right  to  any  one, 
whether  kindred  of  or  not,  to  take  it  by  inheritance.  Descent 
is  a  creature  of  statute  and  not  a  natural  right. ' ' 

State  v.  Hamlin,  86  Me.  495 ;  30  A.  76. 

Maryland. — "The  tax  is  on  the  transmission  of  property.'* 

State  v.  Dalrymple,  70  Md.  294;  17  A.  82. 

Massachusetts. — "To  make  a  distinction  between  collateral 
kindred  or  strangers  in  blood  and  kindred  in  the  direct  line  in 
reference  to  the  assessment  of  such  a  tax,  either  by  exempting 
the  kindred  in  the  direct  line  or  by  imposing  on  collaterals  and 
strangers  a  higher  rate  of  taxation,  has  the  sanction  of  nearly 
all  States  which  have  levied  taxes  of  this  kind.  It  has  a  sanc- 
tion in  reason,  for  the  moral  claim  of  collaterals  and  stran- 
gers is  less  than  that  of  kindred  in  the  direct  line,  and  the 
privilege  is  therefore  greater.  The  tax  imposed  by  this 
statute  is  uniformly  imposed  upon  all  estates  and  all  persons 
within  the  description  contained  in  it,  and  the  tax  is  not  plainly 
and  grossly  oppressive  in  amount. 

"It  is  argued  that  the  excise,  if  upon  the  privilege  of  taking 
property  by  will  or  descent,  should  be  the  same  whenever  the 
privilege  enjoyed  is  the  same  in  kind  and  extent,  whatever 
may  be  the  value  of  the'  estate,  and  that  the  exemptions  should 
relate  to  the  value  of  the  property  received  by  those  who 


12  INHERITANCE   TAXATION 

have  the  privilege  of  receiving  it,  and  not  the  value  of  the 
estate.  But  the  right  or  privilege  taxed  can  perhaps  be 
regarded  either  as  the  right  or  privilege  of  the  owner  of 
property  to  transmit  it  on  his  death,  by  will  or  descent,  to 
certain  persons,  or  as  the  right  or  privilege  of  these  persons 
to  receive  the  property." 

Minot  v.  Winthrop,  162  Mass.  113;  38  N.  E.  512. 

Michigan. — "Respondent's  contention  is  that  it  is  a  tax 
upon  the  transfer  of  property  and  is  based  upon  the  proposition 
that  inheritance  is  not  a  natural  right  but  a  creature  of  the 
statute  and  the  bounty  of  the  public.  The  conclusion  that  this 
statute  imposes  an  ad  valorem  tax  upon  property  can  only 
be  avoided  by  saying  that  it  is  not  a  tax  upon  the  property 
and  that,  therefore,  the  ad  valorem  feature  which  so  far  as 
the  assessment  upon  the  value  is  concerned  is  certainly 
present,  is  wanting  because  it  is  not  an  assessment  upon  the 
value  of  the  property  taxed.  In  short  the  claim  of  the  re- 
spondent is  that  this  is  a  tax  upon  a  privilege,  viz.,  the  privi- 
lege of  succession,  and  that  there  is  a  legal  distinction  between 
a  tax  upon  the  property  itself  assessed  upon  the  basis  of  its 
value  and  a  tax  upon  this  privilege  assessed  upon  the  basis  of 
its  value  which  is  measured  by  that  which  is  the  subject  of 
the  privilege,  viz.,  the  property.  Unless  this  is  a  distinction 
without  a  substantial  difference  the  respondent  is  right." 
After  citing  many  authorities  the  court  concludes : 
"Many  other  authorities  might  be  cited  in  support  of  the 
proposition  that  it  is  a  tax  upon  the  privilege  rather  than 
upon  the  property.  We  are  of  the  opinion  that  the  overwhelm- 
ing weight  of  authority  supports  it." 

Union  Trust  Co.  v.  Probate  Judge,  125  Mich.  487;  84  N.  W.  1101. 

Mirmesota. — "It  is  variously  termed  an  'inheritance  tax,' 
'succession  tax/  'legacy  tax,'  and  'probate  duties,'  but,  what- 
ever it  may  be  termed  it  is  not  a  tax  upon  property ;  but  upon 
the  right  of  succession  thereto." 

State  v.  Bazille,  97  Minn.  11,  19;  106  N.  W.  93. 

Missouri. — "It  is  a  bonus  or  duty  levied  on  the  right  of 
inheritance. ' ' 

Cupples  Estate,  272  Mo.  465;  199  S.  W.  556. 


PART  I  — THE  TAX  13 

"Inheritance  of  property  is  not  a  natural  or  absolute  right 
and  is  not  a  right  which  may  not  be  abolished  by  the  law 
makers. ' ' 

State  ex  rel.  McClintock  v.  Guinotte,  275  Mo.  928 ;  204  S.  W.  806. 

Montana. — '  *  The  burden  of  the  tax  is  not  imposed  upon  the 
property  itself  but  upon  the  privilege  of  acquiring  property 
by  inheritance.  In  nearly  all  the  inheritance  tax  laws  the 
statute  provides  for  an  appraisal  of  the  property  to  be  in- 
herited; but  the  object  of  such  valuation  is  not  to  tax  the 
property  itself.  It  is  to  arrive  at  a  measure  of  the  price  by 
which  the  privilege  of  inheritance  can  be  valued. ' ' 

Gelsthorpe  v.  Furnell,  20  Mont.  299 ;  51  Pac.  267. 

Nebraska. — "It  is  a  tax  upon  the  right  of  succession  to 
property,  that  is  upon  the  right  to  receive  the  property  from 
the  estate  of  the  decedent  and  not  upon  the  property  itself." 

State  v.  Vinsonhaler,  94  Neb.  675;  144  N.  W.  248. 

New  Hampshire. — "Those  who  acquire  title  by  the  opera- 
tion of  our  laws  relating  to  the  estates  of  deceased  persons 
must  take  the  benefits  charged  with  the  burden  imposed  by 
those  laws." 

Mann  v.  Carter,  74  N.  H.  345,  352 ;  68  A.  130. 

New  Jersey. — "The  tax  imposed  is  on  the  right  of  succes- 
sion under  a  will  or  by  devolution  in  case  of  intestacy. ' ' 

Hartmann's  Appeal,  70  N.  J.  Eq.  664;  62  A.  560. 

New  York. — "It  is  a  tax  not  on  property  but  on  succession, 
that  is  to  say  a  tax  on  the  legatee  for  the  privilege  of  succeed- 
ing to  property." 

Matter  of  Gihon,  169  N.  Y.  443 ;  62  N.  E.  561. 

"It  is  in  the  nature  of  an  excise  tax  on  the  right  and  method 
of  transfer. ' ' 

Matter  of  White,  208  N.  Y.  64;  101  N.  E.  793. 

"A  tax  is  a  property  tax  when  imposed  by  reason  of  the 
ownership;  a  transfer  tax  when  imposed  on  the  method  of 
acquisition." 

Matter  of  Vanderbilt,  172  N.  Y.  69;  64  N.  E.  782. 


14  INHERITANCE    TAXATION 

North  Carolina. — "A  succession  tax  is  on  the  right  of  suc- 
cession to  property  and  not  on  the  property  itself.  The  right 
to  take  property  by  devise  or  descent  is  not  one  of  the  natural 
rights  of  man  but  is  a  creature  of  law." 

Morris'  Estate,  138  N.  C.  259;  50  S.  E.  682. 

Ohio. — "As  a  majority  of  the  court  are  of  the  opinion  that 
it  is  not  a  tax  upon  property  but  upon  the  right  to  receive 
property  the  statute  must  as  to  this  point  be  sustained." 

State  v.  Ferris,  53  Ohio  St.  314,  340;  41  N.  E..  579. 

Pennsylvania. — "Conceding  for  argument's  sake  merely 
that  the  Legislature  has  power  under  our  constitution  so  to 
change  the  law  of  descent  and  succession  as  to  give  the  com- 
monwealth a  certain  portion  of  every  decedent's  estate,  or 
otherwise  to  regulate  the  transmission  or  devolution  of  such 
estates,  it  does  not  by  any  means  follow  that  the  direct  in- 
heritance tax  law  under  consideration  is  such  an  act." 

Cope's  Estate,  191  Pa.  St.  1,  23;  43  A.  79. 

South  Dakota. — "Treating  it  as  the  taxation  of  the  privi- 
lege or  right  or  even  more  correctly  the  taxation  of  the  trans- 
mission of  property,  it  is  readily  seen  that  it  becomes  abso- 
lutely immaterial  whether  we  consider  the  transmission  of  or 
succeeding  to  property  an  inherent  right  or  a  statutory  privi- 
lege. A  corporation  acquires  its  right  to  do  business  by  the 
charter  received.  A  natural  person  has  an  inherent  right  to 
do  such  business.  If  the  State  determines  to  tax  the  exercise 
of  such  right,  it  does  so  as  to  both  the  persons  and  the  cor- 
poration, utterly  disregarding  the  nature  or  source  of  the 
right. 

"This  charge  imposed  upon  transmission  of  property  is 
clearly  a  tax  and  has  nothing  to  do  with  and  is  not  at  all 
dependent  for  its  validity  upon  the  right  to  regulate  the  suc- 
cession of  property." 

McKennan's  Estate,  25  S.  D.  369,  377;  126  N.  W.  611. 

Tennessee. — "It  is  a  retention  by  the  State  of  a  part  of  a 
deceased  person's  property  which  the  State  may  take  to  meet 
its  necessities,  and  which  in  certain  cases  it  may  take  in  toto 
as  in  case  of  escheated  property." 

State  v.  Alston,  94  Tenn.  674;  30  S.  W.  750. 


PART  I  — THE  TAX  15 

» 

Utah. — "When,  as  here,  the  tax  is  not  one  which  is  con- 
trolled by  our  constitution  it  is  for  the  Legislature  to  say  to 
what  extent  and  upon  what  property  it  shall  become  opera- 
tive." 

Matter  of  Bullen,  47  Utah,  96 ;  151  Pac.  533. 
Larson  v.  MacMiller,  56  Utah,  84 ;  189  Pac.  579. 

Vermont. — "All  agree  that  this  is  a  tax  upon  the  right  to 
succeed  to  estates  left  vacant  by  death  and  is  imposed  by  the 
sovereignty  regulating  that  right  in  virtue  of  its  authority  to 
enforce  contribution  from  those  who  become  invested  with 
property  by  grace  of  its  power." 

In  re  Joslyn,  76  Vt.  88;  56  A.  281. 

Virginia. — "The  objection  that  the  tax  is  not  levied  upon 
the  heir  or  legatee  but  is  to  be  paid  out  of  the  estate  of  the 
decedent  and,  therefore,  that  it  cannot  be  considered  a  tax 
upon  the  privilege  of  succeeding  to  the  property  is,  I  think, 
more  specious  than  real.  Whether  the  tax  is  paid  by  the 
personal  representative  before  he  turns  over  the  estate  to  the 
party  entitled  or  by  the  latter  after  he  receives  it,  the  effect 
is  the  same.  It  is  in  either  case  a  premium  paid  for  the  right 
enjoyed  and  the  value  of  the  estate  is  exactly  diminished  by 
the  amount  of  the  premium. ' ' 

Eyre  v.  Jacob,  14  Gratt.  422,  429. 

Washington. — "The  act  imposes  a  tax  on  the  right  of  suc- 
cession." 

White  v.  Tax  Commissioners,  42  Wash.  360;  84  Pac.  831. 

Wisconsin. — "It  is  not  a  tax  upon  property  or  upon  prop- 
erty rights  in  any  sense,  but  purely  an  excise  levied  upon  the 
transfer  or  transaction  and  merely  measured  in  amount  by 
the  amount  of  the  property  transferred." 

Beals  v.  State,  139  Wis.  544 ;  121  N.  W.  347. 

United  States. — * '  Thus  the  tax  is  not  upon  the  property  in 
the  ordinary  sense  of  the  word  but  upon  the  right  to  dispose 
of  it,  and  it  is  not  until  it  has  yielded  its  contribution  to  the 
State  that  it  becomes  the  property  of  the  legatee." 

United  States  v.  Perkins,  163  U.  S.  625;  16  8.  Ot.  Rep.  1073. 


16  INHERITANCE    TAXATION 

To  the  same  effect  are: 

Matter  of  Sherwell,  125  N.  Y.  376;  26  N.  E.  464. 

Magoun  v.  111.  Trust  and  Sav.  Bk.,  170  U.  S.  283;  18  S.  Ct.  Eep.  594, 

Plummer  v.  Coler,  178  U.  S.  115;  20  S.  Ct.  Rep.  829. 

Re  Magnes,  32  Colo.  52;  77  Pac.  853. 

Re  Macky,  45  Colo.  316;  101  Pae.  334. 

Wieting  v.  Morrow,  151  la.  590;  132  N.  W.  193. 

Leavel!  v.  Arnold,  131  Ky.  426 ;  115  S.  W.  232. 

Schoolfield  v.  Lynchburg,  78  Va.  366. 

Pullen  v.  Commissioners,  66  N.  C.  361. 

Humphreys  v.  State,  70  Ohio  St.  67 ;  70  N.  E.  957. 

Thompson  v.  Kidder,  74  N.  H.  89;  65  A.  392. 

Tyson  v.  State,  28  Md.  577. 

Drew  v.  Tifft,  79  Minn.  175;  81  N.  W.  839. 

But  if  the  act  is  construed  as  a  property  tax  it  is  void : 

Cope's  Estate,  191  Pa.  St.  1;  43  A.  79. 

Chambee  v.  Durfee,  100  Mich.  112;  58  N.  W.  661. 

Re  Fox,  154  Mich.  5;  117  N.  W.  558. 

It  is  distinct  from  a  legacy  duty. 

Thompson  v.  Advocate  General,  12  Cl.  &  F.  1. 

It  is  not  a  penalty. 

Re  Strode,  52  Pa.  St.  181. 

Nor  a  forfeiture. 

Arnand  v.  Arnand,  3  La.  Ann.  337. 

Carpenter  v.  Pennsylvania,  17  How.  (U.  S.)  456,  462. 

The  Legislature  has  inherent  power  to  impose  inheritance 
taxes : 

Harkness'  Estate  (Okla.),  204  Pac.  911. 

Snyder  v.  Bettman,  190  U.  S.  249;  23  S.  Ct.  Rep.  803. 

Curry  v.  Spencer,  61  N.  H.  624. 

State  v.  Lancaster,  4  Neb.  537. 

Re  Nettleton,  76  Conn.  235;  56  A.  565. 

Re  Joslyn,  76  Vt.  88 ;  56  A.  281. 

Re  Inheritance  Tax,  23  Colo.  492;  48  Pac.  535. 

State  v.  Clark,  30  Wash.  439 ;  71  Pac.  20. 

Peters  v.  Lynchburg,  76  Va.  797. 

2.  The  Privilege  Taxed. 

It  is  obvious  that  the  authorities  are  unanimous  in  declaring 
that  an  inheritance  tax  is  not  and  cannot  be  a  tax  on  property 
without  violating  the  constitutional  principles  of  uniformity 
and  equality.  They  also  agree  that  such  a  tax  is  an  excise  or 


PART  I  — THE  TAX  17 

impost  upon  the  right  or  privilege  of  transmitting  property 
from  the  dead  to  the  living. 

It  is  equally  apparent  that  there  is  some  confusion  or  in- 
accuracy as  to  whether  the  inheritance  tax  imposed  by  a  par- 
ticular statute  is  on  the  right  to  transmit,  the  right  to  receive, 
or  both.  It  is  described  as  a  succession  tax  on  the  right  to 
receive  by  the  courts  of  Colorado,  Connecticut,  Michigan, 
Minnesota,  Montana,  Nebraska,  New  Hampshire,  New  Jersey, 
North  Carolina,  Ohio,  Vermont,  Virginia  and  Washington. 

It  is  referred  to  as  a  bonus,  premium  or  excise  on  the  right 
to  control  the  disposition  of  property  after  death  by  the  courts 
of  Louisiana,  Tennessee  and  Wisconsin;  but  the  statutes 
under  construction  were  distinctly  succession  taxes  on  the 
shares  of  each  beneficiary. 

It  is  described  as  a  tax  on  both  the  right  to  devise  and  the 
right  to  inherit  by  the  leading  cases  in  California,  Illinois, 
Maine,  Massachusetts,  New  York,  and  South  Dakota. 

The  U.  S.  Supreme  Court  has  sustained  the  constitutionality 
of  the  present  Federal  act  on  the  ground  that  it  is  a  tax  on 
the  right  to  transmit  and  not  on  the  right  to  receive.  It  is 
therefore  reasoned  that  the  Federal  tax  comes  out  of  the 
estate  before  it  reaches  the  beneficiaries  and  is  on  the  whole 
estate  without  regard  to  State  taxes. 

New  York  Trust  Co.  v.  Eisner,  256  TJ.  S.  345 ;  65  Law.  Ed.  620. 

In  sound  theory  the  rights  can  scarcely  be  separable,  for,  if 
there  is  a  transfer,  and  the  tax  is  on  that  transfer,  there  must 
be  a  transferrer  and  a  transferee.  No  court  adopting  one 
theory  denies  that  the  other  is  equally  tenable.  Clearly  if  the 
Legislature  has  power  to  tax  the  privilege  of  transmitting  it 
must  also  have  the  power  to  tax  the  privilege  of  receiving  and 
vice  versa. 

These  distinctions,  however,  may  affect  materially  the 
incidence  of  the  tax.  Four  distinct  taxes  are  levied  in  Eng- 
land :  death  duties,  legacy  duties,  succession  duties  and  estate 
duties. 

In  this  country  the  courts  of  Connecticut  alone  seem  to  use 
the  phrase  "  death  duties"  in  describing  inheritance 'taxes. 

Appeal  of  Hopkins,  77  Conn.  644;  60  A.  657. 
Corbin  v.  Baldwin,  92  Conn.  99 ;  101  A.  834. 

2 


18  INHERITANCE    TAXATION 

An  excise  on  the  privilege  of  receiving  property  from  the 
dead  is  held  in  Massachusetts  to  be  included  in  the  term 
"commodity"  as  employed  in  the  constitution  of  that  State. 

Dana  v.  Dana,  226  Mass.  297;  115  N.  E.  818. 

A  tax  on  inheritance  is  held  to  include  succession  by  will  as 
well  as  by  the  intestate  laws. 

Knox  v.  Emerson,  123  Tenn.  409 ;  131  S.  W.  972. 
Ee  White,  42  Wash.  360;  84  Pac.  831. 

A  legacy  tax  would  not  seem  to  include  real  estate;  but  a 
succession  tax  does. 

Ee  Macky,  45  Colo.  316;  102  Pac.  1075. 
Neilson  v.  Eussell,  76  N.  J.  L.  655 ;  71  A.  286. 
Thompson  v.  Advocate  General,  12  Cl.  &  F.  1. 

The  most  important  and  far  reaching  distinction,  however, 
in  the  theory  of  the  tax  is  the  tax  levied  upon  the  estate  of 
the  deceased  because  of  the  power  of  the  State  to  control  the 
disposition  of  the  property  at  death  and  a  tax  upon  the  bene- 
ficiaries based  upon  their  right  to  receive  the  property  con- 
ferred upon  them  by  grace  of  the  taxing  power. 

If  the  tax  is  on  the  right  to  transfer  it  is  on  the  entire 
estate  without  reference  to  the  beneficiaries.  This  is  prac- 
ticable as  long  as  it  is  a  "flat  rate,"  such  as  is  imposed  on  the 
whole  estate  by  the  statutes  of  Rhode  Island  and  was  formerly 
imposed  in  New  York. 

The  difficulty  arises  when  graded  rates  are  imposed  on  the 
right  to  transmit,  viz.,  upon  the  entire  estate,  without  refer- 
ence to  the  beneficiaries.  If  the  estate  is  $1,000,000  and  there 
are  legacies  of  $100,000  to  three  heirs  of  different  degrees  of 
relationship  and  a  residuary  of  $700,000,  and  the  tax  is  on 
the  whole  estate  $50,000,  at  one  rate,  $100,000  at  another  rate 
and  the  whole  is  paid  out  of  the  estate  as  a  debt  the  entire  tax 
falls  on  the  residuary  legatees.  This  has  been  the  interpreta- 
tion placed  upon  the  Federal  act  by  the  New  York  courts. 

Matter  of  Hamlin,  185  App.  Div.  183;  aff.  226  N.  Y.  407. 

On  the  other  hand,  if  the  tax  is  apportioned  among  the 
beneficiaries  a  specific  legatee  will  pay  a  higher  tax  where  the 
estate  is  large  than  will  a  legatee  of  the  same  amount  where 
the  estate  is  small. 

Knowlton  v.  Moore,  178  U.  S.  41;  20  S.  Ct.  Eep.  747. 


PART  I  — THE  TAX  }9 

These  considerations  are  more  fully  discussed  when  we 
review  the  present  Federal  statute. 

The  right  to  transmit,  being  a  single  right,  should  be  uni- 
formly taxed,  without  rates  classified  in  proportion  to  rela- 
tionship to  the  decedent. 

State  v.  Ferris,  53  Ohio  St.  314;  41  N.  E.  579. 
Knowlton  v.  Moore,  178  U.  S.  41,  76;  20  S.  Ct.  Rep.  747. 

The  highest  court  of  Utah  has  sustained  the  statute  of  1915 
which  imposed  a  tax  of  3%  on  the  first  $15,000  and  of  5%  on 
the  balance  of  an  estate  of  $25,000. 

Re  Hone's  Estate,  50  Utah,  92;  166  Pac.  990. 

Since  the  earlier  editions  of  this  work  called  the  attention 
of  the  profession  and  the  courts  to  the  subtle  yet  fundamental 
distinction  between  an  inheritance  tax  on  the  right  to  receive 
and  a  succession  tax  on  the  entire  estate  based  on  the  right  to 
transmit  it  to  the  natural  objects  of  the  decedent's  bounty 
the  matter  has  received  the  attention  of  the  courts  in  several 
important  decisions. 

In  Indiana  the  court  distinguishes  between  the  Federal  and 
the  State  tax  on  the  ground  that  the  State  tax  is  on  the  right 
to  receive  by  the  beneficiary  and  the  Federal  tax  on  the  right 
to  transmit  the  estate.  In  fact,  it  seems  to  be  on  this  theory 
that  the  Federal  courts  have  solved  the  constitutional  diffi- 
culties pointed  out  in  the  earlier  editions  of  this  work. 

State  v.  Calumet  Trust  and  Savings  Bank  (Ind.),  125  N.  E.  200. 

In  California  the  courts  have  made  a  clear  distinction  be- 
tween a  tax  based  on  the  right  to  receive  and  a  tax  imposed 
on  the  right  to  transmit  the  estate. 

People  v.  Bemis  (Gal.),  189  Pac.  32. 

In  Virginia  two  litigations  have  been  determined  on  the 
doctrine  that  the  tax  of  that  State  is  levied  on  the  amount  re- 
ceived by  the  beneficiary  and  not  on  the  entire  estate  trans- 
mitted by  the  decedent. 

Commonwealth  v.  Carter,  126  Va.  469 ;  102  S.  E.  58. 
Commonwealth  v.  Patterson,  127  Va.  14;  102  S.  E.  589. 

In  Washington  the  court  has  held  in  a  recent  case  that  under 
the  inheritance  tax  act  of  that  State  the  tax  is  levied  on  the 


20  INHERITANCE    TAXATION 

right  to  receive  rather  than  on  the  right  to  transmit,  or  on 
the  property  itself;  therefore  it  is  to  be  computed  on  each 
legacy  and  not  on  the  estate  as  a  whole. 

Corbin's  Estate,  107  Wash.  424;  181  Pac.  910. 

In  Oregon  where  the  tax  is  on  the  whole  estate  and  is  then 
apportioned  to  the  legatees  it  is  held  none  the  less  to  be 
imposed  on  the  right  to  receive. 

Clark's  Estate,  100  Ore.  20,  195  Pac.  370. 

And  generally  it  may  be  said  that  most  of  the  State  taxes 
proceed  on  the  theory  that  the  beneficiary  is  taxed  on  the  right 
to  receive  while  the  Federal  estate  tax  is  based  on  the  right 
to  tax  the  privilege  of  transmission. 

New  York  Trust  Co.  v.  Eisner,  256  U.  S.  345;  25  Law.  Ed.  620. 

3.  Practical  Application  of  the  Rule. 

a.  NOT  A  DIRECT  TAX  TO  BE  APPORTIONED  AMONG  THE  STATES. 

The  results  of  the  doctrine  that  inheritance  taxes  are  not 
imposed  upon  property  but  upon  privilege  are  far  reaching, 
as  a  few  of  its  practical  applications  will  illustrate. 

The  Federal  inheritance  tax  of  1898  was  construed  as  an 
excise  or  impost  and  not  a  direct  tax  and  was  not  required 
to  be  apportioned  among  the  States  in  proportion  to  their 
population. 

Knowlton  v.  Moore,  178  U.  S.  41 ;  20  S.  Ct.  Eep.  747. 

The  court  said:  "It  is  apparent  that  if  imposts,  duties  and 
excises  are  controlled  by  the  rule  of  intrinsic  uniformity  the 
methods  usually  employed  at  the  time  of  the  adopting  of  the 
constitution  in  all  countries  in  the  levy  of  such  taxes  would 
have  to  be  abandoned."  And  again — at  page  109,  " Taxes 
imposed  with  reference  to  the  ability  of  the  person  upon  whom 
the  burden  is  placed  to  bear  the  same  have  been  levied  from 
the  foundation  of  the  government. " 

b.  RULES  AS  TO  UNIFORMITY  AND  EQUALITY  ARE  MODIFIED. 

It  is  obvious  that  it  is  impossible  to  enact  any  law  whose 
incidence  shall  at  all  times  be  just  and  perfect. 

2  Kent.  Com.  332. 


PART  I  — THE  TAX  21 

"Perfectly  equal  taxation  will  remain  an  unattainable  good 
as  long  as  laws  and  governments  and  men  are  imperfect." 

Grim  v.  School  District,  57  Pa.  St.  433,  437. 

"In  any  system  of  taxation,  however  wisely  framed,  dis- 
proportionate shares  of  the  public  burden  will  occasionally  be 
thrown  on  some  persons." 

State  v.  Smith,  158  Ind.  543,  549. 

While  this  is  true  as  to  general  taxation  it  is  still  more  diffi- 
cult equitably  to  adjust  the  burdens  of  Inheritance  Taxation 
and  in  imposing  such  taxes  the  Legislature  may  discriminate 
between  classes  of  persons  and  kinds  of  property. 

Maxwell  v.  Edwards,  89  N.  J.  L.  446 ;  99  A.  138. 

c.  POWER  TO  LEVY  NOT  INCLUDED  IN  MUNICIPAL  CHARTERS. 
Authority  to  levy  inheritance  taxes  is  not  included  in  the 

general  power  of  taxation  delegated  to  municipalities  in  their 
charters  and  such  public  corporations  can  only  impose  them 
under  powers  expressly  conferred  by  the  Legislature. 

Sehoolfield  v.  Lynchburg,  78  Va.  366. 
Wytheville  v.  Johnson,  108  Va.  589 ;  62  S.  E.  328. 

d.  PROPERTY  OTHERWISE  EXEMPT  MUST  BE  INCLUDED. 
This  is  so  as  to  United  States  Government  bonds. 

Cornett's  Exrs.  v.  Commonwealth,  127  Va.  640;  105  S.  E.  230. 

Greiner  v.  Lewellyn,  66  Law  Ed.  381;  —  U.  S.  — . 

Succession  of  Levy,  115  La.  Rep.  377;   39  So.  37;   aff.  203  U.  S.  543; 

27  S.  Ct.  Rep.  174. 

Matter  of  Sherman,  153  N.  Y.  1 ;  46  N.  E.  1032. 

People  ex  rel.  U.  S.  A.  P.  P.  Co.  v.  Knight,  174  N.  Y.  475 ;  67  N.  E.  65. 
Plummet  v.  Coler,  178  U.  S.  115;  20  S.  Ct.  Rep.  829. 
Wallace  v.  Myers,  38  Fed.  184. 
Murdock  v.  Ward,  178  U.  S.  139;  20  S.  Ct.  Rep.  775. 

Also  as  to  a  bequest  to  the  United  States  Government. 

Matter  of  Cullom,  76  Hun,  610;   27  Supp.   1105;    aff.   145   N.   Y.   593; 

40  N.  E.  163. 
Matter  of  Merriam,  141  N.  Y.  479;  36  N.  E.  505;   aff.  163  U.  S.  625; 

16  S.  Ct.  Rep.  1073. 

All  property  exempt  by  general  statutes  from  taxation  is 
none  the  less  subject  to  inheritance  taxes  on  its  transfer. 

McKennan's  Estate,  25  S.  Dak.  369;  126  N.  W.  611. 
Matter  of  Kucielski,  144  App.  Div.  100;  128  Supp.  768. 


22  INHERITANCE    TAXATION 

Thus  where  the  State  constitution  limited  the  valuation  of 
mining  claims  to  the  price  paid  therefor  to  the  United  States 
Government  they  must  none  the  less  be  inventoried  at  their 
full  value  for  the  purposes  of  taxing  their  transfer  by 
inheritance. 

Touhy's  Estate,  35  Mont.  431;  90  Pae.  170. 

But  if  a  legacy  is  paid  from  exempt  property  it  is  itself 
exempt. 

Succession  of  Becker,  118  La.  Rep.  1056. 

e.  CONSTRUCTION  OF  CONTRACTS. 

The  rule  often  affects  the  construction  of  contracts.  For 
example,  provisions  in  a  ninety-nine  year  lease  whereby  the 
lessee  is  to  pay  "taxes,  charges  and  assessments,"  do  not 
require  him  to  pay  the  inheritance  tax  imposed  by  reason  of 
the  death  of  the  lessor  because  the  tax  is  on  the  transfer  and 
not  on  the  property. 

North  Trust  Co.  v.  Buck,  263  111.  222;  104  N.  E.  1114. 

f.  PERSONALTY    OF    RESIDENT    TAXED,    THOUGH    IN    FOREIGN 

JURISDICTION. 

Intangible  assets  of  a  resident  decedent,  though  located  in  a 
foreign  jurisdiction,  must  be  included  in  the  valuation  of  his 
estate,  even  though  they  have  been  distributed  elsewhere. 

Bullen  v.  Wisconsin,  240  U.  S.  625;  36  S.  Ct.  Rep.  473. 

A  well-considered  case  in  Massachusetts  thus  explains  the 
rule: 

"But  whatever  the  form  of  the  tax,  the  succession  takes 
place  and  is  governed  by  the  law  of  the  domicile ;  and,  if  the 
actual  situs  is  in  a  foreign  country,  the  courts  of  that  country 
cannot  annul  the  succession  established  by  the  law  of  the 
domicile.  (Dammert  v.  Osborn,  141  N.  Y.  564,  35  N.  E.  1088.) 
In  further  illustration  of  the  extent  to  which  the  law  of  the 
domicile  operates,  it  is  to  be  noted  that  the  domicile  is  re- 
garded as  the  place  of  principal  administration,  and  any  other 
administration  is  ancillary  to  that  granted  there.  Payment 
by  a  foreign  debtor  to  the  domiciliary  administrator  will  be  a 
bar  to  a  suit  brought  by  a"n  ancillary  administrator  subse- 


PART  I  — THE  TAX  23 

quently  appointed.  (Hutchins  v.  State  Bank,  12  Met.  421; 
Martin  v.  Gage,  147  Mass.  204,  17  N.  E.  310.)  And  the 
domiciliary  administrator  has  sufficient  standing  in  the  courts 
of  another  State  to  appeal  from  a  decree  appointing  an  ancil- 
lary administrator.  (Smith  v.  Sherman,  4  Gush.  408.)  More- 
over, it  is  to  be  observed,  if  that  is  material,  that  there  has 
been  no  administration  in  New  York,  that  the  executor  was 
appointed  here,  and  has  taken  possession  of  the  property  by 
virtue  of  such  appointment  and  must  distribute  it  and  account 
for  it  according  to  the  decrees  of  the  courts  of  this  common- 
wealth. To  say,  therefore,  that  the  succession  has  taken 
place  by  virtue  of  the  law  of  New  York  would  be  no  less  a 
fiction  than  the  petitioners  insist  that  the  maxim  mobilia 
sequuntur  personam  is  when  applied  to  matters  of  taxation." 

Frothingham  v.  Shaw,  175  Mass.  59 ;  55  N.  E.  623. 

In  sustaining  the  right  to  tax  personal  property  of  a  resi- 
dent, though  out  of  the  State,  the  Connecticut  court  reasons 
thus: 

"The  same  principle  of  universal  jurisdiction  of  a  State  to 
determine  the  succession  to  and  distribution  of  personal  prop- 
erty situate  within  other  States  recognizes  the  power  and  duty 
of  such  States  to  provide  local  administrations  in  respect  to 
such  property  in  aid  of  the  administration  of  the  domicile. 
And  our  succession  tax  is  computed  with  reference  to  the  value 
of  the  whole  beneficial  succession  which  passes  by  force  of 
our  law  and  payment  of  the  tax  thus  computed  is  required 
from  the  principal  administrator  although  some  portion  may 
be  actually  received  by  a  beneficiary  at  the  hands  of  an  ancil- 
lary administrator." 

Hopkins'  Appeal,  77  Conn.  644,  653;  60  A.  657. 

So,  it  is  held  in  California,  that  personal  property  of  a 
resident  decedent  dying  testate  or  intestate,  located  outside  of 
the  State,  and  which  is  never  brought  into  the  State  for  pur- 
poses of  administration,  is  subject  to  an  inheritance  tax  in 
that  State  under  the  application  of  the  familiar  maxim  mobilia 
personam  sequuntur,  for  by  this  rule  the  right  of  succession 
to  such  property  is  governed  by  the  law  of  the  domicile  and 
not  by  the  law  of  the  locality  of  the  property.  This  rule  is 


24  INHERITANCE    TAXATION 

subject  to  the  limitation  that  there  be  no  rule  to  the  contrary 
in  the  State  where  the  personal  property  is  actually  located. 
But  there  is  no  rule  to  the  contrary  in  Massachusetts.  The 
fact  that  the  State  in  which  the  personal  property  is  dis- 
tributed on  ancillary  administration  also  imposes  an  inheri- 
tance tax  does  not  violate  any  principle  of  constitutional  law 
against  double  taxation. 

Matter  of  Hodges,  50  Cal.  Dec.  15. 

* '  The  fact  that  the  petitioner  was  able  to  obtain  a  transfer 
of  a  large  part  of  the  stock  before  the  will  was  proved  in  this 
commonwealth  does  not  affect  his  duty  under  the  statute  to 
pay  the  tax." 

Greves  v.  Shaw,  173  Mass.  205 ;  53  N.  E.  72. 

On  the  other  hand  the  mere  fact  that  an  executor  of  a  for- 
eign decedent  resides  within  the  State  does  not  make  him 
subject  to  its  laws  in  his  capacity  as  executor  or  render  the 
property  over  which  the  court  of  another  State  has  given  him 
jurisdiction  liable  to  taxation  in  the  State  where  he  resides. 

Commonwealth  v.  Peebles,  134  Ky.  121;  119  S.  W.  774. 

The  court  said : 

"One  may  occupy  the  two  relations,  of  individual  and 
executor ;  and,  as  individual,  he  may  be  subject  to  the  laws  of 
one  State,  and  in  his  official  capacity,  he  may  be  subject  to  the 
laws  of  another  State,  and  he  may,  as  executor,  have  the  legal 
ownership  of  property  over  which  the  courts  of  the  State  in 
which  he  resides  have  no  jurisdiction."  So  the  fact  that  an 
executor  of  an  Ohio  decedent  who  qualified  in  Ohio  was 
domiciled  in  Kentucky  did  not  render  the  assets  of  the  Ohio 
decedent  in  the  hands  of  the  Kentucky  executor  liable  to  the 
tax  in  Kentucky. 

g.     INTANGIBLES  OF  NON-RESIDENT  WITHIN  THE  JURISDICTION 

TAXABLE. 

On  the  same  theory  it  is  reasoned  that  a  State  may  tax  the 
intangible  property  of  a  non-resident  when  within  its  juris- 
diction. 

Alvany  v.  Powell,  55  N.  C.  51. 

Chatfield  v.  Brechtoldt,  L.  R.  7  Ch.  192 ;  41  L.  J,  Ch.  255 ;  26  L.  T.  Rep. 

N.  S.  267. 
Attorney  General  v.  Campbell,  L.  R.  5  H.  L.  524;  41  L.  J.  Ch.  611. 


PAET  I  — THE  TAX  25 

"The  tax  is  on  the  transmission  of  the  property  being  in 
the  State  and  no  reason  has  been  assigned  nor  can  be  sug- 
gested why  the  broad  language  of  the  statute  and  the  evident 
design  of  the  Legislature  should  be  so  narrowed  and  restricted 
as  to  exempt  from  this  tax  the  property  of  a  non-resident 
actually  here  notwithstanding  that  the  same  property  may 
for  other  purposes  be  treated  as  constructively  elsewhere." 

State  v.  Dalrymple,  70  Md.  294;  17  A.  82. 

The  right  to  succeed  to  property  of  a  non-resident  having 
its  situs  in  New  Jersey  is  taxable  there. 

Carr  v.  Edwards,  84  N.  J.  L.  667;  87  A.  132. 

h.     DOUBLE  TAXATION. 

This  is  the  logical  result  although  the  courts  declare  that  it 
is  to  be  avoided  if  it  is  within  the  power  of  reason  to  do  so. 

Matter  of  James,  144  N.  Y.  6,  11 :  38  N.  E.  961. 
Matter  of  Cooley,  186  N.  Y.  220,  227;  78  N.  E.  939. 
State  v.  Davis,  88  Kan.  849;  129  Pae.  1197. 

The  difficulty  is  that  the  Legislatures  of  the  several  States 
having  the  power  insist  upon  using  it, — and  the  decisions  con- 
firm that  power. 

A  few  cases  will  illustrate : 

"It  has  before  this  been  pointed  out  (Blackstone  v.  Miller, 
188  IT.  S.  189),  that  one  State  imposes  a  succession  tax  upon 
the  theory  or  the  fiction  that  the  situs  of  the  personal  estate 
is  the  domicile  of  the  owner  while  another  State  imposes  it 
upon  the  ground  that  the  actual  situs  is  within  the  State  and 
the  same  State  may  assume  either  position  as  the  domicile  of 
the  decedent  or  the  presence  of  the  property  within  the  State 
requires  it." 

Stanton's  Estate,  142  Mich.  491;  105  N.  W.  1122. 

Though  Pennsylvania  consistently  adheres  to  the  taxation 
of  intangibles  at  domicile  of  owner  and  not  within  the  State 
under  ancillary  administration; 

McKeen  v.  Northampton  County,  49  Pa.  St.  519. 

When  the  distribution  and  administration  are  to  be  made 
by  the  Pennsylvania  courts  held  taxable. 

Lewis'  Estate,  203  Pa.  St.  211,  217;  52  A.  205. 


26  INHERITANCE    TAXATION 

"The  fact  that  two  States  dealing  each  with  its  own  law  of 
succession,  both  of  which  the  plaintiff  in  error  has  to  invoke 
for  her  rights  have  taxed  the  right  which  they  respectively 
confer,  gives  no  cause  for  complaint  on  constitutional  grounds. 
(Blackstone  v.  Miller,  188  U.  S.  189,  206,  207;  23  S.  Ct.  Kep. 
277.)  The  fact  that  the  property  may  be  subject  to  a  similar 
burden  in  another  State  does  not  deprive  this  State  of  its 
power  to  impose  the  tax  here  upon  the  property  which  passes 
by  inheritance  or  by  will  under  our  laws. ' ' 

Mann  v.  Carter,  74  N.  H.  345,  352 ;  68  A.  130. 

'  *  The  great  weight  of  authority  favors  the  principle  adopted 
by  the  New  York  Court  of  Appeals  holding  that  the  tax  im- 
posed is  on  the  right  of  succession  under  a  will  or  by  devolu- 
tion in  case  of  intestacy,  and  that  as  to  personal  property  its 
situs,  for  the  purpose  of  a  legacy  or  succession  tax,  is  the 
domicile  of  the  decedent,  and  the  right  to  its  imposition  is 
not  affected  by  the  statute  of  a  foreign  State,  which  subjects 
to  similar  taxation  such  portion  of  the  personal  estate  of  any 
non-resident  testator  or  intestate  as  he  may  take  and  leave 
there  for  safe  keeping  or  until  it  should  suit  his  convenience 
to  carry  it  away." 

Hartmann's  Appeal,  70  N.  J.  Eq.  664,  667;  62  A.  560. 

The  leading  case  is  Matter  of  Blackstone  which  arose  in 
New  York,  was  decided  by  the  Appellate  Division,  69  App. 
Div.  127,  74  Supp.  508,  was  affirmed  by  the  Court  of  Appeals 
without  opinion  171  N.  Y.  682,  64  N.  E.  1118,  on  the  authority 
of  Matter  of  Houdayer,  150  N.  Y.  37,  44  N.  E.  718.  It  then 
went  to  the  United  States  Supreme  Court. 

The  testator,  a  resident  of  Illinois,  had  $4,840,000  on  de- 
posit with  New  York  bankers  and  both  States  imposed  in- 
heritance taxes.  The  appeal  was  from  the  tax  sought  to  be 
collected  by  the  New  York  State  Comptroller. 

The  United  States  Supreme  Court  said,  in  sustaining  the 
tax:  "No  doubt  this  power  on  the  part  of  two  States  to  tax 
on  different  and  more  or  less  inconsistent  principles  leads  to 
some  hardship.  It  may  be  regretted  also  that  one  and  the 
same  State  should  be  seen  taxing  on  the  one  hand  according 
to  the  fact  of  power  and  on  the  other,  at  the  same  time,  accord- 


PART  I  — THE  TAX  27 

ing  to  the  fiction  that  in  successions  after  death  mobilia 
sequuntur  personam  and  domicile  governs  the  whole,  but  these 
inconsistencies  infringe  no  rule  of  constitutional  law.  If  the 
transfer  of  the  deposit  necessarily  depends  upon  and  involves 
the  law  of  New  York  for  its  exercise  or,  in  other  words,  if  the 
transfer  is  subject  to  the  power  of  the  State  of  New  York, 
then  New  York  may  subject  the  transfer  to  a  tax.  But  it  is 
plain  that  the  transfer  does  depend  upon  the  law  of  New 
York  not  because  of  any  theoretical  speculation  concerning 
the  whereabouts  of  the  debt  but  because  of  the  practical  fact 
of  its  power  over  the  person  of  the  debtor.  What  gives  the 
debt  validity?  Nothing  but  the  fact  that  the  law  of  the  place 
where  the  debtor  is  will  make  him  pay." 

Blackstone  v.  Miller,  188  U.  S.  189,  205 ;  23  S.  Ct.  Eep.  277. 


B.— THE  TRANSFER  TAKES  PLACE  AT  DEATH. 

This  rule  is  almost  equally  important  in  the  law  of  Inheri- 
tance Taxation  as  is  the  rule  that  the  tax  is  on  the  transfer  of 
property  and  not  on  property  itself. 

It  is  not  a  transfer  between  the  living  that  is  taxed,  but  a 
transfer  from  the  dead  hand  to  the  living  hand;  and  there- 
fore it  is  the  doctrine,  subject  to  certain  limitations  and  ex- 
ceptions (see  part  B-7),  that  the  transfer  which  is  the  subject 
of  the  tax  takes  place  at  death. 

And  this  applies  to  all  forms  of  Inheritance  Taxation. 

Death  must  be  proved.  Most  of  the  States  have  statutes 
providing  that  one  who  has  disappeared  for  a  certain  period 
may  be  found  to  be  "dead"  and  letters  of  administration 
issued.  But  the  Iowa  court  holds  that  this  is  not  sufficient 
for  the  imposition  of  an  inheritance  tax  in  the  absence  of 
actual  proof  of  death. 

Kite's  Estate  (la.),  187  N.  W.  585. 

"Although  different  modes  of  assessing  such  duties  prevail, 
and  although  they  have  different  accidental  names,  such  as 
probate  duties,  stamp  duties,  taxes  on  the  transaction,  or  the 
act  of  passing  of  an  estate  or  a  succession,  legacy  taxes,  estate 
taxes  or  privilege  taxes,  nevertheless  tax  laws  of  this  nature 
in  all  countries  rest  in  their  essence  upon  the  principle  that 


28  INHERITANCE    TAXATION 

death  is  the  generating  source  from  which  the  particular  tax- 
ing power  takes  its  being  and  that  it  is  the  power  to  transmit, 
or  the  transmission  from  the  dead  to  the  living,  on  which  such 
taxes  are  more  immediately  rested." 

Knowlton  v.  Moore,  178  U.  S.  41,  56;  20  S.  Ct.  747. 

1.  Vested  Right  of  the  State. 

The  right  of  the  State  to  the  tax  is  coincident  with  the 
devolution  of  title  or  interest,  and  the  right  of  the  State  to 
exact  a  tax,  as  well  as  the  obligations  of  the  transferee  to  pay 
it,  depend  not  upon  a  formal,  complete  and  immediate  change 
of  title  or  possession,  but  upon  the  instant  right  to  a  beneficial 
share  or  interest  subject  only  to  the  due  administration  of  the 
estate. 

Matter  of  Ramsdill,  190  N.  Y.  492;  83  N.  E.  584. 

This  same  rule  was  recently  enunciated  by  the  Supreme 
Court  of  Massachusetts  in  construing  a  similar  statute  where 
that  court  said:  "The  rights  of  all  parties,  including  the 
right  of  the  commonwealth  to  its  tax,  vest  at  the  death  of  the 
testator.  It  is  true  that  the  interest  of  a  legatee  is  subject  to 
an  accounting,  but  it  is  an  interest  in  the  existing  fund,  and  it 
is  analogous  to  that  of  a  cestui  que  trust." 

Kingsbury  v.  Chapin,  195  Maas.  533 ;  82  N.  E.  700. 

/'The  transfers  take  place  necessarily  at  the  moment  of 
death,  for  the  will  on  the  one  hand  and  the  intestate  laws  on 
the  other  operate  and  speak  from  that  date." 

Heth  v.  Commonwealth,  126  Va.  493 ;  102  S.  E.  66. 
Matter  of  Seaman,  147  N.  Y.  69;  41  N.  E.  401. 
Matter  of  Abraham,  151  App.  Div.  441 ;  135  Supp.  891. 
Matter  of  Meyer,  83  App.  Div.  381;  82  Supp.  329. 

The  effect  of  the  rule  has  been  strikingly  illustrated  in  two 
cases  in  New  York. 

In  Matter  of  Dreyfous,  18  Supp.  767,  28  Abb.  N.  C.  27,  the 
decedent  died  on  the  same  day  that  the  amendment  of  1891, 
chapter  215,  was  signed  by  the  Governor,  but  death  occurred 
a  few  hours  before  the  signature.  It  was  held  that  the  amend- 
ment did  not  apply. 

On  the  other  hand,  where  it  was  stipulated  that  death  oc- 


PART  I  — THE  TAX  29 

curred  on  the  same  day  the  amendment  was  signed  by  the 
Governor,  but  a  few  hours  after  the  signature,  it  was  held 
that  the  amendment  applied. 

Matter  of  Lane,  157  App.  Div.  694;  142  Supp.  788. 

It  is  therefore  important  that  the  Governor  or  his  secre- 
tary make  a  memorandum  of  the  hour  the  act  was  signed  and 
it  is  the  practice  of  New  York  executives  to  do  so. 

Ordinarily  it  is  a  simple  matter  to  fix  the  day  and  even  the 
hour  of  death,  but  the  possibilities  of  complexity  in  the  matter 
of  Inheritance  Taxation  are  illustrated  by  a  case  which  re- 
cently arose  in  New  York.  An  intestate  had  disappeared  and 
had  been  absent  for  more  than  seven  years.  A  decree  was 
entered  in  the  Surrogate's  Court  of  New  York  county  judi- 
cially declaring  him  dead  pursuant  to  the  statute  in  regard  to 
presumptions  in  such  cases.  The  question  was  when  did  he 
die,  and  what  statute  was  applicable  to  the  taxation  of  the 
inheritance?  The  court  held  that  the  date  of  death  for  the 
purpose  of  Inheritance  Taxation  was  not  the  date  of  the 
decree  judicially  adjudging  him  dead  but  that  the  date  should 
be  fixed  by  reckoning  seven  years  from  the  date  of  his  dis- 
appearance. 

Matter  of  Rowe,  103  Misc.  Ill;  170  Supp.  742. 

The  learned  Surrogate  said :  ' '  There  seems  to  be  a  differ- 
ence of  views  as  to  whether  or  not  there  is  any  presumption 
that  such  a  person  remained  alive  during  the  seven-year 
period  and  died  at  its  expiration  (Lawson,  Presump.  Ev.  rule 
43;  Jones,  Ev.  §  62,  note  to  Butler  v.  Supreme  Court  I.  0. 
Foresters,  26  L.  K.  A.  [N.  S.]  294),  but  that  the  presumption 
of  death  now  exists  in  this  State  is  no  longer  open  to  discus- 
sion in  this  court.  In  Matter  of  Wagener,  143  App.  Div.  286, 
128  N.  Y.  Supp.  164,  it  was  held  that  the  general  rule  that  an 
absentee  who  had  not  been  heard  from  for  seven  years  may 
be  presumed  to  be  dead  at  the  expiration  of  the  seven  years 
for  the  purposes  of  the  distribution  of  his  estate  is  well  set- 
tled, and  in  a  case  similar  to  this  one  the  court,  in  Matter  of 
Benjamin,  155  App.  Div.  233,  139  N.  Y.  Supp.  1091,  in  revers- 
ing the  court  below,  said:  This  court  has  so  recently  laid 
down  rules  as  to  the  presumption  of  death  arising  from  long- 


30  INHERITANCE    TAXATION 

continued  and  unexplained  absence  that  no  further  discussion 
of  that  question  is  now  required." 

The  Legislature  of  California  sought  to  exempt  a  bequest 
to  Leland  Stanford  university  by  the  will  of  its  founder ;  but 
the  court  held  that  the  right  of  the  State  to  the  tax  vested  at 
Stanford's  death  and  could  not  be  given  away.  It  said:  "It 
is  only  by  virtue  of  the  statute  that  an  heir  is  entitled  to  re- 
ceive any  of  his  ancestor's  estate;  and  the  Legislature  can 
provide  that  the  whole  or  only  a  portion  shall  go  to  the  heirs 
or  other  beneficiaries  upon  the  death  of  the  ancestor.  This 
being  so,  and  the  Legislature  in  this  case  having  determined 
that  95%  of  the  decedent's  estate  may  go  to  his  heirs,  and 
the  6%  be  retained  by  the  State,  it  is  too  clear  for  argument 
that  this  5%  vested  in  the  State  at  the  same  time  that  the 
other  95%  vested  in  the  heirs." 

Stanford's  Estate,  126  Cal.  112;  54  Pac.  259;  58  Pac.  462. 

The  result  of  this  doctrine  was  strikingly  illustrated  in  the 
recent  case  of  National  Safe  Deposit  Co.  v.  Stead,  250  111. 
284,  95  N.  E.  973,  where  the  right  of  the  State  to  inspect  the 
contents  of  a  decedent's  safe  deposit  box  was  challenged.  In 
sustaining  the  right  the  court  reasoned  thus:  The  relation 
between  a  safe  deposit  company  and  the  lessee  of  one  of  its 
boxes  is  that  of  bailor  and  bailee.  Its  duty  is  to  deliver  the 
property  on  the  death  of  the  lessee.  The  right  to  succeed  to 
the  property  is  purely  statutory.  The  inheritance  tax  is  on 
the  right  to  succeed  to  property  and  not  on  the  property. 
Therefore  under  the  tax,  the  State  has  a  vested  financial  right 
in  the  estate  of  the  decedent,  and  therefore  it  has  a  right  to 
know  what  property  is  in  the  safe  deposit  box. 

Another  apt  illustration  is  afforded  by  Matter  of  White, 
208  N.  Y.  64, 101  N.  E.  793.  Here  the  testator  died  in  March, 
1908,  leaving  a  life  estate  to  a  grandson  with  remainder  to  an 
exempt  charity.  The  grandson  died  in  November,  1908,  be- 
fore the  estate  was  distributed,  and  the  Appellate  Division 
held  that  the  actual  duration  of  the  life  tenant's  life  was  the 
measure  of  its  value.  But  the  Court  of  Appeals  applied  the 
doctrine  that  the  tax  was  on  the  transfer  and  that  the  transfer 
took  place  at  the  death  of  the  testator.  At  the  date  of  that 
death  the  grandson's  expectation  of  life  was  about  35  years, 


PART  I  — THE  TAX  31 

and  the  court  held  that  the  value  of  the  life  estate  was  to  be 
determined,  not  by  the  actual  duration,  but  the  theoretical 
expectation  of  life.  The  court  said  at  page  67:  "The  true 
test  by  which  the  tax  is  to  be  measured  is  the  value  of  the 
interest  or  estate  transferred  at  the  time  of  the  transfer 
thereof.  The  interest  of  the  life  beneficiary  accrued  on  the 
death  of  the  testatrix  and  its  value  as  of  the  time  of  that 
occurrence  is  the  sum  to  which  the  rate  per  cent  as  fixed  by 
the  statute  should  be  applied." 

2.  Renunciation  by  Legatee. 

An  apparent  exception  to  the  rule  that  the  right  of  the  State 
to  the  tax  vests  at  death  is  found  in  the  right  of  a  legatee  to 
renounce  his  legacy.  Obviously  this  would  make  no  differ- 
ence if  all  beneficiaries  were  taxed  alike;  for  the  renounced 
legacy  must  either  pass  under  the  residuary  clause  or  by  in- 
testacy and  so  be  taxed.  It  is  therefore  the  act  of  the  State 
itself  in  exempting  or  taxing  at  a  lower  rate  that  defeats  or 
abridges  its  vested  interest.  A  distributee  in  case  of  intes- 
tacy cannot  renounce  so  as  to  avoid  the  tax. 

This  principle  was  illustrated  in  Matter  of  Wolfe,  89  App. 
Div.  349,  85  Supp.  949;  aff.  179  N.  Y.  599,  72  N.  E.  1152. 
Executors  who  would  have  been  taxed  at  the  5%  rate  re- 
nounced and  the  property  passed  to  testator's  children  under 
the  residuary  clause  who  were  taxable  at  \%.  The  State 
claimed  a  vested  right  to  the  5%  rate.  The  court  held  that 
the  tax  must  be  imposed  as  the  property  actually  passed. 

To  the  same  effect  is  Owings  v.  State,  22  Md.  116. 

This  presents  a  theoretical  difficulty.  If  the  right  of  the 
legatee  vests  at  death  and  at  that  instant  the  right  of  the  State 
vests  also,  the  act  of  the  beneficiary  should  not  affect  the 
vested  right  of  the  State.  As  far  as  the  legatee  is  concerned, 
of  course,  he  cannot  be  forced  to  accept  a  gift  and  the  transfer 
to  him  is  not  complete  until  he  does  accept  it.  The  theory  is, 
therefore,  that  there  is  no  transfer  to  the  legatee  but  that  the 
property  passes  under  the  residuary  clause  or  as  in  case  of 
intestacy  and  the  tax  is  imposed  upon  the  transfer  that 
actually  takes  place. 

Where  heirs  may  claim  either  under  a  deed  delivered  inter 


32  INHERITANCE    TAXATION 

vivos,  but  not  recorded,  or  under  a  will;  and  they  elect  to 
take  under  the  deed  and  renounce  the  devise  under  the  will 
there  is  no  transfer  under  the  latter. 

Matter  of  Mather,  90  App.  Div.  382;  85  Supp.  657;  aff.  179  N.  Y.  526; 
71  N.  E.  1134. 

By  an  extension  of  the  same  doctrine  it  is  held  that  a  legatee 
may  accept  in  part  and  renounce  in  part,  leaving  the  balance 
to  pass  under  other  provisions  of  the  will. 

Matter  of  Merritt,  155  App.  Div.  228 ;  140  Supp.  13. 

A  legatee  under  a  power  of  appointment  may  renounce  in 
the  same  way  that  he  can  decline  to  accept  any  other  legacy. 

Matter  of  Chauncey,  168  Supp.  1019. 

A  recent  case  in  Massachusetts  affords  an  illustration  of 
the  importance  of  good  legal  advice  in  the  matter  of  Inheri- 
tance Taxation.  In  pursuance  of  an  ante-nuptial  agreement 
a  man  devised  a  legacy  to  his  wife.  She  accepted  the  legacy 
in  lieu  of  the  amount  due  under  the  agreement.  It  was  there- 
fore subject  to  the  tax.  If  she  had  renounced  and  collected 
cash  under  the  agreement  the  court  held  there  would  have 
been  no  tax,  but  she  elected  to  take  the  bonds  devised  by  the 
will  and  had  to  pay  it. 

Hill  v.  Treasurer,  227  Mass.  331 ;  116  N.  E.  509. 

3.  Law  in  Force  at  Date  of  Proceedings  Controls  Procedure 
Only. 

As  to  procedure  the  law  in  force  at  the  date  of  the  proceed- 
ings controls  but  as  to  substantive  rights,  the  law  in  force  at 
the  date  of  death. 

Estate  of  Woodard,  153  Cal.  39 ;  94  Pac.  242. 
Estate  of  Kennedy,  157  Cal.  517,  526;  108  Pac.  280. 
Matter  of  Abraham,  151  App.  Div.  441 ;  135  Supp.  891. 
Matter  of  Sloan,  154  N.  Y.  109;  47  N.  E.  978. 
Matter  of  Davis,  149  N.  Y.  539,  545 ;  44  N.  E.  185. 

In  the  Davis  case,  above  cited,  the  court  said:  "It  is  a 
general  rule  that,  in  the  absence  of  words  of  exclusion,  a 
statute  which  relates  to  the  form  of  procedure  or  the  method 
of  attaining  or  defending  rights,  is  applicable  to  proceedings 
pending  and  subsequently  commenced.  Hence  the  rights  of 


PART  I  — THE  TAX  33 

the  parties  depend  upon  the  statute  of  1885,  while  the  method 
of  procedure  is  governed  by  that  of  1892." 

A  transfer  made  in  1908  to  take  effect  at  death  is  subject 
to  the  law  in  force  at  that  date  though  the  statute  was  changed 
before  the  decedent  died  and  the  tax  was  increased. 

Potter's  Estate,  63  Cal.  Dec.  141;  204  Pac.  826. 

4.  Rates  Fixed  at  Death  Cannot  be  Increased. 

This  rule  is  illustrated  by  a  recent  case  in  Maryland.  A 
testator  devised  a  life  use  with  remainder  to  collaterals.  At 
the  date  of  his  death,  under  the  act  of  1902,  the  tax  upon  the 
inheritance  of  the  collateral  remaindermen  was  ^y2%.  In 
1908  the  rate  was  increased  to  5%  upon  collateral  inheritances. 
The  life  tenant  died  after  the  1908  statute  went  into  effect. 
Under  the  Maryland  law  the  collection  of  the  tax  upon  re- 
mainders is  or  may  be  postponed  until  the  life  tenant  dies. 
The  State  claimed  a  tax  at  the  rate  of  5%,  but  the  court  held 
that  the  rate  as  fixed  by  the  statute  at  the  death  of  the  testator 
and  not  the  rate  prevailing  at  the  death  of  the  life  tenant 
applied. 

State  v.  S.  D.  &  T.  Co.  of  Baltimore,  103  A.  435. 

5.  Rights  Vested  Prior  to  Death  Cannot  be  Taxed. 

As  the  transfer  is  at  death  rights  which  vested  prior  to  the 
transfer  cannot  be  taxed.  So  where  testator  died  prior  to  the 
statute,  leaving  a  life  estate  and  remainders,  it  was  held  that 
the  transfer  does  not  take  place  at  the  death  of  the  life  tenant 
for  the  right  to  the  remainder  vested  at  the  death  of  the 
testator  and  the  statute  could  not  tax  a  transfer  which  had 
already  taken  place. 

Matter  of  Pell,  171  N.  Y.  48 ;  63  N.  E.  789. 
Commonwealth  v.  Wellf ord,  114  Va.  372 ;  76  S.  E.  917. 

So  a  trust  deed  reserving  a  life  estate  vests  the  remainder 
at  the  date  of  the  deed  and  the  transfer  is  not  taxable  under  a 
subsequent  statute. 

State  ex  rel.  Toser  v.  Probate  Court,  102  Minn.  268;  118  N.  W.  888. 

In  another  case  a  testatrix  made  a  deed  in  1896  reserving 
a  life  estate  with  power  of  revocation  which  was  never  exer- 
3 


34  INHERITANCE    TAXATION 

cised  and  by  will  devised  the  same  property  to  the  grantee  of 
the  deed.  She  died  October  20,  1906,  and  the  transfer  tax  act 
became  a  law  March  15, 1906.  Held  that  nothing  passed  under 
the  will  as  the  life  estate  expired  when  she  died  and  that  the 
statute  could  not  tax  the  transfer  by  deed  made  ten  years 
before. 

Commonwealth  v.  McCauley's  Executor,  166  Ky.  450;  179  S.  W.  411. 

The  principle  is  well  illustrated  by  two  New  York  cases.  In 
Matter  of  Harbeck,  161  N.  Y.  211,  55  N.  E.  850,  the  testator 
died  in  1896  exercising  a  power  of  appointment  created  by  the 
will  of  an  ancestor  dying  in  1878,  prior  to  the  enactment  of  the 
transfer  tax  statute.  The  court  held  that  the  effect  of  the 
exercise  of  the  power  was  to  write  the  names  of  the  appointees 
into  the  will  of  the  creator  of  the  power  and  that  the  bene- 
ficiaries took  under  that  will  arid  therefore  their  interests  so 
acquired  were  not  subject  to  the  tax.  The  Legislature  then 
amended  the  act  to  tax  the  exercise  of  the  power  as  though 
the  property  passing  under  its  exercise  belonged  absolutely  to 
the  donee  of  the  power.  This  amendment  came  up  for  con- 
struction in  Matter  of  Dows,  167  N.  Y.  227,  60  N.  E.  439.  The 
power  in  that  case  was  created  under  the  will  of  a  testator 
dying  in  1880,  prior  to  the  statute,  and  was  exercised  by  the 
will  of  a  testator  dying  in  1899,  after  the  statute.  It  was  held 
that  the  Legislature  had  a  right  to  declare  that  the  transfer 
took  place  on  the  exercise  of  the  power  and  not  at  its  creation 
and  that  the  transfer  was  therefore  taxable.  This  was  sus- 
tained in  Orr  v.  Oilman,  183  IT.  S.  278,  22  S.  Ct.  Rep.  213. 

To  the  same  effect  is 

Miller  v.  McLaughlin,  141  Mich.  425;  104  N.  W.  777. 

6.  Gains  or  Losses  During  Administration. 

As  the  transfer  takes  place  at  death  and  the  tax  then  ac- 
crues, interest  that  accrues  or  other  gains  during  administra- 
tion are  not  taxed — as  the  transfer  has  already  taken  place 
and  they  are  the  property  of  the  living  and  not  of  the  dead. 

Re  Williamson,  153  Pa,  St.  508 ;  26  A.  246. 
Matter  of  Vassar,  127  N.  Y.  1 ;  27  N.  E.  394. 

A  curious  illustration  of  this  rule  was  recently  afforded  in 
New  York.  The  decedent  was  entitled  at  his  death  to  a  two- 


PART  I  — THE  TAX  35 

seventh  interest  in  his  father's  estate.  This  being  a  chose 
in  action,  an  increment  in  the  father's  estate  accruing  after 
the  death  of  the  son,  was  not  taxable. 

Matter  of  Hazzard,  228  N.  Y.  26;  126  N.  E.  345. 

Of  course  as  to  interest  accrued  prior  to  death,  it  belonged 
to  the  decedent  and  must  be  valued  as  part  of  the  estate. 

Matter  of  Hewitt,  181  N.  Y.  547;  74  N.  E.  1118. 

The  practical  application  of  this  rule  has  sometimes  worked 
serious  hardships  as  when  an  equity  of  redemption,  valued  on 
appraisal  at  $8,000,  was  wiped  out  by  a  mortgage  foreclosure. 

Matter  of  Meyer,  209  N.  Y.  386 ;  103  N.  E.  713. 

Where  property  is  sold  to  pay  debts  at  less  than  appraised 
value  the  loss  should  be  charged  as  part  of  the  expense  of  ad- 
ministration and  the  tax  imposed  on  the  balance  passing  to 
legatees.  (Citing  Gleason  &  Otis.) 

Ferguson's  Estate,  113  Wash.  598;  194  Pac.  771. 

When  the  executor  was  forced  to  sell  stocks  at  a  loss  dur- 
ing administration  which  caused  a  shrinkage  of  nearly  one- 
fourth  of  the  estate  the  tax  was  imposed  on  the  value  at  death 
and  no  deduction  was  allowed. 

Matter  of  Penfold,  216  N.  Y.  163;  110  N.  E.  497. 

In  enforcing  the  rule  despite  this  apparent  injustice  the 
court  said: 

"It  is  by  statute  due  and  payable  at  the  time  of  the  trans- 
fer, that  is,  at  the  death  of  the  decedent.  It  accrues  at  that 
time  and  the  amount  of  the  tax  is  not  affected  by  an  increase 
or  decrease  in  the  clear  market  value  of  the  estate  between 
the  date  of  the  decedent's  death  and  its  subsequent  distribu- 
tion among  beneficiaries  or  transferees  under  the  will.  The 
necessity  for  certainty  and  uniformity  in  the  time  when  the 
tax  accrues  and  becomes  due  and  payable  required  the  adop- 
tion by  the  Legislature  of  a  fixed  and  arbitrary  rule." 

The  rule  was  applied  in  California  in  a  still  harsher  case 
where  the  executor  embezzled  $98,000  and  the  beneficiaries 
never  received  the  money. 

Kite's  Estate,  159  Cal.  392;  113  Pac.  1072. 


36  INHERITANCE    TAXATION 

But  the  tax  is  imposed  before  it  reaches  the  legatee  and 
before  it  has  become  his  property. 

Matter  of  Finnen,  196  Pa.  St.  72 ;  46  A.  269. 
Matter  of  Hartmann,  70  N.  J.  Eq.  664;  62  A.  560. 

In  view  of  this  obvious  injustice  the  Federal  statute  and 
the  inheritance  tax  law  of  Rhode  Island  adopted  in  1916 
allow  a  deduction  for  certain  losses  during  administration 
except  a  fall  in  the  market  price  of  stocks.  On  the  other 
hand  Montana  taxes  any  increase  during  administration 
including  increase  in  value  of  securities. 

Matter  of  Tuohy,  35  Mont.  431;  90  Pac.  170. 

Curiously  enough  both  the  Rhode  Island  statute  and  the 
Federal  act  impose  a  tax  upon  the  right  to  transmit.  Obvi- 
ously such  a  tax  must  accrue  at  death  and  not  upon  distribu- 
tion which  makes  the  deduction  for  losses  after  death  dis- 
tinctly an  act  of  grace. 

The  foregoing  paragraph  was  quoted  with  approval  by  the 
Rhode  Island  court. 

Hazard  v.  Bliss  (B.  I.),  113  A.  469. 

Its  justice  and  propriety  however  are  so  apparent  that  these 
statutes  will  doubtless  be  followed  in  other  States  as  their 
acts  are  amended  in  the  light  of  experience  with  the  practical 
application  of  the  transfer  tax  laws. 

7.  Exceptions  to  the  Rule. 

The  general  rule  that  the  transfer  takes  place  and  all  rights 
accrue  at  death  is  subject  to'  two  exceptions. 

a.     BY  NATURE  OF  THE  TRANSFER. 

Where  there  is  a  trust  deed  reserving  a  life  estate  and  a  tax 
is  by  the  statute  imposed  upon  such  a  transfer  the  law  in 
force  at  the  date  of  the  trust  deed  governs. 

Murphy's  Estate,  182  Cal.  740;  190  Pac.  46. 

Matter  of  Keeney,  194  N.  Y.  281,  287 ;  87  N.  E.  428. 

Keeney  v.  New  York,  222  U.  S.  525,  530;  32  S.  Ct.  Rep.  105. 

Matter  of  Webber,  151  App.  Div.  539;  136  Supp.  83. 

State  ex  rel.  Tozer  v.  Probate  Court,  102  Minn.  268 ;  113  N.  W.  888. 

Commonwealth  v.  McCauley's  Executor,  166  Ky.  450;  179  S.  W.  411. 

Matter  of  Garcia,  101  Misc.  387. 


PART  1  —  THE  TAX  37 

Taxability,  under  the  inheritance  tax  laws,  of  a  transfer 
made  by  a  decedent,  must  be  determined  by  the  law  in  effect 
at  the  time  the  transfer  was  made. 

Brix's  Estate,  181  Cal.  667,  186  Pac.  135. 

But  where  power  to  revoke  is  reserved  the  transfer  is  not 
complete  and  the  tax  accrues  at  death. 

Line's  Estate,  155  Pa.  St.  378;  26  A.  728. 

Matter  of  Dana,  164  App.  Div.  45;  149  Supp.  417;  atf.  214  N.  Y.  710. 

The  same  rule  was  applied  where  a  deed  was  delivered  to  a 
third  party  to  be  delivered  to  the  grantee  reviewed  therein 
after  death  and  no  tax  was  imposed. 

Hunt  v.  Wicht,  174  Cal.  205;  162  Pac.  639- 

Where  there  is  a  transfer  in  contemplation  of  death  the  tax 
accrues  not  at  death,  but  at  the  date  of  such  transfer,  even 
though  no  proceedings  may  be  had  for  its  collection  until  after 
the  death  of  the  donor. 

Matter  of  Garcia,  183  App.  Div.  712,  717;  170  Supp.  980. 
Matter  of  Hodges,  215  N.  Y.  447;  109  N.  E.  559. 
Felton's  Estate,  176  Cal.  663;  169  Pac.  392. 

A  recent  case  in  Nevada  affords  a  curious  illustration  of  the 
working  of  this  rule.  A  testator,  residing  in  California,  made 
a  deed  of  trust  to  take  effect  at  death.  His  real  estate  was 
situated  in  Nevada  and  was  taxable  under  the  laws  of  that 
State.  The  deed  was  made  prior  to  the  statute,  but  as  it  took 
effect  at  death  and  the  death  occurred  after  the  statute  was 
enacted  the  transfer  was  held  taxable  by  the  Nevada  courts, 
citing  the  California  rule  laid  down  in  Nickel  v.  California, 
179  Cal.  126, 175  Pac.  641. 

Nickel  v.  State,  43  Nev.  12;  185  Pac.  565. 

b.     BY  STATUTE. 

The  Legislature  has  power  to  declare  that  the  tax  shall  ac- 
crue at  any  time  while  the  law  retains  control  of  a  decedent's 
property  and  so  may  retroactively  be  applied  to  estates  still 
in  process  of  distribution,  though  the  owner  died  prior  to  the 
statute,  on  the  theory  that  the  tax  is  on  the  right  to  receive 


38  INHERITANCE    TAXATION 

•    '  "] 

and  may  be  imposed  on  the  legatee's  interest  at  any  time 
before  he  actually  receives  the  property. 

Cahen  v.  Brewster,  203  IT.  S.  543 ;  27  S.  Ct.  Rep.  174. 
Ferry  v.  Campbell,  110  la.  290,  299;  81  N.  W.  604. 
Gelsthorpe  v.  Furnell,  20  Mont.  299 ;  51  Pac.  267. 

The  rule  would  not  seem  to  be  in  accord  with  the  logic  of 
the  doctrine  which  lies  at  the  root  of  the  taxation  of  transfers 
of  non-resident  property  within  the  State.  The  transfer  itself 
takes  place  by  virtue  of  the  control  which  the  courts  of  the 
situs  exercise  over  the  property,  but  the  will  of  the  non-resi- 
dent takes  force  and  effect  by  reason  of  the  statutes  of  the 
State  of  domicile  and  the  personal  property  is  distributed 
under  the  intestate  laws  of  the  foreign  State.  It  is  therefore 
only  because  the  courts  of  the  situs  have  control  of  the  prop- 
erty that  any  tax  can  be  imposed  upon  a  non-resident  transfer. 
Therefore  property  which  is  still  within  the  control  of  those 
courts  and  prior  to  its  delivery  to  the  beneficiary  would  seem 
to  be  taxable  even  though  death  had  occurred  prior  to  the 
statute. 

The  situation  is  different  with  a  remainder,  after  a  life 
estate.  In  such  a  case  the  executors  make  their  final  account- 
ing and  the  property  is  delivered  to  the  life  tenant  in  trust 
or  to  a  trustee,  or  the  executors  cease  to  be  personal  repre- 
sentatives of  the  deceased  and  become  trustees  for  the  remain- 
dermen. That  a  transfer  tax  cannot  be  imposed  upon  the 
remaindermen  after  the  life  tenant  or  his  trustee  take  posses- 
sion would  seem  to  be  the  universal  rule. 

Miller  v.  McLaughlin,  141  Mich.  425 ;  104  N.  W.  777. 
Matter  of  Pell,  171  N.  Y.  48;  63  N.  E.  789. 
Stevens  v.  Bradford,  185  Mass.  439;  70  N.  E.  425. 
Re  Short,  16  Pa.  St.  63. 
Carpentier  v.  Commonwealth,  17  How.  462. 

Firmly  established  as  the  doctrine  would  seem  to  be  the 
courts  of  New  York  rejected  it  in  an  early  decision. 

Matter  of  Pettit,  65  App.  Div.  30;   72  Supp.  469;   aff.  171  N.  Y.  654; 
63  N.  E.  1121. 

This  was  with  regard  to  the  property  of  a  non-resident 
decedent  which  was  still  within  the  State  and  undistributed 
although  death  occurred  prior  to  the  enactment  of  the  statute. 


PART  I  — THE  TAX  39 

The  New  York  rule  seems  to  be  followed  in  New  Hampshire 
and  Maine. 

Carter  v.  WMtcomb,  74  N.  H.  482 ;  69  A.  779. 
Lombard's  Appeal,  88  Me.  587;  34  A.  530. 

The  same  rule  applies  to  contingent  remainders. 

Eury  v.  State,  72  Ohio  St.  448,  454;  74  N.  E.  650. 

Or  to  a  legacy  the  payment  of  which  is  postponed  until  the 
beneficiary  reaches  majority. 

Matter  of  Cogswell,  4  Dem.  (Sur.)  (N.  Y.)  248. 

Or  to  remainders  vested  under  a  contract. 

Lacy  v.  State  Treasurer,  152  la.  477 ;  132  N.  W.  843. 

It  is  also  the  rule  that  the  statute  taxing  an  estate  after 
death  and  while  it  is  still  under  the  control  of  the  State  courts 
must  be  explicit  in  its  intent  or  it  will  not  be  given  such 
retroactive  effect. 

Eury  v.  State,  72  Ohio  St.  448;  74  N.  E.  650. 

A  premature  distribution  cannot  defeat  the  statute  as  to 
personalty. 

Montgomery  v.  Gilbertson,  134  la.  21;  111  N.  W.  964. 

As  the  title  to  real  estate  passes  at  death  and  is  not  held 
in  custodia  legis  during  administration  distribution  cannot 
very  well  be  premature  and  the  rule  does  not  apply. 

Herriott  v.  Potter,  115  la.  645;  89  N.  W.  91. 

As  we  have  seen  the  statute  may  also  allow  for  losses  or 
gains  during  administration. 


C.— CLASSIFICATION. 

The  constitutions  of  most  of  the  States  require  equality  and 
uniformity  in  taxation ;  but  these  provisions  are  held  to  apply 
only  to  property  taxes,  and  not  to  inheritance  taxation. 

Booth  v.  Commonwealth,  130  Ky.  88;  113  S.  W.  61. 
Tyson  v.  State,  28  Md.  577. 
Beals  v.  State,  139  Wis.  544;  121  N.  W.  347. 
Dixon  v.  Eicketts,  26  Utah,  215 ;  72  Pac.  947. 
State  v.  Alston,  94  Tenn.  674 ;  30  S.  W.  750. 
Thompson  v.  Kidder,  74  N.  H.  89 ;  65  A.  392. 


40  INHERITANCE   TAXATION 

The  reason  for  this  rule  is  clearly  stated  by  the  United 
States  Supreme  Court  as  follows : 

"The  constitutionality  of  inheritance  taxes  is  based  on  two 
principles :  1.  An  inheritance  tax  is  not  one  on  property,  but 
one  on  the  succession.  2.  The  right  to  take  property  by  devise 
or  descent  is  the  creature  of  the  law,  and  not  a  natural  right— 
a  privilege,  and  therefore  the  authority  which  confers  it  may 
impose  conditions  upon  it.  From  these  principles  it  is  de- 
duced that  the  States  may  tax  the  privilege,  discriminate  be- 
tween relatives,  and  between  these  and  strangers,  and  grant 
exemptions,  and  are  not  precluded  from  this  power  by  the  pro- 
visions of  the  respective  State  constitutions  requiring  uni- 
formity and  equality  of  taxation." 

Magoun  v.  Illinois  Trust  &  Savings  Bank,  170  U.  8.  283,  287;  18  8.  Ct. 
Eep.  594. 

See  also : 

Crittenberger  v.  State  Savings  and  Trust  Co.,  189  Ind.  411,  127  N.  E.  552. 

The  rule  is  subject  to  this  limitation.  As  to  inheritance 
taxes  the  Legislature  may  make  classifications,  unequal  and 
not  uniform  as  between  the  classes,  but  both  equal  and  uni- 
form as  to  members  of  the  same  class. 

Nunnemacher  v.  State,  129  Wis.  90;  108  N.  W.  627. 

Such  classification  must  not  be  arbitrary.  It  must  be 
founded  on  reason  and  not  caprice. 

Matter  of  Watson,  226  N.  Y.  384. 

But  it  is  not  the  judgment  of  a  learned  court,  nor  the  reason- 
ing that  might  appeal  to  such  a  court,  that  is  required  in  order 
to  sustain  as  constitutional  a  classification  by  the  Legislature 
for  purposes  of  taxation.  There  is  no  constitutional  guar- 
antee that  taxation  shall  be  equal.  It  is  only  necessary  that  it 
shall  be  equal  in  the  sense  that  it  shall  not  be  arbitrary. 

People  ex  rel.  Eismann  v.  Bonner,  185  N.  Y.  285,  291. 

It  is  within  the  taxing  power  of  the  Legislature  to  dis- 
criminate and  to  confer  exemptions. 

People  ex  rel.  Hatch  v.  Eeardon,  184  N.  Y.  431,  433. 


PART  I  — THE  TAX  41 

Substantially  the  only  limitations  are  that  taxation  must  be 
based  upon  judgment  and  reason  and  enforced  by  due  process 
of  law. 

Matter  of  McPherson,  104  N.  Y.  306,  317;  10  N.  E.  685. 
Cooley  on  Constitutional  Limitations  (6th  ed.),  p.  587. 

But  the  court  will  not  substitute  its  judgment  for  legisla- 
tive judgment  or  attempt  itself  to  become  the  taxing  power. 
It  will  merely  see  to  it  that  the  Legislature  has  acted  upon 
judgment  and  not  upon  caprice.  This  doctrine  was  clearly 
stated  in  People  ex  rel.  Farrington  v.  Mensching,  187  N.  Y. 
10,  as  follows : 

"The  rule  governing  the  subject  as  laid  down  by  the  Su- 
preme Court  of  the  United  States  is  that  there  must  be  '  some 
difference  which  bears  a  reasonable  and  proper  relation  to 
the  attempted  classification.'  It  cannot  be  mere  arbitrary 
selection  (citing  cases).  By  this  we  do  not  understand  that 
great  court  to  mean  that  the  relation  must  necessarily  be 
'reasonable  and  proper'  according  to  the  judgment  of  review- 
ing judges,  but  that  the  court  must  be  able  to  see  that  the 
legislators  could  regard  it  as  reasonable  and  proper  without 
doing  violence  to  common  sense.  In  other  words,  there  must 
be  enough  reason  for  it  to  support  an  argument,  even  if  the 
reason  is  unsound." 

Legislative  classifications  for  the  purposes  of  inheritance 
taxation  have  been  sustained  when  based  upon:  Domicile, 
relationship,  amount  of  property  transferred,  kind  of  prop- 
erty transferred  on  the  payment  of  other  taxes  during  the 
life  of  the  deceased  and  on  the  nature  of  the  transfer  itself. 

1.  By  Domicile. 

Classifications  by  domicile  are  constitutional.  For  example, 
it  has  been  held  within  the  legislative  discretion  to  exempt 
transfers  to  domestic  charitable  corporations  and  tax  such 
transfers  when  the  beneficiary  is  a  foreign  corporation. 

Board  of  Education  v.  Illinois,  203  U.  S.  553;  27  S.  Ct.  Eep.  171. 

This  is,  however,  based  upon  the  general  right  of  a  State  to 
regulate  foreign  corporations  and  permit  them  to  do  business 
within  the  State.  As  a  general  proposition  a  State  cannot 


42  INHERITANCE    TAXATION 

grant  privileges  to  its  own  residents  which  it  denies  to  citizens 
of  other  jurisdictions. 

Be  Johnson,  139  Cal.  532 ;  73  Pac.  424. 
State  v.  Hamlin,  86  Me.  495 ;  30  A.  76. 

This  inhibition  does  not  extend  to  aliens,  unless  their  rights 
are  protected  by  treaties;  and  an  alien  is  estopped  to  resist 
taxation  on  a  devise  to  him  on  the  ground  that  the  devise  is 
void  because  he  is  an  alien. 

Scholey  v.  Eew,  90  U.  S.  331 ;  23  L.  R.  A.  99. 

With  these  exceptions  a  classification  by  residence  is  valid, 
and  a  State  may  tax  residents  and  exempt  non-residents  from 
the  tax  as  to  some  or  all  of  their  property  within  the  jurisdic- 
tion. This  is  one  of  the  most  common  classifications  known  to 
inheritance  taxation  and  does  not  seem  to  have  ever  been 
challenged. 

2.  By  Relationship. 

Relationship  of  a  beneficiary  to  the  decedent  was  one  of  the 
earliest  and  most  obvious  distinctions  between  taxable  trans- 
fers and  statutes  imposing  higher  rates  of  tax  upon  transfers 
to  collaterals  and  strangers  than  to  lineals  have  universally 
been  sustained  as  constitutional. 

Campbell's  Estate,  143  Cal.  623;  77  Pac.  574. 
State  v.  Alston,  94  Tenn.  674;  30  S.  W.  758. 
State  v.  Clark,  30  Wash.  439;  71  Pac.  20. 
Re  Fox,  154  Mich.  5;  171  N.  W.  558. 
State  v.  Switzler,  143  Mo.  287;  45  S.  W.  245. 
Eyre  v.  Jacobs,  14  Gratt.  (Va.)  422. 

So,  where  the  statute  exempted  step-children  from  the  tax 
the  Pennsylvania  court  sustained  the  classification  of  such 
children  from  other  strangers  to  the  blood,  remarking  that 
"it  had  nothing  to  do  with  the  wisdom  of  legislation." 

Commonwealth  v.  Randall,  225  Pa.  St.  197 ;  73  A.  1109. 

An  extreme  case  illustrating  the  power  of  the  Legislature 
to  classify  by  relationship  is  afforded  by  a  recent  decision  in 
South  Dakota.  Under  the  statute  of  that  State  a  heavier  tax 
is  levied  upon  a  transfer  to  a  nephew  than  upon  a  transfer  to 
a  cousin  or  an  aunt.  Although  a  cousin  is  generally  regarded 


PAKT  I  — THE  TAX  43 

as  farther  removed  than  a  nephew  or  a  niece,  the  court  sus- 
tained the  classification  upon  reasoning  that  would  sustain 
almost  any  classification,  arbitrary  or  otherwise.  It  says : 

"In  other  words,  it  is  a  declaration  that  the  State,  instead 
of  claiming  all  of  the  estate  of  a  decedent,  will  only  retain  a 
certain  portion  thereof,  and  will  allow  the  legatees  to  receive 
the  remainder  and  according  to  the  wishes  of  the  testator,  but 
less  certain  sums  which  itself  reserves.  It  says :  '  This  prop- 
erty is  ours,  but  we  will  allow  you  certain  legatees  to  take  a 
certain  portion  thereof  and  under  certain  conditions.'  One 
thing,  indeed,  is  certain,  and  that  is  that  none  of  the  heirs  or 
legatees  have  any-vested  interest  in  the  property  of  a  deceased 
person,  and  that  the  State  can  do  away  with  the  right  of  in- 
heritance or  bequest  altogether.  If  it  can  do  this,  it  can  place 
any  limitation  which  is  not  purely  arbitrary  on  the  right  that 
it  desires.  The  heirs  are  purely  donees,  and  take  by  the  bounty 
of  the  State.  What  right  have  any  of  them  to  complain  of 
that  which  is  allotted  to  them,  if  only  they  receive  the  same 
share  as  others  in  the  same  class?  Has  not  the  lord  of  the 
vineyard  the  right  to  do  with  his  own  as  he  pleases,  and  even 
to  give  to  one  at  the  eleventh  hour  his  full  penny,  while  deny- 
ing it,  or  merely  giving  a  similar  amount,  to  one  who  has 
borne  the  burden  and  the  heat  of  the  day?  It  is  a  matter 
which  is  purely  of  legislative  discretion.  It  is  not  one  of  per- 
sonal right." 

3.  By  Amount  of  Property  Transferred. 

Another  ground  of  classification,  which  is  the  basis  of  the 
graded  rates,  common  to  nearly  all  the  statutes,  is  based  upon 
the  amount  of  property  transferred  from  a  decedent  to  a 
beneficiary. 

State  v.  Branham  (Tenn.),  228  S.  W.  58. 

a.     WHERE  THE  TAX  is  ON  THE  RIGHT  TO  RECEIVE. 

"Such  right  is  derived  from  and  regulated  by  municipal 
law ;  it  arises  from  the  relation  of  the  individual  to  the  State, 
and  is  not  an  inherent  or  constitutional  right.  It  follows  that 
in  assessing  a  tax  upon  such  right  or  privilege,  the  State  may 
lawfully  measure  or  fix  the  amount  of  the  tax  by  referring  to 


44  INHERITANCE    TAXATION 

the  value  of  the  property  passing,  and  is  not  precluded  from 
this  power  by  the  provision  of  the  constitution  requiring  uni- 
formity and  equality  of  taxation." 

State  v.  Guilbert,  70  Ohio  St.  229,  255;  71  N.  E.  636. 

So,  where  the  tax  is  based  on  the  amount  received  by  each 
beneficiary  it  has  generally  been  sustained  as  valid.  Thus, 
a  transfer  to  a  widow  may  be  taxed  at  \.%  on  the  first  $25,000, 
and  at  2%  on  the  next  $25,000  above  the  exemption;  while  a 
cousin  may  be  required  to  pay  5%  on  the  first  $25,000  above  a 
smaller  exemption,  and  6%  on  the  next  $25,000. 

Union  Trust  Co.  v.  Durfee,  125  Mich.  487;  84  N.  W.  1101. 
Magoun  v.  Illinois  Savings  Bank,  170  U.  S.  301;  18  S.  Ct.  Rep.  604. 
Knowlton  v.  Moore,  178  U.  S.  41 ;  20  S.  Ct.  Rep.  747. 
State  v.  Vance,  97  Minn.  532;  106  N.  W.  98. 

But  to  tax  one  widow,  who  receives  $25,000,  at  the  rate  of 
1%,  and  another  widow,  who  receives  $50,000,  at  2%  on  the 
entire  bequest  would  seem  of  doubtful  constitutionality. 

State  v.  Ferris,  53  Ohio  St.  314 ;  41  N.  E.  579. 
State  v.  Switzler,  143  Mo.  287;  45  S.  W.  245. 

In  the  Matter  of  McKewwn,  25  S.  D.  369,  126  N.  W.  611 
(reversed  130  N.  W.  33),  the  court  advanced  what  seems  sound 
reasoning,  though  it  was  not  sustained.  It  says : 

"If  one  person  receives  $20,000  and  another  $10,000  it  was 
no  greater  privilege  for  the  first  to  receive  his  first  $10,000 
than  for  the  second.  The  increased  privilege  is  all  found  in 
receiving  of  the  extra  $10,000,  and  it  is  the  exercise  of  this 
extra  privilege,  the  transmission  of  the  extra  $10,000,  that 
should  receive  the  extra  burden  of  taxation." 

b.    WHERE  THE  TAX  is  ON  THE  RIGHT  TO  TRANSFER. 

A  tax  on  the  entire  estate,  without  reference  to  the  bene- 
ficiaries, presents  serious  difficulties,  where  there  is  an  attempt 
to  classify  by  the  amount  of  the  estate.  The  present  Federal 
act  and  the  statutes  of  Rhode  Island  and  Utah  now  impose  the 
tax,  or  part  of  it,  on  this  theory.  The  tax  was  so  imposed  in 
New  York  until  1910  and  courts  generally  have  sustained  taxes 
based  on  the  right  to  transmit  as  distinguished  from  taxes  on 
the  right  to  receive. 

Minot  v.  Winthrop,  162  Mass.  113;  38  N.  E.  512. 


PART  I  —  THE  TAX  4.5 

A  statute  copied  from  the  New  York  act  by  Wisconsin  was 
thus  criticized  by  the  courts  of  that  State  in  Black  v.  State, 
113  Wis.  205,  89  N.  W.  522: 

"It  is  claimed  that  such  is  the  effect  of  the  present  law,  and 
we  can  see  no  escape  from  the  conclusion.  People  in  the  same 
class  are  subject  to  different  rules,  some  being  exempt  and 
some  being  taxed.  This  results  from  the  peculiar  provisions 
of  section  19  of  the  law,  which  defines  ' estate'  and  ' property' 
as  construed  by  the  New  York  courts  before  we  borrowed  the 
law.  As  already  pointed  out,  under  this  provision  the  $10,000 
limitation  or  exemption  is  based  on  the  size  of  the  whole  prop- 
erty devised  or  granted,  and  not  upon  the  amount  received  by 
each  individual  legatee  or  grantee.  Thus  it  results  that  one 
collateral  relative,  receiving  a  legacy  of  $2,000  from  one  tes- 
tator, whose  estate  amounts  to  but  $9,500,  pays  no  tax,  while 
another  collateral  relative  in  the  same  degree,  receiving  a 
legacy  of  $2,000  from  another  testator  whose  estate  amounts 
to  $10,500,  is  obliged  to  pay  a  tax.  Here  is  unlawful  dis- 
crimination, pure  and  simple.  No  rational  distinction  or  dif- 
ference can  be  drawn  between  the  two  legatees  simply  because 
the  estates  from  which  their  legacies  come  are  of  slightly 
different  size.  They  are  both  within  the  same  class,  sur- 
rounded by  the  same  conditions,  and  receiving  the  same  bene- 
fits. One  pays  a  tax,  and  the  other  does  not.  This  is  not  the 
equal  protection  of  the  laws. ' ' 

Notwithstanding  this  criticism  the  court  sustained  the 
exemptions  it  criticized. 

Other  and  more  important  inequalities  become  obvious 
when  progressive  rates  are  based  upon  the  amount  of  the 
entire  estate,  as  exemplified  by  the  present  Federal  statute. 
This  question  is  fully  discussed  in  the  review  of  the  United 
States  statute. 

4.  By  the  Kind  of  Property  Transferred. 

Classifications  based  upon  the  kind  of  property  transferred 
have  been  held  to  be  within  the  legislative  power  and  dis- 
cretion. 

a.     REAL  AND  PERSONAL. 

The  most  common  classification  of  this  nature  is  that 
afforded  by  the  distinction  between  real  and  personal  prop- 


46  INHERITANCE    TAXATION 

erty.  Though  the  Minnesota  court  held  that  both  must  be 
taxed  in  a  valid  statute,  this  has  not  been  the  general 
doctrine. 

Drew  v.  Tif t,  79  Minn.  175 ;  81  N.  W.  839. 

Many  of  the  statutes  distinguish  between  the  real  and  per- 
sonal estate  of  non-residents,  and  the  New  York  act  of  1887 
was  sustained  by  the  Supreme  Court  of  the  United  States 
although  it  taxed  non-resident  transfers  when  the  non-resi- 
dent had  real  estate  in  the  State  of  New  York  and  exempted 
his  personal  property  when  he  did  not  own  real  estate  within 
the  State  because  the  act  afforded  no  machinery  for  collect- 
ing the  tax.  This  was  a  legislative  blunder  afterwards  cured 
by  amendment.  The  court  says : 

"But  though  the  operation  of  the  statute  creates  a  differ- 
ence, this,  even  if  intentional,  is  not,  of  itself,  sufficient  to  in- 
validate the  tax.  The  power  of  the  State  in  respect  to  the 
matter  of  taxation  is  very  broad,  at  least  so  far  as  the  Federal 
constitution  is  concerned.  It  may  exempt  certain  property 
from  taxation  while  other  property  is  subject  thereto.  It  may 
tax  one  class  of  property  by  one  method  of  procedure  and 
another  by  a  different  method  of  procedure." 

Beers  v.  Glynn,  211  U.  S.  477 ;  aff.  Matter  of  Lord,  186  N.  Y.  549. 

Michigan  and  Montana  tax  the  transfer  of  personal  prop- 
erty of  non-residents  within  the  State,  but  exempt  the  trans- 
fer of  their  real  property. 

Massachusetts,  New  Hampshire,  Rhode  Island  and  Ver- 
mont, on  the  other  hand,  tax  the  transfer  of  the  real  estate 
of  non-resident  decedents  within  the  State,  but  exempt  the 
transfer  of  their  personal  property  so  situated. 

b.     TANGIBLES  AND  INTANGIBLES. 

This  distinction  originated  in  the  New  York  act  of  1911, 
and  has  been  adopted  by  several  other  States.  Arkansas. 
Connecticut,  Indiana,  New  Jersey,  Pennsylvania  and  Okla- 
homa adopt  the  New  York  classification  as  to  tangibles  and 
intangibles  of  non-resident  decedents,  but  Pennsylvania  ad- 
mits the  doctrine  of  equitable  conversion  as  to  real  estate, 
while  Arkansas,  New  Jersey  and  Oklahoma  tax  the  non-resi- 


PART  I  — THE  TAX  47 

dent  transfer,  even  though  intangible,  when  it  consists  of  stock 
in  domestic  corporations. 

New  York  found  the  distinction  unworkable,  after  several 
years  of  experiment,  and  abandoned  it  altogether  by  the 
amendment  of  May  14, 1919. 

c.     OTHER  PROPERTY  DISTINCTIONS. 

Under  the  New  York  act  of  1916  the  transfer  of  non-resi- 
dent property  was  taxed  when  it  consisted  of  capital  invested 
in  business  within  the  State,  but  exempted  money  of  non- 
resident estates  deposited  in  New  York  banks.  Several  States 
tax  the  transfer  of  stock  in  domestic  corporations  held  by 
non-residents,  but  do  not  tax  non-resident  transfers  of  stock 
in  foreign  corporations  although  the  certificates  are  within 
the  jurisdiction  of  the  State.  All  this  would  seem  to  illus- 
trate the  general  proposition  that  any  reasonable  classifica- 
tion based  upon  the  kind  of  property  transferred  is  within  the 
constitutional  power  of  the  lawmaking  power. 

Matter  of  McPherson,  104  N.  Y.  316 ;  10  N.  E.  685. 

The  power  of  the  Legislature  to  distinguish  between  dif- 
ferent kinds  of  personal  property  in  inheritance  tax  statutes 
wras  recently  sustained  by  the  New  York  Court  of  Appeals  in 
Matter  of  Watson,  226  N.  Y.  384,  where  the  court  said : 

"In  considering  the  constitutionality  of  this  provision  it 
has  been  suggested  that  while  the  State  may  enact  an  in- 
heritance tax  it  must  treat  all  personal  property  alike  and 
cannot  classify  it  according  to  nature  or  kind.  Why  this 
suggestion  should  separate  personal  property  from  realty  I 
need  not  now  stop  to  consider.  That  in  the  development  of 
taxation  personal  property  has  varied  in  treatment  and  in 
disposition  is  evidenced  by  the  mortgage  tax  law  (Eisman  v. 
Eonner,  185  N.  Y.  285),  the  bank  stock  assessment  (Bridge- 
port Savings  Bank  v.  Feitner,  191  N.  Y.  88 ;  Amoskeag  Sav- 
ings Bank  v.  Purdy,  231  IT.  S.  373),  the  stock  transfer  tax 
(People  ex  rel.  Hatch  v.  Reardon,  184  N.  Y.  431;  Matter  of 
Ball,  161  App.  Div.  731;  Matter  of  Church,  176  App.  Div. 
910),  and  the  special  franchise  tax  (People  ex  rel.  Met.  Tax 
Commissioners,  174  N.  Y.  417). 


48  INHEBITANCE    TAXATION 

"In  dealing  with  a  law's  constitutionality  we  are  examin- 
ing the  question  of  legislative  powers,  or,  to  be  accurate,  the 
limitation  placed  by  constitutions  upon  power.  Whether  the 
Legislature  has  acted  wisely,  made  a  proper  choice,  created 
difficulties,  worked  hardships  or  been  unfair  to  a  class  or  to  a 
particular  kind  of  property  is  never  indicative  of  a  limitation. 
Limitations  are  to  be  found  in  the  words  and  intendment  of 
the  constitution  and  the  fundamental  principles  of  govern- 
ment embodied  therein.  The  taxing  power,  both  direct  and 
through  an  inheritance  tax,  is  very  broad  and  submits  to  few 
restrictions.  Such  laws  need  not  be  submitted  to  courts  for 
their  approval  and  can  only  meet  with  disapproval  when  some 
fundamental  principle  has  been  violated.  In  speaking  of  the 
legislative  power,  whether  it  be  a  police  power,  a  taxing  power 
or  any  other  power  of  like  nature,  we  have  no  ready-made 
formula  which  can  be  easily  applied,  but  must  be  governed  by 
the  principles  developed  in  the  law,  either  by  a  long  series  of 
legislation  or  by  custom,  or  by  judicial  expression  and  appli- 
cation of  principles.  However  accurate  may  be  our  logical 
process,  we  must  not  start  with  assumed  premises,  but  with 
those  furnished  us  by  the  authorities." 

Connecticut  has  also  made  a  similar  classification. 

Gen.  Stat.  Conn.,  §  1190. 

The  New  York  statute,  which  has  since  been  repealed,  was 
sustained  by  the  United  States  Supreme  Court,  which  said : 

"And  what  classification  could  be  more  reasonable  than  to 
distinguish,  in  imposing  an  inheritance  or  transfer  tax,  be- 
tween the  property  which  had,  during  decedent's  lifetime, 
borne  its  fair  share  of  the  tax  burden,  and  that  which  had 
not?" 

Watson  v.  State  Comptroller,  254  U.  S.  122. 

In  New  York  the  Legislature  undertook  to  impose  an  addi- 
tional tax  of  5%  on  all  investments  which  had  not  paid  the 
stamp  tax  or  the  personal  property  tax  during  the  lifetime 
of  the  decedent.  The  statute  was  repealed  by  Ch.  646,  L.  1920. 
The  classification  was  condemned  by  the  lower  courts,  but 
sustained  by  the  Court  of  Appeals,  which  said : 


PART  I  — THE  TAX  49 

"Is  there  not,  at  least,  a  semblance  of  reason  in  seeking  to 
tax  upon  inheritance  property  which  has  not  been  taxed 
locally  or  for  State  purposes,  when  such  fact  can  only  be  dis- 
covered upon  the  death  of  the  owner?  The  matter  at  least 
permits  of  argument,  and  is  not  so  capricious  and  whimsical 
as  to  be  purely  arbitrary.  It  has  in  it  at  least  an  effort  for 
the  equalization  of  taxation  and  the  adjustment  of  the  burdens 
of  government. 

"The  fact  that  other  bodies  have  come  to  the  same  con- 
clusion as  our  own  Legislature  may  have  a  slight  bearing 
upon  the  element  of  reason  in  this  tax  and  its  freedom  from 
mere  arbitrary  action. 

"Thus  Connecticut  has  placed  an  estate  tax  upon  property 
upon  which  no  town  or  city  tax  has  been  assessed  during  the 
year  preceding  death.  (Section  1190,  General  Statutes  of 
Conn.)  And  Louisiana  exempts  from  a  transfer  tax  property 
which  has  borne  its  just  proportion  of  taxes  prior  to  inheri- 
tance (quoted  in  note  to  Cohen  v.  Brewster,  203  U.  S.  543; 
Art.  235  and  Art.  236  of  the  Const,  of  La.;  Succession  of 
Pritchard,  118  La.  Ann.  883 ;  Succession  of  Westfeldt,  222  La. 
Ann.  836). 

"The  objection  to  a  tax  that  it  is  an  arbitrary  discrimina- 
tion must  be  approached  with  the  greatest  caution  (Hatch  v. 
Reardon,  204  U.  S.  152,  p.  158)." 

5.  By  Payment  of  Other  Taxes. 

This  classification  was  first  undertaken  by  the  constitution 
and  statutes  of  Louisiana. 

The  Transfer  Tax  Act  of  Louisiana  provides : 

'  *  The  tax  provided  for  in  the  preceding  article  shall  not  be 
enforced  when  the  property  donated  or  inherited  shall  have, 
borne  its  just  proportion  of  taxes  prior  to  the  time  of  such 
donation  or  inheritance." 

This  portion  of  the  act  was  quoted  by  the  Supreme  Court 
of  the  United  States  when  it  sustained  the  further  provision 
of  the  Louisiana  act  that  the  tax  might  apply  to  successions 
not  already  administered  even  though  the  testator  died  before 
the  statute.  Its  constitutionality  was  not  there  questioned. 
4 


50  INHERITANCE  TAXATION 

The  courts  of  Louisiana  have  found  the  classification  work- 
able and  to  accomplish  substantial  justice. 

Succession  of  Abadie,  118  La.  Ann.  708;  43  So.  306. 
Succession  of  Pritchard,  118  La.  Ann.  883;  43  So.  537. 
Succession  of  Fell,  119  La.  Ann.  1037;  44  So.  879. 
Succession  of  Stauffer,  119  La.  Ann.  66;  43  So.  928. 
Succession  of  Westf eldt,  122  La.  Ann.  836 ;  48  So.  281. 

Similar  distinctions  have  been  made  in  New  York  and 
Connecticut. 

6.  By  the  Kind  of  Transfer. 

In  the  very  nature  of  the  taxation  of  inheritances  there  is 
a  classification  as  to  the  kind  of  transfer,  and  an  excise  on 
such  a  transfer  may  be  imposed  when  there  is  no  such  tax 
upon  similar  transfers  among  the  living.  There  are  certain 
transfers  akin  to  inheritance  which  still  are  not  within  the 
ordinary  scope  of  death  taxes.  These  include  gifts  in  con- 
templation of  death  and  transfers,  inter  vivos,  reserving  a 
life  estate.  To  single  out  such  transfers  among  the  living  for 
taxation  is  held  a  proper  classification. 

Matter  of  Keeney,  194  N.  Y.  281 ;  87  N.  E.  428. 

D.— GENERAL  RULES  OF  CONSTRUCTION. 
1.  Strict  or  Liberal. 

In  the  early  days  of  inheritance  taxation  courts  were  in- 
clined rather  strongly  to  enforce  the  general  rule  that  such 
statutes  being  special  taxes  should  be  construed  strictly 
against  the  State  and  liberally  in  favor  of  the  taxpayer. 

People  v.  Griffith,  245  111.  532;  92  N.  E.  313. 
Matter  of  Enston,  113  N.  Y.  174;  21  N.  E.  87. 
Eidman  v.  Martinez,  184  U.  S.  578 ;  22  S.  Ct.  Rep.  515. 
Matter  of  Fayerweather,  143  N.  Y.  114;  38  N.  E.  278. 
Estate  of  Ullmann,  263  111.  528;  105  N.  E.  292. 
State  v.  Vance,  97  Minn.  532 ;  106  N.  W.  98. 

So,  if  the  tax  is  to  be  applied  to  the  property  of  non-resi- 
dent decedents,  such  transfers  must  be  specifically  included 
by  the  terms  of  the  statute. 

U.  S.  v.  Morris,  27  Fed.  341. 

Wallace  v.  Attorney  General,  L.  R.  1  Ch.  c.  1. 


PART  I  — THE  TAX  51 

But  the  rule  of  strict  construction  ordinarily  applied  to 
taxing  statutes,  apparently,  has  been  abandoned  by  the  more 
modern  authorities.  The  trend  of  the  decisions  seems  to  be 
that  statutes  taxing  inheritances  must  be  given  a  fair  and 
reasonable  construction  to  effectuate  the  intent  of  the  Legis- 
lature. 

State  v.  Bazille,  97  Minn.  11;  106  N.  W.  93. 

And  that  the  rule  of  strict  construction  in  favor  of  the  tax- 
payer is  to  be  applied  to  such  statutes  only  in  case  of  an 
ambiguity. 

Larson  v.  MacMiller,  56  Utah,  84;  189  Pac.  579. 
Curtis  v.  Corbin,  93  Conn.  648;  107  A.  17. 

''While  it  is  generally  held  that  taxation  statutes  will  be 
strictly  construed  against  the  State  or  taxing  power,  never- 
theless they  should  be  fairly  and  reasonably  construed,  so  as 
to  effectuate  the  intention  of  the  Legislature  in  enacting  such 
laws." 

Conway's  Estate  (Ind.),  120  N.  E.  717. 
D'Auquin's  Succession,  9  La.  Ann.  400. 

It  should  tend  rather  to  uphold  the  law  than  to  declare  it 
unconstitutional. 

Knox  v.  Emerson,  123  Tenn.  409 ;  131  S.  W.  972. 

And  should  uphold  the  tax  as  to  all  property  fairly  and 
reasonably  within  its  scope. 

State  v.  Scales,  172  N.  C.  915;  90  S.  E.  439. 

The  words  must  be  given  their  usual  and  ordinary  meaning. 

Mc'Cluskey  v.  Cromwell,  11  N.  Y.  593. 

Matter  of  O'Neil,  91  N.  Y.  516. 

Matter  of  Daly,  79  Misc.  Rep.  586 ;  141  Supp.  199. 

A  construction  which  leads  to  an  absurdity  should  be 
avoided. 

Howard's  Estate,  80  Vt.  489;  68  A.  513. 
Commonwealth  v.  Fenley,  189  Ky.  480;  225  S.  W.  154. 

Effect  must  be  given  to  all  the  words  so  that  none  are  con- 
strued as  void  or  superfluous. 

Stevens  v.  Bradford,  185  Mass.  439;  70  N.  E.  425. 


52  INHERITANCE  TAXATION 

Where  a  particular  subject  is  within  the  scope  of  the  law 
and  an  exemption  from  taxation  is  claimed  on  the  ground  that 
the  Legislature  has  not  provided  proper  machinery  for  ac- 
complishing the  legislative  purpose  in  a  particular  instance 
a  liberal  rather  than  a  strict  construction  should  be  applied, 
and  if  by  fair  and  reasonable  construction  of  its  provisions 
the  purpose  of  the  statute  can  be  carried  out,  that  interpreta- 
tion ought  to  be  given  to  effectuate  the  legislative  intent. 

Matter  of  Stewart,  131  N.  Y.  274,  282;  30  N.  E.  184. 
Matter  of  Hickock,  78  Vt.  259 ;  62  A.  724. 

And  a  statute  may  be  declared  void  in  part  and  yet  sus- 
tained as  to  the  rest,  if  severable. 

Union  Trust  Co.  v.  Durfee,  125  Mich.  487;  84  N.  W.  1101. 
Friend  v.  Levy,  76  Ohio  St.  26;  80  N.  E.  1036. 

2.  Exemptions. 

The  general  rule  has  been  that  exemptions  should  be  strictly 
construed  against  the  exemption  and  in  favor  of  the  tax. 

Be  Bull,  153  Cal.  715 ;  96  Pae.  366. 

State  v.  N.  Y.  Meeting  of  Friends,  61  N.  J.  Eq.  620;  48  A.  227. 
Be  Gopsill,  77  N.  J.  Eq.  215 ;  77  A.  793. 
Matter  of  Deutsch,  107  App.  Div.  191;  95  Supp.  65. 

Matter  of  Francis,  121  App.  Div.  129;  105  Supp.  643;  aff.  189  N.  Y.  554; 
148  Supp.  1116. 

Exemptions  are  an  act  of  grace  and  to  be  construed  strictly. 

Foss'  Estate,  114  Wash.  681;  196  Pac.  10. 

They  are  not  favored  by  the  law  and  the  burden  is  on  the 
one  claiming  them. 

Cornett's  Executors  v.  Commonwealth,  127  Va.  640;  105  S.  E.  230. 

Contra: 

Matter  of  Mergantine,  129  App.  Div.  368;  113  Supp.  948;  aff.  195  N.  Y. 

572;  88  N.  E.  1125. 
Matter  of  Arnot,  145  App.  Div.  708;  203  N.  Y.  627. 

The  exempting  clause  should  not  be  enlarged  at  the  expense 
of  the  enacting  clause. 

McDowell  v.  Addams,  51  Pa.  St.  438. 

All  grants  in  derogation  of  taxation  must  be  strictly  con- 
strued. 

Packer's  Estate,  246  Pa.  St.  133;  92  A.  75. 


PART  I  — THE  TAX  53 

An  exemption  to  local  but  not  to  foreign  charities  is  valid. 

Board  of  Education  v.  Illinois,  203  U.  S.  553 ;  27  S.  Ct.  Rep.  171. 

The  U.  S.  Supreme  Court  holds  that  reasonable  doubt 
should  be  resolved  in  favor  of  the  taxing  power. 

"Exemptions  from  taxation  are  not  favored  by  law,  and 
will  not  be  sustained  unless  such  clearly  appear  to  have  been 
the  intent  of  the  Legislature.  Public  policy  in  all  the  States 
has  almost  necessarily  exempted  from  the  scope  of  the  taxing 
power  large  amounts  of  property  used  for  religious,  educa- 
tional, and  municipal  purposes;  but  this  list  ought  not  to  be 
extended  except  for  very  substantial  reason;  and  while  as 
we  have  held  in  many  cases  Legislatures  may,  in  the  interest 
of  the  public,  contract  for  the  exemption  of  other  property, 
such  contract  should  receive  a  strict  interpretation  and  every 
reasonable  doubt  be  resolved  in  favor  of  the  taxing  power." 

Yazoo  &  Miss.  V.  Ry.  Co.  v.  Adams,  180  U.  S.  1;  21  S.  Ct.  Rep.  240. 

The  rule  as  above  stated  is  followed  in  an  opinion  of  the 
Attorney-General  of  Oregon  in  the  official  tax  pamphlet  of 
that  State,  citing  Gleason  &  Otis. 

The  rule,  however,  has  been  modified  in  New  York,  where 
the  Rockefeller  Foundation  has  been  held  exempt  under  a 
very  liberal  construction  of  the  statute. 

Matter  of  Rockefeller,  177  App.  Div.  786;  165  Supp.  154;  aff.  223  N.  Y. 
563. 

The  recent  trend  of  authorities  has  been  to  sustain  the  New 
York  rule  and  apply  a  liberal  rather  than  a  strict  construction 
to  exemptions  in  favor  of  educational  and  charitable  corpora- 
tions in  inheritance  tax  statutes. 

In  Massachusetts  the  "World  Peace  Foundation"  was  held 
to  be  exempt  under  the  statute  of  that  State. 

Parkhurst  v.  Burrill,  228  Mass.  196;  117  N.  E.  39. 

In  Connecticut  the  statute  of  1915  exempted  corporations 
receiving  "State  aid,"  and  this  was  held  to  include  all  cor- 
porations exempted  from  ordinary  taxation  on  the  theory 
that  they  thus  received  ' i  State  aid, ' '  and  it  was  squarely  held 
that  the  strict  construction  of  exemptions  was  not  applicable 
to  charities  and  educational  institutions. 

Corbin  v.  Baldwin,  92  Conn.  99;  101  A.  834. 


54  INHERITANCE  TAXATION 

The  courts  of  Iowa  have  recently  taken  the  same  position. 

Be  Spangler,  148  la.  333;  127  N.  W.  625. 

And  the  more  liberal  rule  has  also  been  adopted  in  Ver- 
mont. 

Curtis'  Estate,  88  Vt.  445;  92  A.  965. 

3.  Retroactive  or  Prospective. 

Inheritance  tax  statutes,  like  all  others,  are  generally  con- 
strued as  prospective  unless  expressly  declared  to  be  retroac- 
tive in  their  operation.  . 

On  this  theory  the  Supreme  Court  of  the  United  States  has 
held  the  act  of  1916  not  retroactive  as  to  gifts  in  contempla- 
tion of  death,  where  the  testator  died  prior  to  the  statute. 

Schwab  v.  Doyle,  —  U.  8.  — . 

This  doctrine,  as  here  stated,  was  recently  applied  in  an 
inheritance  tax  case  by  the  courts  of  Virginia,  citing  Gleasori 
&  Otis,  2nd  Ed.,  p.  56. 

Commonwealth  v.  Herbert,  127  Va.  291 ;  103  S.  E.  645. 

And  see,  generally: 

Gilbertson  v.  Ballard,  125  la.  420;  101  N.  W.  108. 

Tilford  v.  Dickinson,  79  N.  J.  L.  302;  75  A.  574. 

Provident  Hospital  v.  People,  198  111.  495;  64  N.  E.  1031. 

Re  Line,  155  Pa.  St.  378;  26  A.  728. 

Matter  of  Miller,  110  N.  Y.  216;  18  N.  E.  139. 

Matter  of  Van  Kleeck,  121  N.  Y.  710;  24  N.  E.  50. 

Eury  v.  State,  72  Ohio  St.  448;  74  N.  E.  650. 

As  we  have  seen,  in  most  jurisdictions  an  inheritance  tax 
may  be  retroactively  applied  to  property  of  a  decedent  who 
died  before  the  statute  if  it  remains  undistributed,  as  least 
as  to  personal  property.  (See  ante,  B-7-b.) 

Cohen  v.  Brewster,  203  U.  S.  543;  27  S.  Ct.  Rep.  174. 
Hostetter  v.  State,  26  Ohio  Cir.  Ct.  702. 

But  vested  rights  cannot  be  affected  retroactively,  nor  an 
estate  be  taxed  after  it  has  been  distributed. 

Matter  of  McKelway,  221  N.  Y.  15 ;  116  N.  E.  348. 
Succession  of  Stauffer,  119  La.  Ann.  66;  43  So.  928. 
Lacy  v.  State  Treasurer,  152  la.  477;  132  N.  W.  843. 


PART  I  — THE  TAX  55 

The  only  question  is  when  those  rights  vest.  On  this  the 
decisions  are  not  all  in  accord. 

A  curious  illustration  is  afforded  by  a  case  that  arose  in 
Pennsylvania.  An  intestate  died  leaving  collateral  heirs  and 
an  illegitimate  son  who  was  legitimatized  by  act  of  the  Legis- 
lature after  his  father's  death.  It  was  held  that  the  estate 
descended  to  the  collateral  heirs,  that  the  Legislature  could 
not  retroactively  change  the  succession,  and  that  the  State 
was  entitled  to  collect  the  collateral  inheritance  tax. 

Galbraith  v.  Commonwealth,  14  Pa.  St.  258. 

When  interests  in  real  property  become  vested  under  a 
trust  deed  executed  prior  to  enactment  of  the  statute,  such 
interests  are  exempt  from  the  tax  subsequently  provided. 
This  is  the  rule  even  though  the  interest  acquired  is  subject 
to  contingencies  which  might  affect  the  future  enjoyment 
of  it. 

Morrow  v.  Depper,  153  la.  341 ;  133  N.  W.  729. 
People  v.  MeCormick,  208  111.  437;  64  L.  R.  A.  775. 
Kingman's  Estate,  220  111.  563,  567. 

It  is  held  that  a  statute  of  limitations  may  be  construed 
retroactively  as  to  an  inheritance  tax  statute. 

Matter  of  Strang,  117  App.  Div.  796;  102  Supp.  1062. 
Matter  of  Moench,  39  Misc.  480;  80  Supp.  222. 

The  ordinary  rule  as  to  exemptions  is  that  they  will  not  be 
applied  retroactively. 

Re  Stanford's  Estate,  126  Cal.  112;  58  Pac.  462. 

Matter  of  Ryan,  3  Supp.  136. 

Sherrill  v.  Christ  Church,  121  N.  Y.  701;  25  N.  E.  50. 

A  different  rule  was  applied  in  Maryland  where  a  statute 
declared  that  inheritance  taxes  not  already  paid  by  a  sur- 
viving husband  on  his  wife's  estate  should  not  be  collected. 
The  court  held  that  it  was  not  strictly  in  the  nature  of  an 
exemption  but  rather  a  release. 

Montague  v.  State,  54  Md.  481. 

An  act  to  cure  a  constitutional  flaw  in  a  statute  may  be 
retrospective  in  its  operation. 

Ferry  v.  Campbell,  110  la.  290;  81  N.  W.  604. 


5(J  INHERITANCE  TAXATION 

"That  the  Legislature  may  cure  such  defects  is  fundamen- 
tal. Appellant's  counsel  say,  however,  that  the  estate  vested 
at  the  death  of  the  testator  and  that  any  change  made  thereon 
by  the  Legislature  after  his  death  is  unconstitutional  and 
void.  As  to  the  real  estate  this  is  true,  perhaps,  although  it 
is  best  that  we  do  not  decide  the  point  on  the  arguments  be- 
fore us.  As  to  the  personal  estate  the  rule  seems  to  be  dif- 
ferent, however.  While  the  distributive  share  is  a  vested 
interest — that  is,  vests  in  point  of  right  at  the  time  of  the 
death  of  the  intestate — yet  the  persons  who  take  and  the 
amount  to  be  received  must  be  ascertained  and  determined  by 
the  probate  court.  So  long  as  the  entire  estate  remains  un- 
settled the  Legislature  may  cure  any  defects  in  the  law  creat- 
ing a  lien  thereon  and  the  act  may  be  retroactive." 

So,  where  the  distribution  was  delayed  by  the  provisions  of 
the  will  for  many  years,  and  an  inheritance  tax  law  was  en- 
acted in  the  meantime,  the  court  held  that  the  shares  of  the 
heirs  at  law  were  subject  to  the  tax. 

Hostetter  v.  State,  26  Ohio  Cir.  Ct.  702. 

On  the  other  hand,  no  one  has  a  vested  right  to  a  given 
form  of  procedure,  and  where  a  statute  failed  to  provide  for 
due  notice  and  a  hearing,  the  defect  can  be  cured  retroac- 
tively. Where  the  original  act  did  not  provide  for  notice 
of  appraisal,  but  notice  was  provided  for  by  an  amendment 
which  was  given  a  retroactive  effect,  the  court  said:  "There 
was  no  valid  objection  to  the  levy  of  such  a  tax.  That  is  to 
say,  it  is  not  an  illegal  or  unauthorized  tax.  It  is  invalid 
simply  because  the  Legislature  did  not  provide  for  notice  of 
the  proceedings  by  which  the  amount  of  the  tax  is  to  be 
ascertained." 

Ferry  v.  Campbell,  110  la.  290,  299;  81  N.  W.  604. 

This  rule  as  here  laid  down  was  recently  applied  by  the 
courts  of  Kentucky.  The  statute  of  that  State  in  1906  im- 
posed a  tax  on  non-resident  property  transferred  within  the 
State,  but  gave  no  means  of  enforcing  the  tax  collection.  The 
statute  of  1914  provided  a  remedy  which  was  held  to  be 
retroactive. 

Dewitt  v.  Commonwealth,  184  Ky.  437,  212  S.  W.  437. 


PART  I  — THE  TAX  57 

Even  a  constitution  is  not  retroactive  unless  the  intent  to 
make  it  apply  to  conditions  prior  to  its  adoption  is  clearly 
manifest.  The  Louisiana  constitution  of  1898  provided  that 
the  inheritance  tax  could  not  be  enforced  when  the  property 
in  question  shall  have  borne  its  just  proportion  of  taxes  prior 
to  that.  These  provisions  and  the  provisions  of  the  Louisiana 
statutes  carrying  these  articles  of  the  constitution  into  effect 
do  not  reach  back  to  conditions  anterior  to  the  constitution 
itself,  and  where  taxes  due  in  1878  and  1883  on  certain  lands 
had  not  been  paid  the  collector  urged  that  it  made  no  differ- 
ence how  far  back  in  the  past  the  failure  to  pay  taxes  may 
have  occurred  nor  who  the  owners  of  the  lot  may  have  been 
at  that  time ;  but  the  court  held  that  taxes  due  before  the  pas- 
sage of  the  constitution  are  not  included. 

Succession  of  Westfeldt,  122  La.  Ann.  836;  48  So.  281. 

Statutes  have  been  held  not  retroactive  as  to  gifts  in  con- 
templation of  death. 

Felton's  Estate,  176  Cal.  663;  169  Pac.  392. 

Nor  as  to  gifts  to  take  effect  at  or  after  death  where  the 
property  had  been  delivered  to  a  third  party. 

Hunt  v.  Wicht,  174  Cal.  205;  162  Pac.  639. 

4.  Statutes  Held  Invalid. 

In  1897  Pennsylvania  enacted  a  direct  inheritance  tax 
which  was  declared  unconstitutional  as  a  tax  on  property, 
though  it  was  substantially  copied  from  statutes  sustained 
in  other  States  on  the  theory  of  a  tax  on  privilege;  but  the 
court  is  careful  not  to  say  that  a  statute  might  not  be  sus- 
tained on  the  privilege  theory  if  so  worded  as  to  be  clearly 
an  excise. 

Cope's  Estate,  191  Pa.  St.  1;  43  A.  79. 

This  decision  is  not  an  authority  in  other  States  as  it  is 
based  on  the  peculiar  wording  of  the  Pennsylvania  Consti- 
tution. The  original  collateral  inheritance  tax  was  enacted 
in  that  State  in  1826,  prior  to  the  present  constitution. 

Inheritance  tax  statutes,  under  various  clauses  of  State 
constitutions,  have  been  held  invalid,  generally  because  they 


58  INHERITANCE  TAXATION 

were  in  form  taxes  on  property  and  not  on  the  transfer,  and 
therefore  unequal,  or  the  Legislature  was  regarded  as  hav- 
ing made  arbitrary  classifications. 

State  v.  Mann,  76  Wis.  469;  45  N.  W.  526. 
Black  v.  State,  113  Wis.  205;  89  N.  W.  522. 
State  v.  Ferris,  53  Ohio  St.  314;  41  N.  E.  579. 
Curry  v.  Spencer,  61  N.  H.  624;  60  Am.  St.  Rep.  337. 
State  v.  Switzler,  143  Mo.  316;  45  S.  W.  245. 
State  v.  Harvey,  90  Minn.  150;  95  N.  W.  764. 
State  v.  Bazile,  97  Minn.  11;  106  N.  W.  93. 
State  v.  Gorman,  40  Minn.  232;  41  N.  W.  948. 
Chambee  v.  Durfee,  100  Mich.  112;  58  N.  W.  661. 

Statutes  were  held  void  in  part  and  sustained  as  to  the 
rest  in : 

Friend  v.  Levy,  70  Ohio  St.  26 ;  80  N.  E.  1036. 

Union  Trust  Co.  v.  Durfee,  125  Mich.  487;  84  N.  W.  1101. 

Re  Stanford's  Estate,  54  Pac.  259;  rev.  126  Cal.  112;  58  Pac.  462. 

Where  void  in  part  the  court  refused  to  sustain  the  rest  of 
the  act  in : 

Drew  v.  Tift,  79  Minn.  175;  81  N.  W.  839. 
State  v.  Harvey,  90  Minn.  180;  95  N.  W.  764. 

Many  State  constitutions  require  the  taxing  act  to  express 
its  purpose  in  the  title.  So,  where  an  act  mentioned  only 
collateral  inheritances  in  the  title,  it  was  held  void  as  to 
illegitimate  children  on  the  ground  that  they  could  not  be 
classed  as  collaterals. 

Wirringer  v.  Morgan,  12  Cal.  App.  26;  106  Pac.  425. 

If  the  title  does  not  mention  real  estate  it  was  held  that  the 
tax  could  not  be  imposed  upon  real  estate  transfers  under  the 
New  Jersey  acts  of  1892  and  1893. 

Grossman  v.  Hancock,  58  N.  J.  L.  139;  32  A.  689. 
Van  Ripper  v.  Heffenheimer,  17  N.  J.  L.  49. 

A  tax  on  "inheritances"  sufficiently  covers  transfers  by 
will. 

Re  White,  42  Wash.  360 ;  84  Pac.  831. 

As  a  general  rule,  only  those  adversely  affected  can  attack 
the  validity  of  a  statute. 

Re  Damon,  10  Cal.  App.  542;  102  Pac.  684. 
Matter  of  Keeney,  194  N.  Y.  281;  87  N.  E.  428. 


PART  I  — THE  TAX  59 

5.  Statutes  Sustained  under  the  Fourteenth  Amendment. 

State  inheritance  tax  laws  have  frequently  heen  assailed 
before  the  Supreme  Court  of  the  United  States  on  the  ground 
that  they  are  in  violation  of  the  Fourteenth  Amendment ;  but 
they  have  uniformly  been  sustained.  The  doctrine,  as 
gleaned  from  the  authorities,  is  as  follows: 

The  court  distinguishes  between  "the  measure  of  the  tax 
upon  the  privilege,  with  direct  taxation  of  the  estate  or  thing 
taxed." 

Flint  v.  Stone-Tracy  Co.,  220  U.  S.  107,  162. 

"If  a  State  may  deny  the  privilege  altogether,  it  follows 
that  when  it  grants  it,  it  may  annex  to  the  grant  any  con- 
ditions which  it  supposes  to  be  required  by  its  interests  or 
policy. ' ' 

Mager  v.  Grima,  17  How.  490,  494. 

In  Magoun  v.  Illinois  Trust  and  Savings  Bank,  170  U.  S. 
283,  involving  the  constitutionality  of  the  graded  inheritance 
tax  law  of  Illinois,  which  taxes  the  particular  successions 
according  to  the  measure  of  the  value  of  the  property  at  the 
date  of  death,  this  court,  in  deciding  that  the  act  did  not  con- 
flict in  any  way  with  the  constitution  of  the  United  States, 
appears  in  its  opinion  fully  to  recognize  the  right  of  the  State 
to  measure  its  tax  in  this  way,  and  says  (p.  300) : 

"The  rule  of  equality  of  the  Fourteenth  Amendment  does 
not  require,  as  we  have  seen,  exact  equality  of  taxation.  It 
only  requires  that  the  law  imposing  it  shall  operate  on  all 
alike  under  the  same  circumstances.  The  tax  is  not  on  money ; 
it  is  on  the  right  to  inherit;  and  hence  a  condition  of  in- 
heritance, and  it  may  be  graded  according  to  the  value  of  that 
inheritance.  The  condition  is  not  arbitrary  because  it  is 
determined  by  that  value;  it  is  not  unequal  in  operation  be- 
cause it  does  not  levy  the  same  percentage  on  every  dollar; 
and  does  not  fail  to  treat  all  alike  under  like  circumstances 
and  conditions,  both  in  the  privilege  conferred  and  in  the 
liabilities  imposed." 

In  Plummer  v.  Coler,  178  U.  S.  115,  involving  the  taxation 
of  a  succession  containing  bonds  of  the  United  States,  the 
court  (pp.  128,  129)  quoted,  with  approval,  from  the  opinion 


60  INHERITANCE  TAXATION 

of  Mr.  Justice  Field  in  Home  Insurance  Co.  v.  New  York, 
134  U.  S.  594;  599-600: 

"The  granting  of  such  right  or  privilege  rests  entirely  in 
the  discretion  of  the  State,  and,  of  course,  when  granted, 
may  be  accompanied  with  such  conditions  as  the  Legislature 
may  deem  most  befitting  to  its  interests  and  policy.  It  may 
require,  as  a  condition  of  the  grant  of  the  franchise,  and  also 
of  its  continued  exercise,  that  the  corporation  pay  a  specific 
sum  to  the  State  each  year,  or  each  month,  or  a  specific  por- 
tion of  its  gross  receipts,  or  a  sum  to  be  ascertained  in  any 
convenient  way  which  it  may  prescribe.  The  validity  of  the 
tax  can  in  no  way  be  dependent  upon  the  mode  which  the 
State  may  deem  fit  to  adopt,  in  fixing  the  amount  for  any 
year  which  it  will  exact  for  the  franchise.  No  constitutional 
objection  lies  in  the  way  of  a  legislative  body  prescribing  any 
mode  of  measurement  to  determine  the  amount  it  will  charge 
for  the  privilege  it  bestows. " 

In  Orr  v.  Oilman,  183  U.  S.  248,  the  court  said : 

"The  provisions  of  the  law  extend  alike  to  all  estates  that 
descend  or  devolve  upon  the  death  of  those  who  once  owned 
them.  The  moneys  raised  by  the  taxation  are  applied  to  the 
lawful  uses  of  the  State,  in  which  the  legatees  have  the  same 
interests  with  the  other  citizens.  Nor  is  it  claimed  that  the 
amount  or  rate  of  the  taxation  is  excessive  to  the  extent  of 
confiscation." 

In  Keeney  v.  New  York,  222  U.  S.  525,  the  measure  of  the 
tax  was  questioned  in  brief  for  the  plaintiff  in  error,  and  the 
court  said  (p.  535) : 

"The  validity  of  the  tax  must  be  determined  by  the  laws 
of  New  York.  The  Fourteenth  Amendment  does  not  diminish 
the  taxing  power  of  the  State,  but  only  requires  that  in  its 
exercise  the  citizen  must  be  afforded  an  opportunity  to  be 
heard  on  all  questions  of  liability  and  value,  and  shall  not, 
by  arbitrary  and  discriminatory  provisions,  be  denied  equal 
protection. ' ' 

In  Society  for  Savings  v.  Coite,  6  Wall.  594,  was  upheld 
a  tax  on  savings  banks  measured  by  the  amount  of  the  de- 
posits on  July  1,  and  although  invested  in  United  States 
bonds. 

In  Hamilton  Co.  v.  Massachusetts,  6  Wall.  632,  was  upheld 


PART  I  — THE  TAX  gl 

I 

a  tax  on  a  corporation  measured  by  the  market  value  of  such 
stock  over  the  assessed  value  upon  a  certain  day. 

In  Delaware  R.  R.  Tax  Case,  18  Wall.  206,  231,  this  court 
said: 

"The  manner  in  which  its  value  shall  be  assessed,  and  the 
rate  of  taxation,  however  arbitrary  and  capricious,  are  mere 
matters  of  legislative  discretion.  It  is  not  for  us  to  suggest 
in  any  case  that  a  more  equitable  mode  of  assesment,  or  rate 
of  taxation,  might  be  adopted  than  the  one  prescribed  by  the 
Legislature  of  the  State." 

In  Kirtland  v.  Hotchkiss,  100  U.  S.  491,  499,  the  court  said: 

"Whether  the  State  of  Connecticut  shall  measure  the  con- 
tribution which  persons  resident  within  its  jurisdiction  shall 
make  by  way  of  taxes,  in  return  for  the  protection  which  it 
accords  them,  by  the  value  of  the  credits,  choses  in  action, 
bonds  or  stocks  which  they  may  own  *  is  a  matter 

which  concerns  only  the  people  of  the  State,  with  which  the 
Federal  Government  cannot  rightly  interfere." 

In  Bell's  Gap  R.  R.  Co.  v.  Penn.,  134  U.  S.  232,  a  State  tax 
upon  the  nominal  face  value  of  bonds  instead  of  their  actual 
value  was  held  to  be  a  valid  part  of  the  State  system  of 
taxation  and  that  decision  was  approved  in  Flint  v.  Stone- 
Tracy  Co.,  220  U.  S.  107,  160. 

To  a  like  effect  are : 

Maine  v.  Grand  Trunk  Ey.  Co.,  142  U.  S.  217. 

Horn  Silver  Mining  Co.  v.  New  York,  143  U.  S.  305,  317,  318. 

Hanley  v.  Kansas  City  Ey.,  187  U.  S.  617. 

Wisconsin  &  M.  Ey.  Co.  v.  Powers,  191  U.  S.  379. 

Michigan  Central  Ey.  v.  Powers,  201  U.  S.  245,  293. 

Flint  v.  Stone-Tracy  Co.,  220  U.  S.  107,  162,  163. 

Baltic  Mining  Co.  v.  Commonwealth,  231  U.  S.  68. 

Cornell  Steamboat  Co.  v.  Sohmer,  235  U.  S.  549. 

6.  Notice  and  a  Hearing. 

A  statute  that  does  not  provide  for  it  is  unconstitutional. 

Matter  of  McPherson,  104  N.  Y.  306;  10  N.  E.  685. 
Ferry  v.  Campbell,  110  la.  290;  81  N.  W.  604. 
Keeney  v.  New  York,  222  U.  S.  525. 
State  v.  District  Court,  41  Mont.  357;  109  Pac.  438,  442. 

Where  the  act  provides  for  a  review  of  all  matters  before 
the  probate  court  and  also  for  an  appeal,  there  is  a  "day  in 


(J2  INHERITANCE  TAXATION 

court"  for  all  who  consider  themselves  aggrieved,  and  an  act 
which  does  not  provide  for  a  notice  of  appraisal  but  gives 
these  remedies  is  constitutional. 

Hostetter  v.  State,  26  Ohio  Cir.  Ct.  702. 

Union  Trust  Co.  v.  Durfee,  125  Mich.  487;  84  N.  W.  1101. 

When  the  right  of  appeal  is  conferred  by  the  act  notice  may 
be  implied. 

Re  Belcher,  211  Pa.  St.  615;  61  A.  252. 

It  is  sufficient  if  the  probate  court  has  power  to  hear  allega- 
tions under  the  tax,  with  right  of  appeal  as  in  other  cases. 

Trippet  v.  State,  149  Cal.  521;  86  Pac.  1084. 

Provision  for  notice  by  registered  mail  is  sufficient. 

State  v.  District  Court,  41  Mont.  357;   109  Pac.  438. 

Or  by  publication. 

Farkas  v.  Smith,  147  Ga.  503 ;  94  S.  E.  1016. 

A  defect  in  a  statute,  due  to  want  of  notice,  may  be  cured 
by  amendment  without  re-enactment. 

Ferry  v.  Campbell,  110  la.  290 ;  81  N.  W.  604. 

While  notice  to  the  parties  interested  in  the  estate  is  suffi- 
cient, the  statute  may  also  require  notice  to  the  taxing  officers. 

Matter  of  Collins,  104  App.  Div.  184 ;  93  Supp.  342. 

7.  Copied  or  Adopted  Statutes. 

When  a  statute  is  copied  or  adopted  from  another  State 
the  construction  put  upon  it  by  courts  of  that  State  is  also 
adopted. 

People  v.  Northern  Trust  Co.,  289  111.  475;  124  N.  E.  662. 

People  v.  Carpenter,  264  111.  490;  106  N.  E.  302. 

Mann  v.  Carter,  74  N.  H.  345;  68  A. '130. 

Neilson  v.  Russell,  76  N.  J.  L.  655;  71  A.  286. 

Black  v.  State,  113  Wis.  205;  89  N.  W.  522. 

Miller  v.  McLaughlin,  141  Mich.  425;   104  N.  W.  777. 

While  such  construction  is  not  absolutely  binding  upon  the 
courts  of  the  State  which  copies  the  statute  it  is  "very  per- 
suasive" and  will  generally  be  followed. 

Conner  v.  Parsley,  192  Ky.  827,  234  S.  W.  932. 


PAET  I  — THE  TAX  (J3 

In  view  of  the  general  similarity  of  the  statutes  and  the 
frequency  with  which  they  are  adopted  or  copied  this  rule 
is  of  wide  application  and  of  manifest  importance. 

But  the  date  of  the  decision  cited  is  of  great  importance 
because  the  authorities  cited  from  the  parent  jurisdiction  in 
cases  that  arose  subsequent  to  the  adoption  of  the  statute  are 
advisory  only  and  not  of  any  binding  force. 

Germania  Life  Ins.  v.  Ross  Lewin,  24  Colo.  43;  51  Pac.  488. 

Nicolett  Bank  v.  City  Bank,  38  Minn.  85;  35  N.  W.  577. 

Pratt  v.  Miller,  109  Mo.  78 ;  18  S.  W.  965. 

Stadler  v.  First  National  Bank,  22  Mont.  190;  56  Pac.  111. 

O'Connor,  21  R.  I.  465;  44  A.  591. 

Wyoming  Coal  Co.  v.  State,  15  Wyo.  97;  87  Pac.  377. 

8.  Practical  Construction. 

Where  the  language  of  the  act  is  doubtful  and  a  practical 
construction  has  been  given  it  by  the  collection  officers  and 
has  long  been  acquiesced  in,  the  courts  will  recognize  it;  but 
only  under  these  circumstances. 

"It  is  immaterial  what  the  practice  of  the  administrative 
officers  of  the  Commonwealth  charged  with  the  duty  of  col- 
lecting legacy  and  succession  taxes  may  have  been  in  regard 
to  considering  property  within  and  without  the  Common- 
wealth. It  is  only  when  a  statute  is  of  doubtful  import  and 
the  practice  has  been  long  continued  and  acquiesced  in  by  all 
parties  interested  that  it  can  be  resorted  to  in  aid  of  the 
construction  of  the  statute.  In  the  present  case  we  discover 
no  such  ambiguity  in  the  meaning  of  the  statute  as  to  justify 
as  an  aid  to  construction  a  resort  to  the  practice  of  the  officers 
charged  with  its  execution,  even  if  we  assume  that  the  prac- 
tice had  been  sufficiently  long  continued  to  render  it  otherwise 
admissible. ' ' 

Attorney-General  v.  Barney,  211  Mass.  134;  97  N.  E.-  750. 

On  the  other  hand,  the  same  learned  court  has  recently 
given  great  weight  to  the  practical  construction  of  the  statute 
by  the  officials  entrusted  with  its  enforcement. 

Tyler  v.  Treasurer,  226  Mass.  306;  115  N.  E.  300. 

A  method  followed  by  the  tax  department  in  construing 
rates  and  exemptions  held  valid  on  this  ground,  although  the 


64  INHERITANCE  TAXATION 

court  would  have  decided  otherwise  had  the  question  arisen 
de  novo  and  the  authorities  in  other  States  under  similar  acts 
were  to  the  contrary.  (For  opinion  in  full  see  Appendix 
under  Minnesota  statute.) 

Boutin's  Estate    (Minn.),  182   N.  W.  990. 

But  practical  construction  cannot  create  a  liability  where 
none  exists  by  virtue  of  the  statute. 

Kite's  Estate  (la.),  187  N.  W.  585. 

9.  Arbitrary  or  Confiscatory  Rates. 

No  transfer  tax  has  as  yet  been  held  unconstitutional  on 
the  ground  that  it  is  exorbitant  or  confiscatory.  Ordinarily 
the  doctrine  that  the  power  to  tax  involves  the  power  to 
destroy  is  applied,  on  the  ground  that,  as  there  is  no  consti- 
tutional right  of  inheritance,  and  the  living  take  from  the 
dead  by  virtue  of  statute  only. 

Pullen  v.  Com'rs,  86  N.  C.  361. 

Be  McKennan,  25  S.  D.  369 ;  126  N.  W.  611 ;  130  N.  W.  33. 

Bretton  v.  Fox,  100  Mass.  234. 

Allen  v.  McElroy,  130  Ky.  Ill ;  113  S.  W.  66. 

But  where  a  probate  duty  has  been  imposed  it  has  been 
suggested  that  it  may  be  so  large  as  to  shock  the  good  sense 
of  everybody. 

State  v.  Mann,  76  Wis.  469,  474;  45  N.  W.  526;  46  N.  W.  51. 
State  v.  Gorman,  40  Minn.  232 ;  41  N.  W.  948. 

It  has  also  been  suggested  that  an  arbitrary  and  confis- 
catory progressive  tax  may  be  unconstitutional  if  the  graded 
rates  are  extended  beyond  reason. 

Knowlton  v.  Moore,  178  U.  S.  41 ;  20  S.  Ct.  Eep.  747. 
Blakemore  &  Bankroft,  p.  63. 

There  is,  as  yet,  no  direct  authority  for  the  proposition, 
and  the  doctrine,  so  frequently  emphasized,  that  what  the 
State  gives  it  may  take  away,  to  the  point  of  complete  con- 
fiscation would  seem  to  be  sustained  by  the  weight  of  authority. 
However,  as  the  tax  is  on  the  transfer,  if  all  is  taken  there 
is  no  transfer,  and  hence  the  tax  becomes  one  on  property. 
If  the  tax  is  so  exorbitant  that  it  amounts  to  a  confiscation  of 


PART  I  — THE  TAX  55 

a  material  portion  of  the  property,  the  same  reasoning  might 
apply  and  the  tax  be  condemned  as  a  property  tax. 

The  Federal  tax  of  25%  where  the  estate  is  over  $10,000,000 
and  State  taxes  of  30%  where  the  transfer  is  over  a  million 
to  collaterals  and  strangers  have  never  been  challenged  on  this 
ground  and  Inheritance  Taxation  during  the  war  period 
would  seem  to  have  "gone  the  limit." 

An  amendment  taxing  estates  of  over  $10,000,000  50% 
passed  the  U.  S.  Senate  after  a  protracted  debate  in  the  fall 
of  1921,  but  was  omitted  in  conference  and  no  change  in  the 
present  Federal  rates  was  made.  Such  a  tax  might  be 
attacked  as  confiscation  and  not  taxation. 

That  the  power  to  tax  involves  the  power  to  destroy  is  true 
of  a  property  tax.  It  may  also  be  true  that  a  State  statute 
might  abolish  all  inheritances.  But  it  is  clear  that  the  Fed- 
eral Government  could  not  do  so  under  the  constitution.  It 
is  therefore  within  reason  that  a  Federal  tax  might  be  so  large 
that  the  Supreme  Court  would  refuse  to  sustain  it. 

10.  Public  Purpose. 

Inheritance  taxes,  like  all  other  taxes,  must  be  imposed  for 
a  public  purpose.  The  Missouri  act  of  1895  proved  obnoxious 
to  this  rule,  as  the  proceeds  of  the  tax  were  to  be  devoted  to 
the  support  of  students  attending  the  State  university.  The 
court  pointed  out  that  it  is  one  thing  to  provide  for  the  estab- 
lishment and  maintenance  of  a  system  of  public  education  and 
a  wholly  different  thing  to  support  private  individuals  who 
attend  a  university  and  public  schools  by  public  taxation ;  and 
the  court  concludes  that  the  tax  is  levied  for  a  purely  private 
purpose  and  for  that  reason  is  in  contravention  of  the  con- 
stitution of  Missouri. 

State  v.  Switzler,  143  Mo.  287;  45  S.  W.  245. 

To  the  same  effect  is 

Luminous  Medicine  v.  Leigenhein,  145  Mo.  368;  47  S.  W.  10. 

Missouri  amended  the  act  in  1899  to  meet  this  objection 
and  merely  devoted  the  receipts  from  the  tax  to  a  fund  for 
"State  Seminary  Moneys."  This  statute  was  sustained. 

State  v.  Henderson,  160  Mo.  190;  60  S.  W.  109. 


66  INHERITANCE  TAXATION 

Under  the  present  act  this  State  devotes  the  receipts  from 
inheritance  taxes  to  general  purposes.  (See  Appendix.) 

Statutes  were  held  void  because  the  funds  received  from 
the  tax  were  not  devoted  to  a  constitutional  purpose  in  Wis- 
consin. (L.  1889,  ch.  176.) 

State  v.  Mann,  76  Wis.  479;  45  N.  W.  526;  46  N.  W.  51. 

And  in  Michigan.  (Act  of  1893  wholly  and  act  of  1899  in 
part.) 

Chambee  v.  Durfee,  100  Mich.  112;  58  N.  W.  661. 
Union  Trust  Co.  v.  Durfee,  125  Mich.  487;  84  N.  W.  1101. 

On  the  other  hand,  the  fact  that  a  statute  is  for  a  public 
purpose  does  not  give  it  validity,  if  it  is  otherwise  unconsti- 
tutional. 

Curry  v.  Spencer,  61  N.  "H.  624;  60  Am.  St.  Rep.  337. 

11.  Amendment. 

The  same  principles  apply  in  the  construction  of  an  amend- 
ment to  a  statute  as  prevail  in  the  construction  of  the  original 
act,  and  the  tax  is  governed  by  the  law  in  force  at  the  death 
of  the  testator,  although  it  has  been  amended  or  repealed 
subsequently. 

Quessart  v.  Canouge,  3  La.  560. 

Matter  of  Moore,  90  Hun,  562;  35  Supp.  782. 

Procedure  may  be  changed  by  amendment  and  applied  to 
the  taxation  of  estates  where  death  has  already  occurred,  but 
the  substantial  rights  remain  unaffected. 

Matter  of  Davis,  149  N.  Y.  539;  44  N.  E.  185. 

The  action  of  the  Legislature  in  amending  a  statute  may 
be  taken  as  some  indication  that  the  law  did  not  cover  the 
case  before ;  the  theory  being  that  there  has  been  an  implied 
legislative  construction. 

Matter  of  Enston,  113  N.  Y.  174;  21  N.  E.  87. 
U.  S.  v.  Field,  255  U.  S.  527. 

The  words:  "Acts  amendatory  thereof"  were  construed  to 
apply  only  to  "live"  statutes,  and  not  revive  a  statute  thereto- 
fore repealed;  hence  a  brother's  and  sister's  succession  is 
taxed  under  the  present  Tennessee  statute. 

State  v.  Shepardson,  141  Tenn.  474;  212  S.  W.  101. 


PAET  I  — THE  TAX  67 

An  amendment  creating  exemptions  will  not  be  given  a 
retroactive  effect. 

Connell  v.  Crosby,  210  111.  380;  71  N.  E.  350. 

And  an  amendment  extending  exemptions  has  no  such  effect 
unless  the  act  expressly  so  declares. 

Provident  Hospital  v.  People,  198  111.  95;  64  N.  E.  1031. 

Matter  of  Ryan,  3  Supp.  136. 

Matter  of  Thompson,  14  St.  Eep.  (N.  Y.)  487. 

Matter  of  Wolfe,  66  Hun,  389;  21  Supp.  515. 

An  amendment  without  repeal  continues  the  former  statute, 
and,  as  we  have  seen,  the  estates  of  persons  dying  prior  to  the 
statute  are  taxed  under  the  law  as  it  then  stood. 

Re  Howard,  80  Vt.  489;  68  A.  513. 

Re  Bowen  (Gal.),  94  Pac.  1055. 

Matter  of  Jones,  54  Misc.  202;  105  Supp.  932. 

12.  Repeal. 

The  absolute  repeal  of  an  inheritance  tax  statute  without 
any  saving  clause  may  leave  the  State  with  vested  rights  to 
its  accrued  tax  without  any  machinery  for  enforcing  them. 
This  situation  occurred  in  California  and  the  court  said: 

"The  Legislature  might  perhaps  abolish  all  laws  for  the 
collection  of  debts;  this,  however,  would  not  have  the  effect 
of  paying  or  discharging  the  debts  or  in  the  least  impair  the 
obligation  to  pay  them." 

Estate  of  Stanford,  126  Cal.  112 ;  54  Pac.  259 ;  58  Pac.  462. 

So,  when  the  testator  died  while  the  tax  act  was  in  force, 
but  no  steps  had  been  taken  for  collection  and  the  repealing 
act  saved  no  rights  of  appraisal;  in  an  action  in  equity  to 
quiet  title  held:  "If  there  be  a  valid  claim  against  such  prop- 
erty the  plaintiff  cannot  in  this  equitable  proceeding  quiet  his 
title  against  such  claim,  even  though  the  same  be  unenforce- 
able by  legal  proceedings,  without  paying  the  claim." 

Trippet  v.  State,  149  Cal.  521;  86  Pac.  1084. 
Estate  of  Lander,  6  Cal.  App.  744;  93  Pac.  202. 

a.     SAVING  CLAUSES. 

There  may  be  such  a  clause  in  another  statute,  as  in  New 
York,  where  the  rights  of  the  State  were  held  to  be  saved  by 
such  a  clause  in  the  General  Construction  Law. 

Matter  of  Wright,  214  N.  Y.  714;  108  N.  E.  1112. 


(Jg  INHERITANCE  TAXATION 

In  the  above  cited  case  the  testator  had  died  a  non-resident 
in  1909.  By  the  will  of  his  mother  a  life  interest  in  a  fund 
was  given  to  his  brother  and  in  default  of  issue  of  the  brother 
to  the  testator.  The  brother  lived  until  1912  when  he  died 
without  issue.  The  remainder  then  passed  under  the  will  of 
testator.  The  trust  fund  consisted  of  stock  in  a  New  York 
corporation.  In  1911  the  statute  taxing  intangible  personal 
property  of  non-residents  was  repealed.  It  was  contended 
that  the  remainder  interest,  being  defeasible  by  the  birth  of 
issue  to  the  brother,  could  not  be  ascertained  on  the  death  of 
the  remainderman  in  1909,  and  was  not  taxable  until  1912— 
when  the  life  tenant  died;  and,  as  the  statute  was  then  re- 
pealed, no  tax  was  due  and  the  Appellate  Division  so  held, 
two  justices  dissenting.  The  Court  of  Appeals  held  that  the 
tax  accrued  on  the  death  of  the  remainderman  in  1909,  al- 
though the  life  tenant  survived  him,  and,  being  vested  in  the 
State,  was  not  defeated  by  the  repealing  act  of  1911. 

So  the  United  States  Courts  hold  that  a  saving  clause  pre 
serves  all  taxes  due  prior  to  the  repeal. 

Kertz  v.  Woodman,  218  U.  S.  205 ;  30  S.  Ct.  Eep.  621. 

The  Federal  courts  also  hold  that  a  saving  clause  in  a  re- 
pealing act  does  not  preserve  the  tax  as  to  remainders  after 
life  estates  where  the  life  tenant  still  survives. 

dapp  v.  Mason,  94  U.  S.  589. 

Mason  v.  Sargent,  104  U.  S.  689. 

United  States  v.  Rankin,  8  Fed.  872. 

United  States  v.  Hazard,  8  Fed.  380. 

United  States  v.  N.  Y.  Ins.  and  Trust  Co.,  Fed.  Caa.  15,837. 

Sturgis  v.  U.  S.,  117  U.  S.  363;  6  S.  Ct.  Rep.  767. 

United  States  v.  Kelley,  28  Fed.  845. 

As  we  have  seen  this  doctrine  is  inapplicable  under  statutes 
providing  for  the  immediate  taxation  of  the  remainder. 

Matter  of  Wright,  214  N.  Y.  714;  108  N.  E.  1112. 

A  saving  clause  which  repealed  the  act '  *  except  as  to  estates 
in  which  the  inventory  has  been  filed"  is  arbitrary,  unequal, 
and,  therefore,  unconstitutional. 

Friends  v.  Levy,  76  Ohio  St.  26;   80  N.  E.  1036. 

A  vested  but  defeasible  estate  in  remainder  created  by  deed 
made  before  act  of  1909,  reserving  income  to  the  grantor  for 


PART  I  —  THE  TAX 


69 


life,  is  not  subject  to  the  tax  under  saving  clause  in  the  taxing 
statute  or  saving  clause  of  general  law  concerning  statutes, 
where  death  of  the  grantor  occurred  after  the  act  of  1909 
became  operative,  since  at  the  time  the  act  went  into  effect  the 
State  had  no  right  to  claim  a  tax  thereon  under  the  provisions 
of  the  act  of  1895  as  under  that  act  the  tax  would  not  have 
become  due  until  the  death  of  the  grantor. 

People  v.  Carpenter,  274  111.  102. 

b.    BY  IMPLICATION. 

In  the  case  of  statutes  alleged  to  be  inconsistent  with  each 
other  in  whole  or  in  part,  the  rule  is  well  established  that  effect 
must  be  given  to  both,  if  by  any  reasonable  interpretation  that 
can  be  done ;  that  there  must  be  a  positive  repugnancy  between 
the  provisions  of  the  new  laws  and  those  of  the  old ;  and  even 
then  the  old  law  is  repealed  by  implication  only  pro  tanto,  to 
the  extent  of  the  repugnancy,"  and  that  "if  harmony  is  impos- 
sible, and  only  in  that  event,  the  former  is  repealed  in  part  or 
wholly,  as  the  case  may  be." 

Frost  v.  Wenie,  157  U.  S.  46. 
Wood  v.  U.  S.,  16  Pet.  342. 
U.  S.  v.  Tynen,  11  Wall.  88. 
State  v.   Stall,   17  Wall.   425. 

Where  the  repealing  act  is  in  part  the  same  as  the  prior 
statute  or  in  similar  language  to  the  same  effect  it  will  be  con- 
strued as  continuing  the  former  statute  to  that  extent. 

Be  Howard,  80  Vt.  489;  68  A.  513. 

But  a  statute  covering  the  whole  subject  of  inheritance 
taxation  and  complete  in  itself  impliedly  repeals  the  prior 
statute. 

Succession  of  Frigalo,  123  La.  Ann.  71;  48  So.  652. 

San  Diego  County  v.  Schwartz,  145  Cal.  49;  78  Pac.  231. 

A  statute  repeals  by  implication  the  repugnant  provisions 
of  another  statute  passed  the  same  day  but  at  an  earlier  hour. 

State  v.  District  Court,  41  Mont.  357;  109  Pac.  438. 
Bailey  v.  Drane,  96  Tenn.  16;  33  S.  W.  573. 

The  court  said: 

"It  is  of  no  consequence,  in  legal  contemplation,  that  the 
two  enactments  were  made  at  the  same  session  of  the  Legis- 


70  INHERITANCE  TAXATION 

lature  and  on  the  same  day.  The  repugnance  and  conflict  are 
no  less  on  that  account  but  are  the  same  that  they  would  have 
been  if  the  two  acts  had  been  passed  and  approved  at  different 
sessions  far  apart.  The  reason  and  necessity  for  the  rule 
recognizing  repeals  by  implication  is  the  same  in  one  case  as 
in  the  other.  The  two  provisions  referred  to  cannot  coexist. 
They  cannot  stand  together.  This  being  so  the  latter  one 
must  prevail." 

So  it  is  held  that  the  passage  of  a  general  revenue  act  with- 
out reference  to  the  inheritance  tax  repeals  that  tax  by 
implication. 

Fox  v.  Commonwealth,  16  Gratt.  1. 

Succession  of  Frigalo,  123  La.  71;  48  So.  652. 

Bailey  v.  Drane,  96  Tenn.  16;  33  S.  W.  573. 

Zickler  v.  Union  Bank  and  Trust  Co.,  104  Tenn.  277;  57  S.  W.  341. 

c.    INCIDENTAL  EFFECTS. 

A  repeal  cannot  ordinarily  affect  the  rights  of  parties  in 
pending  litigations ;  nor  can  it  oust  the  United  States  Supreme 
Court  of  jurisdiction. 

Campbell  v.  California,  200  U.  S.  87;  26  S.  Ct.  Bep.  182. 

While  procedure  may  be  altered  to  affect  existing  rights 
under  ordinary  circumstances  the  Supreme  Court  of  Cali- 
fornia has  held  that  the  repeal  of  a  statute  of  limitations 
is  inoperative  where  twelve  years  had  elapsed  since  the  final 
decree  of  distribution. 

Chambers  v.  Gallagher,  177  Cal.  704;  171  Pac.  931. 

The  Iowa  act  of  1913  repealed  the  former  statute  and  made 
the  new  statute  applicable  to  all  estates  where  the  tax  had  not 
been  collected ;  held  to  apply  to  the  remedy  merely  and  not  to 
impose  a  new  tax  at  an  additional  rate. 

State  ex  rel.  Hoyt  v.  Wyman,  190  Iowa  1280,  181  N.  W.  472. 

A  case  illustrating  some  of  the  complications  that  may 
arise  from  the  repeal  of  an  inheritance  tax  recently  came  be- 
fore the  courts  of  Kansas.  The  statute  of  that  State  imposed 
the  tax  upon  the  transfer  of  stock  in  foreign  corporations 
within  the  State.  The  act  was  repealed  in  1913.  The  testator 
died  in  1912,  before  the  statute,  and  the  transfer  was  effected 


PART  I  — THE  TAX  71 

in  1916,  after  the  repeal.    The  court  held  that  while  the  State's  ' 
right  to  the  tax  survived  the  repeal,  its  right  to  penalize  the 
corporation   making   the   transfer   of   the   stock  no   longer 
existed. 

State  v.  A.,  T.  &  St.  F6  E.  E.  Co.,  99  Kan.  831 ;  163  Pae.  157. 

13.  Unconstitutional  Statutes. 

An  unconstitutional  statute  is  void  and  a  tax  paid  there- 
under may  be  recovered. 

Matter  of  Brenner,  170  N.  Y.  185;  63  N.  E.  133. 

And  no  tax  can  be  collected  under  the  unconstitutional  act 
even  though  a  constitutional  statute  is  subsequently  adopted. 

Tozer  v.  Probate  Court,  102  Minn.  268;  113  N.  W.  888. 

But  the  same  tax  may  be  revived  eliminating  the  uncon- 
stitutional features  of  the  former  statute  and  moneys  already 
collected  applied  to  the  newly  created  obligation. 

State  v.  Kings  County,  125  N.  Y.  312. 

A  constitutional  state  is  not  affected  by  the  passage  of  an 
unconstitutional  act. 

Eastwood  v.  Eussell,  81  N.  J.  L.  672 ;  81  A.  108. 
Sawter  v.  Schoenthal,  83  N.  J.  L.  499 ;  83  A.  1004. 

14.  Other  General  Rules. 

Some  State  constitutions  forbid  reference  to  another  act 
without  setting  forth  the  act  referred  to ;  but  under  this  rule 
reference  may  be  made  in  an  inheritance  tax  statute  to  mor- 
tality tables  as  these  are  not  statutes  but  merely  afford  a 
method  of  mathematical  computation. 

Union  Trust  Co.  v.  Durf ee,  125  Mich.  487 ;  84  N.  W.  1101. 

Successive  laws  are  construed  as  a  continuation  of  one 
another. 

Matter  of  Prime,  136  N.  Y.  347;  32  N.  E.  1091. 
Matter  of  Brundage,  31  App.  Div.  348;  52  Supp.  362. 

And  statutes  in  pari  materia  are  to  be  taken  together  and 
construed  as  one  law. 

Pryor  v.  Winter,  147  Cal.  554;  82  Pac.  202. 
Wilson  v.  Donaldson,  117  Ind.  356;  20  N.  E.  250. 
Buss  v.  Comm.,  210  Pa.  St.  544;  60  A.  169. 


72  INHERITANCE  TAXATION 

While  acts  on  cognate  subjects  may  be  referred  to  for  con 
struction. 

People  v.  Koenig,  37  Colo.  283;  85  Pac.  1129. 
Bailey  v.  Henry  (Tenn.),  143  S.  W.  1124. 

The  words  "this  act"  and  "this  article"  apply  to  and 
include  the  original  and  each  successive  act. 

Matter   of   Embury,   20   Misc.    75;    45    Supp.    821;    aff.    154   N.   Y.    746; 
49  N.  E.  1096. 


E.— CONFLICT  OF  LAWS. 

No  foreign  law  will  be  enforced  in  a  sovereign  State  if,  to 
enforce  it,  will  contravene  the  express  statute  law  or  public 
policy  of  the  forum,  or  is  injurious  to  its  interests. 

Nickel  v.  State,  43  Nev.  12,  185  Pac.  565. 

1.  Jurisdiction. 

The  court  which  undertakes  to  assess  an  inheritance  tax 
must  have  jurisdiction  of  the  parties  or  of  the  subject  matter. 
Where  the  court  does  not  acquire  such  jurisdiction  no  tax  can 
be  assessed  notwithstanding  the  requirements  of  the  statute. 

Oakman  v.  Small,  282  111.  360 ;  118  N.  E.  775. 

Matter  of  MeMullen,  199  App.  Div.  393;   192  Supp.  49. 

Welch  v.  Burrill,  223  Mass.  87;  111  N.  E.  774. 

The  above  paragraph  was  quoted  and  cited  with  approval 
by  the  Oklahoma  court. 

Harkness'  Estate  (Okl.),  204  Pac.  911. 

Failure  to  cite  trustee  of  trust  deed  where  executor  had  no 
control  over  the  property  or  interest  therein  is  a  jurisdictional 
defect. 

Dick's  Estate  (Pa.),  116  A.  549. 

A  striking  illustration  of  the  application  of  these  prin- 
ciples is  found  in  State  of  Colorado  v.  Harbeck,  232  N.  Y.  71. 
In  this  case  the  will  of  the  deceased  was  probated  in  New 
York  where  all  the  property  of  the  deceased  was  located.  In 
the  probate  proceedings  and  in  the  New  York  transfer  tax 
proceedings  Colorado  was  alleged  to  be  the  last  domicile  of 
the  deceased  and  his  estate  was  taxed  in  New  York  on  a  non- 


PART  I  — THE  TAX  73 

resident  basis.  A  proceeding  to  re-open  the  transfer  tax  order 
in  New  York  on  the  ground  that  the  alleged  Colorado  resi- 
dence was  a  tax  dodging  expedient  was  unsuccessful. 

Proceedings  were  brought  in  Colorado  to  fix  the  tax  in  that 
State,  but  neither  the  beneficiaries,  the  executor  nor  the  prop- 
erty were  within  its  jurisdiction.  The  State  of  Colorado  then 
brought  action  to  collect  the  tax  from  the  New  York  bene- 
ficiaries in  the  New  York  courts.  Judgment  was  given  against 
the  beneficiaries  by  the  Appellate  Division  (189  App.  Div.  865; 
179  Supp.  510),  but  the  Court  of  Appeals  reversed  (232  N.  Y. 
71 ;  133  N.  E.  357 ) .  The  court  said : 

' '  It  is  urged  that  the  legatee  becomes  liable  to  pay  the  tax 
as  upon  an  implied  contract  when  he  accepts  the  legacy  under 
the  will  of  a  resident  of  Colorado  and  that  he  may  be  sued  in 
the  courts  of  another  State  wherever  jurisdiction  of  the  per- 
son may  be  obtained.  But  taxes  are  not  debts  or  contracts. 
No  contractual  or  quasi  contractual  obligation  to  pay  arises 
out  of  the  assessment  of  a  tax.  (City  of  Rochester  v.  Bloss, 
185  N.  Y.  42,  47;  Meriwether  v.  Garrett,  102  U.  S.  472,  513.) 
The  enforcement  of  revenue  laws  rests  not  on  consent  but  on 
force  and  authority.  Liability  to  pay  is  a  consequence  im- 
posed by  fiat.  A  transfer  tax  is  a  tax  on  the  succession  or  the 
right  to  receive  the  bequest  based  on  the  value  of  the  succes- 
sion, but  it  is  assessed  against  and  paid  by  persons  and  it 
may  not  be  collected  from  persons  or  out  of  property  beyond 
the  State's  jurisdiction.  (Maxwell  v.  Bugltee,  250  U.  S.  525.) 
No  personal  liability  based  upon  the  receipt  of  a  legacy  arises 
except  under  the  provisions  of  the  Colorado  statute  (§1)  that 
the  person  to  whom  the  property  is  transferred  shall  be  per- 
sonally liable  for  the  tax  until  its  payment  and  that  liability 
is  purely  local  and  statutory. 

The  theory  that  a  contract  or  implied  promise  or  obligation 
to  pay,  enforcible  by  action  in  this  State,  springs  from  the 
Colorado  statute  is  fallacious  for  a  further  reason.  Colorado 
had  acquired  no  control  either  of  the  property  of  the  Har- 
beck  estate  or  of  its  owners.  The  executrix  paid  the  legacies 
by  virtue  of  the  authority  vested  in  her  on  the  probate  of  the 
will  by  the  State  of  New  York,  without  invoking  any  privilege 
or  sanction  conferred  upon  her  by  Colorado.  Testator's  right 


74  INHERITANCE  TAXATION 

to  make  a  valid  will  of  his  personal  property  which  was  in  the 
State  of  New  York  did  not  rest  on  the  laws  of  Colorado  nor 
make  the  Colorado  Statute  of  Wills  the  source  of  the  legatees' 
title." 

Adjudications  as  to  residence  or  domicile  though  essential 
to  the  jurisdiction  of  one  State  are  not  binding  on  courts  of 
another  State  and  are  there  open  to  collateral  attack. 

Matter  of  Horton,  217  N.  Y.  363;  111  N.  E.  1066. 
Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Rep.  1. 

2.  Devolution  Controlled  by  Foreign  Laws. 

While  the  tax  is  imposed  by  the  laws  of  one  State  it  may  be 
affected  by  the  laws  of  the  State  of  domicile,  as  to  non-resi- 
dents, which  regulate  the  devolution  of  their  personal  prop- 
erty. While  the  real  estate  of  non-residents  without  the  State 
is  never  subject  to  tax,  foreign  laws  as  to  the  devolution  of 
real  estate  may  become  important  when  the  tax  is  appor- 
tioned and  debts  and  assets  not  within  the  State  are  required 
to  be  considered.  This  was  illustrated  in  a  recent  case  in 
New  Jersey. 

In  estimating  the  tax  on  personal  property  in  New  Jersey, 
belonging  to  a  non-resident  decedent,  it  was  necessary  to 
determine  the  value  of  the  entire  estate  passing  to  her  and 
the  New  Jersey  Comptroller  included  her  dower  interest  in 
lands  situate  in  the  States  of  New  York  and  Minnesota.  In 
the  latter  State  dower  has  been  abolished  by  statute  and  the 
widow's  interest  is  fixed  as  one-third  of  the  real  estate,  pass- 
ing to  her  as  an  inheritance  and  taxable  as  such.  The  court 
held  that  the  law  of  the  situs  controlled  as  to  the  real  estate 
interest ;  that  the  dower  interest  in  the  New  York  real  estate 
was  a  deduction,  but  that  the  interest  in  the  Minnesota  lands 
passed  as  an  inheritance  under  the  laws  of  that  State  and 
therefore  was  properly  included  in  the  valuation. 

Hill  v.  Bugbee,  1  N.  J.  459;  103  A.  861. 
See:     Maxwell  v.  Bugbee,  250  U.  S.  525. 

3.  Full  Faith  and  Credit. 

When  after  publication  for  claims  a  final  decree  is  entered 
it  is  a  bar  to  a  proceeding  in  another  State  for  the  collection 


PART  I  — THE  TAX 


75 


of  a  transfer  tax  providing  the  court  which  entered  such  a 
decree  had  jurisdiction  to  probate  the  will. 

Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Eep.  1. 

So  it  was  held  in  Washington  that  when  ' '  a  resident  of  the 
State  of  Maine  died,  leaving  estate  there  and  in  this  State, 
and  his  will  was  probated  there,  and  all  legacies  to  collateral 
heirs  and  strangers  to  the  blood  and  all  debts  were,  by  order 
of  the  Probate  Court  in  Maine  paid  out  of  the  estate  situated 
in  that  State,  leaving  the  property  in  this  State  to  be  divided 
between  his  widow  and  son  under  the  residuary  clause  in  the 
will,  the  estate  in  the  State  of  Washington  is  not  chargeable 
with  the  increased  inheritance  tax  upon  legacies  to  collateral 
heirs  and  strangers  to  the  blood  at  the  rate  of  3%  and  6% ; 
since  comity  requires  that  full  faith  and  credit  be  given  to 
the  proceedings  in  the  Probate  Court  in  Maine,  ordering  those 
legacies  to  be  paid  out  of  the  estate  within  its  jurisdiction  and 
under  its  control,  and  such  order  is  conclusive  on  the  courts 
of  this  State;  and  since  the  inheritance  tax  is  to  be  deducted 
from  the  legacies  and  paid  by  the  legatees,  and  the  executor 
in  this  State  has  no  opportunity  to  collect  the  same  from  the 
legatees  chargeable  therewith." 

In  re  Clark's  Estate,  37  Wash.  671;  80  Pac.  267. 

Where  a  court  in  California  discharged  an  administrator 
under  a  decree  which  was  binding  only  on  "  heirs,  legatees,  or 
devisees"  and  which  could  have  been  set  aside  by  the  courts 
of  that  State,  it  was  held  that  it  did  not  prevent  the  State  of 
Illinois  from  thereafter  assessing  its  inheritance  tax  on  the 
same  property,  when  later  brought  within  the  State  of  Illinois. 

People  v.  Union  Trust  Co.,  255  111.  168;  99  N.  E.  377. 

But  a  tax  is  not  a  debt  or  a  judgment  in  the  sense  that  it 
can  be  made  the  basis  of  a  suit  in  another  State. 

Colorado  v.  Harbeck,  232  N.  Y.  71 ;  132  N.  E.  357. 

4.  Proof  of  Foreign  Laws. 

The  State  of  the  law  in  a  foreign  jurisdiction  is  a  ques- 
tion of  fact  to  be  proved  like  any  other  controverted  fact. 

Kline  v.  Baker,  99  Mass.  254,  255. 

Matter  of  Cummings,  142  App.  Div.  377;  127  Supp.  109. 


76  INHERITANCE  TAXATION 

This  may  be  proved  by  the  testimony  of  a  duly  qualified 
expert. 

Electric  Welding  Co.  v.  Prince,  200  Mass.  386. 

But  if  the  evidence  of  the  law  of  a  foreign  jurisdiction  con- 
sists entirely  of  a  written  document,  statute  or  judicial  opin- 
ion, the  question  of  the  construction  and  effect  of  the  written 
document,  statute  or  judicial  opinion  is  for  the  court  alone. 

Ely  v.  James,  123  Mass.  36,  44. 

Hackett  v.  Potter,  135  Mass.  349,  351. 

Shoe  &  Leather  National  Bank  v.  Wood,  142  Mass.  563,  568. 

Ufford  v.  Spaulding,  156  Mass.  65,  66. 

Bride  v.  Clark,  161  Mass.  130,  131. 

In  a  transfer  tax  proceeding  a  duly  authenticated  affidavit 
by  an  attorney  of  the  foreign  State  may  be  received  by  the 
appraiser  in  the  absence  of  objection. 

Matter  of  Vivanti,  206  N.  Y.  656. 

Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Rep.  1. 

5.  As  to  Sister  States. 

As  to  proportional  taxation  of  non-residents  see: 

Maxwell  v.  Bugbee,  250  U.  S.  525. 

The  inheritance  tax  statutes  cannot  discriminate  in  favor  of 
their  own  residents  as  against  residents  in  another  State. 

Johnson's  Estate,  139  Cal.  532;  73  Pac.  424. 

In  this  case  there  were  two  appeals,  one  taken  by  resident 
nieces  and  nephews  and  the  other  by  non-resident  nieces  and 
nephews,  citizens  of  sister  States,  from  an  order  assessing 
inheritance  tax  against  them,  on  the  grounds  that  the  statutes 
of  1897,  page  77,  contained  an  amendment  exempting  ''nieces 
or  nephews  when  residents  of  this  State"  and  that  the  effect 
of  this  amendment  is  to  relieve  not  only  nieces  and  nephews, 
resident  of  this  State,  but  also  nieces  and  nephews  resident 
of  other  States  of  the  Union,  and  the  Supreme  Court  so  held. 

The  Estate  of  Mahotiey,  133  Cal.  180;  65  Pac.  389,  was  over- 
ruled, and  the  amendment  exempting  nieces  and  nephews 
resident  of  this  State  held  to  be  constitutional  and  not  in 
violation  of  section  2  of  article  IV  of  the  Constitution  of  the 
United  States,  nor  of  section  1978  of  the  Revised  Statutes  of 


PART  I  — THE  TAX  77 

the  United  States;  and  that  said  section  of  the  Constitution 
declaring  that  "the  citizens  of  each  State  shall  be  entitled  to 
all  the  privileges  and  immunities  of  the  citizens  of  the  several 
States"  does  not  strike  down  or  limit  the  right  of  a  State  to 
confer  such  immunities  and  privileges  upon  its  own  citizens ; 
that  the  clause  of  the  Constitution  is  protective  merely  and 
not  destructive  nor  even  restrictive. 

"It  nowhere  intimates  that  an  immunity  conferred  upon 
citizens  of  a  State,  because  not  in  terms  conferred  upon  citi- 
zens of  sister  States,  shall  therefore  be  void." 

' '  It  leaves  to  the  State  perfect  freedom  to  grant  such  privi- 
leges to  its  citizens  as  it  may  see  fit,  but  secures  to  the  citizens 
of  all  other  States,  by  virtue  of  the  constitutional  enactment 
itself,  the  same  rights,  privileges,  and  immunities." 

"It  is  a  canon  of  construction  that  an  act  of  the  Legislature 
will  yield  to  the  constitution  so  far  as  necessary,  but  no 
further.  The  constitutional  immunity  goes  only  to  citizens 
of  sister  States,  and  there  is  a  clear  distinction  thus  recog- 
nized between  citizens  of  the  States  and  citizens  of  the 
United  States  who  are  not  citizens  of  any  State,  as  well  as 
citizens  of  alien  States.  By  virtue  of  the  constitution  of  the 
United  States,  the  immunity  which  the  Legislature  by  the 
amendment  of  1897  conferred  upon  citizens  of  this  State  is 
extended  to  citizens  of  sister  States,  but  the  immunity  goes 
no  further.  Citizens  of  territories,  of  the  District  of  Colum- 
bia, and  of  our  new  possessions,  as  well  as  aliens,  are  not 
exempted,  and  their  property  is  thus  liable  for  the  tax." 

6.  As  against  Aliens  Protected  by  Treaties. 

The  Federal  constitution  provides  that  the  "constitution,, 
and  the  laws  of  the  United  States  which  shall  be  made  in  pur- 
suance thereof,  and  all  treaties  made,  or  which  shall  be  made, 
under  the  authority  of  the  United  States,  shall  be  the  supreme 
law  of  the  land ;  and  the  judges  in  every  State  shall  be  bound 
thereby,  anything  in  the  constitution  or  laws  of  any  State  to 
the  contrary  notwithstanding."  Art.  VI,  par.  3. 

Hon.  B.  J.  Powers,  of  Des  Moines,  la.,  in  his  excellent 
pamphlet  on  the  inheritance  tax  law  of  that  State  has  well 
said: 


78  INHERITANCE  TAXATION 

"Any  nation  making  a  treaty  with  this  nation  must  take 
notice  of  the  limitation  upon  the  treaty  making  power  of  the 
President,  who  is  aided  by  the  Senate.  There  are  certain 
rights  fixed  by  the  constitution  of  the  United  States  which 
cannot  be  changed  or  modified  by  any  treaty.  Among  these 
rights  are  a  trial  by  a  jury  in  all  criminal  prosecutions,  and 
that  a  person  cannot  be  compelled  to  be  a  witness  against  him- 
self, etc.  Furthermore,  no  agreement  entered  into  is  valid 
without  the  consent  of  the  Senate. 

' '  The  wisdom  of  our  forefathers  in  thus  protecting  and  limit- 
ing the  treaty  making  power  of  our  government  cannot  be 
more  clearly  shown  than  by  pointing  to  the  method  of  treaty- 
making  ordinarily  followed  in  Europe." 

As  a  treaty  is  the  ' '  Supreme  Law  of  the  Land ' '  and  there- 
fore limits  the  power  of  the  States  if  there  be  any  conflict. 

Succession  of  Amat,  18  La.  Ann.  403. 

Friedrickson  v.  Louisiana,  64  U.  S.  445;  16  Law  Ed.  577. 

Treaties  are  to  be  liberally  construed.  They  are  contracts 
between  independent  nations  and  their  words  are  to  be  taken 
in  their  ordinary  meaning  as  understood  by  the  law  of  nations. 

Goefry  v.  Riggs,  133  U.  S.  258;  10  S.  Ct.  R.  295. 
U.  S.  v.  Lee  Yen  Tai,  185  U.  S.  213. 

In  Iowa  it  is  held  that  the  term  "non-resident  alien" 
includes  aliens  residing  in  other  States  of  the  Union. 

Estate  of  Gill,  79  la.  296 ;  44  N.  W.  553. 
Estate  of  Kennedy,  154  la.  460;  135  N.  W.  53. 

Several  of  the  States  have  undertaken  to  discriminate  in 
the  rate  of  tax  imposed  upon  transfers  to  and  from  aliens. 
If  the  treaty  with  the  foreign  power  protects  such  aliens  from 
discrimination,  the  State,  obviously,  has  no  right  to  make 
such  discrimination. 

Adams  v.  Akerlund,  168  111.  632;  48  N.  E.  454. 
Matter  of  Stixrud,  58  Wash.  338;   109  Pac.  343. 
McKeown  v.  Brown,  167  la.  489;  149  N.  W.  593. 
Brown  v.  Daly,  172  la.  379;    154  N.  W.  602. 
Estate  of  Moynihan,  167  la.  489;  199  N.  W.  593. 
Estate  of  Anderson,  166  la.  617;  147  N.  W.  1098. 

But  the  treaty  cannot  impair  the  right  of  the  State  to  regu- 
late transfers  from  its  own  citizens  to  foreign  beneficiaries. 

Frederiekson  v.  Louisiana,  64  U.  S.  445;  16  Lew  Ed.  577. 


PART  I  — THE  TAX  79 

In  Peterson  v.  Iowa,  245  U.  S.  170;  38  Sup.  Ct.  Kep.  109; 
affirming  Estate  of  Peterson,  168  la.  511 ;  151  N.  W.  66,  the 
United  States  Supreme  Court  said: 

"In  other  words,  the  right  of  the  citizens  of  each  of  the  con- 
tracting nations  reciprocally  to  own,  dispose  or  transmit 
their  property  situate  in  another  country  free  from  provi- 
sions or  restrictions  discriminating  because  of  alienages,  is 
in  the  largest  possible  sense,  that  which  is  protected  by  the 
treaty,  and,  conversely,  this  being  true,  it  follows  also  that 
the  treaty  did  not  protect  the  right  of  the  citizens  of  either 
country  to  acquire  by  transfer  or  inheritance  property  situ- 
ated in  the  other  belonging  to  its  own  citizens  free  from  the 
restraints  imposed  by  the  law  of  such  country  on  its  own 
citizens  even  although  such  restraints  would  not  have  been 
applicable  in  case  the  property  had  been  disposed  of  or  trans- 
mitted to  a  citizen." 

The  court  further  held  that  there  was  nothing  in  the  treaty 
guaranteeing  uniformity  of  tax  on  the  right  to  succession  and 
therefore  the  State  could  assess  non-resident  aliens  20%  and 
aliens  who  were  naturalized  5%  of  value  of  property  on  right 
to  succession  thereto. 

The  "most  favored  nation"  clause  of  such  treaties  has  been 
held  to  apply  only  to  commerce  and  navigation  and  not  to 
inheritance  taxes. 

Peterson  v.  Iowa,  245  U.  S.  170;  38  S.  Ct.  Eep.  109. 

Duus  v.  Brown,  245  U.  S.  176;  38  S.  Ct.  Ill;  aff.  168  la.  511. 

Upon  similar  reasoning  the  Supreme  Court  of  North  Dakota 
has  arrived  at  a  similar  conclusion.  Under  the  statute  of 
that  State  a  tax  of  25%  is  levied  upon  transfers  to  non- 
resident aliens  in  case  of  collaterals.  In  the  particular  case 
before  the  court  the  alien  resided  in  the  United  States  and 
not  in  Norway,  his  native  country.  It  was  held  that  the  treaty 
with  Norway  did  not  protect  him.  Under  the  provisions  of 
article  6  of  the  treaty  of  1783,  revived  by  article  17  of  the 
treaty  of  1827,  residents  in  each  country  are  entitled  to  carry 
their  property  home  without  tax  or  molestation.  The  court 
properly  distinguishes  between  the  right  to  carry  property 
out  of  the  State  when  it  belongs  to  a  devisee  and  a  tax  upon 


gO  INHERITANCE  TAXATION 

the  transfer  to  him  at  death  of  the  owner  imposed  before  the 
property  becomes  his. 

Moody  v.  Hagen,  36  N.  D.  471;  162  N.  W.  604. 

On  the  other  hand,  while  aliens  cannot  be  discriminated 
against  in  violation  of  a  treaty  they  are  no  better  off  than 
citizens  and  must  pay  succession  taxes  at  the  same  rate. 

Matter  of  Strobel,  39  Supp.  169 ;  aff.  5  App.  Div.  621. 

But  a  treaty  negotiated  subsequent  to  the  statute  cannot 
affect  the  State's  right  to  its  tax  where  death  occurred  prior 
to  the  treaty. 

Succession  of  Schaffer,  13  La.  Ann.  113. 
Succession  of  Provost,  12  La.  Ann.  577. 
Aff.  Sub.  Nom  Prevost  v.  Greneaux,  60  U.  S.  I. 

The  treaty  with  Sweden  prevents  any  discrimination  against 
Swedish  subjects;  negotiated  1911.  In  1912  heirs  came  into 
possession  but  the  tax  accrued  at  death  of  testator  long  prior 
to  treaty  and  the  tax  accrued  then  and  was  not  affected  by 
said  treaty. 

Welander  v.  Hoyt,  188  la.  972;  176  N.  W.  954. 

The  following  treaties  have  been  construed  in  inheritance 
tax  cases  where  the  Legislature  has  attempted  to  impose  a 
heavier  tax  upon  aliens  than  upon  citizens: 

Bavaria  — 1845. 

Succession  of  Cruisius,  19  La.  Ann.  369. 

Denmark  — 1820-1857. 

Peterson  v.  Iowa,  245  U.  S.  170;  38  S.  Ct.  Eep.  109. 

Great  Britain  — 1899. 

McKeown  v.  Brown,  167  la.  489;  149  N.  W.  593. 

France  — 1853. 

Succession  of  Babasae,  49  La.  Ann.  1405;  22  So.  767,  772. 

Italy  — 1871. 

Succession  of  Bixner,  18  La.  Ann.  552;  19  So.  597. 

Norway  and  Sweden  — 1827. 

Moody  v.  Hagen,  36  N.  D.  471;  163  N.  W.  704. 
Matter  of  Stixrud,  48  Wash.  339;  109  Pac.  343. 


PART  I  — THE  TAX  g^ 

Spain  — 1795. 

Succession  of  Sala,  50  La.  Ann.  1009 ;  24  So.  674. 

Sweden  — 1783-1816-1827-1911. 

Duus  v.  Brown,  245  U.  S.  176 ;  38  S.  Gt.  Rep.  111. 
Adams  v.  Akerlund,  168  111.  632 ;  48  N.  E.  454. 
Wellander  v.  Hoyt,  188  la.  972;  176  N.  W.  954. 

Wurtemberg  — 1844. 

Matter  of  Strobel,  5  App.  Div.  621 ;  39  Sup.  169. 
Friedrickson  v.  Louisiana,  64  U.  S.  445;  16  Law  Ed.  577. 

7.  Reciprocal  Provisions. 

Minnesota  in  1911  exempted  non-resident  transfers  when 
the  laws  of  the  State  of  domicile  "  exempt  or  do  not  impose 
a  tax  upon  transfers  of  personal  property  of  residents  of 
Minnesota  having  its  situs  in  such  State."  A  State  which 
imposes  such  a  tax  upon  the  personal  property  of  collaterals 
and  strangers  only  does  not  come  within  the  provision.  This 
provision  has  since  been  repealed. 

Graff  v.  Probate  Court,  128  Minn.  371 ;  150  N.  W.  1094. 

Under  the  1920  amendment  to  the  Massachusetts  statute  a 
non-resident  pays  only  the  excess  of  the  Massachusetts  tax 
over  the  tax  imposed  by  the  state  of  domicile,  "provided  that 
said  state  makes  a  like  exemption  to  residents  of  Massachu- 
setts." This  proviso  excludes  practically  all  the  states. 
Under  this  provision  a  resident  of  New  York  was  held  to  pay 
only  the  excess  of  the  Massachusetts  tax  over  that  imposed 
in  New  York. 

Bliss  v.  Bliss,  221  Mass.  201 ;  109  N.  E.  148. 

And  under  a  similar  provision  in  the  Vermont  statute 
(repealed  1912)  it  was  held  that  only  the  amount  of  the  tax 
actually  paid  in  another  State,  less  discount,  could  be  deducted. 

Re  Meadon,  81  Vt.  490;  70  A.  579. 
6 


g2  INHERITANCE   TAXATION 


PART  II -THE  TRANSFER 


PAGE 

A.  Transfers  by  Will  and  Intestacy 84 

1.  Testamentary  Provisions  which  may  Affect  the  Tax 84 

a.  What  a  Testator  Cannot  Do 85 

b.  What  He  Can  Do 86 

2.  Transfers  Pursuant  to  Agreements  to  Make  a  Will 87 

a.  Where  the  Agreement  is  Violated 87 

b.  Where  the  Agreement  is  Performed 89 

c.  Antenuptial  Agreements 90 

d.  Mutual    Wills • 92 

e.  Partnership  Agreements 94 

3.  Compromise  Agreement  between  Heirs  and  Devisees 94 

4.  Payment  of  Debt  by  Will 98 

5.  As  Affected  by  Statute 100 

6.  Transfers  by  Intestate  Law 101 

a.  As  to  Real  Estate 101 

b.  As   to   Personal    Property 102 

B.  Gifts 104 

1.  Valid  and  Invalid 105 

a.  Burden  of  Proof  is  on  Donee 105 

b.  There  Must  be  a  Present  Intent  to  Give 105 

c.  There  Must  be  Delivery  of  the  Thing  Given 106 

d.  Delivery   to   an   Agent 107 

(1)  To  Agent  of  Donor 107 

(2)  To  Agent  of  Donee 108 

e.  Symbolical    Delivery 109 

f .  Re-Delivery  by   Donee  to   Donor 109 

g.  Power   of   Revocation Ill 

h.  Stock    Transfer    Stamps 113 

i.  Consideration 113 

2.  Gifts    Causa    Mortis 113 

3.  Gifts  in  Contemplation  of  Death 114 

a.  Nature  of  the  Contemplation 114 

b.  Advanced  Age  alone  Insufficient 119 

c.  Statutory  Time   Limit 123 

d.  Tax  Accrues  at  Date  of  Gift 123 

4.  Gifts  take  Effect  at  or  after  Death 126 

a.  Trust  Deed  Reserving  Income  to  Donor 127 

b.  Where  Part  of  the  Income  is  Reserved 131 

c.  Where  the  Life  Use  is  Waived 132 

d.  Reservation  of  Power  to  Revoke .132 


PART  II  — THE   TEANSFEE  83 

PAGE 

C.  Consideration  as  Affecting  Testamentary  Transfers 138 

1.  Where  the  Transaction  is  Completed  Inter  Vivos 140 

2.  Where  the  Contract  is  Executory 143 

3.  The  Consideration  must  be  Adequate 152 

4.  Burden   of   Proof • 156 

D.  Life  Insurance 157 

1.  Nature  of  the  Contract 160 

2.  No  Title  to  Fund  in  Assured 160 

3.  The  Insurance  Company  Pays  the  Taxes 161 

a.  State  Taxes 161 

b.  Federal    Taxes 161 

4.  Proceeds  Taxable  as  Inheritance  when  Payable  to  Estate 162 

5.  Where  Payable  to  Beneficiary  not  Taxable 169 

6.  Construction    of    Policies 169 

7.  Statutory  Provisions 171 

E.  Power  of  Appointment 171 

1.  The  Common  Law  Rule 171 

2.  The  Statutory  Rule 173 

3.  The  New  York  Rule 173 

4.  The    Massachusetts    Rule 174 

5.  Development  of  the  New  York  Rule 176 

6.  Construction  of    Wills 177 

7.  Where  Power  is  Exercised  by  Deed 178 

8.  Questions  of  Residence 180 

F.  Common  Law   Transfers 182 

1.  Dower 182 

2.  Tenancy  by  the  Curtesy 185 

3.  Marital    Right 186 

4.  Tenancies  by  the  Entirety 187 

a.  Not  Taxable  as  an  Inheritance 187 

b.  Nature  of  the  Estate 187 

c.  How  Created 188 

d.  How  Terminated 190 

e.  Effect  of  Taxing  Statute 190 

5.  Joint    Tenancy 193 

a.  Not   Generally    Taxable 193 

b.  Where  Succession  is  Specifically  Taxed 195 

c.  Construction  of  the  Statute 196 

( 1 )  When  Revocable 201 

(2)  Where  Joint  Depositors  Equal  Contributors 201 

(3)  Deposits  in  Foreign  States 201 

(4)  Trust  Accounts  Not  Taxable 201 

6.  Escheat 202 

G.  Civil   Law  Transfers 203 

1.  Taxable 203 

2.  Not    Taxable • 204 

3.  Gains  Acquired  in  Foreign  Country  Exempt 2J4 

4.  Gains  Acquired  in  this  Country  Taxable 205 


84  INHERITANCE  TAXATION 


PART  II  —  THE  TRANSFER 


A.— TRANSFERS  BY  WILL  AND  INTESTACY. 

Bearing  in  mind  the  cardinal  doctrine  that  it  is  the  trans- 
fer of  property  upon  which  the  tax  is  levied  and  not  upon  the 
property,  we  now  come  to  examine  the  various  forms  of 
transfer  that  are  subject  to  inheritance  taxation. 

The  earlier  statutes  concerned  themselves  only  with  trans- 
fers by  will  or  pursuant  to  intestate  law.  There  soon  ap- 
peared so  many  loopholes  through  which  the  tax  could  be 
avoided  that  there  has  been  a  constant  effort  on  the  part 
of  the  Legislatures  to  reach  transfers  testamentary  in  their 
character  between  the  living,  such  as  gifts  in  contemplation 
of  death,  agreements  to  take  effect  at  death,  deeds  with  the 
reservation  of  a  life  use,  joint  estates  and  even  co-partner- 
ship agreements. 

Strictly  speaking,  an  "inheritance"  would  be  confined  to 
successions  under  the  intestate  laws,  but  transfers  by  will, 
under  the  language  of  the  statutes,  are  held  to  be  included 
within  the  term  "inheritance." 

Be  White,  42  Wash.  360;  34  Pac.  831. 

Knox  v.  Emerson,  123  Term.  409 ;  131  S.  W.  972. 

1.  Testamentary  Provisions  which  may  Affect  the  Tax. 

The  provisions  of  the  will  necessarily  affect  the  transfer 
under  it,  and  some  of  the  most  complex  problems  of  inheri- 
tance taxation  arise  from  the  construction  of  wills.  Most  of 
the  States  have  statutes  prohibiting  the  suspension  of  the 
power  of  alienation  of  real  estate  and  the  absolute  owner- 
ship of  personal  property  and  other  restrictions  upon  the 
power  of  testators  in  the  creation  of  future  and  artificial 
estates,  but  this  subject  is  beyond  the  scope  of  this  work. 


PART  II  — THE  TRANSFER  g5 

a.    WHAT  A  TESTATOR  CANNOT  Do. 

Testators,  or  the  attorneys  who  draw  their  wills,  have 
tried  various  devices  to  defeat  or  minimize  inheritance 
taxes.  One  of  the  most  common  is  to  devise  large  sums  to 
executors,  who  are  also  near  relatives,  in  lieu  of  commis- 
sions. Nearly  all  the  statutes  provide  that  such  bequests 
are  taxable  where  they  are  in  excess  of  ordinary  commis- 
sions. 

People  v.  Bauder,  271  111.  446;  111  N.  E.  598. 

Neither  can  a  testator  effectively  direct  that  no  inventory 
of  his  estate  be  made  or  filed  with  the  court,  for  he  cannot 
thus  nullify  the  statute. 

Matter  of  Morris,  138  N.  C.  259;  50  S.  E.  682. 

He  cannot  change  real  estate  into  personal  property  by 
the  direction  for  its  sale  (except  in  Pennsylvania). 

Connell  v.  Crosby,  210  111.  380;  71  N.  E.  350. 
McCurdy  v.  McCurdy,  197  Mass.  248 ;  83  N.  E.  881. 

Matter  of  Mills,  86  App.  Div.  555;  67  Supp.  956;  84  Supp.  1135;  aff.  177 
N.  Y.  562;  69  N.  E.  1127. 

He  cannot  reduce  the  amount  of  the  tax  by  providing  in 
his  will  that  it  shall  be  paid  as  an  expense  of  administration. 
If  he  BO  provides,  the  amount  of  the  tax  is  not  a  deduction 
from  the  rest  of  the  estate.  That  is  to  say,  if  the  tax 
amounted  to  $10,000,  and  was  payable  out  of  a  residuary 
estate  of  $100,000,  the  taxable  residuary  estate  would  be 
valued  at  $100,000  and  not  at  $90,000. 

Provided  the  intent  of  the  testator  to  give  the  legacy  free 
from  the  tax  is  clear  no  particular  form  of  words  is  essential. 

Kingsbury  v.  Bazeley,  75  N.  H.  13,  30  A.  916. 

Holbrook's  Estate,  3  Pa.  Co.  Ct.  245. 

Matter  of  Swift,  137  N.  Y.  77;  32  N.  E.  1096. 

On  this  subject  the  court  said,  in  the  Swift  case : 
"Another  question,  which  I  shall  merely  advert  to  in  con- 
clusion, arises  upon  a  ruling  of  the  Surrogate  with  respect 
to  appraisement,  in  connection  with  a  clause  of  the  will 
directing  that  the  amount  of  the  tax  upon  the  legacies  and 
devises  should  be  paid  as  an  expense  of  administration.  The 


56  INHERITANCE  TAXATION 

appraiser,  in  ascertaining  the  value  of  the  residuary  estate 
for  the  purpose  of  taxation,  deducted  the  amount  of  the  tax 
to  be  assessed  on  prior  legacies.  The  Surrogate  overruled 
him  in  this,  and  held  that  there  should  be  no  deduction  from 
the  value  of  the  residuary  estate  of  the  amount  of  the  tax  to 
be  assessed,  either  upon  prior  legacies,  or  upon  its  value.  He 
held  that  the  legacies  taxable  should  be  reported,  irrespective 
of  the  provision  of  the  will;  and  that  a  mode  of  payment  of 
the  succession  tax  prescribed  by  will  is  something  with  which 
the  statute  is  not  concerned.  I  am  satisfied  with  his  reason- 
ing and  can  add  nothing  to  its  force.  Manifestly,  under  the 
law  that  which  is  to  be  reported  by  the  appraiser  for  the 
purpose  of  the  tax  is  the  value  of  the  interest  passing  to  the 
legatee  under  the  will,  without  any  deduction  for  any  pur- 
pose, or  under  any  testamentary  direction. " 

b.    WHAT  HE  CAN  Do. 

There  are  a  number  of  things  that  a  testator  can  do,  how- 
ever, to  lessen  or  avoid  the  tax  by  the  provisions  of  his  will. 

The  most  obvious  is  to  cut  up  his  estate  into  numerous 
legacies  so  small  that  they  will  be  within  the  exemption,  or 
pay  the  smallest  percentage  under  the  graded  rates.  But 
this  does  not  help  him  where  the  tax  is  on  the  estate. 

He  can  also  leave  his  property  to  an  exempt  charitable 
corporation  which  might  be  induced  to  make  a  "  settlement " 
with  his  heirs.  Of  course  in  practice  such  a  thing  would 
never  be  done,  but  the  possibility  remains. 

Matter  of  Murray,  92  Misc.  100;   155  Supp.  185. 

He  may  direct  in  his  will  from  what  fund  the  tax  is  to  be 
paid. 

Matter  of  Smith,  80  Misc.  140;   141  Supp.  798. 

The  effect  of  a  provision  that  the  tax  be  paid  out  of  the 
residuary  estate  is  to  increase  the  value  of  the  specific  lega- 
cies by  the  amount  of  the  tax,  the  executor  paying  the  tax  on 
behalf  of  the  legatee  out  of  the  residuary,  instead  of  out  of 
the  legacy. 

Matter  of  Gihon,  169  N.  Y.  443;  62  N.  E.  561. 


PART  II  — THE  TEANSFEE  g7 

When  the  will  directs  the  payment  of  the  tax  out  of  the 
estate  the  apportionment  thereof  among  the  heirs  is  unneces- 
sary. 

Matter  of  Goldenberg,  187  App.  Div.  692;   176  Supp.  201. 

Where  the  intent  of  the  testator  is  clear  to  create  an  un- 
diminished  trust  fund  the  tax  is  payable  out  of  the  general 
estate. 

N.  J.  Title  Guarantee  Trust  Co.  v.  Smith,  90  N.  J.  Eq.  386;  108  A.  16. 

This  presents  an  anomaly  in  the  adjustment  of  the  tax. 
For  example,  if  the  specific  legacy  amounted  to  $100,000, 
taxable  at  5%,  the  tax  would  be  $5,000.  On  the  theory  of  the 
GiJion  case  the  legacy  would  be  substantially  $105,000.  If  the 
residuary  went  to  a  beneficiary  in  the  \%  class,  the  $5,000 
paid  on  behalf  of  the  legatee  should  be  taxed  at  6%  instead 
of  1%,  but  it  never  has  been  so  taxed  in  any  case  called  to  the 
attention  of  the  authors. 

2.  Transfers  Pursuant  to  Agreement  to  Make  a  Will. 

a.    WHERE  THE  AGREEMENT  is  VIOLATED. 

It  frequently  happens  that  men  agree  by  valid  contract 
upon  consideration  to  make  a  will  in  favor  of  the  beneficiary 
who  performs  the  services  or  £ives  other  consideration.  It 
also  occurs  that  the  agreement  is  violated.  In  such  a  case  the 
court  enforces  the  agreement  and  deems  the  transfer  to  take 
place  as  under  the  will  which  should  have  been  made. 

This  is  well  illustrated  in  Matter  of  Kidd,  188  N.  Y.  274; 
80  N.  E.  924.  In  this  case  decedent,  some  years  prior  to  his 
death,  made  an  ante-nuptial  agreement  with  the  woman  whom 
he  subsequently  married  whereby,  in  consideration  of  their 
marriage,  and  the  promise  of  the  woman  to  turn  over  to  him 
the  sum  of  $40,000,  to  be  used  in  his  business,  he  agreed  that 
he  would  adopt  the  daughter  of  the  woman,  give  her  his  name 
and  make  her  his  heir.  He  left  a  will  disposing  of  an  estate 
of  more  than  $800,000,  but  did  not  leave  it  to  the  daughter, 
as  he  had  agreed.  The  daughter  brought  an  action  setting 
forth  these  facts  and  obtained  a  judgment  which  declared 
that  the  contract  was  a  valid  contract,  entitling  the  plaintiff 
to  all  the  property,  real  and  personal,  of  which  the  deceased 


gg  INHERITANCE  TAXATION 

died  seized  or  possessed,  and  directing  the  executors  to  exe- 
cute and  deliver  to  her  all  the  necessary  releases  and  con- 
veyances of  said  property.  Under  these  circumstances  the 
court  held  that  the  transfer  was  pursuant  to  will  and  that 
the  beneficiary  of  the  agreement  thus  enforced  must  pay  the 
transfer  tax. 

The  theory  upon  which  such  agreements  are  sustained  was 
stated  by  Judge  Werner  in  Phalen  v.  U.  S.  Trust  Co.,  186 
N.  Y.  178;  78  N.  E.  943,  as  follows: 

' '  The  principles  upon  which  such  agreements  are  sustained 
was  stated  by  Lord  Camden  as  early  as  the  year  1769  in 
Dufour  v.  Ferraro  (Hargrave's  Jurid.  Arg.,  304),  and  it 
was  not  then  new.  'Though  a  will  is  always  revocable 
and  the  last  must  always  be  the  testator's  will,  yet  a  man 
may  so  bind  his  assets  by  agreement  that  his  will  shall 
be  a  trustee  for  the  performance  of  the  agreement.  A  cove- 
nant to  leave  so  much  to  his  wife  or  daughter,  etc. 
These  cases  are  common  and  there  is  no  difference  between 
promising  to  make  a  will  in  such  a  form  and  making  his  will 
with  a  promise  not  to  revoke.  This  court  does  not  set  aside 
the  will  but  makes  the  devisee,  heir  or  executor,  trustee  to 
perform  the  contract.' 

A  will  is  admissible  to  probate  notwithstanding  it  indi- 
cates some  contract  obligation  of  binding  force  on  the  testa- 
tor's part.  For,  at  all  events,  one  may  by  his  will  appoint 
the  executor  to  administer  the  estate;  and,  more  than  this, 
the  probate  of  a  will  as  to  one's  property  merely  concludes 
that  the  will  is  valid  to  pass  any  estate  which  the  testator 
had  power  to  devise  or  bequeath,  and  not  that  there  was 
power  to  devise  or  bequeath  as  the  will  seeks  to  direct.  Con- 
troversies of  the  latter  sort  are,  on  the  other  hand,  to  be 
settled  by  proper  and  separate  proceedings  in  law  or  equity. 

Sehouler  on  Wills,  Executors  and  Administrators,  5th  ed.,  §  452-a. 

But  where  a  man  made  a  deed  to  his  wife  on  her  promise 
to  devise  the  property  to  him,  and  she  failed  to  do  so,  his 
agreement  was  enforced  by  suit.  Held  not  taxable. 

Nelson  v.  Sehoonover,  89  Kan.  779;  132  Pac.  1183. 

This  case  would  seem  against  the  weight  of  authority. 


PART  II  — THE  TRANSFER  §9 

b.     WHERE  THE  AGREEMENT  is  PERFORMED. 

Transfers  by  will,  even  where  made  upon  consideration  of 
a  prior  agreement,  have  almost  invariably  been  held  taxable. 
This  is  upon  the  theory  that  the  tax  is  on  the  transfer  and 
that  the  motive  of  the  transfer  cannot  affect  its  character, 
even  though  there  is  an  election.  If  the  beneficiary  takes 
under  the  will  he  cannot  avoid  that  tax  on  the  theory  that  he 
might  have  elected  to  take  under  the  contract  and  present  his 
claim  as  a  debt  against  the  estate. 

State  v.  Gerhard,  99  Kan.  462;  162  Pac.  1149. 

This  principle  was  well  illustrated  and  expounded  in  a 
recent  case  in  Massachusetts  (Hill  v.  Treasurer,  227  Mass. 
331;  116  N.  E.  509).  In  this  case,  by  an  ante-nuptial  agree- 
ment, the  man  provided  that  the  woman  whom  he  was  about 
to  marry,  if  she  should  become  his  wife,  should  receive,  at 
the  time  of  his  death,  $250,000,  "for  her  own  property  out- 
right, with  interest  from  the  day  of  death  as  a  debt  against 
my  estate."  By  his  will  the  testator  affirmed  the  agreement 
and  provided:  "It  is  my  wish  that  the  sum  of  $250,000  be 
paid  to  her  within  six  months  of  the  date  of  my  decease  and 
when  such  payment  is  made  instead  of  taking  cash  my  said 
wife,  if  she  so  elects,  may  take  from  out  of  my  estate  bonds, 
stocks,  or  other  evidences  of  value  to  said  amount  of  $250,- 
000. ' '  The  widow  elected  to  take  the  stock  and  bonds  instead 
of  cash  under  the  will.  In  a  proceeding  to  impose  the  inheri- 
tance tax  the  court  said:  "The  transfer  and  acceptance  of 
these  securities  by  Mrs.  Hill  was,  in  fact  and  in  law,  a  legacy 
in  payment  of  a  debt.  The  inheritance  tax  law  of  the  Com- 
monwealth applies  to  all  cases  whether  property  or  an  in- 
terest therein  passes  by  will.  It  is  not  confined  to  cases 
where  the  property,  or  an  interest  therein,  passes  as  a 
gratuity.  It  includes  cases  where  the  property,  or  an  in- 
terest therein,  passes  by  will  in  the  performance  of  an  obliga- 
tion resting  upon  the  testator  to  devise,  or  bequeath,  the 
property  in  question  or  where,  as  in  the  case  at  bar,  a  legacy 
is  given  in  payment  of  a  debt,"  citing: 

Matter  of  Gould,  156  N.  Y.  423 ;  51  N.  E.  287. 
Carter  v.  Craig,  77  N.  H.  200 ;  90  A.  598. 
State  v.  Molier,  96  Kan.  514;  152  Pac.  771. 
Matter  of  Kidd,  88  N.  Y.  274;  80  N.  E.  924. 
Turner  v.  Martin,  7  DeG.  N.  &  G.  429. 


90  INHERITANCE  TAXATION 

A  similar  situation  arose  in  the  Massachusetts  probate 
court  for  Middlesex  county,  July,  1911,  in  the  Matter  of 
Perry.  Here  the  testator  mide  an  agreement  to  leave  prop- 
erty by  will  in  consideration  of  care  and  support  to  be  given 
him  for  the  rest  of  his  life,  and  he  made  a  will  carrying  out 
the  agreement.  The  court  held  that  this  was  not  a  "bona  fide 
purchase  for  full  consideration  for  money  or  money's  worth 
made  *  *  *  to  take  effect  after  the  death  of  the 

grantor."  The  court  found  that  the  devisee  took  no  title  in 
her  lifetime,  but  that  the  words  quoted  applied  only  to  a  deed 
and  not  to  a  will.  As  the  will  was  made  and  allowed  the 
devisee  was  bound  by  an  effective  performance  of  the  agree- 
ment and  took  compensation  under  the  will,  and  as  an  inci- 
dent of  the  transfer  of  the  estate  to  her  she  was  held  liable 
to  the  tax.  The  court  suggested  that  for  actual  disburse- 
ments incurred  in  the  service  the  devisee  might  well  be  a 
creditor  of  the  estate. 

So,  where  a  husband  bought  real  estate  and  conveyed  the 
same  to  his  wife  by  deed,  upon  her  promise  to  devise  the 
same  to  him  by  will,  which  she  did,  held, — taxable. 

Ransom  v.  United  States,  70  Fed.  Gas.  No.  11,574. 

Where  a  man  contracted  with  his  housekeeper  to  make  a 
will  in  her  favor  to  pay  her  for  her  services,  and  the  amount 
thus  contracted  to  be  devised  was  to  increase  by  lapse  of 
time,  and  the  contract  was  thus  not  the  mere  satisfaction  of 
a  debt,  it  was  held  that  the  contract  was  subject  to  the  inheri- 
tance tax  as  fixed  by  the  statute  at  the  date  thereof. 

Clark  v.  Treasurer,  226  Mass.  301 ;  115  N.  E.  416. 

The  doctrine  of  the  Clark  case  has  been  applied  in  Massa- 
chusetts to  a  case  where  a  will  contained  bequests  in  pur- 
suance of  a  contract.  These  were  held  taxable  against  the 
beneficiaries,  the  court  remarking  that  if  it  were  otherwise 
intended  the  contract  should  have  so  provided. 

Richardson  v.  Lane  (Mass.),  126  N.  E.  44. 

c.    ANTE  NUPTIAL  AGREEMENTS. 

Where  the  transfer  is  in  fact  under  the  agreement  and  not 
under  the  will,  though  the  will  confirms  the  agreement,  the 
courts  have  held  the  transfer  not  taxable. 


PAET  II  — THE  TRANSFER  91 

In  Matter  of  Schmoll,  191  App.  Div.  435;  181  Supp.  542; 
aff.  230  N.  Y.  559;  130  N.  E.  893,  the  question  arose  under  an 
agreement  entered  into  in  Paris  on  the  wedding  day  of  the 
couple.  Under  this  agreement  Mr.  and  Mrs.  Schmoll  adopted 
the  Swiss  system  of  universal  community  of  property,  the 
contract  providing  that  it  could  not  be  altered  or  canceled 
during  the  existence  of  the  marriage.  The  agreement  recited 
that:  "If  at  the  time  of  the  decease  of  either  husband  or 
wife  there  should  exist  some  children  or  descendants  from 
this  marriage,  the  division  between  the  children  or  descend- 
ants and  the  survivor  shall  be  regulated  as  follows :  *." 
It  then  provided  that  if  the  husband  died  before  his  wife  the 
wife  should  take  two-thirds  of  the  common  estate  and  the 
children  one-third. 

Construing  this  agreement  under  the  transfer  tax  law  the 
court  said:  "Kecent  decisions  of  the  courts  of  this  State 
have  established  the  law  that  transfers  arising  upon  a 
valuable  and  adequate  consideration,  although  within  the 
classification  of  the  statute,  are  not  within  the  intendment  of 
it  and  are  not  taxable.  Both  parents  had  a  natural 

desire  to  provide  for  the  prospective  offspring  of  their  con- 
templated union,  and  it  is  conceeded  that  the  agreement  made 
in  behalf  of  the  decedent's  children  is  such  an  agreement  as 
could  be  enforced  in  behalf  of  said  children.  With  this  con- 
cession I  can  see  no  good  reason  why  the  share  in  the  de- 
cedent's property  which  the  children  received  under  and  by 
virtue  of  the  ante-nuptial  agreement  executed  by  their 
parents  was  not  upon  consideration.  It  was  in  no  sense 
donative  or  a  benefaction." 

In  Matter  of  Alfred  G.  Vanderbilt,  184  App.  Div.  661,  aff. 
226  N.  Y.  mem,  which  determined  that  the  provisions  of  a 
will  made  pursuant  to  an  ante-nuptial  agreement  did  not  con- 
stitute a  taxable  transfer  the  court  said :  *  *  In  the  case  at  bar 
Mrs.  Vanderbilt 's  right  to  receive  these  securities  did  not 
grow  out  of  the  will,  its  source  was  in  the  ante-nuptial  agree- 
ment and  the  obligation  could  have  been  enforced  against 
the  estate  had  there  been  no  will.  It  rested  upon  a  valuable 
consideration  which  was  executed  by  the  marriage." 

The  principle  thus  established  was  applied  by  the  Surro- 


92  INHERITANCE  TAXATION 

gate's  Court  to  separation  agreements.  Where,  under  such 
an  agreement,  the  wife  was  given  an  income  for  life,  remainder 
to  a  son,  if  he  survived  his  father,  and  the  father  died  before 
the  son,  held  that  the  son  took  under  the  contract  and  not 
under  the  will  and  that  the  transfer  was  not  taxable. 

Matter  of  Roeck,  111  Miss.  509;  183  Supp.  776. 

The  Illinois  courts  draw  a  distinction  where  the  ante- 
nuptial contract  makes  provision  in  lieu  of  dower. 

Prior  to  marriage  the  late  Marshall  Field  entered  into  an 
ante-nuptial  contract  with  his  intended  wife,  whereby  she  was 
to  take  the  sum  of  one  million  dollars  in  event  she  survived 
him,  in  lieu  of  all  rights  or  interests  she  might  have  in  his 
estate  in  the  absence  of  such  an  agreement.  It  was  held  by  the 
Supreme  Court  of  Illinois,  that  under  their  statute,  which 
taxes  all  dower  rights  of  a  widow  exceeding  in  value  $20,- 
000,  that  the  sum  mentioned  in  the  contract  should  be  taxed. 
In  the  strict  sense  of  the  term  this  million  dollars  was  but  a 
11  substitute  for  and  in  lieu  of  dower  and  other  rights,  it  must 
for  the  purpose  of  the  inheritance  tax,  be  treated  the  same  as 
dower  would,  and  is  not  to  be  considered  an  indebtedness  to 
be  deducted  from  the  market  value  of  the  estate. ' '  Therefore 
the  executor  was  not  allowed  to  deduct  the  amount  in  deter- 
mining the  value  of  Marshall  Field's  estate. 

People  v.  Field,  248  111.  147;  93  N.  E.  721. 

See:     People  v.  Union  Trust  Co.,  255  HI.  168;  99  N.  E.  377. 

d.    MUTUAL  WILLS. 

A  more  difficult  problem  arises  under  mutual  wills.  These, 
in  the  absence  of  contract,  are  revocable  without  notice. 

Edson  v.  Parsons,  85  Hun,  263;  32  Supp.  1036;  aff.  155  N.  Y.  555;  50 

N.  E.  265. 
Middleworth  v.  Ordway,  191  N.  Y.  404;  84  N.  E.  291. 

But  where  there  is  a  contract  and  that  contract  provides 
that  the  survivor  shall  have  certain  rights  in  the  estate  of 
the  deceased,  and  the  agreement  is  upon  good  consideration, 
the  question  has  arisen  whether  the  transfers  under  the  mutual 
wills  are  taxable.  The  authorities  hold  that  they  are. 

In  the  Matter  of  Cory,  177  App.  Div.  781;  164  Supp.  956; 
aff.  221  N.  Y.  612,  two  brothers  agreed  that  the  survivor 


PART  II  — THE  TRANSFER  93 

might  buy  certain  securities  from  the  estate  of  the  deceased 
brother  at  a  fixed  price  and  the  surviving  brother  claimed 
that  the  assets  he  thus  acquired  should  be  appraised  at  the 
price  fixed  by  the  will.  The  court  said : 

"The  result  would  have  been,  and  in  fact  was,  so  far  as 
the  State  is  concerned,  that  by  the  contract  and  will  read 
together  John  M.  Cory  received  in  possession  and  enjoyment 
after  his  brother's  death  stock  worth  upwards  of  $100,000. 
In  other  words,  for  the  purpose  of  distribution  the  testator 
might  put  any  arbitrary  value  he  chose  upon  the  stock,  but 
for  the  purpose  of  assessment  for  taxation  under  the  Transfer 
Tax  Law,  the  stock  is  to  be  appraised  at  its  real  value,  and 
it  is  unimportant  under  the  statute  that  the  sale  of  the  stock 
to  John  M.  Cory  at  the  arbitrary  valuation  was  provided  for 
by  an  ante-mortem  bargain  or  contract,  since  the  transfer  by 
virtue  of  that  contract  was  clearly  *  intended  to  take  effect  in 
possession  or  enjoyment  at  or  after'  the  brother's  death.  To 
apply  any  other  rule  to  a  case  like  the  present  would  open 
the  door  to  unlimited  devices  to  avoid  the  payment  of  transfer 
taxes.  My  conclusion  is  that  the  stock  in  question  should  be 
appraised  for  the  purpose  of  the  transfer  tax  at  its  fair 
market  value  at  the  time  of  the  testator's  death." 

In  Matter  of  Burgheimer,  91  Misc.  468;  154  Supp.  943, 
decedent  had  orally  agreed  with  his  partner  that  on  the  death 
of  either  the  survivor  should  take  the  decedent's  interest  in 
the  good  will  of  the  firm;  and  that  each  should  make  a  will 
containing  this  provision.  Surrogate  Fowler  held  that  the 
good  will  was  taxable  notwithstanding,  and  remitted  the 
report  for  determination  of  the  value  thereof.  He  says : 

"An  agreement  between  parties  as  to  the  devolution  of 
the  good  will  of  their  business  on  the  death  of  either  does 
not  prove  that  there  was  no  good  will.  Nor  does  it  perhaps 
bind  the  State  not  a  party  to  the  undertaking.  *  *  *  Un- 
doubtedly the  decedent  died  owning  an  interest  in  the  good 
will  and  firm  name  of  the  co-partners.  Consequently  the  good 
will  formed  a  part  of  his  estate  as  an  asset.  I  fail  to  find  a 
precedent  by  which  the  testator  through  the  operation  of  his 
last  will  and  testament  would  be  able  to  reduce  to  nothingness 
a  substantial  asset  of  his  estate  and  thus  escape  its  proper 


94  INHERITANCE  TAXATION 

taxation.  I  have  examined  the  authorities  submitted  by  the 
respondent  and  do  not  think  that  they  determine  a  legal  find- 
ing different  from  that  which  I  have  expressed." 

e.    PARTNERSHIP  AGREEMENTS. 

It  is  difficult  to  distinguish  in  principle  between  ante- 
nuptial agreements  and  partnership  agreements  where  the 
contract  is  not  donative  and  rests  upon  a  valid  and  adequate 
consideration.  The  question  usually  arises  under  Good  Will 
(see  Post).  Where  the  partnership  articles  provide  that  the 
firm  shall  not  be  dissolved  by  death  of  any  of  the  partners 
and  that  the  surviving  partners  should  have  the  right  to  use 
the  firm  name  it  was  held  that  the  transfer  of  the  good  will 
to  the  survivors  was  not  taxable. 

Matter  of  Borden,  95  Misc.  443;  159  Supp.  346. 

If  an  agreement  is  so  drawn  that  there  is  no  interest  in 
the  good  will  to  a  partner  who  withdraws,  is  bought  out  or 
dismissed  or  dies,  death  being  only  one  of  the  incidents 
whereby  the  firm  might  be  dissolved  there  is  a  serious  ques- 
tion whether  there  is  any  taxable  transfer. 

Matter  of  Dickey,  N.  Y.  L.  J.,  June  1,  1922. 

3.  Compromise  Agreements  between  Heirs  and  Devisees. 

The  weight  of  authority  holds  that  when  the  will  is  ad- 
mitted to  probate  the  tax  must  be  paid  under  its  provisions 
without  reference  to  any  subsequent  arrangement  among  the 
heirs  or  devisees,  as  they  take  by  contract  and  not  under  the 
will  nor  from  the  testator. 

Greenwood  v.  Holbrook,  111  N.  Y.  465;  18  N.  E.  711. 

This  principle  has  been  applied  in  New  York  where  it  is 
held  that  the  amount  paid  by  heirs  to  settle  the  disputed  claim 
of  an  alleged  common  law  wife  cannot  be  deducted  from  the 
amount  of  the  taxable  estate. 

Matter  of  Supple,  186  Supp.  560. 

In  Matter  of  Cook,  187  N.  Y.  253;  79  N.  E.  991,  it  was  held 
that  legacies  to  nephews  and  nieces,  assigned  by  them  to  tes- 
tator's widow,  for  valuable  consideration,  and  in  settlement 
of  a  contest  of  the  will  instituted  by  her,  pass  to  the  widow, 


PAET  II  — THE  TRANSFER  95 

not  under  the  will,  but  by  virtue  of  the  assignment  to  her, 
and  she  takes  as  assignee  and  not  as  legatee,  and  the  legacies 
were  therefore  taxable  at  5%,  not  1%. 

As  we  have  already  seen,  had  the  nephews  and  nieces  re- 
nounced their  legacies  instead  of  assigning  them,  and  the 
legacies  had  then  passed  to  the  widow  under  a  residuary 
clause  of  the  will,  the  result  would  have  been  the  reverse. 

Matter  of  Wolfe,  89  App.  Div.  349;  85  Supp.  949;  aff.  179  N.  Y.  599; 

72  N.  E.  1152. 
Estate  of  Stone,  132  la.  136;  109  N.  W.  455. 

So,  where  heirs  contested  a  will  which  left  a  large  estate  to 
exempt  charitable  corporations  who  ]£aid  the  heirs  one-third 
to  withdraw  contest,  the  bequests  were  exempted  and  the  heirs 
took  nothing  under  the  will,  it  being  no  concern  of  the  State 
what  they  received  under  the  compromise  agreement. 

Matter  of  Murray,  92  Misc.  100;  155  Supp.  185. 

An  heir  threatened  contest  because  disinherited  and  a  sum 
was  paid  her  in  compromise.  It  was  held  taxable  against  the 
residuary  legatees  and  not  against  the  disinherited  heir.  The 
court  said:  "The  whole  of  the  residuary  estate  vested  at 
the  instant  of  his  death  in  the  residuary  legatees.  The  in- 
heritance tax  was  then  due  and  payable.  The  beneficial  in- 
terest then  passed  to  the  legatees  and  their  succession  gave 
rise  to  the  tax.  Subsequent  events  did  not  affect  it.  (In  re 
Cook,  187  N.  Y.  253;  79  N.  E.  991.)  The  contrary  view  is 
held  by  the  Supreme  Court  of  Pennsylvania,  but  we  cannot 
assent  to  the  reasoning  or  the  conclusion  in  those  cases. " 

Estate  of  Graves,  242  111.  212;  89  N.  E.  978. 

Beneficiaries  under  an  earlier  will  permitted  a  later  will  to 
be  probated  under  a  compromise  agreement.  Held,  that  upon 
the  probate  of  the  will  the  entire  estate  vested  in  the  devisees, 
and  they,  and  not  the  contestants,  were  subject  to  tax. 

Estate  of  Wells,  142  la.  255;  120  N.  W.  713. 

A  testator  devised  entire  estate  to  widow.  Collateral  heir.s 
contested  but  withdrew  contest  on  payment  to  them  of  one- 
half  of  the  property  by  the  widow.  Held,  that  no  tax  was  due 
from  the  collateral  heirs. 

English  v.  Grenshaw,  120  Tenn.  531 ;  110  S.  W.  210. 


96  INHERITANCE  TAXATION 

Heirs  agreed  to  convey  a  portion  of  devised  real  estate  in 
settlement  of  a  claim  of  one  of  them.  Held,  that  the  tax  must 
be  paid  on  the  entire  realty  to  release  the  lien. 

Estate  of  Sanford,  90  Neb.  410;  133  N.  W.  870. 

Where  heirs  under  a  compromise  agreement  changed  the 
distribution  as  made  by  the  will  the  tax  should  be  assessed 
as  if  the  property  passed  as  directed  by  the  will  and  not  as 
it  did  under  the  agreement. 

Batt  v.  Treasurer,  209  Mass.  459 ;  95  N.  E.  854. 

In  the  Batt  case  the  court  said: 

"It  is  important  that  in  the  assessment  of  this  tax  there 
should  be  a  plain,  simple  rule.  The  property  upon  which  the 
tax  is  to  be  assessed  is  that  which  passes  by  will  or  by  the 
laws  regulating  intestate  succession.  When  there  is  a  will, 
whether  or  not  it  disposes  of  the  whole  estate  of  the  testator, 
whatever  does  pass  by  it  passes  to  the  legatees  therein  named, 
and  by  force  of  the  will  passes  to  no  other  person. 

"In  view  of  the  nature  and  office  of  the  compromise  statute, 
and  of  the  language  of  the  tax  statute,  the  most  reasonable 
interpretation  of  the  phrase  'which  shall  pass  by  will'  in  the 
tax  statute  is  that  it  describes  only  property  that  passes  by 
the  terms  of  the  will  as  written  and  not  as  changed  by  any 
agreement  for  compromise  made  within  or  without  the  statute. 
Any  other  interpretation  would  make  the  amount  to  be 
assessed  hinge  on  the  manner  in  which  the  agreement  was  to 
be  carried  out.  In  the  case  before  us  there  can  be  no  doubt, 
if  the  will  had  been  admitted  to  probate  without  a  record  of 
the  agreement,  the  tax  would  have  been  assessed  in  accordance 
with  the  terms  of  the  will,  although  the  agreement  as  to  the 
division  of  the  estate  would  have  been  perfectly  valid.  For 
reasons  hereinbefore  stated  the  amount  of  the  tax  is  not 
changed  by  the  fact  that  the  agreement  was  approved  by  the 
court  and  made  a  part  of  the  decree. ' ' 

Where  a  testator  by  his  will  leaves  one-half  of  his  property 
to  his  wife  and  the  other  half  to  his  sons  and  daughters,  and 
the  estate  is  all  community  property,  and  there  is  nothing  in 
the  will  to  indicate  an  intention  to  make  the  testamentary 
gift  to  the  widow  stand  in  lieu  of  her  community  interest,  she 


PART  II  — THE  TRANSFER  97 

takes  three-fourths  of  the  entire  community  property  and  is 
chargeable  with  inheritance  tax  on  such  three-fourths,  not- 
withstanding the  filing  of  a  "waiver"  of  her  rights  to  any- 
thing over  one-half  of  the  estate.  The  right  of  the  State  to 
an  inheritance  tax,  based  upon  three-fourths  of  the  estate, 
vested  upon  the  death  of  the  testator,  and  could  not  be  affected 
by  any  subsequent  arrangement  that  might  be  made  by  the 
heirs. 

Estate  of  Rossi,  49  Cal.  Dec.  60. 

The  amount  passing  to  legatees  under  a  will  and  not  what 
they  actually  receive  under  a  compromise  agreement  is  to  be 
assessed  as  the  "fair  market  value"  of  their  legacy. 

Matter  of  Stockwell,  158  Supp.  320. 

So,  it  was  recently  held  that  an  amount  paid  from  legacies 
to  secure  the  withdrawal  of  a  contest  of  the  will  was  not 
allowable  as  a  deduction. 

Matter  of  Reed,  98  Misc.  102;  162  Supp.  412. 

Where  there  was  a  void  clause  in  a  will  creating  a  trust  the 
heirs  agreed  to  cure  the  defect,  the  property  went  to  the 
trustees;  but  the  court  held  that  there  was  in  fact  an  in- 
testacy as  to  the  trust  funds  and  that  the  tax  must  be  assessed 
against  the  beneficiaries  who  would  take  under  intestacy  and 
not  as  the  property  subsequently  passed  under  the  agreement. 

Matter  of  Leeds,  N.  Y.  L.  J.,  June  2,  1914. 

Money  paid  under  an  agreement  to  compromise  an  adverse 
claim  to  the  estate  is  taxable  against  the  heirs. 

Matter  of  Edwards,  85  Hun,  436;   32  Supp.  901;   aff.  146  N.  Y.   380; 
41  N.  E.  89. 

Where  the  testator  died  in  1869  leaving  a  will  devising 
property  to  a  certain  school,  and  if  the  Legislature  should 
pass  any  act  which  would  defeat  the  carrying  out  of  this 
legacy,  then  he  bequeathed  the  fund  to  his  illegitimate  chil- 
dren, the  illegitimate  children  claimed  that  the  clause  creat- 
ing the  fund  was  illegal  under  Virginia  statutes  and  that  they 
were  therefore  entitled,  and  a  settlement  was  made  with  them 
for  $300,000.  The  court  held  that  the  estate  taken  by  the 
illegitimate  children  was  an  executory  devise  and  was  void 
7 


98  INHEEITANCE  TAXATION 

for  remoteness ;  that  as  they  were  not  entitled  to  any  legacy, 
the  $300,000  paid  them  was  not  paid  as  a  legacy  and  was  not 
liable  to  taxation ;  that  it  was  not  paid  as  a  distributive  share, 
as,  being  illegitimate  children,  they  would  be  entitled  to  no' 
interest  in  the  estate  if  he  died  intestate. 

Page  v.  Rives,  Fed.  Gas.  No.  10,666;  1  Hughes,  297. 

The  only  States  which  hold  a  contrary  view  and  permit 
subsequent  arrangements  among  the  heirs  to  affect  the  tax 
are  Pennsylvania,  Colorado  and  Minnesota. 

Pepper's  Estate,  159  Pa.  St.  508;  28  A.  353. 
Hawley's  Estate,  214  Pa.  525;  63  A.  1021. 
People  v.  Eiee,  40  Colo.  508 ;  91  Pac.  33. 

But  in  these  States  the  tax  is  levied  upon  the  persons  who 
actually  receive  the  property  under  the  agreement.  And  even 
the  amount  paid  to  their  counsel  as  fees  under  the  agreement 
is  held  to  be  taxable. 

Be  Taber,  257  Pa.  St.  205;  101  A.  311. 

In  Pennsylvania  the  allowance  or  compromise  of  the  claims 
of  third  persons  simply  reduces  the  estate  afterwards  passing 
to  volunteers  with  the  same  effect  as  if  the  reduction  had  been 
caused  by  the  payment  of  debts,  or  as  if  the  payment  or 
surrender  had  been  the  result  of  a  suit  terminating  in  favor 
of  the  claimant. 

Ee  Taber,  159  Pa.  St.  512 ;  28  A.  354. 

The  amount  received  under  the  settlement  and  not  the 
amount  that  would  have  been  received  under  the  will  held  to 
be  the  basis  of  the  tax. 

Thorson's  Estate  (Minn.),  185  N.  W.  508. 

4.  Payment  of  Debt  by  Will. 

The  rule  is  established  in  England  that  if  the  decedent  is  a 
creditor  of  a  legatee  and  in  his  will  provided  for  the  remis- 
sion or  forgiveness  of  the  debt,  it  is  to  be  treated  as  a  legacy 
and  taxed  as  such. 

Attorney-General  v.  Holbrook,  12  Price  407;  3  Y.  &  J.  114. 

Morris  v.  Livie,  11  L.  J.  Ch.  172;  1  Y.  and  Coll.  380;  20  Eng.  Ch.  380. 


PAKT  II  — THE  TRANSFER  99 

And  this  is  the  general  rule. 

Matter  of  Gould,  156  N.  Y.  923;  51  N.  E.  287.  ft 

Tyson's  Appeal,  10  Pa.  St.  220. 

This  must  not  be  confused  with  the  mere  direction  in  a  will 
by  a  testator  to  an  executor  to  pay  a  debt,  or  generally  to 
pay  all  lawful  debts.  A  creditor  cannot  be  transformed  into 
a  legatee  by  a  direction  in  his  debtor's  will  that  he  be  paid  the 
debt.  Such  a  direction  neither  makes  a  transfer  nor  creates 
a  succession. 

Matter  of  Burhans,  100  Misc.  646;  166  Supp.  1027. 

Quinn's  Estate,  3  Phila.  (Pa.)  340. 

Gibbon's  Estate,  16  Phila.  (Pa.)  218;  13  W.  N.  C.  99. 

There  must  be  a  distinct  bequest  to  the  creditor  and  such 
bequest  must  clearly  be  intended  as  a  satisfaction  of  the  debt 
or  in  lieu  of  its  payment.  Under  such  circumstances  the  pay- 
ment of  a  debt  by  will  would  seem  to  involve  substantially 
the  same  principle  as  where  the  will  is  made  pursuant  to 
contract.  The  debtor  has  the  same  right  of  election.  He  may 
renounce  the  legacy  and  present  his  claim  against  the  estate 
as  a  debt,  in  which  case  no  tax  would  accrue.  On  the  other 
hand,  the  claim  may  be  rejected  by  the  executor  or  its  amount 
disputed,  and  under  most  statutes  the  legacy  may  be  paid 
more  promptly  than  the  debt.  There  may  be  distinct  advan- 
tages in  accepting  the  legacy;  but  if  it  is  accepted  there  is  a 
transfer  under  the  will  and  the  money  is  paid  as  a  legacy  and 
not  as  a  debt ;  it  is  therefore  held  subject  to  the  tax  imposed 
upon  such  a  transfer.  This  doctrine  seems  amply  supported 
by  authority. 

Where  the  testator  recited  that  his  son  had  rendered  him 
valuable  services  and  devised  $5,000,000  in  payment  of  the 
same  and  all  subsequent  services  until  his  death,  held  a  tax- 
able transfer.  The  court  said:  "It  matters  not  what  the 
motive  of  a  transfer  by  will  may  be,  whether  to  pay  a  debt, 
discharge  some  moral  obligation,  or  to  benefit  a  relative  for 
whom  the  testator  entertains  a  strong  affection ;  if  the  devise 
or  bequest  be  accepted  by  the  beneficiary,  the  transfer  is 
made  by  will,  and  the  State,  by  the  statute  in  question,  makes 
a  tax  to  impinge  upon  that  performance." 

Matter  of  Gould,  156  N.  Y.  423 ;  51  N.  E.  287. 


100  INHERITANCE  TAXATION 

So,  where  a  niece  agreed  to  live  with  her  uncle  and  care  for 
him  as  long  as  he  should  live  and  he  agreed  to  leave  her  all 
his  property  by  will,  and  did  so,  the  property  passed  to  her 
by  will  and  was  taxable  in  spite  of  the  contract,  though  fully 
executed  on  her  part. 

State  v.  Mollier,  96  Kans.  514;  152  Pae.  771. 

Where  bonds  of  a  corporation  were  canceled  by  will  it  was 
held  a  taxable  transfer  to  the  corporation.  The  court  said: 
"The  debenture  bonds  in  question  were  the  property  of  the 
testator.  When  he  bequeathed  them  to  the  asylum  the  prop- 
erty passed  from  him  to  it.  It  might  cancel  the  bonds,  and 
to  relieve  itself  of  the  obligation  they  evidenced,  or  it  might, 
probably,  transfer  them  to  anyone  who  would  be  willing  to 
pay  their  value. 

Re  Rothschild,  71   N.  J.   Eq.   210;   63  A.  615;    aff.   72  N.  J.   Eq.   425; 
65  A.  1118. 

When  notes  of  legatees  are  forgiven  by  will  and  are  shown 
to  be  valueless  no  tax  is  assessable. 

Matter  of  Daly,  100  App.  Div.  373;  91  Supp.  858;  aff.  182- N.  Y.  524; 
74  N.  E.  1116. 

Advancements  paid  by  will  where  the  heir  gets  nothing 
held:  no  tax. 

Succession  of  Fallen,  144  La.  299;  80  So.  544. 

' 

Payment  of  a  debt  by  the  exercise  of  a  power  of  appoint- 
ment is  taxable  if  the  creditors  accept  it. 

Matter  of  Rogers,  71  App.  Div.  461;  75  Supp.  835;  aff.  172  N.  Y.  617; 

64  N.  E.  1126. 
Matter  of  Slosson,  87  Misc.  517;  149  Supp.  797;  affirmed  as  to  this  point 

216  N.  Y.  79;  110  N.  E.  166. 

And  where  the  testator  agreed  to  leave  all  the  property  to 
the  beneficiary  in  return  for  support  for  life,  and  did  so,  the 
devise  was  held  taxable. 

Carter  v.  Craig,  77  N.  H.  200;  9.0  A.  598. 

5.  As  Affected  by  Statute. 

The  New  York  statute  regulating  transfers  by  will  is 
Article  2  of  the  Decedent's  Estate  Law,  Chapter  18,  L.  1909, 
sections  10  to  47. 


PART  II  — THE  TRANSFEE 

Some  of  the  States  require  three  witnesses  to  pass  real 
estate;  and  questions  may  arise  in  tax  proceedings  as  to  the 
validity  of  trusts.  Generally  the  courts  seek  to  avoid  con- 
structions which  will  create  an  intestacy,  and  the  presump- 
tion is  that  the  testator  intended  to  dispose  of  his  entire 
estate. 

Dreyer  v.  Reisman,  136  App.  Div.  796. 

6.  Transfers  by  Intestate  Law. 

In  New  York  these  are  regulated  by  Article  3  of  the 
Decedent  Estate  Law,  and  by  statute  in  all  the  States. 

"The  term  'intestate  laws'  is  intended  to  cover  the  statute 
of  descent  which  relates  to  the  descent  of  real  estate,  and  the 
statute  of  distribution,  which  provides  for  the  distribution  of 
the  surplus  of  the  personal  property  of  decedent,  after  the 
payment  of  his  debts  and  legacies  if  he  left  a  will,  and  after 
setting  apart  to  the  widow  and  minor  children  the  exemptions 
specified  in  section  2713." 

Matter  of  Page,  39  Misc.  220;  79  Supp.  382. 

a.    As  TO  REAL  ESTATE. 

A  child  en  venire  sa  mere  is  in  being  for  purposes  of 
descent. 

Rockwell  v.  Greory,  4  Hun,  606. 

A  will  is  not  revoked  by  the  advent  of  an  after-born  child 
of  testator,  but  the  child  as  heir  is  put  to  his  or  her  special 
statutory  action  under  this  section  and  only  the  Supreme 
Court  may  determine  whether  or  not  the  action  will  lie. 

Matter  of  Sauer,  89  Misc.  105;  151  Supp.  465. 

Lineal  descendants  include  an  illegitimate  child  whose 
parents  subsequently  married. 

Miller  v.  Miller,  91  N.  Y.  315. 

Where  brothers  and  sisters  have  a  reversionary  interest  it 
vests  at  the  death  of  the  intestate  and  is  not  affected  by  the 
intervening  life  estate  of  their  mother. 

Barber  v.  Brundage,  50  App.  Div.  123;  63  Supp.  347;  aff.  169  N.  Y.  368. 


102  INHERITANCE  TAXATION 

In  the  absence  of  statute  great  uncles  inherit  to  the  exclu- 
sion of  great  aunts. 

Hunt  v.  Kingston,  3  Misc.  309;  23  Supp.  352. 

Where  intestate  conveyed  to  his  mother  property  he  had 
received  by  descent  from  his  father,  and  she  afterwards  willed 
it  to  him,  it  was  held  that  the  land  was  received  on  the  part 
of  the  mother  and  went  to  those  of  her  blood. 

Adams  v.  Anderson,  23  Misc.  705 ;  53  Supp.  141. 

Real  estate  received  from  the  mother  goes  to  cousins  on  the 
maternal  side  to  the  exclusion  of  collaterals  on  the  side  of  the 
father. 

Matter  of  McMillan,  126  App.  Div.  155;  110  Supp.  622. 

But  where  the  real  estate  did  not  come  from  either  father 
or  mother  the  collaterals  on  both  sides  are  entitled  to  share. 

Matter  of  Peck,  53  Misc.  535;  109  Supp.  1083. 

b.    As  TO  PERSONAL  PROPERTY. 

Lineal  consanguinity  is  reckoned  by  counting  each  step, 
up  or  down,  from  the  deceased;  collateral  consanguinity  by 
counting  the  steps  from  the  intestate  to  the  common  ancestor, 
then  down  to  the  collateral  beneficiary. 

Matter  of  Marsh,  5  Misc.  428;  26  Supp.  718. 

Three  nephews  and  the  child  of  a  deceased  nephew  share 
equally,  each  one-fourth. 

Matter  of  Prote,  54  Misc.  495;  104  Supp.  301. 

In  all  such  cases  the  nephews  and  nieces  and  the  children 
of  deceased  nephews  and  nieces  take  per  stirpes. 

Matter  of  Fleming,  48  Misc.  589 ;  98  Supp.  306. 
Matter  of  Dunning,  48  Misc.  482;  96  Supp.  1110. 

And  generally,  where  there  are  unequal  degrees,  the  bene- 
ficiaries take  per  stirpes. 

Dwight  v.  Gibb,  150  App.  Div.  573;  135  Supp.  431. 

Brothers  and  sisters  and  their  lineal  descendants  to  the 
most  remote  degree  are  preferred  to  other  kindred  not  in 
closer  blood  relationship;  so  held,  preferring  great  grand- 
nieces  over  first  cousins. 

Matter  of  Butterfield,  161  App.  Div.  506;  146  Supp.  671;  aff.  211  N.  Y. 
395. 


PART  II  — THE  TRANSFER  1Q3 

Prior  to  1898  subdivision  12  of  section  2732  of  the  N.  Y. 
Code,  now  section  98  of  the  N.  Y.  Decedent's  Estate  'Law, 
read: 

"No  representation  shall  be  admitted  among  collaterals 
after  brothers'  and  sisters'  children." 

In  1898  said  subdivision  was  amended  to  read:  "Repre- 
sentation shall  be  admitted  among  collaterals  in  the  same 
manner  as  allowed  by  law  in  reference  to  real  estate." 

Where  an  intestate  is  survived  by  nephews  and  nieces  and 
by  grandnephews  who  are  children  of  a  deceased  nephew  and 
niece,  all  of  such  persons  having  sprung  from  the  intestate's 
deceased  brother,  the  grandnephews  are  entitled  to  receive 
their  parent's  share  of  the  personal  estate. 

Mater  of  Ebbets,  43  Misc.  575;  89  Supp.  544. 

Matter  of  McGovern,  N.  Y.  L.  J.,  March  26,  1903;  distinguishing. 

Matter  of  Davenport,  172  N.  Y.  454. 

Matter  of  Hadley,  43  Misc.  579;  89  Supp.  545. 

Matter  of  Kearney,  N.  Y.  L.  J.,  May  4,  1905. 

Matter  of  Rowe,  103  Misc.  Ill,  170  Supp.  472. 

Subdivision  12  of  section  98  was  further  amended  by  chap- 
ter 539  of  the  Laws  of  1905  to  read : 

"No  representation  shall  be  admitted  among  collaterals 
after  brothers'  and  sisters'  descendants.  This  act  shall  not 
apply  to  an  estate  of  a  decedent  who  shall  have  died  prior 
to  the  time  this  act  shall  take  effect."  And  it  now  reads: 
"Prior  to  May  18,  1905." 

In  the  Matter  of  Nichols,  60  Misc.  299;  113  N.  Y.  Supp. 
277,  the  court  says : 

"Under  this  subdivision,  the  descendants  of  brothers  and 
sisters  to  the  remotest  degree  by  representation  share  in  the 
distribution  of  an  estate.  All  collateral  relatives,  except 
descendants  of  brothers  and  sisters,  are  precluded  from  shar- 
ing in  the  decedent's  estate  by  representation.  Where  they 
are  all  of  the  same  degree  of  kinship,  to  wit,  uncles  and 
aunts,  and  nephews  and  nieces,  the  rule  of  representation  does 
not  apply,  still  they  take  by  reason  of  that  degree. 

"In  the  case  at  bar,  the  uncles  and  aunt  are  of  the  third 
degree  of  kinship,  while  all  of  the  cousins  are  of  the  fourth 
degree.  It  therefore  follows  that  the  cousins  are  precluded 
by  reason  of  their  degree  of  kinship,  and  by  reason  of  the 


INHERITANCE  TAXATION 

prohibition  found  in  said  subdivision  12,  from  sharing  in  the 
distribution  of  this  estate.  (Matter  of  Davenport,  172  N.  Y. 
454.)  Subdivision  10  of  section  2732  provides  that,  'Where 
the  descendants,  or  next  of  kin  of  the  deceased,  entitled  to 
share  in  this  estate,  are  all  in  equal  degree  to  the  deceased, 
their  shares  shall  be  equal.' 

Following  this  it  was  held  in  the  Matter  of  Barry,  62  Misc. 
456,  that  where  an  intestate  leaves  no  nearer  kin  than  cousins 
and  descendants  of  deceased  cousins,  the  cousins  take  under 
subdivision  12,  section  98,  to  the  exclusion  of  the  descendants 
of  deceased  cousins. 

Nephews  and  grandnephews  take  per  stirpes. 

Matter  of  De  Voe,  107  App.  Div.  245 ;  94  Supp.  1129. 

Where  the  surviving  next  of  kin  are  first  cousins  and  the 
children  of  deceased  first  cousins,  under  subdivision  12  the 
first  cousins  are  entitled  to  the  personal  estate  to  the  exclu- 
sion of  such  children. 

Adee  v.  Campbell,  79  N.  Y.  52. 

B.— GIFTS. 

If  the  gift  from  a  decedent  is  for  any  reason  invalid  the 
property  claimed  to  have  been  given  in  fact  remains  a  part 
of  the  estate,  and  the  title  passes  under  the  will  or  pursuant 
to  the  intestate  law.  Whether  a  gift  is  valid  or  invalid  is 
one  of  the  most  frequently  contested  questions  that  arise  in 
inheritance  litigation.  A  peculiar  feature  of  these  contests 
is  that  the  persons  claiming  exemption  from  the  tax  on  the 
ground  of  a  gift  from  the  decedent  would  ordinarily  receive 
the  property  in  any  event,  for  the  executor  would  bear  the 
burden  of  the  contest  were  the  claim  of  gift  made  by  an 
outsider. 

But  even  though  the  gift  is  valid  the  transfer  under  it  may 
be  taxable  if  the  gift  is  intended  to  take  effect  in  possession 
or  enjoyment  at  or  after  death  or  made  in  contemplation 
thereof. 

The  statutes  also  tax  transfers  by  deed,  grant,  bargain  and 
sale  when  intended  to  take  effect  at  death  or  made  in  con- 
templation of  death.  Where  such  transfers  are  donative  in 
character  and  based  upon  inadequate  consideration  they  are 


PART  II  — THE  TRANSFER  105 

taxable ;  but  the  statutes  do  not  apply  to  such  transfers  when 
they  are  based  upon  full  and  adequate  consideration. 

1.  Valid  and  Invalid. 

As  we  have  seen,  the  first  question  arising  is  whether  there 
was  in  fact  a  valid  gift,  or  whether  the  title  to  the  property 
is  still  in  the  estate  of  the  deceased.  To  establish  that  the 
alleged  gift  is  not  a  part  of  decedent's  estate  the  evidence 
must  show  donor's  intent  to  give,  delivery  of  the  thing  given 
and  acceptance  by  or  on  behalf  of  the  donee. 

Beaver  v.  Beaver,  117  N.  Y.  421 ;  22  N.  E.  940. 
Matter  of  Bolin,  136  N.  Y.  177;  32  N.  E.  626. 

Decedent  attempted  to  deliver  to  beneficiaries  specific 
assets  belonging  to  his  wife's  estate.  The  latter  estate  had 
not  been  settled  or  distributed.  Held  that  he  had  no  title  to 
such  assets,  but  only  to  a  distributive  share  of  his  wife's 
estate.  The  gift  was  therefore  invalid. 

Whiting  et  al  v.  Farnsworth,  108  Me.  384. 

a.  BURDEN  OF  PROOF  is  ON  DONEE. 

The  court  said  in  Matter  of  0  'Connell,  33  App.  Div.  483 : 
"He  who  attempts  to  establish  title  to  property  through  a 
gift  inter  vivos  as  against  an  estate  of  a  decedent  takes  upon 
himself  a  heavy  burden  which  he  must  support  by  evidence 
of  great  probative  force,  which  clearly  establishes  every  ele- 
ment of  a  valid  gift,  viz.,  that  the  decedent  intended  to  divest 
himself  of  the  title  in  favor  of  the  donee  and  accompanied  his 
intent  by  a  delivery  of  the  subject-matter  of  the  gift." 

To  the  same  effect  are : 

Matter  of  Perry,  129  App.  Div.  587;  114  Supp.  246. 

Doty  v.  Wilson,  47  N.  Y.  580. 

Beaver  v.  Beaver,  117  N.  Y.  421;  22  N.  E.  940. 

Lehr  v.  Jones,  74  App.  Div.  54;  77  Supp.  213. 

Hemmerich  v.  Union  Dime  S.  I.,  205  N.  Y.  366 ;  98  N.  E.  499. 

b.  THERE  MUST  BE  A  PRESENT  INTENT  TO  GIVE. 

It  is  axiomatic  that  the  gift  must  be  in  praesenti  and  not 
in  futuro.  A  mere  promise  of  a  gift  in  the  future  does  not 
constitute  a  good  gift  inter  vivos. 


106  INHERITANCE  TAXATION 

"If  the  gift  regards  the  future  it  is  but  a  promise  without 
consideration  and  has  no  validity." 

Parsons  on  Contracts  (5th  ed),  15,  §  1. 

This  principle  is  well  illustrated  in  the  case  of  Holmes  v. 
Roper,  141  N.  Y.  64;  36  N.  E.  180.  In  this  case  a  note  was 
given  without  consideration.  This  note  was  handed  and  de- 
livered by  the  deceased  to  his  brother,  and  after  his  death  the 
brother  sued  the  executor,  but  was  unsuccessful,  for  the  court 
held  that  the  note  was  a  mere  executory  promise  in  the  future 
and  therefore  was  not  good  as  a  gift  either  causa  mortis  or 
inter  vivos. 

This  principle  was  applied  to  a  subscription  to  the  build- 
ing fund  of  a  church :  Twenty-third  Street  Baptist  Church  v. 
Cornell,  117  N.  Y.  601,  where  the  court  said:  "The  promise 
died  when  she  died,  and  was  merely  a  good  intention  which 
did  not  survive  her." 

Words  which  necessarily  refer  to  the  future  cannot  be  con- 
strued to  effectuate  a  present  gift. 

Matter  of  Brown,  86  Misc.  187;  149  Supp.  138;  aff.  167  App.  Div.  912. 
Matter  of  Somerville's  Estate,  20  Supp.  76. 

c.     THERE  MUST  BE  DELIVERY  OF  THE  THING  GIVEN. 

"The  necessity  of  delivery  has  been  maintained  in  every 
period  of  the  English  Law." 

Kent's  Commentaries,  vol.  2,  p.  348. 

The  principle  was  applied  in  Harris  v.  Clark,  3  N.  Y.  93. 
The  decedent  gave  a  draft  for  $30,000  to  his  sister  upon  K. 
Clark  &  Co.,  who  had  more  than  sufficient  funds  to  meet  it. 
The  deceased  had  formerly  been  a  partner  of  the  concern, 
and  it  was  amply  solvent.  But  he  died  before  his  sister  could 
present  this  draft  to  them  for  their  acceptance.  The  court 
held  that  as  there  was  no  acceptance  of  the  draft  it  was  a 
mere  promise  to  pay  in  case  they  did  not  pay,  made  without 
consideration  and  revoked  by  his  death;  also,  as  an  order  on 
R.  Clark  &  Co.  that  it  was  revoked  by  his  death. 

The  rule  has  been  followed  in  these  cases: 

Matter  of  King,  51  Mise.  375,  381;  101  Supp.  279. 

Gregan  v.  Union  Trust  Co.,  198  N.  Y.  541;  92  N.  E.  1085. 

Matter  of  Crawford,  113  N.  Y.  366 ;  21  N.  E.  142. 


PAET  II  — THE  TRANSFER  107 

In  a  box  kept  by  decedent  at  his  bank  marked  with  his  name 
and  that  of  his  sister-in-law  there  were  unrecorded  deers 
from  him  to  his  sister-in-law,  and  also  executed  assignments 
of  certain  stock  and  a  mortgage,  and  certificates  of  deposit 
endorsed  on  the  back  by  him  to  the  order  of  another  sister-in- 
law.  The  several  documents  were  in  envelopes  on  which  the 
decedent  had  written  "the  property  of"  with  the  name  of  the 
person:  Held,  no  delivery  and  taxable  as  part  of  decedent's 
estate. 

Matter  of  Sharer,  36  Misc.  502;  73  Supp.  1057. 

d.    DELIVERY  TO  AN  AGENT. 

The  rule  seems  to  be:  That  a  delivery  to  an  agent  or 
trustee  of  a  donee  is  good;  but  that  a  delivery  to  an  agent 
or  servant  of  the  donor  is  not  and  cannot  be  good  delivery 
to  the  donee  for  the  reason  that  the  donor  may  countermand 
the  gift  at  any  time  prior  to  the  delivery  by  his  agent  to  the 
beneficiary. 

(1)  To  Agent  of  Donor. 

A  delivery  to  the  agent  of  the  donor  to  be  delivered  to  a 
third  person  is  not  a  good  delivery.  This  rule  is  as  old  as 
the  common  law.  In  Lyte  et  ux.  v.  Peny,  Easter  Term,  33 
Hen.,  VIII,  a  man  gave  money  to  third  person  to  be  delivered 
to  a  woman  on  the  day  of  her  marriage.  The  question  was 
whether  before  her  marriage  he  could  countermand  and  re- 
voke the  gift.  It  was  held  that  he  could  do  so,  the  court 
reasoning:  "For  if  a  man  delivers  to  his  servant  on  New 
Year's  Day  a  golden  cup  to  give  as  a  New  Year's  gift  to  a 
stranger,  clearly  he  may  countermand  this,  notwithstanding 
the  gift,  for  it  was  not  a  gift  perfectly  executed." 

So  where  a  decedent  had  given  an  order  on  a  bank  to  trans- 
fer her  account  to  the  joint  names  of  herself  and  her  husband 
and  died  before  the  order  was  executed;  held,  no  gift. 

Augsbury  v.  Shurtliff,  180  N.  Y.  138;  72  N.  E.  927. 

The  same  rule  is  laid  down  in  Sessions  v.  Moseley,  4  Gush. 
(Mass.),  87,  at  page  92:  "If,  therefore,  it  be  delivered  to  a 
third  person  with  authority  to  deliver  it  to  the  donee,  this 


108  INHERITANCE  TAXATION 

depository,  until  the  authority  is  executed  by  actual  delivery 
to  and  acceptance  by  the  donee,  is  the  agent  of  the  donor,  who 
may  revoke  the  authority  and  take  back  the  gift,  and  there- 
fore if  the  delivery  does  not  take  place  in  the  donor's  life- 
time, the  authority  is  revoked  by  his  death ;  the  property  does 
not  pass  but  remains  in  the  donor  and  goes  to  his  executor 
or  administrator." 

This  rule  was  followed  in : 

Clapper  v.  Frederick,  199  Pa.  St.  609;   49  A.  218. 
Wadd  v.  Hazleton,  137  N.  Y.  215;  33  N.  E.  143. 
Matter  of  Loewi,  75  Misc.  57;  134  Supp.  679. 

The  delivery  to  the  agent  must  be  accompanied  by  the  in- 
tent to  give.  If  he  holds  as  bailee  his  possession  is  not  such 
as  to  complete  delivery. 

Matter  of  Palmer,  117  App.  Div.  360;  102  Supp.  236. 
Matter  of  Bolin,  136  N.  Y.  177 ;  32  N.  E.  626. 

In  the  Bolin  case,  Julia  Cody,  the  decedent,  deposited  money 
in  the  savings  bank,  "  Julia  Cody  or  daughter,  Bridget  Bolin." 
Before  Mrs.  Cody  died  and  during  her  last  illness  all  of  her 
property,  including  the  savings  bank  pass-book,  came  into 
the  possession  of  her  daughter.  The  court  says  at  page  179 : 
4 'Nor  was  the  custody  of  the  pass-book  by  the  daughter  such 
a  possession  as  evinced  an  intention  to  transfer  the  owner- 
ship of  the  moneys  deposited  to  the  daughter."  In  other 
words,  the  daughter's  possession  was  as  bailee  for  her 
mother,  and  could  not  inure  to  her  benefit  as  the  recipient  of 

a  gift. 

\ 

(2)  To  Agent  of  the  Donee. 

When,  however,  the  third  person  is  held  to  be  the  agent 
of  the  donee,  the  delivery  is  complete. 

In  Matter  of  Mills,  172  App.  Div.  530;  158  Supp.  1100;  aff. 
219  N.  Y.  mem.,  the  decedent,  Darius  0.  Mills,  was  ill  in  Cali- 
fornia. All  his  securities  were  in  possession  of  his  son, 
Ogden  Mills,  in  a  safe  deposit  box  in  New  York.  The  de- 
cedent wrote  to  his  son  that  he  wished  to  give  $1,000,000  each 
to  him  and  to  his  sister,  Mrs.  Whitelaw  Keid,  as  a  Christmas 
present  in  Atchison  stock,  and  directed  his  bookkeeper  to 
make  entries  in  his  books  to  that  effect.  It  was  held  that, 


PAET  II  — THE  TRANSFER  1Q9 

as  the  son  was  already  in  possession,  delivery  would  be  "an 
idle  ceremony,"  and  that  the  son  was  the  agent  of  his  sister 
and  therefore  the  delivery  to  her  was  also  complete. 

So,  where  a  deed  was  delivered  to  a  third  party  to  be  de- 
livered to  the  grantee  after  the  death  of  the  grantor,  and  no 
right  of  revocation  was  reserved,  the  delivery  was  held  to  be 
complete.  This  delivery  was  effected  prior  to  the  act  of  1911 
by  which  California  taxed  gifts  to  take  effect  at  death  and 
the  statute  was  held  not  to  apply  to  the  transfer  as  it  was 
completed  prior  to  the  act. 

Hunt  v.  Wicht,  174  Cal.  205;  162  Pac.  639. 

A  similar  doctrine  was  followed  in  Pennsylvania,  in  Com- 
monwealth v.  Kuhn,  2  Pa.  Co.  Ct.  248.  Here  the  decedent  had 
conveyed  his  property  in  trust  to  assign  it  as  he  might  appoint 
in  his  will  or,  in  default  of  appointment,  to  his  heirs.  No 
right  of  revocation  was  reserved.  The  deed  was  executed  in 
Pennsylvania  in  1857  and  the  grantor  afterwards  moved  to 
New  York,  where  she  died  in  1885.  The  court  held  that  the 
deed  was  an  instrument  intended  to  take  effect  after  death, 
and  was  subject  to  the  tax  imposed  by  the  act  of  1826, — for 
the  transfer  was  completed  in  1857,  but  did  not  take  effect 
until  death,  and  was  made  subsequent  to  the  act  imposing  the 
tax. 

e.  SYMBOLICAL  DELIVERY. 

Symbolical  delivery  has  been  held  sufficient  in  these  cases : 

By  a  key  to  a  safe  deposit  box : 

Gilkinson  v.  Third  Ave.  Railroad  Co.,  47  App.  Div.  472;  63  Supp.  792. 

By  a  savings  bank  book : 

McGuire  v.  Murphy,  107  App.  Div.  104;  94  Supp.  1005. 

By  written  memorandum: 

Champney  v.  Blanchard,  39  N.  Y.  11. 

f.  KE-DELIVERY  BY  DONEE  TO  DONOR. 

The  gift  may  be  re-delivered  by  the  donee  to  the  donor  to 
hold  as  agent. 

Gannon  v.  McGuire,  160  N.  Y.  476 ;  55  N.  E.  7. 


INHERITANCE  TAXATION 

But  if  the  delivery  and  re-delivery  are  so  connected  as  to 
amount  to  one  transaction  and  the  donor  thereafter  retains 
full  power  of  control  and  the  income  for  his  own  benefit  there 
has  been  no  transfer  of  title  and  hence  no  gift. 

Matter  of  Brandreth,  169  N.  Y.  437;  62  N.  E.  563. 

If  on  the  other  hand,  the  title  has  passed  and  the  donor 
holds  the  property  as  agent  for  and  acts  in  good  faith  on 
behalf  of  the  donee  and  not  for  himself  the  fact  that  he  does 
so  is  not  evidence  that  no  gift  was  intended  or  took  place. 

Matter  of  Hendricks,  163  App.  Div.  413;  148  Supp.  511;  aff.  214  N.  Y.  663. 

In  the  Hendricks  case  the  court  said:  "The  learned  Sur- 
rogate, as  appears  from  his  opinion,  reached  the  conclusion 
which  he  did  by  reason  of  the  fact  that  the  control  which  this 
deceased  could  exercise  over  the  stocks  was  greater  than  that 
reserved^  to  the  donor  in  Matter  of  Brandreth,  169  N.  Y.  437, 
and  Matter  of  Cornell,  170  id.  423.  But  it  is  the  source  and 
not  the  extent  of  the  control  which  is  important.  In  each  of 
these  cases  the  donor,  at  the  time  of  making  the  gifts,  re- 
served to  himself  the  income  of  the  property  during  his  life. 
To  that  extent  the  gifts  were  conditional.  Here  the  transfers 
of  the  certificates  did  not  have  attached  to  them  any  condi- 
tion or  reservation  whatever.  The  source  of  the  donor's  con- 
trol was  an  agreement  subsequent  to  the  gifts  and  not  a  condi- 
tion attached  to  them.  The  stocks  in  question  did  not  belong 
to  the  deceased  at  the  time  of  his  death,  they  are  not  a  part 
of  his  estate,  and,  therefore,  not  subject  to  a  tax.  A  con- 
clusion to  the  contrary  would  be  without  evidence  to  sup- 
port it." 

So,  where  a  husband  endorsed  over  to  his  wife  five  notes 
and  thereafter,  by  a  separate  instrument  she  gave  him  the 
proceeds  thereof  during  life,  Surrogate  Cohalan  held  that, 
under  the  decision  in  the  Matter  of  Hendricks  the  title  passed 
and  that  no  transfer  took  place  at  death.  This  would  seem 
to  afford  an  opening  for  avoiding  the  rule  that  a  gift  reserv- 
ing a  life  use  is  taxable  as  a  transfer  to  take  place  at  death. 

Matter  of  Cahen,  N.  Y.  L.  J.,  August  6,  1915. 


PAET  II  — THE  TRANSFER 

g.    POWER  OF  EEVOCATION. 

Where  a  power  to  revoke  the  gift  is  reserved  by  the  donor 
and  he  dies  without  exercising  the  power  the  gift  is  not 
absolute  and  complete  until  death  for,  though  the  title  has 
vested  in  the  donee  it  is  subject  to  be  divested  by  the  act  of 
the  donor.  Under  these  circumstances  the  transfer  under  the 
revocable  gift  is  held  to  be  taxable. 

Re  Douglas  County,  84  Neb.  506 ;  121  N.  W.  593. 
Matter  of  Green,  153  N.  Y.  223 ;  47  N.  E.  292. 
Matter  of  Brandreth,  169  N.  Y.  437;  62  N.  E.  563. 
Matter  of  Cornell,  170  N.  Y.  423 ;  63  N.  E.  445. 
State  v.  Bullen,  143  Wis.  512 ;  128  N.  W.  109. 
Re  Wright,  38  Pa.  St.  507. 

The  courts  have  made  an  apparent  exception  in  the  matter 
of  bank  accounts  taken  in  trust  for  another. 

A  deposit  by  one  person  of  his  own  money,  in  his  own  name 
as  trustee  for  another,  standing  alone,  does  not  establish  an 
irrevocable  trust,  during  the  lifetime  of  the  depositor.  It  is 
a  tentative  trust,  merely  revocable  at  will,  until  the  depositor 
dies  or  completes  the  gift  in  his  lifetime  by  some  unequivocal 
act  or  declaration,  such  as  delivery  of  the  pass-book  or  notice 
to  the  beneficiary.  In  case  the  depositor  dies  before  the  bene- 
ficiary without  revocation  or  some  decisive  act  or  declaration 
of  disaffirmance,  the  presumption  arises  that  an  absolute 
trust  was  created  as  to  the  balance  on  hand  at  the  death  of 
the  depositor. 

Matter  of  Totten,  179  N.  Y.  112;  71  N.  E.  748. 

Matthews  v.  Brooklyn  Sav.  Bk.,  208  N.  Y.  508 ;  102  N.  E.  520. 

But  where  the  beneficiary  dies  before  the  depositor  the 
trust  is  terminated  and  no  title  passes. 

Matter  of  U.  S.  Trust  Co.,  117  App.  Div.  178;  102  Supp.  271;  aff.  189 

N.  Y.  500;  81  N.  E.  1177. 
Matter  of  Duffy,  127  App.  Div.  74;  111  Supp.  77. 

Where  one  deposits  money  in  a  bank  in  his  own  name  in 
trust  for  his  sister,  who  had  no  knowledge  that  such  an  ac- 
count was  opened  and  who  died  before  the  depositor,  he  exer- 
cising sole  dominion  over  the  account  and  drawing  the  interest 
thereon  before  and  after  her  death,  there  is  no  presumption 
that  a  trust  was  created  in  favor  of  the  sister  or  her  estate, 


INHERITANCE  TAXATION 

although  the  depositor  died  without  changing  the  account. 
On  the  contrary  the  presumption  arises  that  the  account  was 
so  kept  for  ulterior  motives, 

Garvey  v.  Clifford,  114  App.  Div.  193;  99  Supp.  555. 

and  such  a  deposit  is  subject  to  the  right  of  creditors  after 
death  of  depositor. 

Beakes  Dairy  Co.  v.  Berns,  128  App.  Div.  137 ;  112  Supp.  529. 

But  it  is  held  that  such  deposits  constitute  a  gift  to  take 
effect  at  death  and  are,  therefore,  taxable. 

Matter  of  Palm,  148  Supp.  1044. 

Matter  of  Halligan,  82  Misc.  30;  143  Supp.  676. 

Matter  of  Crusius,  N.  Y.  L.  J.,  February  26,  1914. 

Where,  however,  the  beneficiary  of  the  trust  has  notice  of 
the  gift  before  the  death  of  the  donor,  the  transfer  of  title 
is  held  complete  and  an  irrevocable  trust  established,  so  that 
no  tax  is  imposed. 

Matter  of  Brennan,  92  Misc.  423;  157  Supp.  141. 
Matter  of  Rudolph,  92  Misc.  347;  156  Supp.  825. 

As  a  general  rule  where  there  is  a  power  to  revoke  no  gift 
is  consummated  and  the  property  remains  that  of  the  donor, 
passing  at  his  death  and  subject  to  tax. 

In  Matter  of  Dana,  215  N.  Y.  461;  109  N.  E.  557,  the  court 
said:  "The  trust  instrument  was  essentially  testamentary 
in  character.  It  reserved  to  the  donor  the  income  from  the 
stock  during  his  lifetime ;  the  right  to  direct  how  the  trustee 
should  vote  thereon ;  the  power  to  cause  the  trustee  to  sell  the 
stock  in  such  manner  and  at  such  price  as  the  donor  might 
direct ;  the  right  to  substitute  a  different  trustee  at  will ;  and 
the  absolute  right  of  revocation  at  any  time  during  the  life- 
time of  the  donor.  In  fact,  after  the  execution  of  the  deed  of 
trust  Mr.  Dana  still  retained  just  as  much  power  over  the 
stock  as  he  would  have  had  if  he  had  disposed  of  it  by  will 
instead  of  executing  the  instrument  which  he  delivered  to  Mr. 
Seibert.  There  was  no  element  of  finality  about  the  instru- 
ment during  the  donor's  lifetime,  for  it  was  just  as  capable 
of  revocation  as  a  will  would  have  been." 

See  post,  p.  131. 


PAET  II  —  THE  TRANSFER 

h.     STOCK  TRANSFER  STAMPS. 

Under  the  New  York  tax  on  transfers  of  stock  the  statute 
requires  the  stamps  to  be  affixed  at  the  time  of  the  transfer. 
In  case  of  failure  to  do  so  no  evidence  of  the  gift  can  be  re- 
ceived in  any  court,  under  the  statute.  If  no  stock  transfer 
stamps  were  affixed  by  donor  of  stock  at  the  time  of  the  gift 
and  objection  to  evidence  of  an  alleged  gift  is  made  on  that 
ground  before  the  appraiser  it  must  be  stricken  out. 

Matter  of  Ball,  161  App.  Div.  79;  146  Supp.  499. 

Matter  of  Church,  N.  Y.  L.  J.,  June  5,  1916;  aff.  176  App.  Div.  910. 

Matter  of  Houseman,  182  App.  Div.  37. 

But  it  is  too  late  to  take  the  objection  on  appeal  to  the  surro- 
gate or  to  move  to  strike  out  the  evidence  admitted  by  the 
appraiser  when  the  point  was  not  raised  before  him. 

Matter  of  Cleveland,  171  App.  Div.  908;  155  Supp.  109. 

Matter  of  Mills,  172  App.  Div.  530;  158  Supp.  1100;  aff.  219  N.  Y.  100. 

1.  CONSIDERATION. 

If  the  donee  gives  full  consideration  of  course  it  is  not  a 
gift  but  a  contract,  and  if  the  title  passes  and  the  trans- 
action is  completed  inter  vivos  no  tax  is  imposed. 

Matter  of  Thome,  44  App.  Div.  8;  60  Supp.  419. 

Matter  of  Hess,  110  App.  Div.  476;  96  Supp.  990;  aff.  187  N.  Y.  554;  80 

N.  E.  1111. 
Matter  of  Edgerton,  35  App.  Div.  125;  54  Supp.  700;  aff.  158  N.  Y.  671; 

52  N.  E.  1124. 
See  post,  p.  138. 

2.  Gifts  Causa  Mortis. 

A  gift  causa  mortis  is  revocable  at  any  time  by  the  donor 
and  becomes  void  if  the  donee  dies  first.  It  is  therefore  not 
only  in  contemplation  of  death  but  title  to  the  property  is 
subject  to  be  defeated  by  donor's  revocation. 

Ridden  v.  Thrall,  125  N.  Y.  572 ;  26  N.  E.  627. 

In  the  early  cases  in  New  York  it  was  substantially  held 
that  there  was  no  distinction  between  gifts  causa  mortis  and 
gifts  in  " contemplation  of  death." 

Matter  of  Spaulding,  49  App.  Div.  541;  63  Supp.  694;  aff.  163  N.  Y.  607; 
57  N.  E.  1124. 

8 


INHERITANCE  TAXATION 

But  this  view  is  held  too  narrow  by  the  courts  of  other 
States. 

Estate  of  Reynolds,  169  Cal.  600;  147  Pac.  268. 

See,  however,  as  to  rule  in  California, 

Spreekles'  Estate,  30  Cal.  App.  363 ;  158  Pae.  549. 

See  also  California  statute  of  1917,  Appendix. 

It  is  no  longer  entertained  by  the  courts  of  New  York. 

Matter  of  Dee,  148  Supp.  423;  aff.  161  App.  Div.  881;  145  Supp.  1120; 
aff.  210  N.  Y.  625. 

It  is  now  universally  held  that  though  such  gifts  are  not 
causa  mortis  and  are  complete  inter  vivos  yet  they  are  tax- 
able if  clearly  made  "in  contemplation  of  death. " 

Merrifield  v.  People,  212  111.  400 ;  72  N.  E.  446. 
State  v.  Pabst,  139  Wis.  561 ;  121  N.  W.  351. 

In  the  Merrifield  case  it  was  held  that  under  the  Illinois 
statute  of  1895  the  gift  was  subject  to  the  tax  although  the 
transfers  made  in  contemplation  of  death  were  absolute  and 
the  donees  accepted  the  property  and  assumed  absolute  pos- 
session and  ownership  thereof  while  the  donor  parted  with  all 
right,  title  or  interest  therein.  It  was  contended  on  behalf  of 
the  estate  that  a  gift  causa  mortis  is  a  transfer  of  property 
made  without  consideration  in  contemplation  of  death,  and 
that  the  stipulation  that  the  gift  was  absolute  prevented  it 
from  being  a  gift  causa  mortis.  But  the  court  found  that  as 
the  gifts  were  made  in  contemplation  of  death  they  were  gifts 
inter  vivos  made  in  contemplation  of  death  and  within  the 
designation  of  gifts  causa  mortis. 

3.  Gifts  in  Contemplation  of  Death, 
a.     NATURE  OF  THE  "CONTEMPLATION." 

It  is  not  the  general  knowledge  of  all  men  that  they  must 
"die  sometime ;"  or,  as  Lord  Mansfield  put  it,  that  "we  all 
have  in  us  the  seeds  of  mortality. ' '  The  grantor  must  have  in 
mind  some  condition  of  health  or  infirmity. 

Contemplation  of  death  has  been  defined  by  the  California 


PART  II  — THE  TRANSFER 

court  as  "the  state  of  mind  of  a  person  when  he  makes  a 
will,"  rather  than  his  state  of  mind  when  he  makes  a  gift 
causa  mortis.  But  this  is  rather  broader  than  the  general 
trend  of  the  authorities. 

Minor's  Estate,  180  Cal.  291. 

The  rule  was  clearly  stated  by  the  Appellate  Court  of  In- 
diana in  Conway's  Estate,  120  N.  E.  717,  where  the  court 
said: 

"It  is  a  generally  recognized  principle  or  rule  of  law  that 
inheritance  tax  statutes  are  not  intended  to  take  away  the 
right  of  a  person  to  make  an  absolute  gift  and  transfer  of  his 
property,  but  they  are  intended  to  impose  the  tax  upon  trans- 
fers of  property  by  will,  by  the  laws  of  inheritance,  and  by 
such  other  gifts  of  transfers  as  are  of  like  nature  and  may 
properly  be  classed  therewith.  When  such  statutes  have  been 
enacted,  it  is  the  policy  of  the  law  that  the  owner  of  the  prop- 
erty shall  not  evade  the  law,  or  defeat  the  purpose  of  its  enact- 
ment by  any  form  of  conveyance  or  transfer,  where  the  facts 
clearly  and  reasonably  bring  such  transfer  within  the  pro- 
visions of  the  enactment  (Rosenthal  v.  People,  211  111.  306; 
71  N.  E.  1121;  Merrifield's  Estate  v.  People,  212  111.  400;  72 
N.  E.  446,  447;  State  Street  Trust  Co.  v.  Stevens,  209  Mass. 
373;  95  N.  E.  851). 

"The  words  'in  contemplation  of  death'  as  used  in  inherit- 
ance tax  statutes  do  not  refer  to  that  general  expectation  of 
death  entertained  by  all  persons,  but  they  do  refer  to  that 
expectation  of  death  which  arises  from  such  bodily  or  mental 
conditions,  irrespective  of  the  cause  in  any  particular  case, 
which  prompts  persons  to  dispose  of  their  property  to  those 
they  deem  entitled  to  their  bounty. 

"Those  words, — when  employed  in  taxation  statutes,  are 
not  restricted  to  the  technical  meaning  of  such  phrases  when 
applied  to  gifts  causa  mortis,  but  are  given  a  reasonable  and 
liberal  interpretation,  which  tends  to  make  effectual  such 
taxation  laws  without  destroying  the  right  of  the  owner  of 
the  property  to  make  an  absolute  gift  of  the  same.  Gifts 
causa  mortis  come  within  the  provisions  of  the  statute,  and 
likewise  gifts  inter  vivos  made  in  contemplation  of  death." 

Facts  or  circumstances  must  be  adduced  to  show  some  exist- 


INHERITANCE  TAXATION 

ing  condition  of  mind  or  body  from  which  an  apprehension  of 
death  might  arise. 

Matter  of  Spaulding,  49  App.  Div.  541;   63  Supp.  694;   aff.  163  N.  Y. 
607;  57  N.  E.  1124. 

It  is  therefore  a  question  of  fact  and  must  depend  upon  the 
circumstances  of  each  particular  case. 

People  v.  Kelly,  218  111.  509 ;  75  N.  E.  1038. 

Matter  of  Mahlstedt,  67  App.  Div.  176;  73  Supp.  818. 

and  the  burden  of  proof  is  on  the  State. 

State  v.  Thompson,  154  Wi».  320 ;  142  N.  W.  647. 
Matter  of  Wadsworth,  198  App.  Div.  483. 

But  "To  prove  that  property  is  transferred  in  contempla- 
tion of  death  is  exceedingly  difficult,  as  the  only  parties  whose 
intimacy  with  a  decedent  would  afford  them  an  opportunity 
of  being  cognizant  of  his  intentions  are  usually  those  whose 
interests  would  be  served  by  testimony  to  the  effect  that  the 
gift  was  not  made  in  contemplation  of  death  and  the  State  is, 
therefore,  compelled  to  rely  upon  conclusions  derived  from  the 
testimony  of  witnesses  who  are  interested  in  disproving  its 
contention.  It  is  also  in  large  measure  the  attempted  proof 
of  the  operations  of  a  man's  mind." 

Matter  of  Price,  62  Misc.  149-152;  116  Supp.  283. 

So  when  it  appears  that  the  deceased  had  had  two  paralytic 
strokes  the  court  is  bound  to  presume  that  a  gift  has  been 
made  in  view  of  death. 

Williams  v.  Guile,  117  N.  Y.  343,  349;  22  N.  E.  1071. 

And  the  fact  that  the  donor,  a  physician,  was  seen  making  a 
stethoscopic  examination  of  his  own  chest  at  about  the  time 
of  the  gift  and  the  next  day  died  suddenly  was  held  sufficient, 
with  the  surrounding  circumstances,  to  show  the  "contempla- 
tion ' '  required  by  the  law. 

Matter  of  Dee,  161  App.  Div.  881;  145  Supp.  1120;  aff.  210  N.  Y.  625. 
See  also  Matter  of  Eundell,  179  App.  Div.  978. 

A  gift  of  property  made  by  the  donor  for  the  purpose  of  so 
reducing  his  estate  that  a  step-son  would  not  get  it  from  his 


PART  II  — THE  TRANSFER 

mother,  when  the  donor  was  suffering  with  Bright  'a  disease, 
was  held  a  gift  in  contemplation  of  death. 

Re  Estate  of  Benton,  234  111.  366;  84  N.  E.  1026. 

The  fact  that  the  will  was  executed  on  the  same  day  as  the 
deeds  and  that  the  latter  were  not  recorded  until  after  death 
raises  a  presumption  that  the  deeds  were  made  in  contempla- 
tion of  death;  but  this  presumption  was  rebutted  by  proof 
that  the  deeds  were  made  pursuant  to  a  contract  upon  valid 
consideration. 

Kueter's  Estate  (S.  Dak.),  187  N.  W.  625. 

The  legal  contemplation  required  has  been  thus  defined  in  a 
well  considered  case  in  Wisconsin : 

"It  is  manifest  the  words  were  intended  to  cover  transfers 
by  parties  who  were  prompted  to  make  them  by  reason  of  the 
expectation  of  death,  and  which,  in  view  of  that  event,  accom- 
plish transfers  of  the  property  of  decedents  in  the  nature  of 
a  testamentary  disposition.  It  is  therefore  obvious  that  they 
are  not  used  as  referring  to  that  expectation  of  death  gen- 
erally entertained  by  every  person.  The  words  are  evidently 
intended  to  refer  to  an  expectation  which  arises  from  such  a 
bodily  or  mental  condition  as  prompts  persons  to  dispose  of 
their  property  and  bestow  it  upon  those  whom  they  regard  as 
entitled  to  their  bounty.  This  accords  with  the  general  objects 
and  purposes  of  the  law,  namely,  the  imposition  of  a  tax  upon 
the  devolution  of  property  involved  in  the  demise  of  the  owner. 

State  v.  Pabst,  139  Wis.  561,  590;  121  N.  W.  351. 

The  adequacy  of  the  consideration  must  be  considered  as 
a  fact  bearing  on  the  "contemplation." 

Abstract  and  Ttitle  Guarantee  Co.  v.  State,  173  Cal.  691;  101  Pac.  264. 

The  Illinois  court  took  a  similar  view: 

"A  gift  is  made  in  contemplation  of  an  event  when  it  is 
made  in  expectation  of  that  event  and  having  it  in  view;  and 
a  gift  made  when  the  donor  is  looking  forward  to  his  death 
as  impending,  and  in  view  of  the  event  is  within  the  language 
of  the  statute.  *  The  preparation  of  the  will,  under 

the  circumstances  and  in  view  of  the  rapid  progress  of  the 
disease,  is  strong  evidence  that  death  was  expected  and  no 


INHERITANCE  TAXATION 

other  moving  cause  than  the  expectation  of  death  is  apparent. 
While  the  widow  and  the  physician  testified  that  the  deceased 
did  not  expect  to  die  they  also  said  that  it  was  not  the  subject 
of  the  conversation  at  all,  and  in  view  of  his  condition  it  is  a 
fair  inference  that  he  was  not  so  dull  of  comprehension  as  to 
suppose  he  would  get  well." 

Kosenthal  v.  People,  211  111.  306;  71  N.  E.  1121. 

Donor  was  past  eighty-eight  years  of  age,  in  poor  health, 
under  a  specialist's  care  and  constantly  in  charge  of  an 
attendant  or  maid.  He  was  affected  with  an  incurable  dis- 
ease, was  fully  advised  of  that  fact,  and  was  no  longer  taking 
any  active  interest  in  his  business  affairs.  His  whole  environ- 
ment was  that  of  a  man  who  realised  that  he  had  not  long  to 
live,  and  his  thoughts  seemed  centered  upon  making  provi- 
sion for  those  who  were  to  enjoy  his  property  after  his  death. 
This  is  shown  by  the  transfer  of  his  store  and  farm  property 
to  his  son-in-law ;  the  execution  of  a  lease  of  the  land  in  ques- 
tion, at  a  nominal  rental,  for  the  period  of  his  natural  life; 
the  gift  of  certain  of  his  property  to  his  son ;  the  taking  from 
the  son  of  an  acknowledgment  that  he  had  received  his  share 
of  his  father's  estate;  the  execution  of  the  deed  for  certain 
lands  to  his  nephew,  to  be  delivered  at  his  death;  the  execu- 
tion of  the  deeds  in  question ;  the  assignment  of  the  notes  and 
securities  to  his  daughter,  in  which  he  reserved  the  interest  or 
income  during  his  life;  and  the  almost  simultaneous  execu- 
tion of  the  codicil  to  his  will,  by  which  he  endeavored  to  make 
the  prior  gifts  to  his  daughter  doubly  secure  to  her.  All  of 
these  are  the  acts  of  a  man  who  realizes  that  his  death  is  apt 
to  occur  in  the  near  future  and  is  making  preparation  for  that 
event. 

People  v.  Danks,  289  111.  542,  548. 

In  a  California  case  when  the  decedent  was  suffering  from 
a  mortal  disease  at  the  time  of  the  gift  the  court  said :  ' '  Com- 
ing then  to  the  testimony  in  the  case,  we  have  already  spoken 
of  the  physical  condition  of  the  deceased  and  of  his  knowl- 
edge of  the  character  of  his  ailment.  The  transfers  to  his 
wife  were  admittedly  gifts,  pure  and  simple.  They  were 
made  prior  to  and  following  an  operation  'considered  abso- 


PART  II  — THE  TRANSFER 

lutely  necessary  to  save  his  life.'  Mrs.  Eeynolds  speaks  of 
the  transfers  to  her  as  gifts  and  says  that  they  were  made 
under  Mr.  Eeynolds'  promise  to  make  provision  for  her. 
After  his  death  she  filed  her  election  to  take  these  gifts  in- 
stead of  the  benefits  under  the  will.  All  this  was  done  under 
the  agreement  that  she  had  had  with  Mr.  Reynolds,  that  the 
property  given  to  her  was  in  lieu  of  all  rights  and  claims 
which  she  might  have  against  his  estate.  It  would  seem  to 
be  clear  beyond  peradventure  that  as  to  these  transfers,  they 
were  made  in  that  contemplation  of  death  which  the  law 
designates,  and  that  they  were  gifts  in  life  substituted  for 
gifts  by  will." 

Estate  of  Reynolds,  169  Cal.  600;  147  Pac.  268. 

All  the  cases  agree  that  contemplation  of  death  must  be  the 
impelling  motive  without  which  the  transfer  would  not  have 
been  made. 

People  v.  Burkhalter,  247  111.  600;  93  N.  E.  379. 

b.    ADVANCED  AGE  ALONE  INSUFFICIENT. 

Merely  that  the  deceased  had  reached  an  advanced  age  is 
not  sufficient  evidence  that  the  gift  was  made  in  contempla- 
tion of  death.  So  it  was  held  when  there  were  several  large 
gifts  to  a  child  by  an  aged  parent,  sound  in  body  and  mind, 
they  could  not  be  subjected  to  the  tax  merely  because  the 
donor  had  reached  an  unusually  advanced  age.  The  Wiscon- 
sin court  said:  "The  gifts  were  a  perfectly  natural  disposi- 
tion of  his  estate  and  were  equally  as  consistent  with  a  desire 
to  see  his  daughter  and  family  enjoy  the  fruits  of  his  accumu- 
lation and  to  observe  the  use  they  made  thereof  during  his 
lifetime. ' ' 

The  burden  is  on  the  public  officials  to  show  that  gifts  were 
made  in  contemplation  of  death.  A  gift  by  a  father  eighty- 
six  years  old  in  good  health  was  not  made  in  contemplation 
of  death  in  In  re  Dessert's  Estate,  154  Wis,  320;  142  N.  W. 
647. 

State  v.  Thompson,  154  Wis.  320;  142  N.  W.  647. 

Old  age  is  an  evidentiary  fact  to  be  considered. 

Pauson's  Estate  (Cal.),  199  Pac.  331. 


120  INHERITANCE  TAXATION 

Where  deceased  was  75  years  old  and  afflicted  with  a  dis- 
ease of  which  he  died  a  year  later  gifts  held  taxable. 

People  v.  Taverner,  300  111.  373;  133  N.  E.  211. 

Where  a  father,  75  years  of  age  and  in  feeble  health  con- 
veyed to  his  son,  but  retained  control  of  the  property  the  gift 
was  held  taxable,  though  the  principle  of  incomplete  gift 
would  be  applicable  at  any  age,  the  fact  of  the  advanced  age 
of  the  donor  was  taken  into  consideration  as  bearing  on  the 
intent  of  the  transaction. 

People  v.  Porter,  287  HI.  401 ;  123  N.  E.  59. 

These  authorities  seem  to  be  getting  away  from  the  deci- 
sion of  the  California  court  in  the  Matter  of  Spreckles,  30 
Cal.  App.  363 ;  158  Pac.  549,  where  Mrs.  Spreckles,  the  widow 
of  the  "Sugar  King"  put  her  millions  into  a  trust  and  gave 
the  stock  to  her  children  when  at  the  age  of  79  and  suffering 
from  a  dangerous  heart  disease.  She  died  within  a  month 
after  the  gifts.  The  court  acknowledged  that  it  was  a  close 
case  but  sustained  the  decision  of  the  trial  court  whereby  the 
estate  escaped  taxation  on  the  theory  that  though  the  decision 
might  be  against  the  weight  of  evidence  there  was  some  testi- 
mony to  support  it  and  therefore  it  could  not  be  disturbed. 
But  the  reasoning  of  the  court  practically  confines  such  gifts 
to  gifts  causa  mortis  though  subsequent  cases  in  that  State,  as 
we  have  seen,  have  repudiated  that  rule.  In  reviewing  the 
testimony  the  court  said: 

"In  support  of  appellant's  position  it  is  pointed  out  that 
Mrs.  Spreckles,  at  the  time  of  the  execution  of  the  transfer, 
was  a  woman  of  venerable  years,  at  best  not  far  removed 
from  the  natural  end  of  her  life;  that  for  many  years  prior 
to  and  up  to  the  time  of  the  transfer  she  had  been  a  chronic 
sufferer  from  a  serious  and  dangerous  heart  trouble  which 
was  of  a  nature  that  from  it  her  death  might  suddenly  occur 
at  any  moment,  a  condition  of  which  she  undoubtedly  pos- 
sessed a  keen  realization ;  that,  as  a  matter  of  fact,  her  death 
occurred  within  a  few  weeks  after  she  made  the  transfer. ' ' 

Conceding  that  this  testimony  would  bring  the  case  within 


PART  II  — THE  TRANSFER 

the  statute  the  court  recapitulates  the  testimony  produced  by 
the  estate  as  follows: 

"Shortly  after  her  husband's  death  in  1908,  Mrs.  Spreckles 
expressed  her  intention  of  forming  a  corporation  for  the 
avowed  object  of  transferring  her  property  thereto.  She  had 
often  declared  her  intention  of  giving  her  property  to  the 
plaintiffs,  and  to  Mr.  Rudolph  Spreckles,  stated  her  wish  that 
her  children,  the  plaintiffs,  should  own  and  enjoy  the  prop- 
erty in  her  lifetime.  These  ideas  seemed  at  all  times  and 
prior  to  the  date  of  the  transfers  to  have  constituted  the 
central  thoughts  of  her  mind  until  their  crystallization  by  the 
organization  of  the  investment  company,  the  immediate  trans- 
fer of  the  greater  part  of  her  estate  thereto,  and  thereupon 
the  transfer  of  the  stock  therein  to  the  plaintiffs.  Under  the 
circumstances  it  was,  without  any  thought  of  her  own  death 
or  without  any  view  to  preparation  therefor,  a  most  natural 
thing  to  do.  At  her  then  advanced  age,  having  other  means 
far  more  than  necessary  for  her  own  maintenance  for  the 
remainder  of  her  life,  she  doubtless  believed  that  she  would 
in  her  declining  days  be  happiest  if  relieved  of  the  heavy 
burden  and  serious  responsibilities  which  necessarily  go  with 
the  control  and  management  of  vast  and  varied  property 
interests  such  as  she  was  the  owner  and  possessor  of  and 
that  in  obtaining  release  from  their  burdens  her  happiness 
would  be  the  more  certainly  assured  by  transferring  her  prop- 
erty to  her  children  so  that  they  might  own  and  enjoy  it  dur- 
ing her  lifetime.  While  she  was  afflicted  with  a  serious  heart 
affection  and  had  suffered  intermittent  spells  of  illness  that, 
temporarily  confined  her  to  her  bed,  it  is  evident  that  she 
did  not,  at  any  time  prior  to  the  date  of  the  transfers,  harbor 
the  thought  that  her  life  was  in  immediate  peril  from  her 
malady,  or  that  she  would  not  live  for  many  years  to  come. ' ' 

In  support  of  this  last  assertion  the  court  cites  the  fact 
that  the  deceased  was  repairing  her  residence  at  much  ex- 
pense and  talked  of  going  to  Europe.  Under  the  court's 
theory  nothing  short  of  proving  that  the  deceased  made  the 
transfers  on  her  death  bed  would  have  made  the  gift  of  all 
her  property  one  in  contemplation  of  death. 

[See  California  Statute  of  1917 — Appendix.] 


122  INHERITANCE  TAXATION 

In  the  Matter  of  Mills,  172  App.  Div.  530;  158  Supp.  1100; 
aff.  219  N.  Y.  642,  the  donor  was  84  years  old  and  in  failing 
health,  unable  to  write,  and  barely  able  to  sign  his  name,  but 
gifts  of  $2,000,000  to  his  children  were  sustained  as  not  tax- 
able though  he  died  ten  days  later. 

This  rule  has  proved  so  unsatisfactory  that  Surrogate 
Cohalan  of  New  York  County  has  promulgated  another  doc- 
trine which  would  go  far  to  solving  a  problem  that  has  pro- 
voked drastic  legislation  of  doubtful  constitutionality.  In 
Matter  of  Dunne,  N.  Y.  Law  Journal,  May  25,  1914,  he  stated 
the  doctrine  as  follows : 

"When  a  person  reaches  the  age  of  80  years  and  makes  a 
gift  of  a  substantial  part  of  his  property,  the  presumption  is 
that  the  gift  is  made  because  the  donor  realizes  that  in  the 
ordinary  course  of  nature  he  cannot  survive  much  longer  and 
wishes  to -anticipate  the  effect  of  a  will  or  the  intestate  laws 
by  giving  his  property  to  those  persons  who  would  be  legatees 
under  a  will  or  beneficiaries  under  the  intestate  laws.  If  such 
gifts  were  not  taxable,  the  provisions  of  the  Transfer  Tax 
Law  could  be  nullified  and  rendered  ineffective.  To  prevent 
such  an  evasion  of  the  law  the  statute  provides  that  such 
gifts  shall  be  taxable  in  the  same  manner  as  if  the  property 
constituting  the  gift  were  transferred  by  will  or  under  the 
intestate  laws.  I  think  the  evidence  before  the  appraiser  was 
sufficient  to  warrant  his  finding  that  the  conveyance  of  the 
premises  by  the  decedent  to  her  son  Charles  Dunne  consti- 
tuted a  gift  in  contemplation  of  death  and  that  it  was  there- 
fore subject  to  a  transfer  tax." 

This  suggestion  has  not  been  generally  followed  and  in  fact 
the  contrary  doctrine  seems  so  firmly  established  by  the  au- 
thorities that  the  remedy,  if  any,  is  for  the  Legislatures.  In 
the  recent  case  of  McDougald  v.  Wulzen,  34  Cal.  App.  31; 
166  Pac.  1033,  deeds  were  executed  by  a  husband  of  83  to 
his  wife  a  year  and  six  months  prior  to  his  demise  and  the 
gift  was  held  not  to  be  in  contemplation  of  death. 

But  advanced  age  may  be  taken  into  consideration  when 
coupled  with  other  circumstances  concerning  the  physical  con- 
dition of  the  donor. 

Matter  of  Fitzgibbon,  106  Misc.  130;  173  Supp.  898. 


PART  II  — THE  TRANSFER  123 

c.  STATUTORY  TIME  LIMIT. 

It  was  to  cover  cases  like  those  of  Mills  and  Spreckles  that 
Judge  McElroy  in  his  able  work  on  "Inheritance  Taxation" 
made  this  suggestion,  at  page  109 : 

"A  provision  in  the  statute  fixing  a  definite  time  prior  to 
death,  within  which  gifts  would  be  deemed  'made  in  con- 
templation of  death/  would  settle  all  contention  in  respect 
to  gifts  of  this  kind,  but  as  yet  the  wisdom,  or  even  the  neces- 
sity, of  such  a  provision  has  not  received  the  consideration 
of  the  Legislature." 

This  suggestion  has  been  adopted  by  New  York,  Colorado, 
Wisconsin  and  several  other  States  as  well  as  by  the  Federal 
statute. 

The  New  York  and  Federal  statutes  make  the  transfer  of 
a  material  portion  of  the  estate  two  years  prior  to  death 
presumptive  evidence  of  a  gift  in  contemplation  of  death. 

The  Wisconsin  act  fixes  six  years  as  the  limitation  and  its 
provisions  have  been  held  constitutional,  although  the  act 
seems  to  make  the  fact  conclusive. 

Matter  of  Ebeling,  169  Wis.  432. 

See  also  State  v.  Stevens,  decided  June  14,  1922  and  not  yet  reported. 

d.  TAX  ACCRUES  AT  DATE  OF  GIFT. 

Theoretically  the  tax  accrues  at  the  date  of  a  gift  in  con- 
templation of  death,  though  proceedings  are  in  practice  never 
brought  to  collect  it  until  death  reveals  the  facts.  It  would 
seem  unjust  to  impose  interest  for  six  years  when  the  gift 
was  made  that  length  of  time  prior  to  the  statute;  but  such 
is  the  logic  of  the  case. 

Matter  of  Hodges,  215  N.  Y.  447 ;  109  N.  E.  559. 
Felton's  Estate,  176  Cal.  663,  169  Pae.  392. 

The  court  said  in  the  Hodges  case : 

"Here,  however,  under  the  express  provisions  of  the  Tax 
Law  (§  222)  the  gift  of  bonds  and  securities  to  the  wife  was 
taxable  as  soon  as  it  was  made.  As  such  gifts  seldom  be- 
come known  to  the  taxing  authorities  until  after  the  death 
of  the  person  making  them  there  is  usually  no  effort  to  tax 
them  earlier;  but  this  fact  does  not  affect  their  liability  to 
earlier  taxation  if  ascertained." 


124  INHERITANCE  TAXATION 

There  are,  however,  two  reasons  why  estates  have  contended 
for  this  rule:  first  the  general  increase  in  rates  makes  it 
desirable  to  have  the  tax  imposed  under  earlier  statutes  and 
second  there  being  a  distinct  and  separate  transfer  the  graded 
rates  are  lessened.  For  example,  if  the  gift  in  contemplation 
took  effect  five  years  before  death  and  $100,000  passed  then 
and  $100,000  more  at  death,  the  tax  would  be  computed  upon 
two  transfers  of  $100,000  each  and  not  upon  one  transfer  at 
death  of  $200,000.  Under  such  circumstances  the  question  of 
interest  becomes  unimportant. 

Several  recently  decided  cases  have  dealt  with  this  problem 
and  have  laid  down  a  rule  that  seems  to  be  reasonable.  * '  The 
time  when  the  tax  accrues,  that  is,  when  the  transfer  takes 
effect,  would  seem  to  be  the  test  whether  the  transfers  made 
by  different  methods  or  instruments  should  be  taxed  sepa- 
rately or  combined." 

Matter  of  Van  Cott,  180  App.  Div.  817;  168  Supp.  95. 
Matter  of  Cummings,  187  Supp.  921. 

In  the  latter  case  a  trust  deed  which  took  effect  in  1912 
was  taxed  under  the  act  prevailing  on  that  date,  with  distinct 
rates  and  exemptions  from  the  transfer  under  the  will  and 
another  transfer  taking  effect  under  the  laws  at  the  date  of 
death— 1921. 

On  the  other  hand  where  transfers  under  a  will,  power  of 
appointment  and  trust  deed  all  took  effect  at  death  all  were 
grouped  as  one  transfer  in  one  estate. 

Matter  of  Furnald,  187  Supp.  921;  aff.  196  App.  Div.  933;  232  N.  Y.  Mem. 

This  rule  has  been  rejected  in  Wisconsin  where  it  is  held 
that  a  man  can  have  but  one  estate  and  that  the  transfer  in 
contemplation  must  be  taxed  with  the  other  transfers  at  death 
as  part  of  that  estate  and  not  as  a  separate  transfer  at  another 
time  and  under  other  rates  of  tax. 

Matter  of  Stephenson,  171  Wis.  452;  177  N.  W.  579. 

A  different  result  has  been  reached  in  California  where  the 
New  York  rule  has  been  applied.    This  decision  is  discussed 
in  the  California  Law  Review,  Vol.  10,  March,  1922,  as  fol 
lows: 


PART  II  — THE  TRANSFER  125 

"Taxation:  Inheritance  Tax:  Inclusion  of  a  Prior  Gift  in 
Computing  the  Tax  Eate  on  a  Subsequent  Legacy. — A  mother 
in  1908  made  a  gift  of  $850,300  to  her  son  vesting  complete 
title.  The  gift  was  taxable  by  the  inheritance  tax  act  of 
1905.  By  her  will,  effective  at  her  death  in  1916,  she  be- 
queathed additional  property  of  the  value  of  $146,773  to  the 
same  son.  At  the  time  of  the  second  transfer  the  act  of 
1913,  as  amended  in  1915,  was  in  effect,  which  imposed  a 
higher  tax  rate  than  the  act  of  1905.  Neither  the  act  of  1905 
nor  that  of  1913,  as  amended  in  1915,  in  express  terms  directed 
the  addition  of  the  two  transfers  in  computing  the  tax  rate. 
Held  (on  rehearing  in  the  Supreme  Court) :  that  the  gift  and 
the  legacy  constituted  two  distinct  entities,  taxable  separately, 
with  complete  separate  exemptions,  and  that  the  prior  gift 
could  not  be  taken  into  consideration  in  computing  the  rate  of 
tax  on  the  legacy. 

Estate  of  Potter  (Feb.  2,  1922),  63  Cal.  Dec.  141;  204  Pac.  826. 

"The  decision  on  rehearing  reverses  the  previous  holding  of 
the  court  (61  Cal.  Dec.  273),  questioned  in  9  California  Law 
Review,  510,  and  reaches  a  more  logical  result  in  view  of  the 
previous  inheritance  tax  cases  in  this  State.  The  Legislature 
is  powerless  to  increase  the  taxation  on  a  past  transfer.  Hunt 
v.  WicU  (1917),  174  Cal.  205,  162  Pac.  639,  L.  E.  A.  1917C 
761;  Estate  of  Felton  (1917),  176  Cal.  663,  169  Pac.  392; 
Chambers  v.  Gibb  (1921),  61  Cal.  Dec.  790;  198  Pac.  1032. 
The  tax  on  the  gift  was  therefore  unalterable.  The  chief 
question  in  the  principal  case  was  whether  the  Legislature 
intended  under  the  later  acts  to  include  the  value  of  the  gift 
in  estimating  the  tax  rate  on  the  subsequent  legacy.  That 
the  Legislature  has  power  to  take  such  prior  gifts  into  con- 
sideration and  require  the  addition  of  all  transfers  between 
the  same  donor  and  donee  to  be  regarded  as  one  succession  is 
undoubted.  But  was  such  the  legislative  intention  ?  The  act 
of  1913,  as  amended  in  1915,  is  not  explicit  on  the  point.  In 
the  construction  of  tax  statutes  every  intendment  is  in  favor 
of  the  taxpayer.  Connelly  v.  San  Francisco  (1912),  164  Cal. 
101;  127  Pac.  834;  Lewis'  Sutherland  on  Statutory  Construc- 
tion, 537;  1  Cooley  on  Taxation,  463.  Furthermore,  the  en- 


126  INHERITANCE  TAXATION 

actment  in  1917  (Cal.  Stats.  1917,  p.  883),  of  an  express  pro- 
vision requiring  the  addition  of  several  transfers  between  the 
same  donor  and  donee  in  computing  the  tax  indicates  doubt 
as  to  their  addition  under  prior  acts.  U.  S.  v.  Field  (1921), 
255  U.  S.  257;  65  L.  Ed.  335;  41  Sup.  Ct.  Eep.  256.  Such  con- 
siderations fortify  the  position  taken  by  the  majority  opinion 
in  the  instant  case.  The  divergent  opinions  presented  neatly 
reflect  the  hopeless  task  of  the  court  in  construing  ambiguous 
and  fragmentary  legislation,-  and  most  inheritance  tax  diffi- 
culties root  in  this  same  evil.  The  inheritance  tax  innovation 
is  as  yet  too  novel  to  be  thoroughly  understood  in  all  its 
ramifications  and  it  is  not  to  be  expected  that  the  Legislature 
could  omnisciently  provide  for  every  possible  situation  by  any 
a  priori  scheme.  Inheritance  tax  law  is  still  in  process  of 
building  on  the  trial-and-error  method.  At  every  session  the 
Legislature  apparently  must  'shatter  it  to  bits  and  remould 
it  nearer  to  the  heart's  desire.'  But  in  view  of  the  fact  that 
the  inheritance  tax  is  purely  a  creature  of  legislation,  and 
considering  also  the  almost  unlimited  power,  constitutionally, 
of  the  Legislature  in  this  field,  the  burden  should  be  on  it  to 
make  its  intention  clear.  The  court  should  not  by  implication 
increase  the  'high  cost  of  dying.' 

4.  Gifts  to  Take  Effect  at  or  after  Death. 

Practically  all  the  statutes  tax  such  gifts,  and  they  are  to 
be  distinguished  from  gifts  in  contemplation  of  death  which 
form  another  and  entirely  distinct  class  of  taxable  transfers. 
There  must  be  an  intent  to  postpone  the  passing  of  title. 
For  example,  where  a  deed  was  executed  and  delivered  upon 
consideration  of  an  agreement  to  support  but  was  not 
recorded  until  after  death  the  conveyance  was  complete  and 
the  transfer  was  not  taxable. 

Kelly  v.  Woolsey,  177  Cal.  325,  170  Pac.  837. 

A  gift  to  take  effect  after  death  but  made  prior  to  the 
statute  taxing  such  gifts  is  not  taxable,  as  title  has  passed 
though  possession  and  enjoyment  are  postponed. 

Lewis  v.  Brown,  182  la.  738,  166  N.  W.  99. 


PART  II  — THE  TRANSFER  127 

So,  if  the  life  use  reserved  is  terminated  before  the  death 
of  the  grantor  there  is  no  postponement  of  possession  and 
no  tax. 

Brown  v.  Guilford,  181  la.  897,  165  N.  W.  182. 

A  fund  due  to  retiring  partner  left  in  the  business,  interest 
to  be  paid  thereon  as  long  as  he  should  live,  then  the  debt 
forgiven,  held  not  taxable. 

Wolff  v.  Comptroller,  90  N.  J.  Eq.  221. 

a.    TRUST  DEED  RESERVING  INCOME  TO  DONOR. 

Where  the  grantor  reserves  to  himself  a  life  interest  and 
the  income  is  paid  to  him  the  gift  of  the  remainder  interest 
under  the  deed  is  a  taxable  transfer. 

The  application  of  this  doctrine  recently  received  an  apt 
illustration  in  Matter  of  Garcia,  183  App.  Div.  712 ;  170  Supp. 
980,  where  the  court  said: 

"The  widow,  of  course,  took  the  corpus  of  the  trust  by 
virtue  of  the  trust  agreement  and  not  under  the  will.  That, 
however,  does  not  necessarily  indicate  whether  it  was  tax- 
able, or,  if  taxable,  when  she  took  it.  If  it  were  a  completed 
gift  inter  vivos,  vested  in  possession  and  enjoyment,  neither 
contingent  on  the  wife  surviving  her  husband  nor  made  in 
contemplation  of  death,  then,  of  course,  it  would  become  effec- 
tive at  once  as  an  executed  gift,  and  would  not  be  subject  to 
the  transfer  tax;  and  if  a  completed  gift  inter  vivos,  but 
made  in  contemplation  of  death,  or  intended  to  take  effect  in 
possession  or  enjoyment  at  or  after  the  death  of  the  donor, 
then,  too,  she  would  take  as  of  the  date  of  the  execution  of 
the  trust  agreement,  and  the  transfer  tax  accrued  imme- 
diately upon  the  transfer,  which  at  once  became  effective; 
but,  if  the  gift  of  the  corpus  to  her  was  in  the  nature  of  a 
testamentary  disposition  thereof,  then,  although  evidenced  by 
a  separate  instrument,  for  the  purpose  of  determining  the 
rate  of  taxation  and  exemptions,  it  should  be  added  to  the 
legacy  and  other  bequests  which  she  took  under  the  will  at 
the  same  time  (Matter  of  Hodges,  215  N.  Y.  447;  109  N.  Y. 
559;  Matter  of  Thompson,  167  App.  Div.  356;  153  N.  Y.  Supp. 
164;  Matter  of  Van  Cott,  180  App.  Div.  814;  168  N.  Y.  Supp. 


128  INHERITANCE  TAXATION 

95;  Matter  of  Bostwick,  160  N.  Y.  489;  55  N.  E.  208;  Matter 
of  Cornell,  170  N.  Y.  423;  63  N.  E.  445),  and  there  should  be 
only  one  exemption,  for  the  sole  purpose  of  the  amendment 
to  section  221a  of  the  Tax  Law,  made  by  chapter  664  of  the 
Laws  of  1915,  after  the  statute  had  been  construed  as  grant- 
ing an  exemption  on  each  transfer  (Matter  of  Hodges,  86 
Misc.  Eep.  367;  148  N.  Y.  Supp.  424;  affirmed  on  Surrogate 
Fowler's  opinion  168  App.  Div.  913;  152  N.  Y.  Supp.  1117, 
and  affirmed  215  N.  Y.  447;  109  N.  E.  559),  appears  to  have 
been  to  require  that  all  of  the  property  transferred  at  the 
same  time  should  be  considered  together,  as  if  embraced  in 
a  single  transfer. 

By  section  220,  subds.  1,  2,  anc  3  of  the  Tax  Law  (chapter 
60,  Consol.  Laws),  as  amended  by  chapter  323,  Laws  of  1916, 
which  took  effect  before  the  death  of  the  testator,  a  tax  was 
imposed  upon  the  transfer  of  any  tangible  property  within 
the  State,  and  of  intangible  property  or  of  any  interest  therein 
or  income  therefrom,  whether  in  trust  or  otherwise,  subject 
to  certain  exemptions  not  here  involved.  The  statute  relates 
to  any  interest  in  property  in  possession  or  enjoyment  present 
or  future,  passing  not  only  by  will,  but  also  by  inheritance, 
descent,  grant,  deed,  bargain,  sale,  or  gift  in  the  manner 
prescribed  in  the  statute  (sections  220  and  243,  Tax  Law) ; 
and,  so  far  as  material  to  the  decision  of  this  appeal,  the 
manner  so  prescribed  is  found  in  subdivision  4  of  said  section 
220,  and  is  "by  deed,  grant,  bargain,  sale  or  gift  made  in  con- 
templation of  the  death  of  the  grantor,  vendor  or  donor,  or 
intended  to  take  effect  in  possession  or  enjoyment  at  or  after 
such  death. ' '  Subdivision  5  of  said  section  also  provides  that 
a  tax  shall  be  imposed  upon  the  transfer  of  such  property, 
when  the  transferee  becomes  beneficially  entitled  in  posses- 
sion or  expectancy,  to  any  property  or  the  income  thereof  by 
any  transfer,  as  provided  in  the  preceding  subdivisions  of  the 
section,  whether  made  before  or  after  the  enactment  of  the 
statute.  It  is  perfectly  clear  that  the  gift  of  this  trust  fund 
to  the  widow  was  not  intended  to  take  effect  in  possession  or 
enjoyment  until  after  the  death  of  the  testator.  Her  estate 
or  interest  was  not  only  future,  but  it  was  wholly  contingent, 
depending  on  her  surviving  the  donor,  and  also  on  whether 


PART  II  — THE  TRANSFER  129 

the  trustees  resigned  or  died  without  naming  their  successors, 
and  whether  in  that  event  the  testator  elected  to  appoint  suc- 
cessors to  the  trustees  or  to  terminate  the  trust.  Although 
he  did  not  reserve  unconditionally  the  right  of  control  or 
revocation,  he  did  not  part  with  all  interest  in  or  control  over 
the  property ;  and  it  is  perfectly  plain  that  he  did  not  intend 
that  his  wife  should  take  any  interest  in  the  corpus  personally 
unless  she  survived  him." 
The  general  doctrine  is  established  by  numerous  cases. 

Carter  v.  Bugbee,  91  N.  ,T.  L.  438 ;  103  A.  818. 

Matter  of  Green,  153  N.  Y.  223 ;  47  N.  E.  292. 

Matter  of  Keeney,  194  N.  Y.  281 ;  87  N.  E.  428 ;  aff .  222  U.  S.  525. 

Matter  of  Bacon,  226  N.  Y.  (Mem.). 

In  the  Keeney  case  Judge  Cullen,  writing  for  the  court,  says 
at  page  286 : 

"A  not  wholly  unnatural  desire  exists  among  owners  of 
property  to  avoid  the  imposition  of  inheritance  taxes  upon 
the  estates  they  may  leave  so  that  such  estates  may  pass  to 
the  objects  of  their  bounty  unimpaired.  It  is  a  matter  of 
common  knowledge  that  for  this  purpose  trusts  or  other  con- 
veyances are  made  whereby  the  grantor  reserves  to  himself 
the  beneficial  enjoyment  of  his  estate  during  life.  "Were  it  not 
for  the  provision  of  the  statute  which  is  challenged,  it  is  clear 
that  in  many  cases  the  estate,  on  the  death  of  the  grantor, 
would  pass  free  from  tax  to  the  same  persons  who  would 
take  it  had  the  grantor  made  a  will  or  died  intestate.  It  is 
true  that  an  ingenious  mind  may  devise  other  means  of  avoid- 
ing an  inheritance  tax,  but  the  one  commonly  used  is  a  transfer 
with  reservation  of  a  life  estate.  We  think  this  fact  justified 
the  Legislature  in  singling  out  this  class  of  transfers  as  sub- 
ject to  a  special  tax. ' ' 

In  the  same  case  the  U.  S.  Supreme  Court  said,  Judge 
Lamar  writing  the  opinion: 

* '  There  is  no  natural  right  to  create  artificial  and  technical 
estates  with  limitations  over,  nor  have  the  remaindermen  any 
more  right  to  succeed  to  possession  of  property  under  such 
deeds  than  legatees  or  devisees  under  a  will.  The  privilege 
of  acquiring  property  by  such  an  instrument  is  as  much  de- 
pendent upon  the  law  as  that  of  acquiring  property  by  in- 
9 


130  INHERITANCE  TAXATION 

heritance;  and  transfers  to  take  effect  at  death  have  fre- 
quently been  classed  with  death  duties,  legacy  and  inheritance 
taxes. ' ' 

Keeney  v.  New  York,  222  U.  S.  525,  533 ;  32  S.  Ct.  Rep.  105. 

To  the  same  effect  are: 

Matter  of  Bostwick,  160  N.  Y.  489;  55  N.  E.  208. 

Matter  of  Dana,  215  N.  Y.  461 ;  109  N.  E.  557. 

Matter  of  Beal,  167  App.  Div.  916 ;  151  Supp.  1103 ;  aff.  215  N.  Y.  620. 

Matter  of  Patterson,  146  App.  Div.  286;  130  Supp.  970;  aff.  204  N.  Y.  677. 

Matter  of  Ogsbury,  7  App.  Div.  71 ;  39  Supp.  987. 

Matter  of  Cowan,  N.  Y.  L.  J.,  July  24,  1913. 

New  England  Trust  Co.  v.  Abbott,  205  Mass.  279;  91  N.  E.  379. 

Re  Douglas  County,  84  Neb.  506;  121  N.  W.  593. 

Lines'  Estate,  155  Pa,  St.  378;  26  A.  728. 

Reisch  v.  Commonwealth,  106  Pa.  St.  521. 

Appeal  of  Seibert,  110  Pa.  St.  324;  1  A.  346. 

Lamb  v.  Morrow,  140  la.  89;  117  N.  W.  1118. 

State  v.  Bullen,  143  Wis.  512 ;  128  N.  W.  109 ;  aff.  240  U.  S.  625. 

In  the  recent  case  of  Bullen  v.  Wisconsin,  240  U.  S.  625 
(sustaining  State  v.  Bullen,  143  Wis.  512,  supra),  the  whole 
subject  of  trust  deeds  reserving  life  use  and  power  of  revoca- 
tion was  again  discussed.  In  this  case  the  decedent  gave  a 
fund  of  $1,000,000  to  a  Trust  Company  in  Illinois,  reserving 
a  part  of  the  income,  the  rest  to  his  wife  and  four  sons  and  on 
his  death  the  principal  to  them.  He  also  reserved  a  right  to 
revoke  and  a  right  to  control  the  investment  of  the  fund.  He 
then  incautiously  moved  to  Wisconsin  and  changed  his  domi- 
cile to  that  State  leaving  the  corpus  of  the  trust  fund  in  Illi- 
nois. Result ;  the  fund  was  taxed  in  both  States  and  the  heirs 
appealed  to  the  United  States  Supreme  Court.  Mr.  Justice 
Holmes  speaking  for  the  court  says,  at  page  630 : 

"We  do  not  speak  of  evasion  because  when  the  law  draws 
a  line  a  case  is  on  one  side  of  it  or  the  other  and  if  on  the 
safe  side  is  none  the  worse  legally  that  a  party  has  availed 
himself  to  the  full  extent  of  what  the  law  permits.  When  an 
act  is  condemned  as  an  evasion  what  is  meant  is  that  it  is  on 
the  wrong  side  of  the  line  indicated  by  the  policy  if  not  by  the 
mere  letter  of  the  law.  What  we  do  say  is  that  the  Supreme 
Court  of  Wisconsin  was  fully  justified  in  treating  Bullen 's 
general  power  of  disposition  as  equivalent  to  a  fee  for  the 
purposes  of  the  taxing  statute,  that  there  is  no  constitutional 
objection  to  its  doing  so,  and  that  although  Illinois  has  also 


PART  II  —  THE  TRANSFER  131 

taxed  the  fund,  as  it  might,  we  are  not  aware  that  it  has 
attempted  to  qualify  the  effect  that  Wisconsin  has  given  to 
the  power  and  do  not  intimate  that  it  could  have  done  so  if 
it  had  tried." 

Where  the  decedent  made  an  absolute  deed  of  land  and  took 
a  bond  back  from  the  grantee  to  pay  the  income  to  the  grantor 
for  his  life,  this  is  a  conveyance  in  contemplation  of  death 
within  the  terms  of  the  Pennsylvania  inheritance  tax  of  1826, 
especially  where  it  was  made  during  the  last  sickness  of  the 
grantor.  "It  is  true,  the  obligation  of  the  bond  was  not  in- 
serted as  a  condition  or  reservation  in  the  deed;  it  was  in 
form  a  mere  personal  obligation ;  but  this  contention  does  not 
involve  a  technical  question  of  title  nor  of  lien;  the  whole 
matter  depends  upon  the  single  fact  whether  or  not  the  trans- 
fer was  made  or  intended  to  take  effect  in  enjoyment  at  the 
death  of  the  grantor.  The  policy  of  the  law  will  not  permit 
the  owner  of  an  estate  to  defeat  the  plain  provisions  of  the 
Collateral  Inheritance  Law,  by  any  devise  which  secures  to 
him,  for  life,  the  income,  profits,  and  enjoyment  thereof;  it 
must  be  by  such  a  conveyance  as  parts  with  the  possession, 
the  title,  and  the  enjoyment  in  the  grantor's  lifetime. 

Reish  v.  Commonwealth,  106  Pa.  St.  521,  526. 

b.     WHEN  PART  OF  THE  INCOME  is  RESERVED. 

And  so  it  is  held  that  when  a  part  of  the  income  is  reserved 
the  remainder  created  is  taxable  pro  tanto,  where  severable. 

When  a  trust  deed,  not  made  in  contemplation  of  death, 
takes  effect  on  delivery  for  the  sole  benefit  of  the  cestuis  que 
trustent  except  that  the  grantors  reserve  the  right  to  them- 
selves or  the  survivor  to  an  annual  income  of  $2,400  per  year 
for  life,  the  court  may  separate  the  portion  to  take  effect  in 
presenti  and  in  futuro,  and  hold  that  so  much  of  the  estate 
conveyed  as  was  necessary  to  produce  an  annual  income  of 
$2,400  is  subject  to  an  inheritance  tax. 

People  v.  Kelly,  218  111.  509;  75  N.  E.  1038. 

A  trust  deed  reserving  life  estate  made  by  a  non-resident  of 
property  out  of  the  State  does  not  become  a  taxable  transfer 
because  the  property  is  subsequently  invested  in  New  York. 

Matter  of  Dwight,  N.  Y.  L.  J.,  October  8,  1911;  aff.  149  App.  Div.  912; 
133  Supp.  1119. 


132  INHERITANCE  TAXATION 

c.  WHERE  LIFE  USE  is  WAIVED. 

It  has  been  held  in  Iowa  that  the  remainderman  may  show 
by  parol  evidence  that  the  donor,  subsequent  to  the  delivery 
of  the  deed,  waived  the  life  use,  and  that  an  absolute  title 
vested. 

Lamb  v.  Morrow,  140  la.  89 ;  117  N.  W.  1118. 

Aside  from  any  question  of  evidence  there  can  be  no  doubt 
that  if  the  life  use  was  in  fact  terminated  and  title  and  pos- 
session both  vested  prior  to  death  there  was  no  postponement, 
the  deed  took  effect  inter  vivos  and  no  tax  could  be  imposed 
under  such  circumstances. 

Brown  v.  Guilford,  181  la.  897;  162  N.  W.  182. 

d.  "RESERVATION  OF  POWER  TO  REVOKE. 

The  authorities  draw  a  sharp  distinction  between  deeds  of 
trust  reserving  a  life  use  where  there  was  reserved  also  a 
power  to  revoke  and  such  deeds  where  the  transfer  was  abso- 
lute. If  such  a  deed  contains  no  such  power  of  revocation  it 
took  effect  at  the  date  of  the  deed,  and  if  that  date  was  prior 
to  the  statute  or  the  deceased  was  at  the  time  a  non-resident 
the  remainder  is  not  taxable  on  the  death  of  the  life  tenent. 
Or  where  the  statute  taxing  intangibles  has  been  repealed  the 
reverse  may  be  the  result. 

Matter  of  Dwight,  N.  Y.  L.  J.,  October  8,  1911;  aff.  149  App.  Div.  912; 

113  Supp.  1119. 

Matter  of  Meserole,  98  Misc.  105;  162  Supp.  414. 
Matter  of  Webber,  151  App.  Div.  539;  136  Supp.  83. 
Matter  of  Atterbury,  N.  Y.  L.  J.,  March  25,  1913. 
Matter  of  Agnew,  N.  Y.  L.  J.,  December  13,  1913. 
Matter  of  Gibson,  N.  Y.  L.  J.,  March  3,  1914. 
Matter  of  Russell,  N.  Y.  L.  J.,  June  1,  1914. 
Matter  of  Curry,  N.  Y.  L.  J.,  May  27,  1914. 

On  the  other  hand,  where  there  is  reserved  a  power  of 
revocation  the  gift  does  not  become  complete  until  the  date 
of  the  donor's  death  and  the  law  as  of  that  date  applies. 

Matter  of  Bostwick,  160  N.  Y.  489;  55  N.  E.  208. 

Matter  of  Dana,  164  App.  Div.  45;  149  Supp.  417;  aff.  214  N.  Y.  710. 

Matter  of  Dana,  215  N.  Y.  461 ;  109  N.  E.  557. 

Matter  of  Hoyt,  86  Misc.  696;  149  Supp.  91. 

Matter  of  Schermerhorn,  William  C.,  N.  Y.  L.  J.,  June  26,  1913. 

Matter  of  Caswell,  N.  Y.  L.  J.,  April  24,  1914. 

Matter  of  Ely,  149  Supp.  90. 


PART  II  — THE  TRANSFER  133 

Where  the  power  reserved  can  only  be  exercised  on  the 
consent  of  the  beneficiary  the  transfer  is  not  taxable  as  taking 
effect  at  death. 

Matter  of  Bowers,  195  App.  Div.  548;  aff.  231  N.  Y.  613. 

A  rather  pretty  problem  was  presented  for  solution  in 
Matter  of  Hawes,  where  a  resident  of  Massachusetts  made  a 
trust  deed  in  1864  reserving  to  himself  the  income  for  life  and 
a  power  of  appointment  on  his  demise.  The  deed  further  pro- 
vided that  if  he  failed  to  exercise  the  power  of  appointment 
the  property  should  be  distributed  under  the  intestate  laws  of 
Massachusetts.  Part  of  the  trust  fund  was  subsequently  in- 
vested in  New  York  securities  and  the  donor  died  prior  to 
the  New  York  amendment  of  1911  which  repealed  the  tax  on 
such  securities,  without  exercising  the  power  of  appointment 
he  had  reserved. 

The  heirs  claimed  that  they  took  under  the  deed  and  that 
the  Massachusetts  statutes  of  distribution  should  be  read  into 
that  deed,  and  that  as  it  was  executed  in  1864,  long  prior  to 
any  inheritance  tax  statutes  in  either  New  York  or  Massachu- 
setts, that  their  succession  was  exempt  from  tax.  The  New 
York  county  Surrogate  so  held;  but  he  was  reversed  by  the 
Appellate  Division  and  this  decision  was  affirmed  without 
opinion  by  the  Court  of  Appeals. 

Matter  of  Hawes,  162  App.  Div.  173;  147  Supp.  329;  aff.  221  N.  Y.  613. 

It  was  held  in  Matter  of  Masury,  28  App.  Div.  580;  51 
Supp.  331,  affd.  159  N.  Y.  532;  53  N.  E.  1127,  that  the  reserva- 
tion of  a  bare  power  to  revoke  where  the  income  was  paid 
to  the  donee  was  insufficient  to  prevent  the  vesting  of  title 
without  some  evidence  that  the  donor  intended  to  exercise  it. 

The  Masury  case  was  distinguished  and  confined  to  its  par- 
ticular facts  in  Matter  of  Bostivick,  160  N.  Y.  489;  55  N.  E. 
208.  The  court  said : 

"I  think  that  we  may  have  gone  too  far  in  generally  affirm- 
ing the  Masury  decision ;  certainly  the  limit  was  then  reached, 
beyond  which  the  courts  could  not  go  without  emasculating 
the  provisions  of  the  statute.  We  thought  there  were  some 
reason  in  the  facts  of  the  Masury  case  for  finding  an  intention 
in  the  donor  to  make  an  absolute  transfer  of  property  during 


134  INHERITANCE  TAXATION 

his  life,  which  the  mere  reservation  of  a  power  to  revoke  was 
of  itself  insufficient  to  negative.  But,  if  the  trust  transfers 
now  in  question  were  held  to  be  without  the  operation  of  the 
act,  too  dangerous  a  latitude  of  action  would  be  permitted  to 
persons  who  desired  to  evade  its  provisions  by  some  technical 
transfer,  w^hich  would  still  leave  the  substantial  rights  of 
ownership  in  the  donor." 

The  later  cases  in  New  York  follow  the  Bostwick  case. 

Matter  of  Dana,  164  App.  Div.  45;   149  Supp.  417;   aff.  214  N.  Y.  710. 

Until  recently  the  courts  have  generally  followed  the  Bost- 
wick case  and  its  principle  was  thought  to  be  firmly  estab- 
lished. In  New  York  the  provisions  of  the  Real  Property 
law  may  have  some  bearing.  Section  145  of  that  statute 
provides  that  "where  the  grantor  in  a  conveyance  reserves 
to  himself,  for  his  own  benefit  an  absolute  power  of  revoca- 
tion he  is  to  be  still  deemed  the  absolute  owner  of  the  estate 
conveyed  so  far  as  the  rights  of  creditors  and  purchasers  are 
concerned.  (See  also  sections  149,  150  and  151.) 

Matter  of  Dana,  164  App.  Div.  45 ;  149  Supp.  417 ;  aff.  214  N.  Y.  710. 

But  the  principle  of  the  Masury  case  has  recently  been  re- 
iterated both  in  New  York  and  Illinois. 

Matter  of  Bowers,  195  App.  Div.  548;  aff.  231  N.  Y«  613;  132  N.  E.  910. 

Matter  of  Voorhees,  200  App.  Div.  259;   193  Supp.  168. 

Matter  of  Coehrane,  117  Misc.  18;  190  Supp.  895. 

Matter  of  Wing,  190  Supp.  908. 

People  v.  Northern  Trust  Co.,  289  111.  475 ;  124  N.  E.  662. 

In  the  Bowers  case  the  consent  of  the  trustee  was  necessary 
to  make  the  transfer  effective;  but  the  Appellate  Division 
opinion  and  the  decisions  of  the  lower  courts  would  seem  to 
overlook  this  distinction. 

The  Illinois  court  said:  "We  are  entirely  unwilling,  how- 
ever, to  declare  that  trust  deeds  and  trust  instruments  in  the 
form  in  which  we  find  those  under  consideration  in  this  record, 
render  the  property  conveyed  taxable  under  our  inheritance 
tax  act  by  the  mere  insertion  of  a  clause  of  revocation,  so 
useful  and  so  long  in  use  for  the  protection  of  the  grantees  in 
such  deeds,  when  it  so  clearly  appears  that  that  was  the  inten- 
tion, as  it  does  in  this  case." 


PART  II  — THE  TRANSFER  135 

The  result  of  these  recent  decisions  would  seem  to  be  that 
the  taxability  of  property  conveyed  by  a  trust  deed  with 
power  to  revoke  reserved  depends  from  the  intent  of  the 
parties.  This  will  lead  to  much  litigation.  A  safer  rule  is 
that  indicated  in  the  Bowers  case :  viz.,  where  the  consent  of 
the  trustee  or  beneficiary  is  necessary  to  make  the  reservation 
of  the  power  effective. 

In  Maryland  a  deed  to  trustees  with  power  to  revoke  and 
life  use  reserved  was  held  taxable. 

Smith  v.  State,  134  Md.  473;  107  A.  255. 

In  Wisconsin  where  there  was  a  trust  deed  executed  prior 
to  death  and  the  property  was  also  transferred  by  will  the 
entire  estate  was  treated  as  transferred  at  death  and  the 
amount  of  the  trust  property  was  added  to  the  estate. 

Stephenson's  Estate,  171  Wis.  452;   177  N.  W.  579. 

In  Illinois  deeds  to  wife  and  daughters  for  life  were  held 
to  be  only  colorable  where  the  deceased  retained  control  of 
the  property  and  collected  the  rents.  The  intent  of  the  par- 
ties was  held  to  govern  and  that  this  intent  could  be  shown  by 
parole  evidence. 

People  v.  Shaffer,  291  IU.  142;   125  N.  E.  887. 

That  the  reservation  of  a  power  to  revoke  made  the  transfer 
taxable  as  of  the  date  of  death  was  also  held  in 

Matter  of  Miller,  109  Misc.  267;  178  Supp.  554. 
Matter  of  Flynn,  117  Misc.  90,  190  Supp.  905. 

These  divergent  cases  all  turn  upon  the  intent  of  the  trans- 
action, and  this,  apparently  may  be  shown  by  parole.  Ob- 
viously the  matter  will  have  to  be  clarified  by  further 
litigation,  and  perhaps  by  legislation.  (See  N.  Y.  statute  as 
amended  by  ch.  430,  L.  1922.) 

In  Welch  v.  Treasurer,  217  Mass.  348;  104  N.  E.  726,  the 
donor  died  ten  years  prior  to  the  statute.  The  deed  was  to 
trustees  and  was  subject  to  a  possible  defeasance  by  the  joint 
action  of  the  trustees  and  the  donor  and  his  wife.  The  court 
held  this  possibility  was  insufficient  to  prevent  the  vesting  of 
title.  It  said : 

'  *  The  plain  meaning  of  this  language  is  that  property  whose 


136  INHERITANCE  TAXATION 

title  passed  before  the  date  when  the  statute  took  effect  is  not 
affected  by  it.  For  determining  whether  this  or  the  earlier 
laws  should  apply,  a  definite  and  practical  date  was  provided 
—that  of  death  where  the  property  passes  by  will  or  under 
the  intestate  succession  laws,  and  that  of  the  deed  when  the 
title  so  passes.  This  section  applies  to  the  case  at  bar. 
Almost  ten  years  before  the  statute  became  operative  Mr. 
Loring  irrevocably  and  completely  conveyed  away  all  his  right 
and  title  in  this  property ;  and  at  that  time,  and  by  the  same 
instrument,  the  life  interest  of  the  petitioners  was  vested  in 
them,  even  though  it  was  subject  to  possible  defeasance  by 
the  joint  act  of  the  trustees,  Mr.  Loring,  and,  during  her  life, 
Mrs.  Loring.  As  between  the  grantor  and  the  trustees  the  con- 
veyance was  absolute,  as  he  had  no  more  power  to  revoke  or 
alter  the  deed  than  he  would  have  had  if  the  so-called  power 
of  revocation  had  not  been  inserted  therein." 

On  the  other  hand,  where  there  was  a  deed  to  trustees  with 
life  use  reserved  and  power  to  appoint  by  will,  the  deed  being 
made  before  the  statute,  and  the  deceased  died  exercising  the 
power  of  appointment  reserved  in  the  deed,  held  taxable. 
The  court  said : 

"We  see  no  difference  in  principle  between  property  pass- 
ing by  a  deed  intended  to  take  effect  in  possession  or  enjoy- 
ment on  the  death  of  the  grantor  and  property  passing  by 
will.  In  either  case  it  is  the  privilege  of  disposing  of  prop- 
erty after  the  death  of  the  grantor  or  testator  and  of  succeed- 
ing to  it  which  is  taxed,  though  the  amount  of  the  tax  is 
determined  by  the  value  of  the  property.  The  constitution- 
ality of  the  law  in  regard  to  taxing  property  passing  by  will 
was  fully  considered  in  Minot  v.  Winthrop,  162  Mass.  113; 
38  N.  E.  512,  and  that  case,  we  think,  is  decisive  of  this. 

"It  is  immaterial,  it  seems  to  us,  in  this  case,  as  it  would 
be  in  the  case  of  a  will,  that  the  indentures  were  dated  and 
executed  before  St.  1891,  ch.  425,  took  effect.  It  is  the  vesting 
of  the  property  in  possession  and  enjoyment  on  the  death  of 
the  grantor  and  after  the  statute  took  effect,  that  renders  it 
liable  to  the  tax,  and  both  of  those  things  happened  in  this 
case.  (In  re  Green  and  In  re  Seaman,  ubi  supra.) 

* '  The  appellant  has  pointed  out  some  difficulties  that  might 


PART  II  — THE  TRANSFER 

arise  in  a  supposable  case,  but  it  is  enough  to  say  that  they 
do  not  exist  in  this  case.  No  interest  vested  in  this  case  either 
in  possession  or  enjoyment  in  any  of  the  legatees  till  after 
the  death  of  the  grantor;  and  that  did  not  happen  till  after 
the  passage  of  St.  1891,  c.  425.  It  was  held  in  Gushing  v. 
Aylwin,  12  Mete.  169,  that  Rev.  St.,  c.  62,  §  3,  applied  to  a  will 
made  before  that  law  took  effect,  '  when  the  will  had  not  taken 
effect,  before  that  time,  by  the  death  of  the  testator.'  We 
think  that  that  case  applied  to  this,  and,  if  authority  is  needed, 
is  sufficient  to  justify  the  conclusion  to  which  we  have  come. 
It  is  true  that  in  New  York  there  is  an  express  provision 
by  which  the  statute  is  applicable  whether  the  transfer  was 
made  before  or  after  the  passage  of  the  act.  But  we  think 
that  the  conclusion  arrived  at  in  the  cases  in  that  State  to 
which  we  have  referred  would  have  been  the  same  without  that 
provision." 

Crocker  v.  Shaw,  174  Mass.  266;  54  N.  E.  549. 

And  this  is  the  rule  in  other  States. 

State  v.  Bullen,  143  Wis.  512 ;  128  N.  W.  109 ;  aff.  240  U.  S.  625. 

Re  Line's  Estate,  155  Pa.  St.  378;  26  A.  728. 

N.  E.  Trust  Co.  v.  Abbott,  205  Mass.  279 ;  91  N.  E.  379. 

In  the  Abbott  case  the  court  thus  reviews  the  facts : 
"The  only  part  of  the  property  which  was  finally  disposed 
of  in  a  known  and  definitely  stated  way  was  the  income  for 
the  period  of  five  years.  The  disposition  of  the  principal  was 
left  subject  to  contingencies,  any  one  of  three  of  which  might 
terminate  the  trust  and  give  direction  to  the  payment  of  the 
principal.  The  creator  of  the  trust,  six  months  before  the 
expiration  of  the  five  years,  could  give  notice  of  his  intention 
to  withdraw  the  principal,  or  the  Trust  Company  could  give 
notice  of  its  intention  to  pay  it  off,  in  either  of  which  cases 
the  money  would  be  returned  to  Marshall  (the  donor) ;  or,  if 
Marshall  survived  and  no  notice  was  given,  another  period 
of  five  years  would  begin  under  the  same  arrangement ;  or  if 
Marshall  died  before  the  expiration  of  the  first  period  and  no 
notice  had  been  given,  the  trust  would  be  terminated  and  the 
principal  paid  off  to  Miss  Abbott  at  the  end  of  sixty  days 
from  the  expiration  of  the  period. 


138  INHERITANCE  TAXATION 

'  *  She  had  a  vested  interest  in  the  income  until  the  termina- 
tion of  the  trust.  The  arrangement  in  regard  to  the  principal 
was  very  different.  Her  only  interest  in  that  was  contingent, 
and  she  was  not  to  enter  into  the  possession  and  enjoyment  of 
it,  in  any  event,  until  after  the  death  of  Marshall,  and  then 
only  if  the  trust  had  not  been  terminated  by  either  party  by 
giving  notice  in  his  lifetime. 

"The  question  under  the  statute  is  whether  this  gift  of  the 
property  was  'made  or  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor.'  We  think  it 
plain  that  it  was.  Miss  Abbott  could  have  no  possession  or 
enjoyment  of  the  principal  until  after  his  death.  The  fact  that 
she  had  the  possession  and  enjoyment  of  the  income  in  his 
lifetime  makes  no  difference.  In  that  respect  the  case  is  the 
same  as  if  this  income  had  been  given  to  another  person,  with 
the  disposition  of  the  principal  that  appears  in  the  agree- 
ment." 

So,  where  a  right  was  reserved  "to  alter,  change,  modify 
or  revoke  all  disposition  and  direction  as  to  transfer  and  dis- 
positions made  and  to  be  made  of  said  property."  Held 
taxable. 

Line's  Estate,  155  Pa.  St.  378;  26  A.  728. 

C.— CONSIDERATION  AS  AFFECTING  TESTAMEN- 
TARY TRANSFERS. 

"Transfers  by  deed,  grant,  bargain,  sale  or  gift,  made  in 
contemplation  of  death,  or  intended  to  take  effect  in  posses- 
sion or  enjoyment  at  or  after  death."  Such  is  the  language 
of  substantially  all  the  statutes  and  of  the  Federal  act.  Some 
of  the  statutes  except  transfers  made  on  "adequate"  con- 
sideration or  "bona  fide  consideration  in  money  or  money's 
worth." 

Are  such  transfers  taxable  when  made  on  consideration, 
without  reference  to  its  adequacy? 

The  problem  is  common  to  all  jurisdictions  where  inherit- 
ance taxes  are  levied. 

In  the  early  cases  the  courts  were  inclined  to  the  doctrine 
that  the  words  "deed,  grant,  bargain  sale"  meant  nothing  or 
meant  transfers  in  those  forms  which  were  in  fact  gifts. 


PAET  II  — THE  TRANSFER  139 

"The  word  'sale'  includes  only  such  transactions  which 
though  in  form  '  sales '  are  in  fact  gifts. ' ' 

Haggerty  v.  State,  55  Ohio  St.  613 ;  45  N.  E.  1046. 

"The  words  refer  to  transfers  without  consideration  which 
become  operative  only  by  way  of  gift. 

Blair  v.  Harold,  150  Fed.  199 ;  aff.  158  Fed.  804. 

"It  is  very  evident  that  the  word  'deed'  as  used  in  this  act 
has  no  reference  to  a  conveyance  of  property  by  such  an  in- 
strument made  in  the  ordinary  course  of  business  for  a  valid 
consideration,  but  is  confined,  to  conveyances  of  real  property, 
intended  as  gifts." 

Matter  of  Birdsall,  22  Misc.  180;  49  Supp.  450;  aff.  43  App.  Div.  624; 
60  Supp.  1133. 

"I  do  not  consider  that  the  statute  has  reference  to  trans- 
fers made  upon  a  valuable  consideration,  for  the  tax  is  not  one 
upon  payment,  but  upon  the  right  of  succession.  The  payment 
of  an  obligation  dependent  upon  valuable  consideration  is  not 
a  succession  in  any  sense. ' ' 

Matter  of  Miller,  77  App.  Div.  473;   78  Supp.  930. 


. . ' 


:If  a  person,  fully  realizing  that  his  death  is  to  occur 
within  a  few  hours,  should  convey  by  deed  real  estate  and 
receive  the  full  consideration  therefor,  it  would  not  be  claimed 
that  the  real  estate  so  conveyed  would  be  subject  to  the  tax 
in  question,  notwithstanding  the  conveyance  was  clearly  made 
in  contemplation  of  death. ' ' 

Matter  of  Spaulding,  49  App.  Div.  541;  63  Supp.  694;  aff.  163  N.  Y.  607; 
57  N.  E.  1124. 

"The  transfer  related  to  in  this  subdivision  is  a  gratuitous 
transfer ;  in  other  words,  a  gift. ' ' 

Matter  of  Escoriaza,  N.  Y.  L.  J.,  Nov.  15,  1914. 

The  trend  of  the  authorities,  however,  has  been  to  a  broader 
construction  of  the  statute.  They  now  divide  such  transfers 
into  three  classes : 

1.  When  the  transaction  is  completed  inter  vivos  though 
payment  is  postponed  until  death ; 


140  INHERITANCE  TAXATION 

2.  Where  the  contract  is  executory; 

3.  When  the  consideration  is  inadequate. 

The  first  class  of  transfers  are  not  taxable ;  the  second  and 
third  are. 

1.  Where  the  Transaction  is  Completed  Inter  Vivos. 

If  a  grantor  makes  a  deed  conveying  a  present  interest  in 
the  land  to  collateral  heirs,  without  in  any  way  making  the 
grantee's  estate  dependent  upon  the  grantor's  death,  the 
grantees  may  take  the  property  free  from  the  collateral  in- 
heritance tax.  The  tax  applies  when  the  interest  in  the  real 
estate,  or  enjoyment  thereof,  is  postponed  until  after  death 
of  the  grantor. 

Bell's  Estate,  150  Iowa  725;  130  N.  W.  798. 

In  the  Matter  of  Thome,  44  App.  Div.  8;  60  Supp.  419, 
appeal  dismissed  162  N.  Y.  238,  there  was  a  completed  transfer 
of  $100,000  of  stock  in  the  American  Press  Association  upon 
the  consideration  that  the  donee  would  support  the  donor 
during  life.  "It  amounted  to  the  purchase  of  an  annuity," 
said  the  court. 

In  the  Matter  of  Edgerton,  35  App.  Div.  125 ;  54  Supp.  700 ; 
aff.  158  N.  Y.  671;  52  N.  E.  1124,  there  was  a  completed  trans- 
fer of  a  large  property  to  nieces  and  nephews  upon  a  con- 
sideration of  bonds  binding  them  to  support  the  donor  during 
life.  This  was  held  a  completed  transfer  inter  vivos  and  also 
amounted  to  an  annuity. 

In  the  Matter  of  Hess,  110  App.  Div.  476;  96  Supp.  990; 
aff.  187  N.  Y.  554;  80  N.  E.  1111,  there  was  a  need  of  land 
reserving  the  right  to  dwell  thereon  during  life  upon  con- 
sideration of  an  agreement  to  support  the  grantee.  Here 
again  appears  the  theory  of  an  annuity. 

To  the  same  effect  are: 

Matter  of  Daniel,  40  Misc.  29. 
Matter  of  Hulse,  15  Supp.  770. 
Matter  of  Burhans,  100  Misc.  646,  166  Supp.  1027. 

A  contrary  rule  has  recently  been  laid  down  in  New  Jersey. 
A  decedent  had  transferred  stock  to  a  beneficiary  in  con- 
sideration of  an  annuity  equal  to  the  dividends  on  the  stock, 


PART  H  —  THE  TRANSFER 

held  a  transfer  in  contemplation  of  death  without  adequate 
consideration. 

Bottomley's  Estate,  92  N.  J.  Eq.  202;  111  A.  605. 

In  an  ante-nuptial  contract  the  grantor,  in  consideration  of 
marriage,  deeded  the  property  in  trust,  reserving  a  life  income 
and  remainder  to  his  widow  or  his  son,  if  any.  The  contract 
was  made  prior  to  the  statute.  The  remainders  being  thus 
vested,  the  transaction  was  held  completed  inter  vivos  and 
not  taxable. 

Matter  of  Craig,  181  N.  Y.  551;  74  N.  E.  1116. 

Where  the  decedent  conveyed  a  farm  to  his  nephew  for  a 
good  consideration,  and  where  the  deed  was  never  placed  on 
record  until  after  the  grantor's  death,  the  transfer  is  not 
subject  to  an  inheritance  tax  in  the  absence  of  evidence  of 
intent  to  evade. 

In  re  MeCormick,  15  Pa.  Co.  Ct.  621. 

As  we  have  seen,  the  later  authorities  hold  a  trust  deed 
reserving  a  life  estate,  where  made  after  the  statute,  taxable. 

Matter  of  Keeney,  194  N.  Y.  281 ;  87  N.  E.  428 ;  aff .  222  U.  S.  525. 

The  principle  is  well  illustrated  by  a  recent  case  in  Illinois : 
On  the  death  of  William  J.  Orendorff  intestate  his  widow 
and  his  three  sons  agreed  to  divide  his  property  not  according 
to  the  statutes  of  distribution,  but  by  giving  the  widow  a  life 
estate  in  the  whole  property  and  on  her  death  the  remainder 
to  the  three  sons.  This  was  held  not  a  contract  to  take  effect 
at  death,  but  an  agreement  complete  inter  vivos  on  valid  con- 
sideration. On  the  death  of  the  widow  the  remainder  interest 
in  the  three  sons  was  held  not  subject  to  an  inheritance  tax. 
The  court  said,  at  page  254 : 

"In  view  of  the  interest  the  law  gave  her  in  her  husband's 
estate  there  was  ample  consideration  for  William  J.  Oren- 
dorff's  widow,  Mary  Orendorff,  to  sell  all  the  interest  in  the 
remainder  of  said  shares  of  stock  for  the  life  interest  that 
was  given  her  by  said  agreement.  Without  question  Mary 
Orendorff  and  her  sons,  after  her  husband's  death,  could  by 
agreement,  acting  together,  dispose  of  all  his  property  in  any 


142  INHERITANCE  TAXATION 

way  they  saw  fit.  An  absolute  transfer  or  gift  of  property 
left  by  William  J.  Orendorff,  made  in  good  faith,  for  a  valuable 
consideration,  at  the  time  this  agreement  was  made,  or  at  any 
time  before  her  death,  would  not  be  subject  to  an  inheritance 
tax  at  the  death  of  Mary  Orendorff  as  part  of  her  estate." 

People  v.  Orendorff,  262  111.  246 ;  104  N.  E.  656. 

A  similar  case  arose  in  New  York  with  a  similar  result. 

Matter  of  Polhemus,  84  Misc.  332;  145  Supp.  1107. 

The  leading  case  in  New  York  presents  some  difficulties  and 
is  apt  to  mislead  if  not  carefully  analyzed,  and  it  has  fre- 
quently been  distinguished.  In  the  Matter  of  Baker,  83  App. 
Div.  530;  82  Supp.  390;  affd.  178  N.  Y.  575,  one  Henry  B. 
Baker,  being  about  to  marry,  entered  into  an  ante-nuptial 
contract  with  his  prospective  wife  whereby  he  agreed,  in  con- 
sideration of  the  contemplated  marriage,  to  presently  give 
her  the  sum  of  $1,000,  and  if  the  marriage  were  consummated 
and  his  wife  outlived  him,  that  he  would  provide  by  will  for 
the  payment  of  $20,000  to  her  out  of  his  estate.  The  wife  on 
her  part  agreed  to  accept  this  provision  in  lieu  of  her  dower 
rights  in  her  husband's  property.  Baker  died  intestate,  leav- 
ing his  widow  and  a  sister  who  was  his  next  of  kin  and  only 
heir  at  law,  and  by  agreement  between  them  the  $20,000  was 
paid  to  the  widow  out  of  the  estate.  The  question  was  whether 
this  sum  was  taxable,  and  it  was  held  that  it  was  not  because 
the  agreement  that  the  wife  should  be  paid  out  of  the  estate 
created  a  debt  payable  out  of  the  husband's  estate  after  his 
death. 

In  Logan  v.  Whitley,  129  App.  Div.  666;  114  Supp.  255, 
there  was  an  ante-nuptial  contract  precisely  similar  to  that 
in  the  Baker  case.  The  amount  to  be  paid  was  $10,000.  The 
husband  shot  and  killed  his  wife  and  then  committed  suicide. 
A  complaint  in  a  suit  by  the  wife's  next  of  kin  was  sustained 
by  the  Appellate  Division  on  the  theory  that  it  was  in  the 
nature  of  a  debt  against  the  estate  which  was  good  and  valid, 
although  the  wife  did  not  survive  her  husband  by  reason  of  his 
own  wrongful  act.  In  other  words,  the  court  held  that  it  was 
not  a  claim  which  took  effect  in  possession  and  enjoyment 


PART  II  — THE  TRANSFER  143 

after  the  husband's  death  because  the  wife  never  in  fact 
became  his  widow. 

2.  Where  the  Contract  is  Executory. 

A  distinction,  however,  arises,  where  the  contract  is  execu- 
tory even  though  full  and  valid  consideration  be  paid. 

Matter  of  Kidd,  188  N.  Y.  274;  80  N.  E.  924. 

George  W.  Kidd,  being  about  to  marry  a  widow,  entered 
into  an  ante-nuptial  contract  with  her  whereby,  in  considera- 
tion of  the  marriage,  and  the  promise  of  his  expectant  wife 
to  turn  over  to  him  the  sum  of  $40,000,  he  agreed  that  he 
would  adopt  Grace  C.  Slocum,  her  daughter,  give  her  his  name 
and  make  her  his  heir,  and  there  should  be  no  issue  of  the 
marriage  (as  there  was  not)  that  he  would  devise  and  bequeath 
all  of  his  property  to  said  Grace  C.  Slocum.  The  mother 
fulfilled  her  part  of  the  agreement,  but  Kidd  failed  to  fulfill 
his  part,  leaving  at  his  death  a  will  whereby  he  disposed  of 
his  property  otherwise  than  as  he  had  agreed.  Grace  C. 
Slocum  (then  named  Dickson)  sued  to  establish  Kidd's  con- 
tract for  her  benefit,  and  succeeded  in  obtaining  a  judgment 
that  she  was  entitled  to  his  whole  estate.  The  question  was 
whether  the  property  thus  recovered  was  subject  to  a  transfer 
tax.  It  was  held  that  it  was.  It  was  pointed  out  in  the  opinion 
that  no  present  interest  in  the  estate  vested  in  Miss  Slocum 
by  virtue  of  Kidd's  agreement  with  her  mother.  All  that 
Kidd  agreed  to  do  was  to  leave  her  whatever  he  might  have 
when  he  died,  but  in  the  meantime,  while  he  could  not  have 
conveyed  away  his  property  in  fraud  of  her  rights,  he  might 
have  entirely  consumed  it  in  living  expenses  or  have  lost  it  in 
speculation. 

This  case  overrules  Matter  of  Demers,  41  Misc.  470;  84 
Supp.  1109. 

These  principles  were  applied  and  the  distinction  between 
the  Baker  and  Kidd  cases  emphasized  in 

Matter  of  Cory,  177  App.  Div.  871;  164  Supp.  956;  aff.  221  N.  Y.  612. 

Here  two  brothers,  long  associated  in  business  as  copart- 
ners, incorporated  their  business  and  issued  stock  worth  $200 
a  share,  each  brother  having  500  shares  or  an  interest  worth 


144  INHERITANCE  TAXATION 

$100,000.  They  agreed  that  the  survivor  might  buy  of  thi- 
estate  of  the  decedent  the  $100,000  interest  for  $60  per  share 
or  $3,000.  The  deceased  brother,  Charles,  ratified  the  agree- 
ment by  will.  The  surviving  brother,  John,  claimed  that  he 
should  be  taxed  on  a  transfer  of  $30,000  and  not  of  $100,000. 
and  the  Surrogate  so  held.  In  the  course  of  its  opinion  revers- 
ing this  decision  the  Appellate  Division  said : 

"The  statute  imposed  a  tax  upon  the  'transfer  by  deed, 
grant,  bargain,  sale  or  gift  intended  to  take  effect 

in  possession  or  enjoyment  at  or  after  death.'  The  transfer 
of  the  stock  of  John  M.  Cory  falls  exactly  within  the  terms 
of  the  act.  There  was  not  a  present  sale  of  the  stock  from 
Charles  Cory  to  his  brother,  but  merely  a  contract  that  after 
Charles  Cory's  death  John  M.  Cory  might  purchase  the  stock 
at  an  agreed  price.  We  are  of  the  opinion  that  the  mutuality 
of  obligation  assumed  by  the  brothers  furnished  a  sufficient 
consideration  for  their  mutual  agreement;  but,  even  so,  the 
agreement  constituted  merely  a  mutual  bargain  for  the  sale 
of  the  stock  after  the  death  of  whichever  brother  should  first 
die,  and  under  which  the  transfer  of  ownership  could  not  take 
effect  either  in  possession  or  enjoyment  until  after  death.  In 
fact,  so  long  as  Charles  Cory  lived  he  could  at  any  time  have 
sold  or  otherwise  parted  with  the  stock  as  he  chose,  without 
violating  his  agreement  with  his  brother,  which  in  terms 
applied  only  to  the  stock  owned  by  the  brother  first  dying  *  at 
the  time  of  his  decease.'  Until  one  of  the  brothers  died  the 
contract  remained  wholly  executory,  and  after  death  the  only 
right  given  to  the  survivor  was  that  he  might  buy  the  stock 
from  the  estate  of  the  decedent,  paying  therefore  sixty  dollars 
per  share." 

Two  days  after  the  Cory  case  had  been  affirmed  without 
opinion  by  the  Court  of  Appeals,  July  14,  1917,  the  Appellate 
Division,  First  Department,  handed  down  a  decision  in  Matter 
of  Orvis  reversing  the  New  York  county  Surrogate,  who  had 
held  that  where  two  partners  entered  into  an  agreement  that 
the  survivor  should  take  two  funds  aggregating  $1,000,000 
there  was  no  tax,  as  the  agreement  was  upon  consideration 
and  did  not  come  within  the  terms  of  the  statute.  This  went  a 
step  beyond  the  Cory  case.  Two  justices  wrote  dissenting 


PART  II  — THE  TRANSFER  145 

opinions  (Shearn  and  Page)  and  Justices  Smith  and  Bowling 
concurred  with  Scott,  P.  J. 

This  is  a  pioneer  case  and  of  wide  application,  and  the 
opinions  both  in  the  Appellate  Division  and  Court  of  Appeals 
establish  the  doctrine  that  any  agreement  donative  in  char- 
acter, even  though  based  upon  consideration,  is  subject  to  the 
tax  when  taking  effect  at  or  after  death.  The  facts  are  stated 
at  length  in  the  Appellate  Division  opinion,  which  is  reported 
at  173  App.  Div.  1 ;  166  Supp.  126.  It  is  in  full  as  follows : 

'  *  SCOTT,  J.  The  sole  question  involved  in  this  appeal  is  as 
to  the  taxability  of  two  certain  funds  established  by  the 
deceased,  Charles  E.  Orvis,  and  his  brother  and  partner  in 
business  Edwin  W.  Orvis. 

"These  two  brothers  had  been  members  of  the  copartner- 
ship of  Orvis  Bros,  and  Co.,  and  on  January  2,  1911,  made  a 
mutual  agreement  in  the  following  form : 

"  'Whereas,  It  is  the  desire  of  Charles  E.  Orvis  and  Edwin 
W.  Orvis,  founders  of  the  firm  of  Orvis  Brothers  and  Co.,  to 
provide  for  the  continuation  of  the  said  firm,  by  the  survivor, 
in  event  of  the  death  of  either  of  them. 

"  'Now  therefore  it  is  hereby  mutually  agreed  by  and 
between  said  Charles  E.  Orvis  and  Edwin  W.  Orvis,  that  the 
sum  of  five  hundred  thousand  dollars  shall  be  drawn  from  the 
profits  and  accumulations  of  the  said  firm,  heretofore  accrued, 
and  shall  be  placed  to  the  credit  of  Foundation  Account,  and 
that  such  account  shall  be  owned  equally  (half  and  half)  by 
said  Charles  E.  Orvis  and  Edwin  W.  Orvis,  and  it  is  hereby 
expressly  and  distinctly  agreed  by  and  between  the  parties 
hereto,  that  in  the  event  of  the  decease  of  either  of  them,  the 
survivor  of  them  shall  be  the  sole  owner  of  the  Foundation 
Account,  and  the  heirs  of  the  one  deceased  shall  have  no  right, 
title,  interest  or  claim  thereto.  And  it  is  hereby  further 
agreed  that  to  provide  against  any  impairment  of  the  said 
Foundation  Account,  an  equal  amount  of  five  hundred  thou- 
sand dollars  shall  be  placed  to  the  credit  of  Contingent  Ac- 
count, and  it  is  expressly  and  distinctly  agreed  by  the  parties 
hereto  that  terms  of  this  agreement,  in  relation  to  the  said 
Contingent  Account  shall  in  every  respect  be  exactly  the  same 
10 


146  INHERITANCE  TAXATION 

as  the  terms  in  regard  to  the  Foundation  Account,  as  herein- 
before stated. 

"  'In  witness  whereof  we  have  signed,  sealed  and  delivered 
this  agreement  on  the  second  day  of  January,  1911,' 

"The  two  funds  provided  for  by  this  agreement  were  set 
up  and  were  continued  until  the  death  of  Charles  E.  Orvis, 
by  which  time  the  so-called  Foundation  Account  had  been 
impaired  to  the  extent  of  $134,000,  the  Contingent  Account 
remaining  intact. 

"As  will  be  seen  from  a  reading  of  the  agreement,  one- 
half  of  each  fund  was  owned  by  Charles  E.  Orvis  until  at  his 
death  it  passed  by  virtue  of  the  agreement  to  his  brother 
Edwin.  The  question  is  whether  or  not  a  tax  should  be  levied 
upon  this  transfer  or  devolution  of  ownership.  The  learned 
Surrogate  held  that  it  should  not,  because  the  agreement 
under  which  the  devolution  or  transfer  was  to  take  place, 
rested  on  what  he  termed  a  valuable  consideration,  such  con- 
sideration being  found  in  the  mutuality  of  the  agreement 
whereby  the  brothers  reciprocally  agreed  that  the  survivor  of 
them  should  take  the  interest  in  the  business  belonging  to  him 
who  died  first. 

"That  this  does  furnish  a  sufficient  consideration  to  sup- 
port the  agreement  as  between  themselves  I  do  not  question, 
but  I  do  not  consider  that  that  fact  alone  establishes  the  non- 
taxability  of  the  transfer.  Mutual  promises  may  furnish  a 
sufficient  consideration  for  a  promise  to  convey  in  the  future, 
but  if  there  be  no  other  consideration  the  conveyance  when  it 
takes  place  is,  in  effect,  a  voluntary  one. 

"Section  220  of  the  Tax  Law  imposes  a  tax  upon  a  transfer 
by '  grant,  sale  or  gift — intended  to  take  effect  in  possession  or 
enjoyment  at  or  after  such  death,'  i.  e.?  that  of  the  grantor, 
vendor  or  donor. 

"This  language  seems  to  fit  exactly  the  present  case. 
Whether  the  transaction  be  considered  a  sale  or  a  gift,  it  was 
clearly  intended  to  take  effect  only  on  the  death  of  the  vendor 
or  donor,  and  not  then  unless  the  vendee  or  donee  should 
outlive  the  vendor  or  donor. 

"Each  copartner  retained  the  sole  ownership  of  one-half  of 
the  moneys  going  to  make  up  the  two  funds,  just  as  he  had 


PART  II  — THE  TRANSFER  147 

before  the  funds  were  set  up,  for  it  is  specifically  provided 
that  'such  amount  shall  be  owned  equally  (half  and  half)  by 
said  Charles  E.  Orvis  and  Edwin  W.  Orvis.' 

* '  The  effect  of  the  transaction  is  precisely  as  it  would  have 
been  if  each  brother  had  made  a  will  leaving  to  the  other  his 
interest  in  the  accumulated  and  funded  profits,  providing  such 
brother  survived.  In  such  case  no  one  would  doubt  that  the 
transfer  was  taxable. 

"Under  the  terms  of  the  agreement  each  brother  retained 
the  sole  ownership  of  his  share  of  the  two  funds  and  was 
entitled  to  the  profits  arising  from  the  use  thereof.  The  only 
limitation  upon  his  ownership  was  that  he  could  not  freely 
dispose  of  the  funds  after  death,  if  he  happened  to  pre- 
decease his  brother.  All  the  elements  were  present  that  have 
led  to  the  taxation  of  property  conveyed  by  trust  deeds  under 
which  the  creator  of  the  trust  has  retained  the  beneficial  title 
of  the  property  during  life,  and  has  disposed  of  the  remainder 
after  death.  (Matter  of  Green,  153  N.  Y.  223;  47  N.  E.  292; 
Matter  of  Brandreth,  169  N.  Y.  473 ;  62  N.  E.  563 ;  Matter  of 
Cornell,  170  N.  Y.  423;  63  N.  E.  445;  Matter  of  Keeney,  194 
N.  Y.  581 ;  87  N.  E.  428.)  In  fact  the  agreement  was  essentially 
testamentary  in  character,  and  is  therefore  subject  to  the 
transfer  tax  law.  (Matter  of  Dana,  164  App.  Div.  45;  149 
Supp.  417;  aff'd  214  N.  Y.  710.) 

"I  am  unable  to  distinguish  the  present  case  in  principle 
from  Matter  of  Kidd,  178  N.  Y.  274.  In  that  case  the  testator 
had  made  a  valid  ante  mortem  agreement  to  leave  his  property 
by  will  to  his  wife 's  daughter.  He  attempted  to  leave  it 
otherwise,  but  the  agreement  was  upheld  and  the  daughter's 
right  to  receive  his  property,  at  his  death  was  sustained,  but 
it  was  held  that  the  transfer  was  taxable.  That  case  and  this 
are  clearly  distinguishable  from  those  in  which  the  transfer 
at  death  is  to  be  made  in  payment  of  an  antecedent  debt,  as  in 
Matter  of  Baker,  83  App.  Div.  530;  77  Supp.  170;  aff'd  178 
N.  Y.  575,  or  in  those  in  which  there  had  been  an  actual  com- 
pleted sale  during  life  by  title  passed,  although  possession 
was  to  be  postponed  until  death  of  grantor  or  vendor.  Nothing 
of  the  sort  appears  in  the  present  case.  Charles  E.  Orvis 
distinctly  did  not  confer  title  upon  his  brother  during  his  own 


INHERITANCE  TAXATION 

life,  for  it  is  expressly  agreed  that  he  should  continue  to  own 
half  of  the  two  funds,  and  whatever  consideration  there  was 
for  his  promise  that  the  brother  should  take  the  whole  fund 
at  death,  was  but  a  reciprocal  promise  in  futuro  by  the 
brothers  and  in  no  sense  a  present,  valuable  consideration 
which  created  a  debt. 

"In  my  opinion  the  order  should  be  reversed  with  costs 
and  disbursements  to  the  appellant,  and  the  matter  remitted 
to  the  Surrogates'  Court  for  entry  of  an  order  imposing  the 
proper  tax  upon  the  transfer  in  question. 

"Bowling  and  Smith,  JJ.,  concur." 

In  the  Court  of  Appeals  the  Orvis  case  was  unanimously 
affirmed.  The  opinion  is  by  Collin,  J.,  and  is  reported  in  223 
N.  Y.  1;  119  N.  E.  88,  where  the  court  says:  "The  Legisla- 
ture did  not  intend  that  a  purchaser  who  had  paid  full  value 
for  the  property  transferred  should  directly  or  indirectly  pay 
the  tax  besides.  *  *  *  It  was  intended  to  tax  all  trans- 
fers which  are  accomplished  by  will,  the  intestate  laws  of  the 
State  and  those  made  or  incepted  prior  to  the  death  of  the 
transferor  in  contemplation  of  or  intended  to  take  effect  in 
possession  or  enjoyment  after  his  death  which  are  in  their 
nature  or  character  instruments  or  souces  of  bounty  or  bene- 
faction and  which  can  be  classed  as  similar  in  nature  or  effect 
with  transfers  by  wills  or  the  intestate  laws  because  they 
accomplish  transfers  of  property  donative  in  effect  under 
circumstances  which  impress  on  it  the  characteristics  of  a 
disposition  made  at  the  time  of  the  transferor's  death.  *  * 
The  taxability  does  not  depend  upon  fraud  or  an  attempt  to 
evade  the  statute  nor  does  it  depend  upon  the  purpose  or 
inducement  for  the  transfer,  nor  does  it  depend  upon  the  form 
given  the  transfer ;  if  in  truth  it  in  effect  bestows  under  statu- 
tory conditions  a  bounty  or  benefaction  and  is  not  a  transfer 
for  money's  worth,  it  is  taxable." 

In  Matter  of  Keeney,  194  N.  Y.  281;  87  N.  E.  428;  affd.  222 
U.  S.  525,  the  transaction  was  by  a  deed  of  trust  executed 
four  years  before  decedent's  death;  she  conveyed  certain 
bonds  and  stock  in  trust,  the  income  to  be  paid,  one-fourth 
to  her  during  her  life  and  three-fourths  to  her  children ;  and 
after  her  death  to  continue  to  pay  the  income  or  pay  the 


PART  II  — THE  TRANSFER  149 

principal  to  the  children  or  their  issue.  A  tax  upon  the  one- 
fourth  interest  of  which  the  decedent  had  the  income  for  life 
was  sustained  as  a  transfer  to  take  effect  at  death.  The 
opinion  does  not  show  what  the  consideration  was  for  the 
agreement,  but  being  under  seal  consideration  is  presumed. 
Judge  Cullen  used  this  language  in  speaking  of  the  statute: 
' '  It  may  also  be  observed  that  if  the  statute  is  to  be  considered 
as  applicable  only  to  voluntary  gifts,  as  to  which  we  express 
no  opinion,  etc." 

In  Matter  of  Dana,  164  App.  Div.  45;  149  Supp.  417;  aff. 
214  N.  Y.  710,  it  appeared  that  the  decedent  was  a  stock- 
holder and  the  president  of  William  B.  Dana  Company,  and 
five  years  before  his  death  he  surrendered  the  certificate  for 
his  shares  and  had  a  new  certificate  issued  to  him  for  620 
shares,  which  certificate  read  "William  B.  Dana  and  Jacob 
Seibert,  Jr.,  and  the  survivor."  This  certificate  he  delivered 
to  Seibert,  at  the  same  time  executing  and  delivering  to  him 
also  an  instrument  in  writing  whereby  he  appointed  Seibert 
trustee  of  such  shares  of  stock,  reserving  to  himself  the 
income  derived  from  the  stock  and  the  right  to  revoke  the 
trust  and  retake  the  stock  at  any  time;  he  also  reserved  the 
right  to  appoint  a  new  trustee  and  to  dictate  how  the  stock 
should  be  voted.  The  court  imposed  a  tax  upon  the  transfer 
as  a  transfer  to  take  effect  at  death.  Some  evidence  was 
given  showing  that  the  inducing  cause  of  the  gift  was  services 
which  Seibert  had  rendered  to  the  William  B.  Dana  Company 
in  the  past  and  might  be  induced  to  render  in  the  future.  But 
the  fact  of  consideration  did  not  alter  the  result. 

The  cases  tending  to  support  the  view  here  presented  are : 

Matter  of  Green,  153  N.  Y.  223;  47  N.  E.  292. 

Matter  of  Bostwiek,  160  N.  Y.  489 ;  55  N.  E.  208. 

Matter  of  Brandreth,  169  N.  Y.  437;  62>  N.  E.  563. 

Matter  of  Cornell,  170  N.  Y.  423;  63  N.  E.  445. 

Matter  of  Keeney,  194  N.  Y.  281;  87  N.  E.  428. 

Matter  of  Skinner,  45  Misc.  559. 

Matter  of  Dobson,  73  Mise.  470;  132  Supp.  472. 

Matter  of  Burgheimer,  91  Misc.  468;  154  Supp.  943. 

Matter  of  Cruger,  54  App.  Div.  405;  66  Supp.  636;  aff.  166  N.  Y.  602; 

59  N.  E.  1121. 

Matter  of  Dana,  164  App.  Div.  45;  149  Supp.  417;  aff.  214  N.  Y.  710. 
Appeal  of  Waugh,  78  Pa.  St.  436. 


150  INHERITANCE  TAXATION 

While  some  of  these  agreements  were  voluntary,  several 
were  upon  consideration,  and  nearly  all  the  others  were  under 
seal  importing  consideration. 

They  were  all  bargains  to  take  effect  in  possession  or 
enjoyment  at  or  after  death,  and  were  held  taxable  under  the 
statute. 

In  addition  to  the  authorities  already  reviewed  there  are 
several  instances  where  a  tax  has  been  imposed  upon  trans- 
fers by  agreement  very  similar  to  the  one  in  the  Cory  case 
(supra). 

In  Matter  of  Burgheimer,  91  Misc.  468 ;  154  Supp.  943,  the 
decedent  agreed  with  his  brother  and  copartner  that  on  the 
death  of  either  the  survivor  should  take  the  good  will  of  the 
firm.  Neither  brother  had  any  interest  in  the  other's  share 
of  the  good  will  until  after  death.  There  were  also  mutual 
wills  carrying  the  agreement  into  effect.  Surrogate  Fowler 
held  the  interest  in  the  good  will  owned  by  the  deceased 
brother  taxable. 

In  Matter  of  Hellman,  172  Supp.  671;  aff.  226  N.  Y.  702, 
there  was  a  copartnership  agreement  that  on  the  death  of 
any  partner  his  interest  in  the  good  will  passed  to  the  sur- 
vivor without  consideration.  The  appraiser  found  that  the 
interest  of  the  deceased  in  the  good  will  was  worth  $131,417.12, 
and  half  of  that  amount  was  taxed  as  a  transfer  to  each  of 
the  two  surviving  partners.  The  order  was  affirmed  both  by 
the  Appellate  Division  and  Court  of  Appeals  without  opinion. 

In  the  Matter  of  Halle,  103  Misc.  661,  170  N.  Y.  Supp.  898, 
the  facts  were  that  there  were  written  articles  of  copartner- 
ship which  provided  as  follows : 

"For  the  purpose  of  determining  the  interest  of  any  mem- 
ber of  the  firm  in  the  firm's  assets  in  the  event  of  death,  a 
dissolution  of  the  partnership  or  any  other  event,  the  good 
will  of  the  business  of  the  copartnership  hereby  formed  shall 
be  deemed  to  be  of  no  value. ' ' 

After  reviewing  the  Cory  and  Orvis  cases  the  court  said: 

"It  would  seem,  therefore,  that  the  agreement  of  the  dece- 
dent and  his  partner  to  the  effect  that  upon  the  death  of  either 
his  interest  in  the  good  will  of  the  business  should  be  deemed 
to  be  of  no  value,  does  not  prevent  the  State  of  New  York 


PART  II  — THE  TRANSFER  3.51 

from  ascertaining  whether  such  good  will  had  a  market  value 
and  from  assessing  a  tax  upon  the  value  so  ascertained  against 
the  surviving  partners  or  the  other  persons  who  were  the 
beneficiaries  thereof. ' ' 

In  the  Matter  of  Heyman  Cohen,  170  N.  Y.  Supp.  156,  there 
was  an  agreement  that  in  the  event  of  a  dissolution  of  a  firm 
by  the  death  of  any  partner  or  by  voluntary  agreement,  no 
value  was  to  be  placed  upon  the  good  will,  and  the  court  says : 

"The  evidence  shows  that  the  business  had  a  good  will, 
and  the  value  of  the  decedent's  interest  in  this  good  will  is 
taxable,  irrespective  of  any  agreement  which'  he  may  have 
made  with  the  other  partners  as  to  the  right  of  the  surviving 
partners  to  the  good  will." 

This  principle  was  recently  applied  wrhere  a  firm  agreement 
gave  the  surviving  partner  all  the  assets.  This  was  held  a 
transfer  at  death  and  taxable  as  such. 

Matter  of  Reimer,  107  Misc.  322;  176  Supp.  430. 

In  Matter  of  Skinner,  45  Misc.  559 ;  92  Supp.  972,  Surrogate 
Silkman  in  Westchester  county  held  that  where  the  decedent 
five  months  before  his  death  transferred  by  deed  all  of  his 
real  and  personal  property  amounting  to  more  than  $100,000 
to  his  secretary  "in  consideration  of  services  heretofore 
rendered  me  and  to  be  rendered  as  my  private  secretary  and 
business  manager,"  such  transfer  was  taxable.  The  opinion 
does  not  show  whether  there  was  any  proof  taken  as  to  the 
services  which  the  secretary  had  or  did  render  under  this  con- 
tact, nor  was  such  proof  necessary,  for  the  transfer  was  by  a 
deed  under  seal,  so  that  there  was  a  presumption  of  considera- 
tion which  could  only  be  rebutted  on  the  ground  of  fraud. 

In'Matter  of  Dobson,  73  Misc.  170;  132  Supp.  472,  Surro- 
gate Sexton  of  Oneida  county  held  that  a  transfer  was  taxable 
where  the  decedent  deeded  to  her  cousin  with  whom  she  was 
living  $80,000  of  real  property,  in  consideration  that  the 
cousin  should  execute  a  lease  to  the  grantor  for  her  lifetime, 
and  which  lease  was  executed  the  same  day.  A  tax  was 
imposed,  the  Surrogate  saying  that  it  was  not  a  bona  fide  sale 
for  a  valuable  consideration,  but  a  gift  by  deed  of  $80,000 
worth  of  real  property  for  such  companionship  and  care  as 
she  might  feel  equal  to. 


152  INHERITANCE  TAXATION 

The  United  States  statute  of  1864  covers  an  advance  made 
by  a  father  to  his  son,  as  it  is  a  gift  made  without  valuable 
or  adequate  consideration.  The  fact  that  the  son  was  named 
in  his  father's  will  does  not  give  him  any  vested  or  contingent 
estate  but  is  a  bare  possibility  not  assignable  and  can  therefore 
not  be  made  the  basis  for  a  consideration. 

United  States  v.  Banks,  17  Fed.  322. 

Long  prior  to  the  death  of  the  testator  he  advanced  to  the 
beneficiaries  on  account  of  their  legacy  at  different  times  sums 
which  aggregated  $4,000  and  took  from  them  their  bonds  in 
corresponding  amounts  conditioned  for  the  payment  during 
his  life  of  an  annuity  or  yearly  sum  equal  to  the  interest  at 
6%  on  the  advancements.  The  court  holds  that  this  was  really 
a  device  to  evade  the  tax  and  its  meaning  that  the  testator 
should  receive  a  life  income  from  his  legacy  and  that  full 
enjoyment  of  the  principal  should  be  had  by  the  legatee  only 
after  the  testator's  death. 

In  re  Conwell,  5  Pa.  Co.  Ct.  368. 

3.  The  Consideration  must  be  Adequate. 

Even  in  the  absence  of  a  specific  provision  in  the  statute  so 
providing  the  courts  now  incline  to  the  view  that  the  consid- 
eration for  a  transfer  taking  effect  at  death  must  be  adequate 
in  order  to  escape  the  tax. 

In  all  cases  in  which  the  value  of  the  consideration  for  the 
property  transferred  under  the  statutory  conditions  is  so  dis- 
proportionately less  than  the  value  of  the  property  trans- 
ferred that  the  transfer  is,  in  the  light  of  reason,  or  ordinary 
intelligence  and  judgment,  beneficent  and  donative,  the 
transfer  is  taxable. 

Several  cases  on  this  subject  have  been  decided  since  the 
second  edition  of  this  work. 

In  California  it  is  held  that  a  waiver  by  a  wife  of  her 
interest  in  community  property  is  a  valuable  and  adequate 
consideration  and  no  tax  was  imposed. 

Brix's  Estate,  181  Cal.  667;  186  Pac.  135. 

In  New  York  a  transfer  to  a  wife  and  daughters  of  certifi- 
cates of  stock  made  four  months  before  death  in  consideration 


PART  II  —  THE  TRANSFEE  153 

of  care  during  illness  was  held  not  taxable,  as  a  gift  in 
contemplation  of  death. 

Matter  of  Beyer,  190  App.  Div.  802;  180  Supp.  396. 

The  principle  received  recent  illustration  in  Matter  of  Van 
Cott,  180  App.  Div.  814;  168  Supp.  95,  where  there  was  a 
transfer  of  a  copartnership  interest  by  a  father  to  his  son. 
The  court  said : 

"The  Tax  Law  imposed  a  tax  upon  transfers,  not  only  by 
will,  but  'by  deed,  grant,  bargain,  sale  or  gift  made  in  con- 
templation of  the  death  of  the  grantor,  vendor  or  donor,  or 
intended  to  take  effect  in  possession  or  enjoyment  at  or  after 
such  death.'  (Section  220,  subd.  4.)  Under  the  agreement 
the  father  retained  the  ownership  of  the  property  and  a 
stipulated  return  therefrom  during  his  life,  and  in  case  of 
the  dissolution  of  the  partnership  by  mutual  consent,  or  by 
the  death  of  the  son,  he  was  to  receive  in  cash  the  full  value 
of  his  interest  of  $22,212.90.  The  agreement  also  provided 
that  the  transer  by  the  father  was  of  'all  the  right,  title, 
and  interest  said  first  party  may  own  at  the  time  of  his 
death,  or  at  the  time  of  the  dissolution  of  the  partnership, 
in  and  to  said  firm  business,  property,  or  assets.'  This  was 
not  a  present  transfer  of  all  his  interest,  but  was  to  take 
effect  in  the  future  upon  the  death  of  the  father  or  the  dis- 
solution of  the  partnership.  Upon  the  father's  death  the 
son  became  entitled  to  the  property  absolutely  without  the 
payment  of  its  value,  although  obligated  to  make  certain 
payments  to  his  mother  during  her  lifetime.  It  wras  plainly 
the  intention  of  the  agreement  that  neither  the  son  nor  the 
mother  should  have  any  rights  in  the  ownership  of  the  prop- 
erty until  after  the  father's  death,  when  the  grant  was 
intended  to  take  effect  in  enjoyment.  'Since  they  could  not 
receive  any  part  of  the  principal  or  the  income  till  after  her 
death,  their  right  of  enjoyment  was  postponed  till  the  hap- 
pening of  that  event. .  Whatever  interest  they  may  have 
had  before,  the  right  to  possession  and  enjoyment  depended 
upon  the  death  of  the  donor.  (Matter  of  Green,  153  N.  Y. 
223,  227;  47  N.  E.  292,  293.)' 

"While  there  was  a  valuable  consideration  for  the  lease, 
the  transfer  of  the  corpus  upon  the  death  of  the  father  was 


154  INHERITANCE  TAXATION 

without  consideration.  The  agreement  was  testamentary 
in  character.  The  will,  executed  the  same  day,  supple- 
mented the  agreement.  It  disposed  of  all  his  other  prop- 
erty. As  was  said  in  Matter  of  Dana,  215  N.  Y.  461,  465; 
109  N.  E.  557,  559:  'In  the  present  case,  however,  the  trust 
instrument  took  effect  precisely  as  would  a  will  bequeathing 
the  stock  which  it  conveyed;  and  the  fact  that  the  testator 
thus  withdrew  a  portion  of  his  property  from  the  operation 
of  his  will  does  not  prevent  that  portion  from  being  a  part 
of  a  transfer  to  the  same  parties,  taking  effect  upon  his 
death,  to  be  combined  with  their  legacies  under  the  will.' 
To  this  effect  are  also  Matter  of  Bostwick,  160  N.  Y.  489: 
55  N.  E.  208;  Matter  of  Cornell,  170  N.  Y.  423;  63  N.  E.  445. 

' '  The  time  when  the  tax  accrues  —  that  is,  when  the  trans- 
fers take  effect  —  would  seem  to  be  the  test  whether  trans- 
fers made  by  different  methods  or  instruments  should  be 
taxed  separately  or  combined.  (Matter  of  Hodges,  215 
N.  Y.  447;  109  N.  E.  559.)  Under  this  rule,  I  think  the 
entire  transfer  should  be  treated  as  a  whole,  and  only  one 
exemption  of  $5,000  to  each,  the  widow  and  son,  allowed." 

One-fourth  of  the  inheritance  tax  statutes  now  provide 
that  a  transfer  taking  effect  at  death  must  be  upon  adequate 
consideration  to  escape  the  tax,  and  several  of  them  add 
that  the  consideration  must  be  in  money  or  money's  worth. 
The  statutes  of  California,  Colorado,  Delaware,  Georgia, 
Kansas,  Maine,  Massachusetts,  Nevada,  Khode  Island, 
Vermont,  Wisconsin  and  the  Federal  act  so  provide;  but 
in  the  States  where  there  is  no  specific  provision  to  the 
effect  the  rule  of  the  Orvis  case  will  probably  prevail,  as 
these  provisions  would  seem  to  be  declaratory  of  the  inter- 
pretation to  be  placed  upon  the  language  common  to  all  the 
statutes.  This  is  the  trend  of  the  authorities  construing  the 
provisions  as  to  adequate  consideration. 

In  the  Estate  of  Reynolds,  169  Cal.  600;  147  Pac.  268,  the 
court  held  that  the  amendment  served  to  clarify  but  not  to 
change  the  pre-existing  law  and  applied  it  to  a  case  arising 
prior  to  the  amendment.  A  father  suffering  from  a  mortal 
disease  transferred  his  department  store,  valued  at  $100,000, 
upon  consideration  that  his  son  should  assume  the  debts 


PART  II  — THE  TRANSFER  155 

amounting  to  $30,000  arid  pay  the  father  $600  a  month  during 
life.  The  court  said: 

"If  it  can  be  said  that  there  was  any  element  of  valuable 
consideration  received  back  by  the  father  for  his  transfer 
to  the  son,  it  was  certainly  not  adequate  from  any  commer- 
cial point  of  view.  He  was  in  failing  health  at  the  time  the 
gift  was  made.  It  was  known,  and  he  knew,  that  his  tumor 
had  returned  and  that  the  days  of  his  life  were  numbered, 
and  the  agreement  to  assume  an  indebtedness  of  $30,000  in 
consideration  of  a  gift  in  value  exceeding  $100,000,  and  the 
further  agreement  to  pay  $600  a  month  during  the  donor's 
life  (which  agreement  itself  does  not  seem  to  have  been 
observed),  certainly  do  not  measure  up  to  the  requirements 
of  the  law  of  a  valuable  and  adequate  consideration.  Indeed, 
it  seems  to  be  quite  plain  that,  as  in  the  case  of  the  widow, 
so  in  the  case  of  the  son,  the  father  in  contemplation  of  death 
was  transferring  by  gift  instead  of  devise  the  valuable 
business  which  he  owned  and  had  theretofore  conducted." 

Since  the  Reynolds  case  the  California  courts  have  had 
the  question  upon  in  several  proceedings,  and  have  adhered 
to  the  rule  that  the  consideration  must  be  adequate  to  escape 
the  tax  where  the  transfer  takes  effect  at  death. 

Where  the  agreement  was  to  pay  the  dividends  to  the 
transferor  on  part  of  the  stock  transferred,  it  was  held  a 
valuable  but  not  an  adequate  consideration,  and  therefore 
the  transfer  was  taxed. 

Felton's  Estate,  176  Cal.  663;   169  Pac.   392. 

Where  the  consideration  expressed  in  the  deed  was  $10, 
and  the  land  was  shown  to  be  worth  over  $550,  and  there 
was  no  proof  of  consideration  other  than  that  expressed  in 
the  deed,  the  transfer  was  held  taxable. 

Abstract  Title  and  Guarantee  Co.  v.  State,  173  Cal.  691,  161  Pac.  264. 

A  similar  amendment  to  the  Massachusetts  statute  has 
received  a  similar  construction: 

A  widow  advanced  in  years  and  in  feeble  health  desired 
to  secure  during  life  the  services  and  companionship  of  a 
certain  man,  fifty-four  years  of  age,  who  was  employed  as 
a  traveling  salesman  at  a  salary  of  $2,200  a  year  in  addition 


156  INHERITANCE  TAXATION 

to  his  traveling  expenses.  In  consideration  of  his  resigning 
this  position  and  removing  with  his  wife  to  the  widow's  resi- 
dence, where  they  continued  to  live  and  to  care  for  her  until 
her  death,  the  widow  deposited  with  a  trustee  $100,000,  face 
value,  of  3l/2%  bonds  of  the  Commonwealth  of  Massachu- 
setts, with  a  declaration  of  trust  directing  the  trustee  to  pay 
the  income  during  her  life  in  equal  shares  to  the  man  and 
his  wife,  and  upon  her  death  to  transfer  the  bonds  to  them 
in  equal  shares  absolutely  if  they  both  survived  her,  or,  in 
case,  at  the  time  of  the  settlor's  death,  either  of  the  bene- 
ficiaries should  be  dead,  to  transfer  the  whole  of  the  bonds 
to  the  survivor,  or,  in  case  the  settlor  should  survive  both 
the  beneficiaries,  then  at  her  death  to  transfer  one-half  of 
the  bonds  as  one  of  the  beneficiaries  should  have  appointed  by 
his  will  and  the  other  half  as  the  other  beneficiary  should 
have  appointed  by  her  will,  or  in  default  of  appointment  by 
either  of  them,  to  his  or  her  next  of  kin.  At  the  time  of  the 
settlor's  death  the  bonds  had  an  actual  market  value  of  not 
less  than  $90,000.  Upon  a  bill  in  equity  by  the  trustee  for 
instructions,  it  was  held  that  the  transfer  of  the  bonds  under 
the  deed  of  trust  did  not  constitute  "a  bona  fide  purchase 
for  full  consideration  in  money  or  money's  worth"  within 
the  exception  contained  in  St.  1909,  c.  490,  Part  IV  1,  and 
consequently  that  the  transfer  was  subject  to  a  succession  tax 
under  that  statute. 

State  Street  Trust  Co.  v.  Treasurer,  209  Mass.  373;  95  N.  E.  851. 

4.  Burden  of  Proof. 

A  recent  case  in  California  holds  that  the  burden  of  proof 
is  on  the  Comptroller  to  show  want  of  consideration. 

' '  The  act  in  question  does  not  impose  a  tax  generally  upon 
transfers  made  in  contemplation  of  death  or  intended  to 
take  effect  in  enjoyment  after  death.  It  imposes  a  tax  only 
upon  such  transfers  when  made  *  without  valuable  and  ade- 
quate consideration.'  The  absence  of  the  consideration  is 
just  as  essential  to  the  obligation  to  pay  the  tax  as  the 
contemplation  of  death  or  the  intention  of  the  transferrer 
that  the  possession  or  enjoyment  shall  be  postponed  until 
death." 

McDougald  v.  Boyd,  172  Cal.  753;  159  Pac.  168. 


PART  II  — THE  TRANSFER  157 

Though  the  California  statute  was  amended  in  1917  with 
this  decision  in  view,  the  courts  of  that  State  still  hold  that 
the  burden  of  proof  is  on  the  State  officials  to  prove  that  the 
consideration  was  not  valuable  or  that  it  was  inadequate. 

Nickel  v.  State,  179  Cal.  126;  175  Pac.  641. 

This  would  seem  to  make  the  task  of  the  State's  taxing 
officers  a  difficult  one  and  to  open  the  door  for  litigation. 
There  is  some  doubt  as  to  the  rule  in  New  York.  Where  the 
question  arose  over  the  taxation  of  a  joint  account  the  court 
said  in  a  recent  case:  "The  record  does  not  disclose  who 
furnished  the  money  which  was  deposited  to  the  joint  credit. 
Nothing  indicates  that  the  succession  in  this  case  was  not 
donative  in  character  (Matter  of  Orvis,  223  N.  Y.  1,  7),  and 
we  may  well  reserve  consideration  of  the  application  of  the 
statute  to  a  case  where  the  survivor  had  previously  acquired 
his  interest  for  value." 

Matter  of  Dolbeer,  226  N.  Y.  mem. ;  123  N.  E.  387. 

It  would  therefore  appear  that  there  was  no  presumption 
in  favor  of  the  estate  that  there  had  been  a  transfer  for 
value  and  that  the  burden  was  on  the  executor  rather  than 
on  the  Comptroller  to  show  that  property,  once  shown  to 
have  belonged  to  a  decedent,  had  passed  out  of  the  estate 
for  valuable  and  adequate  consideration. 

D.— LIFE  INSURANCE. 

Life  insurance  is  not  a  contract  taking  effect  at  death 
within  the  meaning  of  the  inheritance  tax  statutes.  The 
widespread  attention  called  to  this  statement  in  the  first 
edition  of  this  book  justifies  a  more  extended  consideration 
of  the  whole  subject.  The  State  doubtless  has  power  to  tax 
policies  of  life  insurance,  but  it  has  not  been  the  policy  to 
do  so  in  this  country.  In  any  event  such  a  tax,  if  imposed, 
would  not  be  an  inheritance  tax,  for  the  beneficiary  under  a 
life  insurance  policy  does  not  succeed  to  its  proceeds  either 
by  will  or  by  intestate  law,  nor  is  the  contract  of  insurance 
testamentary  in  its  character. 

The  Wisconsin  statute  taxing  life  insurance  as  an  inherit- 
ance has  been  sustained  by  the  Supreme  Court  of  that  State 


158  INHERITANCE  TAXATION 

in  the  Matter  of  Allis,  174  Wis.  527;  184  N.  W.  381.  It 
seems,  however,  that  the  Wisconsin  Legislature  decided  to 
treat  life  insurance  as  inheritance  and  not  as  income  because 
the  income  tax  of  that  State  is  much  higher  than  the  inherit- 
ance tax  on  bequests  to  direct  heirs.  However  benevolent 
the  intent  of  the  Legislature,  the  decision  is  to  be  criticised 
for  the  reasons  already  set  forth. 

The  new  Federal  estate  tax  of  February  24,  1919,  under- 
takes to  impose  a  tax  upon  the  transfer,  as  part  of  the  estate, 
upon  all  amounts  received  by  beneficiaries  under  policies  in 
excess  of  $40,000.  This  is  a  new  departure  in  inheritance 
taxation  and  its  constitutionality  may  be  doubted.  It  would 
seem  clear  under  all  the  authorities  herein  cited  that  the 
transfer  under  a  policy  of  life  insurance  is  not  an  inherit- 
ance, that  the  fund  derived  therefrom  never  becomes  a  part 
of  the  estate,  and  the  right  of  the  Government  to  tax  such 
a  transfer  as  part  of  the  estate  is  extremely  doubtful. 

Tennessee  has  repealed  the  tax  on  life  insurance  imposed 
by  its  act  of  1919. 

Where  the  policy  was  originally  payable  to  the  estate  and 
therefore  taxable,  and  three  days  before  death,  while  very 
ill,  deceased  assigned  it  to  a  beneficiary,  held  to  be  taxable 
as  a  transfer  in  contemplation  of  death. 

Matter  of  Einstein,  114  Misc.  452,  186  Supp.  931. 

The  Appellate  Division,  Third  Department,  has  refused  to 
adopt  the  theory  of  the  Einstein  case,  and  held  that  changing 
the  names  of  the  beneficiaries  and  assigning  the  policy  was 
not  a  transfer  to  take  effect  at  death  or  in  contemplation 
thereof. 

Matter  of  Voorhees,  200  App.  Div.  25,  193  Supp.  168. 

Discussing  the  nature  of  a  life  insurance  policy  and  the 
transfer  thereunder,  the  court  said  in  the  case  above  cited: 

*  *  Generally  a  life  insurance  policy  is  not  properly  acquired 
for  the  benefit  of  the  owner ;  it  is  not  an  investment,  or  part 
of  his  estate ;  it  returns  to  him  no  income ;  nor  generally  is 
it  an  instrument  for  his  present  or  future  use,  but  rather  a 
contract  to  secure  payment  of  a  sum  after  his  death  to 
another,  the  beneficiary  named  therein.  The  intent  of  the 


PART  II  — THE  TRANSFER  159 

assured  with  respect  to  these  policies  seems  plain;  he 
acquired  the  several  policies  and  assigned  them  to  provide 
a  trust  fund  for  the  benefit  of  his  wife,  his  son  and  others 
after  his  death;  and  by  the  trust  deeds  he  directed  how, 
under  what  conditions,  when  and  to  whom  payments  there- 
from should  be  made  after  his  death.  By  his  plan  he  was 
not  distributing  after  death  property  valuable  to  him  or  his 
estate.  Unless  he  made  the  contracts  Avith  the  insurance 
companies  and  paid  the  premiums,  there  would  be  no  sums 
coming  in  therefrom  and,  having  made  the  contracts,  except 
in  the  event  of  a  default  in  payment  of  the  premiums,  the 
contracts  of  insurance  would  be  of  little  value  to  him  or  his 
estate.  If  he  failed  to  pay  the  premiums  on  the  ten-year 
renewable  term  policies,  they  would  lapse  and  on  the  four 
straight  life  policies  there  is  but  a  small  paid-up  value.  He 
has  indeed  by  his  trust  deeds  directed  how  the  proceeds  of 
these  policies  shall  be  distributed  after  death,  and  named 
the  conditions  under  which  the  beneficiaries  should  take.  But 
this  is  the  effect  in  principle  of  every  life  policy  payable  at 
death  to  another  than  the  assured  or  his  estate.  Consider- 
ing the  nature  of  the  property,  we  do  not  consider  that  the 
plan  of  the  assured  should  be  held  to  be  of  a  testamentary 
character.  The  reserved  right  of  revocation,  standing  alone, 
is  in  substance  the  right  to  name  a  new  beneficiary,  which  is 
the  right  which  exists  generally  under  life  insurance  policies. 
The  reservation  does  not  indicate  a  present  intent  to  change 
his  purpose  or  plan  with  reference  to  the  policies  and  their 
proceeds.  There  might  be  many  reasons  why  he  would 
desire  to  change  his  trustee,  or  to  change  some  of  the  pro- 
visions of  the  trust  deeds.  The  reservation  does  not  at  all 
indicate  that  he  intended  to  recover  possession  of  the  policies 
to  his  own  use.  That  he  has  availed  himself  of  the  assign- 
ments and  a  trust  deed  to  dispose  of  these  proceeds  no  more 
indicates  an  intent  to  defeat  the  Transfer  Tax  Law  than 
does  the  procuring  of  a  life  policy  payable  to  another  than 
himself  or  his  estate.  There  is  nothing  to  indicate  that  the 
grantor  made  the  reservation,  or  that  he  intended  to  use  it 
for  any  purpose  other  than  to  protect  his  beneficiaries." 


160  INHERITANCE  TAXATION 

1.  Nature  of  the  Contract. 

"The  contract  of  life  insurance  is  a  mutual  agreement  by 
which  one  party  undertakes  to  pay  a  given  sum  upon  the 
happening  of  a  particular  event  contingent  upon  the  dura- 
tion of  human  life  in  consideration  of  the  payment  of  a 
smaller  sum  immediately  or  in  periodical  payments." 

25  Cyc.,  p.  698. 

State  v.  Merchants'  Exchange,  M.  B.  S.,  72  Mo.  146,  159. 

Campbell  v.  Supreme  Conclave,  I.  O.  H.,  66  N.  J.  L.,  274;  49  A.  550. 

Nye  v.  Grand  Lodge,  A.  O.  U.  W.,  9  Ind.  App.  131 ;  36  N.  E.  42. 

Columbia  Bank  v.  Equitable  L.  As.,  79  App.  Div.  601;  80  Supp.  428. 

Bitter  v.  Mutual  L.  I.  C-,  169  U.  S.  139 ;  18  S.  Ct.  Rep.  300. 

"A  policy  of  life  insurance  is  an  inchoate  or  incomplete 
gift  from  the  assured  to  the  beneficiary  and  so  may  be 
changed  at  any  time,  in  the  absence  of  a  contract  to  the 
contrary. ' ' 

Union  Mutual  L.  I.  Co.  v.  Stevens,  19  Fed.  671. 

While  a  life  policy,  during  the  life  of  the  assured,  has 
many  of  the  characteristics  of  property,  being  assignable 
and  in  a  sense  collateral  security  for  money  borrowed,  it  is 
not  property,  and  the  assured  is  not  called  upon  to  declare 
it  as  such  to  the  assessors. 

Matter  of  Knoedler,  140  N.  Y.  377;  35  N.  E.  601. 

As  the  payment  of  the  premium  is  an  obligation  of  the 
assured  it  is  an  expense  within  the  meaning  of  the  income 
tax  law,  and  the  Federal  authorities  have  ruled  that  it  is  not 
a  deduction. 

Corporation  Trust  Co.'s  Income  Tax  Service  No.  2211. 

2.  No  Title  to  Fund  in  Assured. 

As  a  policy  of  life  insurance  is  merely  an  incomplete  cause 
of  action  the  holder  of  such  a  policy  has  no  title  to  the  fund 
set  aside  by  the  insuring  company  for  its  payment.  This 
was  demonstrated  by  a  well-reasoned  case  in  Maine. 

"Are  the  premiums  paid  as  the  consideration  for  the  con- 
tract of  life  insurance  personal  property  placed  in  the  hands 
of  the  insurance  company  as  an  accumulating  fund  for  the 
future  benefit  of  heirs  or  other  persons,  within  the  meaning 


PART  II  — THE  TRANSFER 

of  the  statute?  We  think  not.  The  premiums  are  paid 
absolutely  to  the  corporation  as  the  consideration  for  the 
policy  of  insurance.  They,  with  their  accumulations,  are 
not  to  be  paid  to  the  heirs  or  other  persons  at  some  future 
day;  but  the  sum  to  be  paid  by  the  special  contract  on  the 
happening  of  "the  death  of  the  insured  is  fixed  and  absolute, 
having  no  regard  to  the  amount  of  premiums  paid  or  their 
accumulations.  The  contrast  of  life  insurance  is 

not  a  deposit  of  the  premiums  to  be  paid  to  some  person 
with  their  accumulations  at  some  future  time,  but  a  special 
contract  of  hazard  for  the  payment  of  a  sum  stipulated 
without  regard  to  the  amount  paid  in  premiums  before  the 
happening  of  the  contingency." 

3.  The  Insurance  Company  Pays  the  Taxes. 

a.  STATE  TAXES. 

Conversely,  while  the  insured  does  not  have  any  title  to 
the  fund  out  of  which  his  policy  is  ultimately  to  be  paid,  and 
therefore  is  not  liable  to  pay  any  taxes  upon  his  policy  dur- 
ing its  life,  the  insuring  corporation  has  the  title  to  the  fund 
held  by  it  as  a  reserve  to  meet  policies  as  they  accrue,  and 
this  fund  is  liable  to  taxation. 

State  v.  Parker,  34  N.  J.  L.  479. 

The  contingent  liability  of  such  an  insurance  company 
before  loss  is  not  such  an  indebtedness  as  may  be  deducted 
from  the  credits  of  the  company  subject  to  taxation. 

Life  Assn.  v.  Hill,  51  Kan.  636 ;  33  Pac.  300. 
Kenton  Ins.  Co.  v.  Covington,  86  Ky.  213. 

It  is  not  a  trust  fund  but  one  to  which  the  company  has 
absolute  title  as  part  of  its  assets. 

Provident  Trust  Co.  v.  Durham,  212  Pa.  St.  68,  75 ;  61  A.  636. 

A  fund  sufficient  to  reinsure  all  outstanding  risks  is  the 
property  of  the  company  and  subject  to  taxation. 

People  ex  rel.  Feitner,  166  N.  Y.  129 ;  59  N.  E.  731. 

b.  FEDERAL  TAXES. 

The  Federal  Government  has,  however,  for  the  first  time 
in  the  history  of  transfer  tax  legislation,  undertaken  to  tax 
11 


INHERITANCE  TAXATION 

the  beneficiary  of  a  life  insurance  policy  to  any  amount 
received  under  such  policy  in  excess  of  the  sum  of  $40,000. 
But  under  the  act  of  Nov.  23,  1921,  such  tax  does  not  apply 
to  non-residents. 

4.  Proceeds  Taxable  as  Inheritance  when  Payable  to  Estate. 

If  the  life  insurance  policy  is  payable  to  the  estate  its 
proceeds  become  part  of  that  estate  and  pass  by  the  terms 
of  the  will  or  pursuant  to  the  intestate  laws.  Under  such 
circumstances  the  transfer  is  taxable,  not  of  the  policy,  but 
of  the  proceeds  of  the  policy.  In  the  leading  case  in  which 
this  question  was  tested  before  the  courts  of  New  York  the 
attorneys  for  the  estate  took  the  position  that  the  policy 
itself  was  property  and  that  it  was  not  taxable  as  an  inher- 
itance upon  the  death  of  the  assured,  although  payable  to 
his  estate,  because  it  was  not  subject  to  ordinary  taxation. 
The  Court  of  Appeals  thus  disposed  of  the  contention : 

"The  argument  is  made  that  it  is  only  property  which  is 
liable  to  taxation  under  the  general  tax  law  of  the  State 
which  can  be  taxed  under  the  act  relating  to  taxable  trans- 
fers, and  that,  inasmuch  as  life  insurance  policies  cannot  be 
included  in  the  valuation  of  a  taxpayer's  property  under 
the  general  law,  they  cannot  be  considered  in  assessing  a  tax 
under  the  collateral  inheritance  law.  The  main  premise 
upon  which  this  proposition  rests  is  manifestly  inadmissi- 
ble. The  taxable  transfer  law  has  no  reference  or  relation 
to  the  general  law.  The  two  acts  are  not  in  pari  materia. 
While  the  object  of  both  is  to  raise  revenue  for  the  support 
of  the  government,  they  have  nothing  else  in  common. 
Nearly  sixty  years  intervened  between  the  passage  of  the 
earlier  and  the  later  statute,  and  the  latter  was  enacted 
under  different  conditions  from  the  former.  It  proceeds 
upon  a  new  theory  of  the  right  of  the  government  to  tax  and 
establishes  a  new  system  of  taxation.  It  taxes  the  right  of 
succession  to  property,  and  measures  the  tax  in  the  method 
specifically  prescribed.  All  property  having  an  appraisable 
value  must  be  considered,  whether  it  is  such  as  might  be 
taxed  under  the  general  law  or  not.  Many  kinds  of  prop- 
erty might  be  enumerated  which  are  not  assessable  under 


PART  II  — THE  TRANSFER  163 

the  general  law,  but  which  are  appraisable  under  the  col- 
lateral inheritance  act,  The  definition  of  the  different  kinds 
of  property  which  the  Legislature  has  incorporated  in  the 
general  tax  law,  for  the  purposes  of  that  law,  cannot  be 
imported  into  the  collateral  inheritance  tax  law  upon  any 
sound  principle  of  statutory  construction.  It  is,  therefore, 
immaterial  whether  life  insurance  policies  can  be  valued  and 
assessed  for  taxation  under  the  general  law." 

Matter  of  Knoedler,  140  N.  Y.  377;  35  N.  E.  601. 

The  difficulty  is  that  neither  the  court  nor  counsel  observed 
the  distinction  that  it  was  not  the  policy  but  its  proceeds 
which  became  part  of  the  estate  and  were  taxable  as  an 
inheritance. 

This  led  to  further  litigation  and  the  matter  was  cleared 
up  when  it  came  to  the  taxation  of  the  proceeds  of  a  policy 
held  by  a  non-resident  in  a  New  York  insurance  company. 
This  came  before  the  Court  of  Appeals  in  Matter  of  Rhoads, 
190  N.  Y.  525;  83  N.  E.  1130,  where  the  court  affirmed  with- 
out opinion  an  order  of  the  Surrogate's  Court.  The  tes- 
tator died  a  resident  of  Massachusetts  on  May  30,  1905. 
Decedent  was  the  owner  of  a  life  insurance  policy  on  his  life 
in  Mutual  Life  Insurance  Company  of  New  York.  The 
beneficiaries  named  in  said  policy  were  the  decedent's  wife, 
or  in  the  event  of  her  dying  before  him  then  his  children 
were  mentioned  as  such  beneficiaries.  As  a  matter  of  fact, 
decedent's  wife  and  all  his  issue  predeceased  him,  and  at 
the  time  of  his  death  his  sister  was  his  only  heir  and  next 
of  kin.  The  policy  was  in  decedent's  safe  deposit  box  in 
Boston.  Held,  not  taxable. 

The  reasoning  actuating  the  court  in  the  Rhoads  case  was 
clearly  indicated  in  Matter  of  Gordon,  186  N.  Y.  471 ;  79  N.  E. 
722,  where  the  same  question  was  presented.  The  court  said : 

"If  the  contract  in  this  case  is  subject  to  the  imposition 
of  a  transfer  tax,  then  any  contract  of  insurance  issued  to 
a  non-resident,  passing  to  and  held  by  his  non-resident  repre- 
sentatives or  assigns,  and  being  administered  and  enforce- 
able in  a  foreign  jurisdiction,  whether  in  the  State  of  Texas 
or  California,  or  in  some  foreign  country,  would  afford  the 
basis  of  taxation  in  this  State,  provided  only  the  policy  was 


164  INHERITANCE  TAXATION 

issued  by  a  New  York  corporation  and  assess  could  be 
obtained  by  the  tax  collector  to  its  proceeds.  No  distance 
of  domicile  of  the  assured  and  his  transferees  or  beneficiaries, 
and  no  completeness  of  foreign  jurisdiction  over  administra- 
tion and  enforcement,  and  no  lack  of  anticipation  of  such  a 
result  upon  the  part  of  the  assured,  would  be  a  bar  to  the 
attempted  application  of  the  taxing  power.  It  requires  no 
great  imaginative  processes  to  picture  the  limits  and  dis- 
approval and  friction  to  which  this  theory  would  lead  if 
logically  carried  to  its  full  length. 

"It  was  undoubtedly  the  intent  of  the  Legislature  that 
the  statute  under  consideration  should  be  liberally  construed 
to  the  end  of  taxing  the  transfer  of  all  property  which  fairly 
and  reasonably  could  be  regarded  as  subject  to  the  same, 
and  this  court  has  unequivocally  placed  itself  upon  record  in 
favor  of  construing  the  statute  in  the  light  of  such  intent. 
But  the  proposition  now  propounded,  if  adopted,  would  lead 
far  beyond  any  point  which  has  thus  far  been  reached,  and 
we  do  not  believe  that  it  would  be  wise  or  practicable  to 
adopt  it." 

To  the  same  effect  are : 

Matter  of  Horn,  39  Misc.  133;  78  Supp.  979. 
Matter  of  Abbett,  29  Misc.  567;  61  Supp.  1067. 

It  therefore  appears  that  while  the  proceeds  of  a  policy 
payable  to  the  estate  of  a  resident  and  passing  under  his 
will  or  the  intestate  laws  are  taxable  as  an  inheritance,  they 
are  not  taxable  against  the  estate  of  a  non-resident,  even  if 
the  company  which  pays  the  policy  is  a  domestic  corporation. 

5.  Where  Payable  to  Beneficiary  not  Taxable. 

It  seems  equally  well  established  in  all  jurisdictions  where 
the  question  has  been  considered  that  where  the  proceeds 
of  a  life  policy  are  payable  to  a  beneficiary  named  in  the 
policy  the  transfer  of  the  proceeds  of  the  policy  is  not  an 
inheritance  and  is  not  taxable  as  such.  The  proceeds  do  not 
pass  to  the  estate,  they  are  not  liable  for  the  debts  of  the 
deceased,  they  do  not  pass  pursuant  to  the  terms  of  the  will, 
nor  are  they  distributed  under  the  intestate  laws  of  the 
State.  In  sound  reason  they  are  not  within  the  class  of 


PAKT  II  —  THE  TRANSFER  165 

gifts,  grants,  bargains  or  sales  made  in  contemplation  of 
death  or  to  take  effect  in  possession  or  enjoyment  at  or  after 
death.  For  Federal  statute  see  post,  p.  610. 

The  distinction  between  two  classes  of  policies  —  those 
payable  to  the  insured  or  his  personal  representatives,  and 
those  payable  to  a  specific  beneficiary  —  is  clearly  recognized 
by  the  decisions.  In  the  first  class  the  contract  is  made  for 
the  benefit  of  the  insured  and  the  proceeds  pass  to  his  per- 
sonal representatives  as  part  of  his  estate  and  are  liable  for 
the  payment  of  his  debts  and  legatees;  while  in  the  latter 
case  the  contract  is  made  for  the  benefit  of  others,  and  the 
proceeds  are  transferred  to  them  by  the  terms  of  the  con- 
tract, and  not  by  virtue  of  the  Statute  of  Distributions  or 
the  provisions  of  the  will  of  the  insured. 

Heaton  on  Surrogate's  Courts,  p.  1100,  citing  Matter  of  Fay,  25   Misc. 
468;  55  Supp.  749. 

These  propositions  seem  well  sustained  by  the  authorities. 
Thus  far  the  question  of  the  taxability  of  transfers  under  an 
insurance  policy  has  arisen  in  inheritance  tax  cases  in  the 
States  of  Massachusetts,  Pennsylvania,  Wisconsin  and  New 
York  and  all  agree  upon  the  rule  as  here  stated. 

In  Tyler  v.  Treasurer,  226  Mass.  306;  115  N.  E.  300,  the 
Supreme  Judicial  Court  of  Massachusetts  thus  discusses  the 
question : 

"The  rights  of  the  beneficiary  are  vested  when  the  desig- 
nation is  made  in  accordance  with  the  terms  of  the  contract 
of  insurance.  They  take  complete  effect  as  of  that  time. 
They  do  not  wait  for  their  efficacy  upon  the  happening  of 
a  future  event.  They  are  in  no  wise  modified  or  increased 
at  the  time  of  the  death  of  the  insured. 

'The  contract  of  life  insurance  differs  from  most  other 
contracts  in  that  it  is  not  intended  ordinarily  for  the  benefit 
of  the  insured  but  of  some  dependent.  Its  original  and 
fundamental  conception  is  a  provision  by  small  periodical 
contributions  to  secure  a  benefit  for  the  family.  While  this 
conception  has  been  enlarged  in  some  respects  and  espe- 
cially in  its  commercial  aspects,  still  the  basic  elements  con- 
tinue and  are  found  in  all  the  cases  at  bar.  The  insured 
retains  no  ownership  of  that  which  has  passed  to  the  bene- 


166  INHERITANCE  TAXATION 

ficiary  under  the  contract.  A  reserved  right  to  change  the 
beneficiary  does  not  affect  the  essential  nature  of  the  rights 
of  the  beneficiary  so  long  as  they  last.  *  *  *  The  insured 
has  no  title  to  the  amount  due  on  the  policy.  He  does  not 
and  cannot  make  a  gift  of  that.  The  right  to  that  amount 
as  an  instant  obligation  does  not  spring  into  existence  until 
after  his  death.  Even  then  the  money  belongs  to  the  insurer 
who  is  charged  with  the  duty  to  pay  the  beneficiary  under 
the  contract.  So  far  as  he  can  make  a  'gift'  the  only  thing 
which  he  has  to  give  is  a  right  in  a  contract.  By  designating 
the  beneficiary  both  the  grant  and  the  gift,  so  far  as  they 
exist  at  all,  take  effect  in  enjoyment  and  possession  at  once. 
Such  a  relation  does  not  by  fair  intendment  come  within  the 
descriptive  words  of  the  statute  as  'property  which  shall 
pass  by  gift  made  or  intended  to  take  effect  in  possession 
or  enjoyment  after  the  death  of  the  grantor.'  The  conclu- 
sion is  that  the  sums  received  by  the  beneficiaries  in  accord- 
ance with  the  designations  made  in  the  contract  of  insurance 
are  not  subject  to  the  succession  tax." 

The  same  question  came  before  the  Supreme  Court  of 
Wisconsin  in  Matter  of  Sullen,  143  Wis.  512,  523;  128  N.  W. 
109,  where  the  widow,  Mrs.  Bullen,  was  the  beneficiary  under 
a  policy  of  $25,000  on  the  life  of  her  husband.  The  court 
says,  as  to  the  proceeds  of  this  policy:  "This  property 
remained  the  property  of  Mrs.  Bullen  and  was  not  a  part  of 
the  estate  of  Mr.  Bullen.  The  court  below,  therefore,  was 
right  in  refusing  to  tax  it." 

The  Pennsylvania  County  Court  made  a  similar  ruling 
in  V ogle's  Estate,  1  Pa.  Co.  Ct.  352,  saying:  "That  the 
money  upon  which  the  collateral  inheritance  tax  has  been 
directed  to  be  paid  never  formed  part  of  the  decedent's 
estate  and  was  not  received  by  the  accountant  as  adminis- 
trator is,  we  think,  conclusive  against  the  ruling  of  the  audit- 
ing judge.  It  was  not  an  estate  nor  part  of  an  estate  to  be 
enjoyed  after  the  death  of  the  grantor  or  bargainer  and  was 
therefore  not  within  the  letter  or  the  spirit  of  the  act  of  1826 
and  its  supplements." 

The  courts  of  New  York  have  reached  the  same  conclusion 
upon  similar  reasoning.  In  Matter  of  Parsons,  117  App. 


PART  II  — THE  TRANSFER 

Div.  321;  102  Supp.  168,  the  court  said:  "A  policy  of  insur- 
ance differs  from  other  contracts  as  it  is  not  ordinarily 
intended  to  bring  a  benefit  to  the  insured  himself,  but  to 
others  after  his  death.  The  statutes  of  this  State  favor  and 
encourage  insurance  for  the  benefit  of  a  wife  and  the  State  is 
at  a  disadvantage  when  it  seeks  to  tax  such  a  provision  for 
her  when  the  company  and  all  others  recognize  her  right  to 
the  benefit  intended. 

''This  is  not  a  case  of  an  assignment  'intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  such  death'  as 
mentioned  in  the  statute.  It  was  an  absolute  present  assign- 
ment of  the  interest  of  the  assignor  in  the  policy.  But  the 
policy  was  payable  at  his  death  and  therefore  the  assignment 
provided  that  it  was  payable  to  her  if  she  survived  him." 

In  Matter  of  Elting,  78  Misc.  692 ;  140  Supp.  238,  the  policy 
was  made  payable  to  the  "administrators,  executors  or 
assigns, ' '  but  it  recited  that  this  was  for  ' '  the  express  benefit 
of  his  wife  Carrie  D.  Elting  and  surviving  children."  The 
court  held  that  the  proceeds  of  the  policy  did  not  go  to  the 
estate,  that  the  administrator  was  merely  trustee  of  the  fund, 
which  could  not  be  reached  by  creditors  and  therefore  was 
not  subject  to  the  inheritance  tax. 

In  Matter  of  Fay,  25  Misc.  468;  55  Supp.  749,  it  was  held 
that  the  proceeds  of  the  policy  did  not  pass  to  the  estate  but 
to  the  beneficiaries  named  therein  and  that  no  inheritance 
tax  was  payable. 

Where  a  life  policy,  payable  to  the  estate  of  the  insured, 
was  assigned  by  the  insured,  with  power  to  revoke  the  assign- 
ment reserved,  and  the  insured  died  without  exercising  the 
power  of  revocation,  it  was  held  in  a  recent  case  that  the 
assignee  took  under  the  assignment  and  not  as  a  transfer 
taking  effect  at  death,  and  therefore  no  inheritance  tax  was 
due. 

The  opinion  of  the  learned  Surrogate  is  enlightening.  In 
the  course  of  it  he  says : 

"There  are  many  distinguishing  features  between  insur- 
ance policies  and  actual  property,  like  bonds,  mortgages,  and 
stocks,  such  as  were  delivered  to  the  trustee  under  the  trust 
agreements  in  the  Masury  and  Bostwick  cases,  supra,  but 


168  INHERITANCE  TAXATION 

further  discussion  along  that  line  would  seem  to  be  unneces- 
sary. There  is  another  fact,  however,  that  should  be  borne 
in  mind,  and  that  is  that  these  policies  of  insurance  were  all 
of  them,  together  with  the  assignments  and  the  deeds  of  trust, 
delivered  to  the  trustee  at  the  city  of  Philadelphia,  in  the 
State  of  Pennsylvania,  the  donor  of  the  trust  being  there 
present  at  the  time  of  the  delivery,  and  the  trust  deed  estab- 
lishes the  situs  of  the  trust  in  the  State  of  Pennsylvania,  and 
the  avails  of  the  policies  were  paid  to  the  trustee  in  the  city 
of  Philadelphia,  and  were  never  in  the  hands  of  the  executor 
of  the  will  in  the  State  of  New  York. 

"It  seems  to  have  been  the  desire  of  the  insured  to  carry 
insurance  for  the  benefit  of  his  wife  and  child  and  other 
members  of  his  family,  but  that  the  avails  of  the  policies 
should  not  be  paid  to  them,  but  held  in  trust.  Each  of  the 
trust  agreements  comprises  several  typewritten  pages.  It 
will  readily  be  seen  that  under  any  standard  form  of  policy 
all  of  these  terms  and  conditions  of  payment  could  not  be 
included,  and  it  may  have  been  for  that  reason  that  the  poli- 
cies were  made  payable  to  the  insured 's  executors,  adminis- 
trators, or  assigns,  and  then  assigned  to  the  company  and  the 
agreements  entered  into  establishing  the  trust  for  these 
different  beneficiaries. 

"It  is  admitted  by  counsel  for  the  State  Comptroller  that 
an  insurance  policy  payable  to  a  designated  beneficiary,  but 
reserving  the  right  to  the  insured  to  change  the  beneficiary, 
does  not  fall  within  the  provisions  of  the  Transfer  Tax  Act 
(Consol.  Laws,  c.  60,  §§  220-245)  on  the  policy  becoming  a 
claim  by  death.  It  is  difficult  to  distinguish  such  a  policy 
from  the  policies  involved  in  this  case.  The  policies  reserve 
the  right  to  the  insured  to  change  the  beneficiary.  Unless 
the  insured  reserved  the  right  in  the  trust  deed  to  revoke  the 
trust,  he  would  lose  the  benefit  of  that  clause  in  his  policy 
reserving  to  him  the  right  to  change  the  beneficiary.  It  was 
necessary  that  the  revocation  clause  should  be  put  in  the  trust 
agreement,  to  the  end  that  it  should  harmonize  with  the  poli- 
cies. This  case  would  seem  to  fall  within  the  decision  in 
Matter  of  Elting,  78  Misc.  Rep.  692 ;  140  N.  Y.  Supp.  238,  in 
which  it  is  held  that  a  policy  of  insurance  on  the  life  of  a 


PAET  II  — THE  TRANSFER  16Q 

testator  in  terms  payable  to  his  executors,  administrators,  or 
assigns  for  the  express  benefit  of  testator's  wife  and  surviv- 
ing children  is  not  subject  to  a  transfer  tax.  That  is  evi- 
dently what  the  testator  under  the  policies  in  question 
intended  to  accomplish  by  the  assignment  to  the  trustee  and 
the  deed  of  trust.  The  same  principle  was  also  involved  in 
the  case  of  Matter  of  Van  Dermoor,  42  Hun,  326. 

1  'My  conclusion,  therefore,  is  that  the  deceased  was  not 
possessed  of  the  policies  at  the  time  of  his  death,  and  that 
his  beneficiaries  did  not  obtain  title  to  them  through  his  will, 
or  by  the  laws  of  the  State." 

Matter  of  Voorhees,  103  Misc.  515;  171  Supp.  859,  200  App.  Div.  259,  193 
Supp.  168. 

These  seem  to  be  all  the  cases  in  which  the  question  has 
arisen  and  as  they  are  all  to  the  same  effect  and  reach  the 
same  conclusion  there  would  seem  to  be  no  doubt  that  the 
proposition  has  been  conclusively  established.  The  new 
Federal  act,  however,  taxes  beneficiaries  on  all  amounts 
received  under  policies  in  excess  of  $40,000, —  a  new  departure 
in  taxation. 


6.  Construction  of  Policies. 

As  frequently  happens  while  the  rule  of  law  is  sufficiently 
clear  its  application  is  often  involved  in  difficulty.  This  is 
because  of  the  carelessness  or  indifference  of  those  who  make 
out  the  insurance  policies.  While  the  question  has  usually 
arisen  between  creditors  and  beneficiaries,  or  between  bene- 
ficiaries and  heirs  or  legatees,  it  is  often  hard  to  tell  whether 
the  language  of  the  policy  calls  for  its  payment  to  the  estate 
or  to  some  beneficiary. 

Extrinsic  evidence  may  be  resorted  to  in  order  to  ascertain 
who  was  intended  to  be  the  beneficiary  where  the  policy  is 
ambiguous. 

Clinton  v.  Hope  Ins.  Co.,  45  N.  Y.  454. 

Where  the  policy  was  in  favor  of  the  "legal  heirs"  of  the 
assured  it  was  held  that  an  administratrix  has  sufficient  inter- 
est in  the  contract  to  maintain  an  action  against  the  insurance 


170  INHERITANCE  TAXATION 

company.  "It  is  true  that  the  fund  does  not  come  into  her 
hands  technically  and  strictly  as  assets  of  the  estate  nor  is 
it  liable  for  his  debts,"  but  it  was  held  that  she  stood  in  the 
light  of  a  quasi  trustee  for  the  purposes  of  the  action. 

Bishop  v.  G.  L.  E.  O.  of  M.  A.,  112  N.  Y.  627. 

Janda  v.  Bohemian  R.  C.  U.,  71  App.  Div.  150;    75  Supp.  654. 

Where  a  policy  reads  to  the  *  *  legal  representatives ' '  of  the 
assured  the  court  has  construed  it  to  mean  his  widow  and 
children  and  not  his  estate  or  creditors. 

Griswold  v.  Sawyer,  125  N.  Y.  411 ;  26  N.  E.  468. 

Schultz  v.  Cit.  M.  L.  Ins.  Co.,  59  Minn.  308 ;  61  N.  W.  331. 

In  Illinois  such  language  makes  the  proceeds  go  to  the 
estate  in  the  absence  of  provisions  of  the  charter  or  other 
circumstances. 

People  v.  Phelps,  78  111.  147. 

A  policy  reading  "for  the  benefit  of  estate"  was  construed 
in  Florida  to  be  intended  for  the  benefit  of  the  only  minor 
child  and  not  the  creditors,  under  the  special  circumstances 
of  the  case. 

Pace  v.  Pace,  19  Fla.  438. 

Where  a  policy  was  for  the  benefit  of  the  "heirs  at  law" 
it  was  held  not  payable  to  the  estate  but  to  the  distributees 
under  the  laws  of  the  State  where  the  decedent  had  his  domi- 
cile and  not  under  the  laws  of  the  State  where  the  insurance 
company  was  incorporated  —  Illinois,  where  the  widow  would 
have  taken  the  whole  proceeds. 

N.  W.  M.  A.  Assn.  v.  Jones.  154  Pa.  St.  99;  26  A.  253. 

A  creditor  had  no  insurable  interest  as  the  Massachusetts 
statute  then  enacted,  where  the  policy  was  for  the  benefit  of 
creditors,  held  that  the  executrix  was  entitled  to  the  proceeds 
of  the  policy  in  trust  for  those  entitled  to  be  beneficiaries. 

Clark  v.  Swartzenberg,  162  Mass.  98;   38  N.  E.  17. 

Without  further  citation  of  authorities  it  is  obvious  that 
the  courts  incline  to  a  construction  of  a  life  policy  which  will 
pass  the  proceeds  to  the  natural  objects  of  a  decedent's 
solicitude,  rather  than  to  his  estate. 


PART  II  — THE  TRANSFER 

7.  Statutory  Provisions. 

None  of  the  State  statutes  specifically  tax  life  insurance 
and  it  seems  to  be  practically  the  only  form  in  which  prop- 
erty can  pass  from  one  who  seeks  to  make  provision  for  the 
natural  objects  of  his  bounty  at  his  death  without  the  payment 
of  inheritance  taxes. 

Under  Article  X  of  the  Treasury  Department  rulings  of 
1916  the  Federal  inheritance  tax  applied  only  in  case  the 
insurance  is  payable  to  the  estate,  and  this  is  in,  accord  with 
the  rulings  of  the  State  courts  on  the  subject.  But  the  new 
Federal  act  of  1919  taxes  beneficiaries  on  all  amounts  in 
excess  of  $40,000. 

As  the  contract  of  life  insurance  when  made  becomes  a 
vested  right  of  the  assured  provided  he  keeps  his  part  of 
the  bargain  no  statute  passed  subsequent  to  the  date  of  the 
contract  could  impair  its  obligation  by  the  imposition  of  a 
tax  thereon  under  the  provisions  of  the  U.  S.  Constitution 
which  prohibits  any  State  from  passing  laws  which  impair 
the  obligation  of  contracts.  Of  course,  the  Constitution  does 
not  thus  limit  the  power  of  Congress,  but  it  does  prohibit 
Congress  from  imposing  direct  taxes  not  apportioned  among 
the  States  in  proportion  to  population. 

This  limitation  has  frequently  been  applied  to  inheritance 
tax  statutes,  though  not  in  relation  to  life  insurance,  for  the 
simple  reason  that  no  State  has  yet  attempted  specifically  to 
tax  life  policies. 

Matter  of  Pell,  171  N.  Y.  48;  63  N.  E.  789. 

Matter  of  McKelway,  221  N.  Y.  15;  116  N.  E.  348. 

E.— POWER  OF  APPOINTMENT. 

1.  The  Common  Law  Rule. 

Transfers  under  powers  of  appointment  have  been  the 
subject  of  much  litigation.  It  was  the  original  theory  of 
the  law  as  to  such  transfers  that. the  exercise  of  a  power  of 
appointment  was  in  legal  effect  merely  the  writing  into  the" 
blank  left  by  the  will  of  the  ancestor  the  names  of  the 
appointees.  As  many  life  tenants  held  powers  of  appoint- 
ment under  wills  probated  before  any  inheritance  tax  statutes 


172  INHERITANCE  TAXATION 

had  been  enacted  many  courts  applied  the  principle  that 
the  tax  was  on  the  transfer  and  could  not  affect  transfers 
consummated  prior  to  its  enactment. 

Emmons  v.  Shaw,  171  Mass.  410;  50  N.  E.  1033. 
Matter  of  Harbeck,  161  N.  Y.  211;  55  N.  E.  850. 
Hoyt  v.  Hancock,  65  N.  J.  Eq.  688;  55  A.  1004. 

A  general  power  of  appointment  vests  no  estate  in  the 
donee  of  the  power. 

United  States  v.  Field,  255  U.  S.  257;  41  S.  Ct.  Eep.  256. 

So  in  Kentucky  it  was  held  that  a  contract  related  back 
to  the  original  will.  The  testator  devised  all  his  property 
to  his  mother  and  entered  into  a  written  contract  with  her 
that  in  consideration  of  the  devise  she  would  leave  by  will 
one-half  of  the  property  she  received  to  A.  B.  The  testator 
died  leaving  his  mother  surviving  and  on  her  death  she 
devised  the  property  in  accordance  with  her  contract.  The 
inheritance  tax  was  passed  after  the  making  of  the  contract 
by  the  mother  and  before  her  death,  and  the  court  holds  that 
the  property  passing  to  A.  B.  is  not  subject  to  the  tax.  The 
court  says  that,  reading  the  will  and  contract  together  as 
they  must  be  read,  the  mother  took  a  life  estate  only  with 
an  obligation  to  leave  by  will  to  A.  B.,  and  that  therefore 
A.  B.  really  took  under  the  will  of  the  testator  and  not  under 
that  of  the  mother. 

Winn  v.  Schenck.  33  Ky.  L.  Rep.  615 ;  110  S.  W.  827. 

Kansas  has  recently  applied  this  doctrine.  Where  the 
testator  died  before  the  statute  of  1915,  and  the  power  was 
exercised  afterwards,  it  was  held  that  the  transfer  was  not 
taxable. 

State  v.  U.  S.  Trust  Co.  of  N.  Y.,  99  Kan.  841 ;  163  Pac.  156. 

In  Maryland  it  is  held  that  the  tax  is  on  the  right  to 
receive  and,  therefore,  the  appointees  must  pay  the  tax  under 
the  exercise  of  the  power  on  the  value  of  the  property  when 
so  received. 

Fisher  v.  State,  106  Md.  104;  66  A.  661. 

The  majority  of  the  States,  however,  follow  the  rule  in 
Matter  of  Harbeck,  supra,  where  no  statute  has  intervened. 


PAET  II  — THE  TRANSFER  173 

2.  The  Statutory  Rule. 

In  order  to  reach  the  transfer  of  property  under  such 
powers  New  York  in  1897  amended  the  statute  and  declared 
that  the  tax  should  be  imposed  upon  the  exercise  of  the 
power  in  the  same  way  as  though  the  property  belonged 
absolutely  to  the  donee  of  the  power.  (Chapter  284,  L. 
1897.) 

This  was  sustained  in 

Matter  of  Potter,  51  App.  Div.  212 ;  64  Supp.  1013. 

Matter  of  Vanderbilt,  50  App.  Div.  246;  63  Supp.  1079;  aff.  163  N.  Y. 

597;  57  N.  E.  1127. 
Matter  of  Dows,  167  N.  Y.  227;   60  N.   E.  439;   sus.  sub.  nom.   Orr  v. 

Gilmon,  183  U.  S.  278. 
Matter  of  Brooks,  32  Supp.  176. 

And  also  as  to  the  exercise  of  a  power  under  a  deed  made 
prior  to  the  statute  taxing  inheritances. 

Matter  of  Delano,  176  N.  Y.  486;  68  N.  E.  871;  sua.  sub.  nom.  Chanler  v. 
Kelsey,  205  U.  S.  466. 

Under  the  common  law  rule  relationship  to  the  donor  and 
not  the  donee  determined  the  rate  of  tax. 

Gallard  v.  Winans,  111  Md.  434-472 ;  74  A.  26. 

But  under  the  statute  the  rule  is  reversed. 

Matter  of  Walworth,  66  App.  Div.  171 ;  72  Supp.  984. 
Matter  of  Rogers,  172  N.  Y.  617;  64  N.  E.  1125. 
Matter  of  Seaver,  63  App.  Div.  283 ;  71  Supp.  544. 

The  statute  also  provided  that  even  if  the  donee  of  the 
power  failed  to  exercise  it  the  transfer  should  be  taxed  in 
the  same  manner  as  if  the  donee  had  owned  the  property. 

But  when  the  donee  fails  to  exercise  the  power  the  tax 
must  be  assessed  upon  the  transfer  in  the  estate  of  the  donor 
and    the    taxing   order    in    that    estate    can    be    modified 
accordingly. 

Matter  of  Duff,  114  Misc.  309;  186  Supp.  259. 

3.  The  New  York  Rule. 

The  provision  first  came  up  for  construction  in  Matter 
of  Lansing,  182  N.  Y.  238;  74  N.  E.  882.  The  donee  of 
the  power  exercised  it  but  she  appointed  the  same  person 


174  INHERITANCE  TAXATION 

who  would  have  received  the  property  in  default  of  its  exer- 
cise. The  court  held:  first,  that  the  exercise  of  the  power 
was  a  nullity,  as  it  made  no  change  in  the  devolution  of  the 
property  and  the  appointee  might  elect  to  take  under  the 
will  of  the  ancestor;  secondly,  Judge  Vann,  writing  for  the 
court,  said:  "We  pass  without  serious  discussion  that  part 
of  the  statute  which  provides,  in  substance,  that  the  failure 
or  omission  to  exercise  a  power  of  appointment  subjects  the 
property  to  a  transfer  tax  in  the  same  manner  as  if  the 
donee  of  the  power  had  owned  the  property  and  had  devised 
it  by  will  (L.  1897,  ch.  284,  §  220,  subd.  5).  Where  there  is 
no  transfer  there  is  no  tax,  and  a  transfer  made  before  the 
act  relating  to  taxable  transfers  is  not  affected  by  it  because 
as  we  held  in  the  Pell  case,  such  an  act  imposes  a  direct  tax 
and  is  unconstitutional,  since  it  diminishes  the  value  of 
vested  estates,  impairs  the  obligation  of  contracts  and  takes 
private  property  for  public  use  without  compensation." 

Judges  Cullen,  O'Brien  and  Bartlett  concurred,  Judges 
Werner  and  Haight  dissented  and  Judge  Gray  was  absent. 

4.  The  Massachusetts  Rule. 

Meanwhile  the  section  of  the  New  York  statute  thus  de- 
clared unconstitutional  had  been  copied  and  is  still  retained 
in  the  statutes  of  Colorado,  Connecticut,  Idaho,  Illinois, 
Massachusetts,  Minnesota,  Rhode  Island,  South  Dakota,  and 
Wisconsin. 

The  Supreme  Court  of  Massachusetts  refused  to  follow 
the  rule  laid  down  by  the  New  York  Court  of  Appeals  and 
sustained  the  provision  which  wras  declared  unconstitutional 
in  the  Lansing  case,  and  which  had  been  adopted  in  Massa- 
chusetts by  chapter  527,  §  8,  Laws  of  1909. 

The  question  first  arose  in  Minot  v.  Treasurer,  207  Mass. 
588;  93  N.  E.  973.  The  court  reasoned  thus: 

"It  is  but  a  short  step  further  to  apply  the  second  part  of 
the  statute,  which  refers  to  coming  into  succession  through 
the  conduct  of  the  donee  in  refusing  or  omitting  to  make  an 
appointment  that  might  carry  the  succession  elsewhere. 
While  he  has  the  power  of  appointment,  he  is  in  control  of 
the  succession.  He  may  allow  it  to  go  to  the  persons  named 


PART  II  — THE  TRANSFER  175 

in  the  will  or  deed,  or  he  may  transmit  it  elsewhere.  By 
exercising  the  power  he  may  give  his  own  creditors  the 
benefit  of  it  after  his  death.  When  property  is  held  subject 
to  such  possibilities  of  disposition,  is  it  usurpation  or  an 
unlawful  interference  with  vested  rights  for  the  Legislature 
to  say  that  the  succession  in  possession  and  enjoyment  is  not 
yet  determined,  that  it  belongs  to  no  one  until  it  is  deter- 
mined that  the  determination  of  it  depends  upon  the  will  and 
conduct  of  the  donee  of  the  power,  and  that  when  it  is  deter- 
mined by  his  conduct,  either  by  action  or  by  refraining  from 
action,  it  shall  be  subject  to  a  tax?  We  think  it  is  in  the 
power  of  the  Legislature  to  say  in  reference  to  succession  in 
possession  after  the  death  of  the  persons  whose  decease  is 
awaited,  that  property  so  held  is  not  vested  in  anybody,  and 
that  when  it  vests  in  possession,  through  a  proper  disposition 
of  it  which  is  dependent  upon  the  will  and  conduct  of  the 
donee,  a  succession  tax  shall  be  imposed.  We  think  that 
Chanler  v.  Kelsey,  205  U.  S.  466;  27  S.  Ct.  Eep.  550,  looks 
in  this  direction,  although  it  does  not  discuss  this  particular 
subject.  The  decision  in  Moffit  v.  Kelly,  218  U.  S.  400,  pub- 
lished since  'the  argument  in  the  present  case,  is  almost,  if 
not  quite,  decisive  of  the  question. 

"The  decision  to  the  contrary  in  re  Lansing,  182  N.  Y. 
238 ;  74  N.  E.  882,  was  by  four  of  the  judges,  two  others  dis- 
senting in  a  well  reasoned  opinion.  So  the  decision  in  the 
Matter  of  Chapman,  133  App.  Biv.  (N.  Y.)  337;  117  Supp. 
679,  which  was  afterwards  affirmed  by  the  Court  of  Appeals 
in  196  N.  Y.  561,  without  an  opinion,  was  by  three  judges, 
while  two  others  joined  in  a  dissenting  opinion." 

The  above  has  been  followed  in  the  later  case  of  Burnham 
v.  Treasurer,  212  Mass.  165 ;  98  N.  E.  603,  and  in  the  very 
recent  case  of  Montague  v.  State,  163  Wis.  58 ;  157  N.  W.  508. 
It  may  be  safely  assumed  that  the  courts  of  the  States  which 
follow  the  language  of  the  original  New  York  statute  will 
sustain  it  and  follow  the  Massachusetts  doctrine. 

On  the  other  hand,  the  portion  of  the  section  declared 
unconstitutional  in  the  Lansing  case  was  omitted  from  the 
statute  in  1911,  and  the  section  as  thus  amended  has  been 
copied  by  Arkansas,  Indiana,  Oklahoma  and  West  Virginia, 


176  INHERITANCE  TAXATION 

all  very  recent  statutes  yet  to  be  construed.     It  is  to  be 
assumed  they  will  sustain  it  and  follow  the  New  York  rule. 

Note --The  New  York  rule  has  just  been  adopted  and  fol- 
lowed in  California,  citing  the  Lansing  case,  supra. 

Murphy's  Estate,  182  Cal.  740,  190  Pac.  46. 

An  interesting  development  of  the  Massachusetts  rule  is 
illustrated  by  a  case  recently  arising  in  that  State.  There 
was  a  deed  of  trust  with  a  life  use  to  a  daughter  with  power 
of  appointment.  In  case  of  her  failure  to  exercise  the  power 
and  death  without  issue  there  was  an  alternative  power  of 
appointment  to  charitable  uses  in  the  trustee.  It  was  held 
that  the  death  without  issue  and  failure  to  exercise  the 
power  did  not  create  a  taxable  transfer  because  there  was 
a  second  power  of  appointment  not  yet  exercised  and  there- 
fore no  succession  upon  the  failure  to  exercise  the  first  power 
of  appointment  by  the  life  tenant. 

Attorney-General  v.  Thorpe  (Mass.),  119  N.  E.  171. 

5.  Development  of  the  New  York  Rule. 

The  rule  that  when  the  exercise  of  the  power  makes  no 
material  change  from  the  devolution  under  the  ancestor's 
will,  in  default  of  its  exercise,  the  appointee  may  elect  to 
take  under  the  will  of  the  ancestor  who  died  prior  to  the 
statute  and  thus  avoid  the  tax  has  led  to  much  litigation  in 
which  the  Lansing  case  has  been  sustained  and  applied. 

Matter  of  Backhouse,  110  App.  Div.  737;  96  Supp.  466;  aff.  185  N.  Y.  544; 

77  N.  E.  1181. 

Matter  of  Spencer,  190  N.  Y.  517;  83  N.  E.  1132. 
Matter  of  Haggerty.  128  App.  Div.  479;  112  Supp.  1017;  aff.  194  N.  Y. 

550;  87  N.  E.  1120. 
Matter  of  Chapman,  61  Misc.  593;  115  Supp.  981;  aff.  199  N.  Y.  562; 

93  N.  E.  1118. 

Matter  of  Haight,  152  App.  Div.  228;  136  Supp.  557. 

Matter  of  Hoffman,  161  App.  Div.  836 ;  146  Supp.  808 ;  aff.  212  N.  Y.  604. 
Matter  of  Lewis,  194  N.  Y.  550;  88  N.  E.  1124. 

Where  the  donee  of  the  power  makes  material  changes  in 
the  devolution  the  rule  in  the  Lansing  case  does  not  apply. 

Matter  of  Cooksey,  182  N.  Y.  92;  74  N.  E.  880. 

But  where  the  exercise  of  the  power  disposed  of  one-fifth 
of  the  property  otherwise  than  it  would  have  gone  under  the 


PART  II  — THE  TRANSFER  177 

ancestor's  will  in  default  of  its  exercise,  the  tax  attaches 
only  to  that  one-fifth;  the  rest  passes  under  the  ancestor's 
will. 

Matter  of  Ripley,  122  App.  Div.  419;  106  Supp.  844;  aff.  192  N.  Y.  536; 
84  N.  E.  1120. 

And  where  the  donee  exercised  the  power  to  pay  her  own 
debts  out  of  the  fund,  and  left  the  balance  to  the  same  per- 
sons who  would  have  received  it  in  default  of  the  power,  the 
tax  is  payable  on  the  appointment  to  the  creditors  but  the 
beneficiaries  may  elect  to  take  the  balance  under  the  ancestor's 
will. 

Matter  of  Slosson,  216  N.  Y.  79;  110  N.  E.  166. 

In  default  of  the  power  the  remainder  passed  to  the 
" children"  of  the  donor  of  the  power.  The  donee  appointed 
her  sister's  children,  who  were  grandchildren  of  the  donor. 
The  word  "children"  in  the  donor's  will  could  not  be  held 
to  include  "grandchildren"  and  the  latter  did  not  take  under 
the  ancestor's  will  but  under  the  exercise  of  the  power,  and 
their  shares  were  taxed. 

Matter  of  King,  217  N.  Y.  358 ;  111  N.  E.  1060. 

Election  to  take  under  the  will  of  the  ancestor  will  be 
presumed  where  it  avoids  the  tax. 

Matter  of  Mitchell,  N.  Y.  L.  J.,  Nov.  22,  1913. 

But  a  beneficiary  under  a  power  of  appointment  cannot 
accept  its  benefits  in  part  and  as  to  the  rest  elect  to  take 
under  the  will  of  an  ancestor. 

Matter  of  Isabel  Brush,  N.  Y.  L.  J.,  April  26,  1917. 

Nor  can  they  actually  receive  the  property  under  the  exer- 
cise of  the  power  and  yet  claim  to  take  it  under  the  will  of 
the  donor  for  purposes  of  the  transfer  tax. 

Matter  of  Warren,  62  l^isc.  444 ;  116  Supp.  1034. 

6.  Construction  of  Wills. 

It  frequently  becomes  a  serious  question  whether  a  power 
has  been  conferred  or  whether  the  provisions  of  the  will  do 
not,  in  fact,  confer  a  fee  with  remainders  over  that  are  void. 
12 


178  INHERITANCE  TAXATION 

In  recent  case  of  Appeal  of  Luques,  114  Me.  235;  95  A. 
1021,  the  ancestor,  who  died  before  the  statute,  gave  prop- 
erty to  his  wife  absolutely,  but  provided  that  if  she  should 
not  dispose  of  it  during  life  or  by  will  then  his  sons  should 
take.  The  widow  devised  to  the  sons  but  the  court  held 
they  could  not  elect  to  take  under  the  ancestor's  will  as  the 
bequest  to  their  mother  was  absolute  and  the  remainder  over 
void. 

On  the  other  hand,  in  a  recent  Arkansas  case  a  husband 
devised  a  life  estate  to  his  wife  with  power  to  appoint  "  dur- 
ing life."  She  appointed  by  will.  It  was  held  that  the 
exercise  of  the  power  was  void  and  that  the  property  passed 
under  her  husband's  will  who  died  before  the  statute  and 
hence  was  exempt  from  tax. 

State  ex  rel.  McDaniel  v.  Gaugan,  124  Ark.  548;  187  S.  W.  918. 

So,  in  a  recent  Kentucky  case,  a  life  estate  was  devised 
with  power  to  appoint,  but  in  such  language  that  it  was  held 
the  life  estate  was  enlarged  to  a  fee  and,  therefore,  the 
appointees  could  not  take  under  the  ancestor's  will. 

Commonwealth  v.  Stoll's  Estate,  132  Ky.  234;  114  S.  W.  279;  116  S.  W.  687. 

7.  Where  the  Power  is  Exercised  by  Deed. 

The  power  of  the  Legislature  to  impose  a  transfer  tax 
upon  the  exercise  of  a  power  of  appointment  by  deed  was 
recently  sustained  by  the  New  York  Court  of  Appeals  in 
Matter  of  Wendel,  223  N.  Y.  433 ;  119  N.  E.  879. 

"The  statutes  prior  to  1897  relate  exclusively  to  transfers 
by  succession  or  inheritance  or  made  in  contemplation  of 
death,  but  the  amendment  of  that  year  extended  their  scope. 

"The  statute  does  not  attempt  to  impose  a  tax  upon  prop- 
erty but  upon  the  exercise  of  a  power  of  appointment.  The 
act,  so  far  as  it  relates  to  the  power  of  appointment,  is  consti- 
tutional when  the  power  is  exercised  by  will  even  though  the 
transfer  would  not  be  subject  to  a  tax  under  the  act  exce.pt 
for  the  exercise  of  the  power  of  appointment.  (Matter  of 
Delano,  176  N.  Y.  486;  Chanler  v.  Kelsey,  205  U.  S.  466: 
Matter  of  Vanderbilt,  50  App.  Div.  246;  aff.  163  U.  S.  597; 
Matter  of  Brez,  172  N.  Y.  609;  Matter  of  Dows,  167  N.  Y. 


PART  II  — THE  TRANSFER  179 

227;  Orr  v.  Oilman,  183  U.  S.  278;  Matter  of  Keeney,  194 
N.  Y.  281;  Keeney  v.  New  York,  220  U.  S.  525.) 

''The  title  to  the  property  in  the  deed  from  the  decedent 
to  his  sisters  came  from  the  decedent's  father,  but  the 
grantees  in  the  deed  from  decedent  obtained  their  title 
thereto  through  his  deed  to  them  and  the  exercise  of  the  power 
of  appointment  given  by  the  will  of  his  father.  The  power 
of  appointment  was  a  privilege  vested  in  the  decedent  by  a 
testamentary  provision  not  for  his  own  benefit  or  advantage 
but  for  the  benefit  and  advantage  of  those  within  the  terms 
of  his  father's  will  whom  he  might  choose  as  the  beneficiaries 
of  the  appointment.  The  constitutional  power  to  impose  a  tax 
upon  a  transfer  pursuant  to  a  privilege  of  appointment  is  not 
dependent  upon  a  particular  manner  of  exercising  the  privi- 
lege. The  power  to  impose  taxes  is  one  so  unlimited  in 
force  and  so  searching  in  extent  that  the  courts  scarcely  ven- 
ture to  declare  that  it  is  subject  to  any  restrictions  whatever 
except  such  as  rest  in  the  discretion  of  the  authority  which 
exercises  it." 

The  court  cites  People  ex  rel.  Eismann  v.  Ronner,  185  N.  Y. 
285,  sustaining  the  Mortgage  Tax  and  People  ex  rel.  Hatch 
v.  Reardon,  sustaining  the  stamp  tax  on  stock  transfers,  and 
then  quotes  as  follows  from  Keeney  v.  New  York,  222  U.  S. 
525,  533;  32  S.  Ct.  Rep.  105:  "But  the  plaintiffs  insist  that 
there  is  a  radical  difference  between  an  inheritance  tax  and 
one  on  transfers  inter  vivos.  The  first,  they  say,  is  an  excise, 
imposed  on  a  privilege;  while  that  complained  of  here  is 
really  on  property,  though  called  a  tax  on  a  transfer. 
But  if  any  such  distinction  could  be  made  between  taxing  a 
right  and  taxing  a  privilege,  it  would  not  avail  the  plaintiffs 
in  the  present  case.  There  is  no  natural  right  to  create 
artificial  and  technical  estates  with  limitations  over,  nor  has 
the  remainderman  any  more  right  to  succeed  to  the  posses- 
sion of  property  under  such  deeds  than  legatees  and  devisees 
under  a  will.  The  privilege  of  acquiring  property  by  such 
an  instrument  is  as  much  dependent  upon  the  law  as  that  of 
acquiring  property  by  inheritance  and  transfers  by  deed  to 
take  effect  at  death,  have  frequently  been  classed  with  death 
duties,  legacy  and  inheritance  taxes.  Some  statutes  go  fur- 


180  INHERITANCE  TAXATION 

ther  than  that  of  New  York,  and  tax  gratuitous  acquisitions 
under  marriage  settlements,  trust  conveyances,  or  other 
instruments  where  the  transfer  of  property  takes  effect  upon 
the  death,  not  merely  of  the  grantor,  but  of  any  person, 
whosoever  *  *  *.  The  Fourteenth  Amendment  does  not 
diminish  the  taxing  power  of  the  State,  but  only  requires  that 
in  its  exercise  the  citizen  must  be  afforded  an  opportunity  to 
be  heard  on  all  questions  of  liability  and  value  and  shall  not, 
by  arbitrary  and  discriminatory  provisions  be  denied  equal 
protection." 

8.  Questions  of  Residence. 

If  the  donor  died  in  a  State  where  the  transfer  is  taxed 
only  upon  exercise  of  a  power  and  the  donee  lives  in  another 
State,  obviously  no  tax  can  accrue.  If  the  donee  has  moved 
to  a  State  where  the  tax  is  against  the  estate  of  the  donor — 
also  no  tax  can  accrue.  This  and  other  possible  complexities 
have  produced  some  puzzling  questions. 

Transfers  under  a  power  of  appointment  by  a  resident  are 
not  taxable  where  the  donors  were  residents  of  an  adjoining 
State  where  the  property  was  situated  and  the  will  was 
probated. 

Matter  of  Can  da,  197  App.  Div.  597. 

Where  the  donor  of  the  power  resided  in  another  State 
and  the  property  subject  to  the  power  was  in  the  hands  of  a 
trustee  in  another  State  the  exercise  of  the  power  by  a  resi- 
dent is  not  subject  to  the  tax  in  the  donee's  State  of  domicile. 

Walker  v.  Treasurer,  etc.,  221  Mass.  600;  109  N.  E.  647. 

The  test  to  be  applied  is  "  Would  the  property  have  been 
taxable  if  it  had  belonged  to  the  donee  of  the  power?  So 
where  a  non-resident  donee  exercised  the  power  over  a  trust 
fund  in  the  possession  of  Massachusetts  trustees  shares  of 
stock  in  a  foreign  corporation  in  possession  of  those  trustees 
held  not  taxable. 

Clark  v.  Treasurer,  etc.,  218  Mass.  292;  105  N.  E.  1055. 

Exercise  of  power  by  non-resident  donee  taxed  only  as  to 
taxable  assets  within  the  State  though  the  donor  of  the  power 
was  a  resident. 

Matter  of  Fearing,  138  App.  Div.  881;  123  Supp.  396;  aff.  200  N.  Y.  340; 
93  N.  E.  956. 


PART  II  — THE  TRANSFER 

The  donor  of  the  power  died  a  resident.  His  wife,  the 
donee,  moved  to  New  Jersey  and  there  died  exercising  the 
power.  Taxed  only  as  against  taxable  property  of  a  non- 
resident within  the  State. 

Matter  of  Kissel,  65  Misc.  443;  121  Supp.  1088;  aff.  142  App.  Div.  934; 
127  Supp.  1217. 

Where  a  resident  donee  exercised  the  power  over  personal 
property  without  the  State,  held :  taxable. 

Matter  of  Hull,  111  App.  Div.  322;   97  Supp.   701;  aff.  186  N.  Y.  586; 
79  N.  E.  1107. 

Acting  under  a  power  of  appointment  in  a  will  executed 
by  his  mother  in  Kentucky  a  testator  residing  in  Minnesota 
exercised  the  power  by  will  in  favor  of  nephews  residing  in 
Tennessee.  The  property  was  in  the  custody  of  a  resident  of 
Kentucky.  Held :  that  the  tax  was  on  the  transfer  as  though 
the  property  belonged  to  the  donee  and  the  transfer  was, 
therefore,  taxable  in  Minnesota,  citing  Matter  of  Hull,  supra. 

State  v.  Probate  Court,  124  Minn.  508 ;  145  N.  W.  390. 

A  citizen  of  Maryland  gave  a  life  use  and  power  of  appoint- 
ment to  a  citizen  of  Pennsylvania  —  held :  that  no  tax  was 
due  under  the  exercise  of  the  power  in  Pennsylvania. 

Re  Duffield,  12  Pa.  St.  277. 

A  resident  donor  gave  stock  in  Massachusetts  to  a  Maine 
donee  after  a  life  estate  in  said  donee  who  exercised  the 
power.  The  trustees  of  the  fund  made  an  agreement  whereby 
the  stocks  were  deposited  with  a  Maine  corporation  which 
had  color  of  title  though  the  actual  control  was  still  in  the 
Massachusetts  trustees  —  held :  that  complete  succession  could 
not  be  accomplished  without  the  aid  of  the  laws  of  the  State 
of  Massachusetts  and  that  the  transfer  under  the  exercise  of 
the  power  was,  therefore,  taxable  in  Massachusetts. 

Gardner  v.  Burrill,  225  Mass.  355;  114  N.  E.  617. 

Where  the  power  was  created  by  will  of  a  non-resident  and 
exercised  by  will  of  a  resident,  held :  taxable. 

Matter  of  Frazier,  N.  Y.  L.  J.,  March  28,  1912. 

Bonds  and  mortgages  on  New  York  real  estate  transferred 
by  a  non-resident  under  the  exercise  of  a  power  where  there 


INHERITANCE  TAXATION 

had  been  an  intervening  life  estate,  held :  taxable  under  statute 
in  force  at  date  of  the  exercise  of  the  power. 

Matter  of  Warden,  94  Misc.  563 ;  157  Supp.  1111. 

For  questions  arising  under  the  taxation  of  transfers  by 
power  of  appointment,  see  post  Part  III  D  Life  Estates  and 
Remainders. 

F.— COMMON  LAW  TRANSFERS. 

Transfers  pursuant  to  the  provisions  of  the  common  law 
are  generally  held  not  taxable  under  the  usual  language  of  the 
statutes  taxing  inheritances  and  must  be  specified  in  the  act 
if  they  are  not  to  escape  taxation. 

1.  Dower. 

A  widow  does  not  take  dower  as  heir  of  her  husband  and 
it  does  not  pass  by  intestate  law.  (Excepting  in  Illinois  and 
North  Carolina.) 

Be  Avery,  34  Pa.  St.  304. 

Matter  of  Weiler,  122  Supp.  608;  aff.  139  App.  Div.  905;  124  Supp.  1133. 

Matter  of  Church,  80  Misc.  447 ;  142  Supp.  284. 

McDaniel  v.  Byrkett,  120  Ark.  295;  179  S.  W.  491. 

Estate  of  Sanford,  91  Neb.  752;  137  N.  W.  864. 

Matter  of  Bullen,  47  Utah,  96 ;  151  Pac.  533. 

Sandford  v.  Jackson,  10  Paige,  266. 

Konvalinka  v.  Schlegel,  104  N.  Y.  125 ;  9  N.  E.  868. 

Gray  v.  Gray,  5  App.  Div.  132 ;  39  Supp.  57. 

Kimbel  v.  Kimbel,  14  App.  Div.  570;  43  Supp.  900. 

The  dower  interest  is  allowed  as  a  deduction  unless  a 
bequest  is  accepted  in  lieu  of  dower  in  which  case  no  dower  is 
set  off  and  the  bequest  in  lieu  of  dower  is  taxable. 

State  v.  Simms  (Utah),  173  Pac.  964. 
State  v.  Lane,  134  Ark.  71;  203  S.  W.  17. 
Matter  of  Gordon,  172  N.  Y.  25 ;  64  N.  E.  753. 
Matter  of  Eiemann,  42  Misc.  648;  87  Supp.  731. 
Matter  of  De  Graaf,  24  Misc.  147;  53  Supp.  591. 
Matter  of  Barbey,  114  Supp.  725. 

But  in  California  it  has  recently  been  held  that  a  bequest 
in  lieu  of  the  widow's  distributive  share  is  not  taxable. 

Kohn's  Estate  (Cal.),  189  Pac.  409. 


PART  II  —  THE  TEANSFEE  183 

Nice  questions  often  arise  as  to  whether  the  bequest  is 
intended  to  be  in  lieu  of  dower  or  in  addition  to  dower.  The 
intent  of  the  testator  governs. 

Matter  of  Vivanti,  63  Misc.  618;  118  Supp.  680;  aff.  206  N.  Y.  656. 

So  where  the  decedent  gave  his  widow  the  life  use  of  all 
his  realty,  after  the  payment  of  all  taxes,  insurance  and  repairs 
it  was  held  that  he  could  not  have  intended  also  to  give  one- 
third  of  the  life  use  of  the  same  property. 

Matter  of  Foster,  93  Misc.  400;  aff.  174  App.  Div.  864. 
Matter  of  Martinez,  160  Supp.  1121. 

The  widow  must  elect  where  will  gives  her  60%  of  the  estate 
with  the  balance  to  relatives. 

Sobel,  191  Supp.  677. 

And  where  the  testator  devised  his  entire  estate  to  a  trustee 
with  part  of  the  income  to  the  widow,  upon  her  acceptance  of 
the  bequest  held  an  incompatibility  and  no  deduction  for 
dower  allowed. 

Matter  of  Keys,  N.  Y.  L.  J.,  March  15,  1912. 

Where  there  was  a  life  estate  in  the  widow  with  power  to 
invade  the  principal  if  the  income  fell  below  $1,500  the  widow's 
dower  was  allowed  as  a  deduction. 

Matter  of  Bloss,  100  Misc.  643;  166  Supp.  1005. 

On  the  other  hand,  where  the  bequest  was  of  the  entire 
estate  for  life  or  until  remarriage,  it  was  held  that  there  was 
an  intent  to  separate  the  life  use  and  the  dower  and  a  deduc- 
tion for  dower  was  granted. 

Matter  of  Knabe,  94  Misc.  67. 

And  generally,  where  there  are  no  express  words  giving 
the  bequest  "in  lieu  of  dower,"  the  widow  is  entitled  to  both 
dower  and  bequest  also,  unless  there  is  an  incompatibility. 

Matter  of  Stuyvesant,  72  Misc.  295;  131  Supp.  197. 

Lewis  v.  Smith,  9  N.  Y.  520. 

Adsit  v.  Adsit,  2  Johns.  Ch.  448. 

Horstman  v.  Flege,  172  N.  Y.  384;  65  N.  E.  202. 

The  phrase  "incompatibility"  is  applied  as  a  rule  of  con- 
struction to  arrive  at  the  true  intent  of  the  testator.  If  it  is 


184  INHERITANCE  TAXATION 

clear  from  the  terms  of  the  will  that  the  testator  intended 
the  bequests  as  in  lieu  of  dower,  then  the  widow  cannot  receive 
both  the  dower  and  the  bequests,  but  this  must  clearly  appear 
from  the  terms  of  the  will.  The  mere  fact  that  the  widow  is 
largely  provided  for  in  the  will  is  not  sufficient  to  bar  dower. 
This  would  seem  to  be  clearly  settled  by  the  authorities. 

Casey  v.  McGowan,  50  Misc.  426. 

Closs  v.  Eldert,  30  App.  Div.  338;  51  Supp.  881. 

Accounting  of  Fraser,  92  N.  Y.  289. 

The  law  is  clear  enough ;  as  usual  it  is  the  interpretation  of 
the  obscurities  in  the  mind  of  the  testator  and  the  muddled 
phrases  of  poorly  drawn  wills  that  cause  the  trouble.  The 
only  thing  the  courts  can  do  is  to  arrive  at  the  intent  of  the 
testator  from  the  terms  of  the  will  as  best  they  may,  and  the 
intent,  as  thus  ascertained,  must  control. 

Boessle  v.  Roessle,  81  Misc.  558 ;  142  Supp.  984. 

Such  obscurities  are  generally  resolved  in  favor  of  the 
widow's  dower;  but  if  the  disposition  which  the  testator 
makes  of  his  estate  clearly  indicates  that  he  intended  the 
provisions  in  his  will  to  be  in  lieu  of  dower  she  is  put  to  her 
election. 

Savage  v.  Burnham,  17  N.  Y.  561. 

Vernon  v.  Vernon,  53  N.  Y.  531. 

Asche  v.  Asche,  113  N.  Y.  232 ;  21  N.  E.  70. 

Where  the  husband  secures  an  interlocutory  judgment  of 
divorce  under  Section  1774  of  the  Code,  and  dies  before  final 
judgment,  the  wife  is  not  deprived  of  her  dower  right  in  his 
real  estate. 

Byron  v.  Byron,  134  App.  Div.  320;  119  Supp.  41. 

Where  a  wife  obtains  a  divorce  in  Indiana  on  grounds  other 
than  adultery,  her  right  of  dower  under  the  laws  of  the  State 
of  New  York  are  not  affected. 

Van  Blaricum  v.  Larson,  146  App.  Div.  278;    130  Supp.   925;   aff.   205 
N.  Y.  355. 

In  States  where  there  are  allowances  to  the  widow  by 
statute  in  the  nature  of  dower,  such  as  "widow's  award"  and 


PART  II  —  THE  TRANSFER  185 

"family  allowance"  or  "homestead" — are  generally  held 
exempt  from  inheritance  taxes. 

Kennedy's  Estate,  157  Gal.  516;  108  Pac.  280. 
Crenshaw's  Estate,  124  Tenn.  528;  137  S.  W.  24. 
Blackburn's  Eetate,  51  Mont.  234;  152  Pae.  31. 
Smith  v.  State,  161  Wis.  588;  155  N.  W.  509. 
Strahan's  Estate,  93  Neb.  828;  142  N.  W.  678. 
Hildebrand's  Estate,  261  Pa.  112;  104  A.  711. 

California  now  taxes  the  widow's  "Homestead"  as  a 
transfer  at  death. 

Stewart's  Estate,  174  Cal.  547;  163  Pac.  902. 

The  widow's  allowance  is  not  subject  to  tax  in  Minnesota. 

State  v.  Hennepin  County,  137  Minn.  238;  163  N.  W.  285. 

Nor  a  widow's  life  estate  in  homestead  property. 

Murphy's  Estate,  146  Minn.  418;  179  N.  W.  728. 

In  Illinois  the  contrary  rule  prevails.  Dower  is  held  tax- 
able as  a  transfer. 

People  v.  Field,  248  111.  147;  93  N.  E.  721. 
People  v.  Nelms,  241  111.  571 ;  89  N.  E.  683. 

A  statute  exempting  life  estates  devised  by  testator  does 
not  apply  where  the  widow  renounces  under  the  will  and 
elects  to  take  her  statutory  interest  in  the  property. 

Connell  v.  Crosby,  210  111.  380;  71  N.  E.  350. 

Billings  v.  People,  189  HI.  472;  59  N.  E.  798;  aff.  sub.  nom.  Billings  v. 
Illinois,  188  U.  S.  97. 

A  widow's  award  is  also  a  taxable  transfer  in  Illinois. 

People  v.  Forsyth,  273  111.  141 ;  112  N.  E.  378. 

North  Carolina  follows  the  Illinois  rule  and  taxes  dower  as 
an  inheritance. 

Corporation  Commissioners'  v.  Dunn,  174  N.  C.  679 ;  94  S.  E.  481. 

2.  Tenancy  by  the  Curtesy. 

A  husband's  tenancy  by  the  curtesy  was  held  not  taxable 
in  New  York. 

Matter  of  Starbuck,  63  Misc.  156;  116  Supp.  1030;  aff.  201  N.  Y.  531; 
94  N.  E.  1098. 


INHERITANCE  TAXATION 

As  a  result  of  this  decision  the  New  York  statute  was 
amended  to  tax  tenancy  by  the  curtesy.  (Ch.  732,  L.  1911.) 

Curtesy  is  not  vested  right  and  is  not  alienable  during  the 
marriage ;  but  may  be  modified  or  annulled  at  any  time  before 
the  death  of  the  wife. 

Matter  of  Hinrichs,  148  Supp.  912. 

Matter  of  Beckhardt,  N.  Y.  L.  J.,  June  7,  1913. 

Thurber  v.  Townsend,  22  N.  Y.  517. 

Matter  of  Clark,  40  Hun,  233. 

Albany  Co.  Sav.  Bank  v.  McCarty,  149  N.  Y.  71. 

Where  a  wife  executes  a  will  devising  all  her  property  to 
two  children  of  a  former  marriage  and  without  providing  for 
future  issue,  a  child  subsequently  born  is  entitled  to  succeed  to 
the  same  portion  of  his  mother's  real  and  personal  property 
as  would  have  descended  or  been  distributed  to  him  if  she  had 
died  intestate ;  he  takes  this  interest  by  inheritance  as  an  heir 
at  law,  and  his  father  is  entitled  to  a  tenancy  by  curtesy  in  so 
much  of  the  real  estate  as  descends,  to  him. 

Yung  v.  Brake,  163  App.  Div.  501 ;  148  Supp.  557. 

An  estate  by  the  curtesy  does  not  attach  to  property  con- 
veyed to  a  wife  subject  to  the  use  and  occupation  of  another 
during  life,  where  she  was  never  in  actual  possession  of  the 
property,  and  she  died  before  the  termination  of  the  life 
estate. 

Collins  v.  Russell,  184  N.  Y.  74;  76  N.  E.  751. 

3.  Marital  Right. 

The  common  law  right  of  a  husband  to  succeed  to  the  per- 
sonal property  of  his  intestate  wife  was  held  not  a  taxable 
transfer  under  the  intestate  laws  of  New  York. 

Matter  of  Green,  144  App.  Div.  232;  129  Supp.  54. 

The  New  York  statute  was  amended  to  cover  such  transfers 
in  consequence  of  this  decision.  (Ch.  732,  L.  1911.) 

As  to  a  husband's  marital  right  to  succeed  to  his  wife's 
personal  property  in  New  York,  see  generally. 

Matter  of  Thomas,  33  Misc.  729;  68  Supp.  1116. 
Robins  v.  McClure,  100  N.  Y.  328;  3  N.  E.  663. 
Wadheim  v.  Hancock  and  ano..  8  Misc.  506.;  28  Supp.  766. 


PART  II  — THE  TRANSFER  137 

The  right  rests  solely  upon  the  common  law  in  the  absence 
of  statute,  and  was  not  affected  by  the  married  woman's  acts. 

Vallance  v.  Bausch,  28  Barb.  633. 
Burke  v.  Valentine,  52  Barb.  422. 

And  when  a  married  woman  dies  leaving  no  descendants  and 
no  will  the  husband  is  entitled  to  her  personal  property  jure 
mariti. 

Matter  of  Russell,  168  N.  Y.  169 ;  61  N.  E.  166. 
Barnes  v.  Underwood,  47  N.  Y.  351. 

But  if  the  wife  leaves  a  will  the  transfer  is  pursuant  to  the 
will  even  though  she  leaves  all  her  property  to  her  husband, 
and  the  succession  is  taxable. 

Matter  of  Andrews,  N.  Y.  L.  J.,  February  21,  1912. 

4.  Tenancies  by  the  Entirety. 

a.  NOT  TAXABLE  AS  AN  INHERITANCE. 

The  succession  to  the  sole  estate  on  the  death  of  one  tenant 
by  the  entirety  is  not  taxable  as  an  inheritance  and  is  not 
covered  by  the  language  of  the  usual  inheritance  tax  statute. 

Palmer  v.  Treasurer,  222  Mass.  263 ;  110  N.  E.  283. 

None  of  the  statutes  attempted  specifically  to  tax  this  class 
of  succession  until  the  amendment  to  the  New  York  statute  in 
1916. 

b.  NATURE  OF  THE  ESTATE. 

Blackstone  in  his  commentaries  (Lewis  Ed.  Bk.  II  *p.  180) 
says:  "The  properties  of  a  joint  estate  are  derived  from  its 
unity,  which  is  fourfold:  the  unity  of  interest,  the  unity  of 
title,  the  unity  of  time  and  the  unity  of  possession." 

And  this  is  the  doctrine  of  all  modern  writers  on  real 
estate : 

Washburn  on  Real  Estate,  8th  ed.,  vol.  I,  p.  529. 
Reeves  on  Real  Property,  vol.  II,  §§  689,  670. 
Tiedeman  on  Real  Property,  2d  ed.,  §  237. 
Cye.,  vol.  XXIII,  p.  484. 

These  authorities  also  hold  that  it  arises,  not  out  of  contract, 
but  by  operation  of  law,  as  a  result  of  the  marital  relation. 
These  rules  are  important  to  be  borne  in  mind  and  strictly 


]88  INHERITANCE  TAXATION 

applied,  because,  if  the  courts,  in  dealing  with  common  law 
estates,  do  not  measure  them  by  common  law  standards,  the 
result  is  confusion.  They  apply  only  to  real  estate.  There  is 
no  such  thing  as  tenancy  by  the  entirety  of  personal  property. 

Matter  of  Albrecht,  136  N.  Y.  91;  32  N.  E.  632. 

In  a  case  involving  only  the  joint  ownership  of  personal 
property,  the  New  York  Court  of  Appeals  recently  observed, 
obiter,  as  follows: 

"Joint  tenants,  by  reason  of  the  combination  of  entirety  of 
interest  with  the  power  of  transferring  in  equal  shares,  are 
said  to  be  seized  per  my  et  per  tout,  or  by  the  half  and  the 
whole,  but  tenants  by  the  entirety  are  seized  per  tout  et  non 
per  my,  and  the  conveyance  by  either  husband  or  wife  will 
have  no  effect  against  the  other  if  survivor.  (Hiles  v.  Fisher, 
144  N.  Y.  306;  39  N.  E.  337.)  Upon  the  vesting  of  an  estate 
by  the  entirety,  both  tenants  become  seized  of  the  whole  estate, 
and  upon  the  death  of  one  of  the  survivor  acquires  no  new  or 
additional  interest  by  survivorship.  (Matter  of  Klatzl,  216 
N.  Y.  83.) 

Matter  of  McKelway,  221  N.  Y.  15;  116  N.  E.  348. 

It  has  also  been  held  in  Hiles  v.  Fisher,  144  N.  Y.  306 ;  39 
N.  E.  337,  that  the  statutes  have  so  far  modified  the  common 
law  rule  as  to  rents  and  profits  of  lands  held  by  the  entirety 
that  while  the  husband  and  wife  are  living  they  are  joint 
tenants  of  the  rents  and  profits ;  but  the  court  is  very  careful 
to  point  out  that  the  right  of  the  husband  to  the  entire  rents 
and  profis  arose  jure  uxoris  and  not  from  the  nature  of  the 
tenancy  by  the  entirety,  the  court  saying,  "As  long  as  the 
question  of  survivorship  is  in  abeyance  they  are  joint  tenants 
of  the  use,  as  the  right  of  the  husband  to  the  rents  and  profits 
did  not  spring  from  the  nature  of  the  estate  but  from  the 
common  law  rules  of  coverture." 

3.  How  CREATED. 

A  tenancy  by  the  entirety  at  common  law  could  only  be 
created  by  a  conveyance  from  a  third  party  to  husband  and 
wife;  and,  as  they  were  one  in  the  eye  of  the  law,  the  estate 
was  a  unit  —  inseverable. 


PART  II  — THE  TRANSFER  139 

But  when  a  husband  conveyed  to  his  wife  and  himself  as 
"tenants  by  the  entirety,"  the  Comptroller  contended  that  a 
tenancy  by  the  entirety  was  not  created,  merely  because  it  was 
so  described  in  the  deed. 

The  Court  of  Appeals  was  evenly  divided  on  the  question. 

Matter  of  Klatzl,  216  N.  Y.  83 ;  110  N.  E.  181. 

The  Court  of  Appeals  has  since  construed  the  Klatzl  deed 
as  creating  a  joint  tenancy  and  not  an  entirety. 

Matter  of  Lyon,  233  N.  Y.  208. 

In  Matter  of  Horler,  97  Misc.  587 ;  161  Supp.  957 ;  reversed 
on  another  point  180  App.  Div.  608;  168  Supp.  221,  a  wife 
deeded  to  her  husband  a  one-half  interest  in  her  real  estate 
with  the  intention  of  creating  a  joint  tenancy  in  the  whole 
with  right  of  survivorship.  The  Comptroller  contends,  on 
appeal,  that  such  a  deed  cannot  create  a  common  law  estate 
under  the  common  law  rules  as  to  unity. 

The  learned  Surrogate,  in  discussing  the  Klatzl  case,  in  his 
opinion  in  the  Horler  case,  says : 

"The  Comptroller  contends  that  the  decision  of  the  Court 
of  Appeals  in  the  Matter  of  Klatzl  (216  N.  Y.  83;  110  N.  E. 
181)  is  controlling  on  this  point.  In  that  case  decedent,  who 
was  seized  of  certain  real  estate,  conveyed  it  to  himself  and 
his  wife  as  tenants  by  the  entirety.  Three  of  the  judges  of  the 
Court  of  Appeals  held  that  the  conveyance  did  not  constitute 
a  tenancy  by  the  entirety,  but  that  the  husband  and  wife  held 
as  tenants  in  common,  and  that  upon  the  death  of  the  husband 
his  wife  took  his  undivided  one-half  under  the  provisions  of 
his  will.  Three  of  the  judges  held  that  the  conveyance  did 
constitute  a  tenancy  by  the  entirety,  and  that  no  part  of  the 
property  was  subject  to  taxation  upon  the  death  of  the 
husband.  The  chief  justice,  while  holding  that  the  wife  took 
the  property  by  virtue  of  the  deed  from  her  husband,  held 
that  her  undivided  one-half  passed  to  her  husband  upon  her 
death,  and  that  that  one-half  was  subject  to  a  transfer  tax. 
I  do  not  understand  the  decision  in  Matter  of  Klatzl  to  go  so 
far  as  to  subject  joint  tenancies  to  the  succession  tax  on  the 
death  of  any  joint  tenant.  In  the  matter  under  consideration 
there  is  little  room  for  difference  of  opinion  as  to  the  char- 


190  INHERITANCE  TAXATION 

acter  of  the  tenancy  created  by  the  conveyance  from  the  dece- 
dent to  her  husband,  as  it  is  expressly  stated  therein  that  the 
grantor  conveys  an  undivided  one-half  interest  in  the  premises 
to  the  grantee,  and  that  it  was  her  intention  to  create  a  joint 
tenancy  in  herself  and  her  husband,  with  an  absolute  fee  in 
the  survivor.  The  facts  in  this  matter,  therefore,  are  different 
from  those  in  the  Matter  of  Klatsl." 

d.  How  TERMINATED. 

Death  terminates  the  estate  by  the  entirety  and  transforms 
it  to  a  sole  estate. 

Divorce  transforms  it  to  a  tenancy  in  common. 

Stelz  v.  Shreck,  128  N.  Y.  263 ;  28  N.  E.  510. 

In  this  case  property  had  been  deeded  to  husband  and  wife. 
Thereafter  there  was  a  divorce  a  vinculo  for  fault  of  the  wife 
and  the  husband  married  a  second  time.  On  his  death  the 
first  wife  claimed  the  property  as  tenant  by  the  entirety,  and 
the  court  held  that  as  her  title  sprang  not  from  contract  but 
from  marital  relation,  that  the  divorce  had  destroyed  the 
tenancy  by  the  entirety  and  created  a  tenancy  in  common. 

The  parties  also  by  mutual  agreement  can  sever  the  entirety 
under  the  New  York  statute  (Domestic  Relations  Law). 

Sec.  56.  HUSBAND  AND  WIFE  MAY  CONVEY  TO  EACH  OTHER  OR 
MAKE  PARTITION. —  Husband  and  wife  may  convey  or  transfer 
real  or  personal  property  directly,  the  one  to  the  other,  with- 
out the  intervention  of  a  third  person;  and  may  make  parti- 
tion or  division  of  any  real  property  held  by  them  as  tenants 
in  common,  joint  tenants  or  tenants  by  the  entireties.  If  so 
expressed  in  the  instrument  of  partition  or  division,  such 
instrument  bars  the  wife's  right  to  dower  in  such  property, 
and  also,  if  so  expressed,  the  husband's  tenancy  by  curtesy. 

This  statute  has  been  held  not  to  abolish  tenancy  by  the 
entirety. 

Bertles  v.  Noonen,  92  N.  Y.  152. 

Zortlein  v.  Bram  et  al.,  100  N.  Y.  12 ;  2  N.  E.  388. 

e.  EFFECT  OF  TAXING  STATUTE. 

In  1916  New  York  adopted  a  statute  taxing  the  transfer  at 
the  death  of  one  tenant  by  the  entirety. 


PART  II  — THE  TRANSFER 

Under  this  statute  the  Appellate  Division  held  that  an  estate 
by  the  entirety  was  taxable  as  to  one-half  of  its  value  on  the 
death  of  one  of  the  tenants. 

Matter  of  Moebus,  178  App.  Div.  709;  165  Supp.  887. 

This  case  was  not  taken  to  the  Court  of  Appeals  but  was 
regarded  as  of  doubtful  authority.  After  the  lapse  of  three 
years  the  question  was  raised  in  Matter  of  Edmund  Lyon, 
233  N.  Y.  208,  decided  April  18,  1922.  As  to  estates  created 
prior  to  the  statute  the  court  holds  the  taxation  unconstitu- 
tional. The  opinion  is  in  full  as  follows : 

ANDREWS,  J.  When  on  July  31st,  1908,  a  house  and  lot  was 
conveyed  to  Edmund  Lyon  and  to  Carolyn,  his  wife,  as  tenants 
by  the  entirety  they  became  seized  of  an  estate  having  well- 
recognized  attributes.  Whatever  the  original  reasoning  upon 
which  this  estate  was  based,  the  rules  with  regard  to  it  had 
long  become  a  part  of  the  law  of  real  property  consistently 
enforced  in  New  York.  (Matter  of  Klatzl,  216  N.  Y.  83.) 
Husband  and  wife  were  not  joint  tenants.  One  did  not  acquire 
the  rights  and  property  of  the  other  by  survivorship.  The 
fee  was  indivisible.  As  an  entirety  it  was  vested  in  both.  For 
this  purpose  they  were  considered  one  and  not  two.  On  the 
death  of  either  the  fee  vested  in  the  other,  not  because  there 
was  a  transfer  of  any  part  of  the  estate,  but  because  the 
survivor  was  the  representative  of  the  single  ownership.  The 
rule  was  a  technical  one.  So  are  many  of  the  rules  affecting 
real  estate.  We  appeal  to  history  and  not  to  logic  for  the 
explanation. 

The  statute  with  regard  to  taxable  transfers  originated  in 
1885  (Ch.  483).  Then  and  since  a  tax  has  been  placed  upon 
the  transfer  of  any  property  by  will  or  by  our  intestate  laws 
or  where  made  by  gift  in  contemplation  of  death.  This  was 
not  a  tax  upon  the  property  itself.  It  was  a  tax  upon  the 
privilege  of  succession  (Matter  of  Penfold,  216  N.  Y.  163) ; 
and  the  privilege  of  succession  under  certain  defined  circum- 
stances. At  once  came  the  question  as  to  when  this  tax  was 
to  be  paid.  How  about  dower  (Matter  of  Weiler,  139  App. 
Div.  905) ;  or  curtesy  (Matter  of  Starbiick,  137  App.  Div. 
866) ;  or  of  ante-nuptial  settlement  (Matter  of  Baker,  178 
N.  Y.  575) ;  or  of  joint  tenancy  (Matter  of  Klatzl,  216  N.  Y. 


192  INHERITANCE  TAXATION 

83) !  In  all  these  cases  a  portion  of  the  estate  vested  in  the 
deceased  passed  upon  his  death  to  another.  But  as  it  did  not 
pass  by  will  or  by  inheritance  or  by  gift,  there  was  no  tax. 
Nor  was  there  a  tax  of  an  estate  in  remainder  created  before 
but  received  in  possession  after  1885.  (Matter  of  Seaman, 
147  N.  Y.  69;  Matter  of  Lansing,  182  N.  Y.  238.)  The  reason, 
however,  was  different.  Here  there  was  no  transfer  of  any 
kind  upon  the  death  of  the  life  tenant.  His  life  estate  did  not 
pass  to  the  remaindermen.  It  could  not  be  conveyed  to  the 
latter.  It  could  only  be  released.  (Co.  Litt.,  sees.  479,  480; 
Bacon's  Abridg.,  vol.  6,  p.  615.)  By  either  death  or  release 
the  life  estate  was  extinguished.  The  same  reasoning  applied 
to  an  estate  by  the  entirety.  (Matter  of  Klatzl,  supra.} 

Since  1916  the  statute  has  been  altered.  (Cons.  Laws,  ch. 
60,  section  220,  subd.  7.)  Where  there  is  a  joint  tenancy  or 
a  tenancy  by  the  entirety,  the  right  of  the  survivor  to  the 
immediate  ownership  and  enjoyment  of  the  property  shall  be 
deemed  a  taxable  transfer  "in  the  same  manner  as  though 
the  whole  property  belonged  absolutely  to  the 

deceased  tenant  by  the  entirety  (or)  joint  tenant 
and  had  been  bequeathed  to  the"  survivor  by  the  deceased. 
This  means  that  the  tax  is  to  be  imposed  upon  the  entire 
estate  held  by  the  joint  tenants  or  by  the  tenants  by  the 
entirety  as  if  the  whole  had  passed  by  will.  (Matter  of 
Dolbeer,  226  N.  Y.  623.)  The  act  is  also  retroactive  and  is 
an  endeavor  to  tax  such  estate  whenever  created  provided  the 
death  occurs  after  1916.  (Matter  of  McKelway,  221  N.  Y. 
15.) 

Whatever  power  the  legislature  may  have  with  regard  to 
such  estates  later  created  does  not  extend  to  those  already 
vested  before  the  adoption  of  the  amendment.  (Matter  of 
Pell,  171  N.  Y.  48.)  This  estate  by  the  entirety  with  all  its 
incidents  was  vested  in  Mr.  and  Mrs.  Lyon  in  1910.  What  was 
then  acquired  may  not  subsequently  be  diminished  by  a  tax 
upon  that  acquisition.  As  there  was  no  transfer  after  1916 
there  can  be  no  tax.  Mrs.  Lyon  now  has  what  she  had  in 
1910,  no  more  and  no  less.  (Matter  of  McKelway,  supra.) 

The  order  of  the  Appellate  Division,  the  effect  of  which  is 
to  impose  a  transfer  tax  upon  the  estate  by  the  entirety,  must, 


PART  II  — THE  TRANSFER  193 

therefore,  be  reversed  and  that  of  the  surrogate  affirmed,  with 
costs  in  this  court  and  in  the  Appellate  Division,  and  the 
question  certified  to  us  must  be  answered  in  the  negative. 

Hiscock,  Ch.  J..  Hogan,  Cardozo,  Pound,  McLaughlin  and 
Crane,  JJ.,  concur. 

Order  reversed,  etc. 

The  effect  of  this  decision  is  to  reverse  the  decisions  of  the 
lower  courts  in  several  cases  involving  large  estates.  See 

Matter  of  Carnagie,  191  Supp.  753. 

Matter  of  Greim,  183  Supp.  149. 

Matter  of  Chase,  112  Misc.  684 ;  183  Supp.  638. 

See  also  Matter  of  Wormser,  102  Misc.  501 ;  169  Supp.  206. 

5.  Joint  Tenancy. 

A  devise  to  two  or  more  persons  will  be  construed  as  creat- 
ing a  tenancy  in  common  unless  expressly  declared  in  the 
will  to  be  a  joint  tenancy. 

Matter  of  Eldridge,  29  Misc.  734 ;  62  Supp.  1026. 

Where  a  devise  is  expressly  declared  to  be  in  joint  tenancy 
each  of  the  interests  is  of  equal  value  in  ascertaining  the  tax. 

Matter  of  Sullivan,  94  Misc.  529 ;  159  Supp.  616. 

The  first  question  arising  is  whether  a  joint  tenancy  has  in 
fact  been  created,  and  this  must  be  clear,  as  joint  ownership 
has  been  held  an  object  of  disfavor. 

Overheiser  v.  Lackey,  207  N.  Y.  229. 

a.  NOT  GENERALLY  TAXABLE. 

In  the  absence  of  statute  the  transfer  at  the  death  of  one 
of  the  joint  tenants  is  generally  held  not  to  be  an  inheritance 
or  a  contract  to  take  effect  at  death  under  the  ordinary 
language  of  the  inheritance  tax  statutes. 

Matter  of  Tilly,  166  App.  Div.  240;  151  Supp.  79;  aff.  215  N.  Y.  702. 
Matter  of  Thompson,  167  App.  Div.  356;  153  Supp.  164;  aff.  217  N.  Y.  609. 
Matter  of  Dalsimer,  167  App.  Div.  365;  153  Supp.  58;  aff.  217  N.  Y.  608. 
McDougald  v.  Boyd,  172  Cal.  753 ;  150  Pac.  168. 
Attorney-General  v.  Clark,  222  Mass.  291 ;  110  N.  E.  299. 

It  would  seem  that  the  rule  of  survivorship  does  not  prevail 
in  Iowa. 

Brown's  Estate,  113  la.  351;  85  N.  W.  617. 
Knutson  v.  Vidders,  126  la.  511 ;  102  K  W.  435. 

13 


INHERITANCE  TAXATION 

In  the  Tilly  case,  supra,  the  court  said:  "The  right  of 
survivorship  vests  at  the  creation  of  the  joint  tenancy,  and 
the  only  question  determined  by  death  is  which  shall  take 
the  entire  estate.  Under  such  circumstances  it  is  clear  that 
there  is  no  succession  to  be  taxed,  for  it  was  not  'made  in 
contemplation  of  the  death  of  the  grantor,  vendor  or  donor, 
or  intended  to  take  effect  in  possession  or  enjoyment  at  or 
after  such  death.'  The  possession  is  given  upon  the  creation 
of  the  estate ;  the  rights  are  absolutely  and  conclusively  fixed, 
and  the  only  question  which  is  contingent  is  which  of  two  or 
more  joint  tenants  shall  eventually  own  the  entire  estate.  But 
each  is  in  full  possession,  each  has  full  ownership  as  against 
all  the  world,  with  the  exception  of  the  equal  right  of  the 
other,  and  the  transfer  which  becomes  fully  determined  at  the 
death  of  one  of  two  joint  owners  relates  back  to  the  creation 
of  the  estate.  It  was  then  that  the  rights  vested,  and  the 
death  only  determines  which  shall  be  the  gainer  by  the 
transaction. ' ' 

The  California  court  followed  the  same  line  of  reasoning 
as  these  New  York  cases : 

"Mrs.  Boyd  did  not  take  any  interest  in  the  deposits  as 
heir  of  or  successor  to  her  deceased  husband.  She  took 
by  virtue  of  her  estate  originating  at  the  time  of  creation  of 
the  joint  tenancies.  The  imposition  of  the  tax  cannot,  there- 
fore, be  sustained  upon  the  theory  that  the  deposits  formed 
part  of  the  estate  of  Colin  M.  Boyd  passing  upon  his  death 
to  his  wife.  Boyd  died  on  March  13,  1912.  The  inheritance 
tax  statute  then  in  force  was  the  act  approved  April  7,  1911, 
and  this  act  did  not  undertake  to  impose  a  tax  upon  the  right 
accruing  to  a  surviving  joint  tenant  on  the  death  of  his 
co-tenant. ' ' 

MeDougald  v.  Boyd,  172  Gal.  753,  756;  150  Pac.  168. 

In  Massachusetts  the  doctrine  was  stated  thus : 
' '  The  statute  does  not  in  express  terms  authorize  the  taxa- 
tion of  the  interest  accruing  to  a  surviving  tenant  upon  the 
termination  of  a  joint  tenancy  by  the  death  of  his  co-tenant. 
In  England  such  interests  are  expressly  made  taxable  by 
statute.  (St.  57  &  58  Viet.,  c.  30,  §  2  [d]  xx.)  We  think  that 
the  laws  regulating  the  intestate  succession  mean  the  statute 


PART  II  —  THE  TRANSFER  195 

laws  regulating  the  descent  and  distribution  of  intestate 
estates  and  do  not  include  the  succession  of  property  which 
passes  under  the  common  law.  Joint  tenancies  arise  under 
the  common  law,  and  the  doctrine  of  survivorship  thereunder 
grows  out  of  the  application  of  common  law  principles  wholly 
independent  of  statute.  Joint  tenants  hold  under  the 
conveyance  or  instrument  by  which  the  tenancy  is  created. ' ' 

Attorney-General  v.  Clark,  222  Mass.  291,  295;  110  N.  E.  299. 

Where  stock  was  placed  in  joint  names  by  one  Dana  to 
retain  the  services  of  one  Seibert  in  the  business,  and  a 
power  of  revocation  and  to  vote  the  stock  was  reserved,  the 
court  made  a  distinction  and  held  the  succession  taxable, 
stating  its  reason  thus : 

"The  suggestion  which  has  been  made  that  if  we  hold  this 
transfer  taxable  we  would  have  to  hold  the  same  as  to  all 
joint  tenancies  in  personal  property,  or  the  further  suggestion 
that  if  Seibert 's  interest  in  this  stock  becomes  taxable  upon 
Dana's  death,  if  Seibert  had  died  first,  a  like  interest  passing 
to  Dana  would  have  then  been  subject  to  taxation,  is  not  cor- 
rect. The  latter  could  not  be  so,  because  Dana  did  not 
acquire  his  interest  in  the  stock  by  'gift'  from  Seibert,  whereas 
Seibert  did  acquire  his  interest  therein  by  'gift'  from  Dana." 

Matter  of  Dana,  164  App.  Div.  45;  149  Supp.  417;  aff.  214  N.  Y.  710. 

It  is  difficult  to  reconcile  the  Dana,  and  Thompson  and 
Dalsimer  cases.  The  fact  that  the  gifts  were  from  husband 
to  wife  was  not  sufficient  to  alter  the  nature  of  the  tenancy; 
and  the  fact,  in  the  two  latter  cases,  that  the  tenancy  was 
created  by  gift  was  possibly  overlooked. 

No  true  common  law  joint  tenancy  can  be  created  by  gift 
because  there  is  no  unity  of  title.  Nor  does  the  reservation 
of  a  power  to  revoke  afford  the  distinction  because,  by  its 
very  nature,  a  joint  tenancy  is  always  revokable  by  conveyance 
at  the  option  of  either  joint  tenant. 

b.  WHERE  SUCCESSION  is  SPECIFICALLY  TAXED. 

Estate  attorneys  have  not  been  slow  to  take  advantage  of 
the  loophole  thus  afforded  and,  on  the  other  hand,  Legisla- 
tures have  taken  alarm  at  the  escape  of  large  properties 


196  INHERITANCE  TAXATION 

from  a  tax  that  must  reach  all  or  be  unfair.  In  California 
an  amendment  in  1915  declared  that  where  a  decedent  has 
placed  property  in  the  joint  names  of  himself  and  another 
without  consideration  it  shall  be  deemed  a  transfer  to  take 
effect  at  death  and  be  taxable  accordingly.  The  Federal 
statute  taxes  the  interest  to  which  a  surviving  joint  tenant 
succeeds. 

The  New  York  Legislature  went  a  step  further.  The 
courts  had  held  that  each  joint  tenant  owned  the  whole,  that 
death  merely  determined  which  should  survive,  but  did  not 
alter  the  nature  of  the  ownership,  and  that  therefore  there 
was  no  tax.  The  Legislature  accepted  the  doctrine  and  taxed 
the  whole  property  on  the  death  of  one  joint  tenant. 

Chapter  664,  L.  1915,  provides  as  follows:  "Whenever 
intangible  property  is  held  in  the  joint  names  of  two  or  more 
persons,  or  as  tenants  by  the  entirety,  or  is  deposited  in 
banks  or  other  institutions  or  depositors  in  the  joint  names 
of  two  or  more  persons  and  payable  to  either  or  the  survivor, 
upon  the  death  of  one  of  such  persons  the  right  of  the  sur- 
viving tenant  by  the  entirety,  joint  tenant  or  joint  tenants, 
person  or  persons,  to  the  immediate  ownership  or  possession 
and  enjoyment  of  such  property  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  chapter  in  the  same 
manner  as  though  the  whole  property  to  which  such  transfer 
relates  belonged  absolutely  to  the  deceased  tenant  by  the 
entirety,  joint  tenant  or  joint  depositor  and  had  been 
bequeathed  to  the  surviving  tenant  by  the  entirety,  joint  tenant 
or  joint  tenants,  person  or  persons,  by  such  deceased  tenant 
by  the  entirety,  joint  tenant  or  joint  depositor,  by  will. ' ' 

And  this  was  copied  by  the  California  statute  of  1917. 

C.    CONSTEUCTION  OF  THE  STATUTE. 

The  New  York  act  was  open  to  obvious  objections  and  was 
at  once  attacked  as  unconstitutional,  and  was  so  held  by  the 
lower  courts,  which  were  reversed  on  appeal  in  two  recent 
cases  as  to  half  the  property  transferred. 

In  the  Matter  of  McKehvay,  decided  by  the  Court  of  Appeals 
May  8,  1917  (221  N.  Y.  15,  116  N.  E.  358),  Judge  Pound, 
writing  for  the  court,  said : 


PART  II  — THE  TRANSFER  197 

"But  joint  ownership  in  personal  property  may  be  severed 
by  the  act  of  one  in  disposing  of  his  interest.  If  the  interest 
of  one  joint  owner  passes  to  a  third  party  he  and  the  other 
joint  tenant  become  tenants  in  common.  The  doctrine  of  the 
survivorship  applies  only  if  the  jointure  is  not  severed. 
(Williams  on  Personal  Property,  pp.  302-306.)  The  undi- 
vided half  of  this  joint  property  which  Mr.  McKelway  might 
have  effectually  disposed  of  at  any  time  during  his  life  never 
passed  into  the  absolute  ownership  of  his  wife  until  her 
husband's  death.  A  transfer  tax  thereon  does  not  diminish 
the  value  of  a  vested  estate  and  is  free  from  the  objections  to 
a  tax  on  vested  remainders  and  reversions  as  set  forth  in 
Matter  of  Pell,  171  N.  Y.  48;  63  N.  E.  789,  or  to  a  tax  on 
contingent  remainders  as  set  forth  in  Matter  of  Lansiny, 
supra. 

"As  to  the  one-half  which  Mrs.  McKelway  herself  owned 
and  had  the  right  to  dispose  of,  the  rule  of  the  Pell  case 
must  govern.  She  gained  nothing  in  regard  thereto  by  the 
death  of  her  husband  except  as  the  jus  accrescendi  eliminated 
his  interest.  The  right  of  the  survivor  of  two  joint  tenants 
of  personal  property  to  the  exclusive  ownership  thereof  may 
be  deemed  a  taxable  transfer  of  one-half  of  the  joint  prop- 
erty but  not  to  the  whole.  It  is  taxable  only  to  the  extent  of 
the  beneficial  interest  arising  by  survivorship,  which  is,  as 
we  have  seen,  the  accruer  by  survivorship  of  the  whole  instead 
of  the  half.  To  this  extent  it  was  a  property  rightfully 
acquired  only  on  survivorship,  analogous  to  an  interest  cre- 
ated by  a  power  of  appointment  under  a  will  executed  prior 
to  the  enactment  of  the  law  taxing  transfers,  and,  therefore, 
one  that  could  be  cut  down  by  the  imposition  of  an  excise  tax 
after  the  joint  ownership  began.  (Matter  of  Vanderbilt,  50 
App.  Div.  246;  63  Supp.  1079;  163  N.  Y.  597).  The  imposi- 
tion of  such  a  tax  violates  no  contract  for  neither  joint  tenant 
agrees  not  to  terminate  the  joint  tenancy.  Mrs.  McKelway 
had  no  contract  with  her  husband  as  to  the  joint  property 
which  was  not  as  ambulatory  as  a  will  to  the  last  moment  of 
Mr.  McKelway 's  life  and,  for  the  purposes  of  taxation,  she  is 
deemed  to  have  acquired  his  interest  in  the  joint  property 
by  his  death." 


198  INHERITANCE  TAXATION 

The  same  problem  was  presented  to  the  court  in  California 
with  a  different  result,  the  court  holding  that  the  statute 
could  not  apply  to  joint  estates  created  prior  to  its  enact- 
ment. In  this  case  a  joint  bank  account  was  opened  by  hus- 
band and  wife  in  1911.  It  was  held  that  the  joint  title  had 
vested  and  that  there  was  no  succession  at  the  death  of  one 
of  the  joint  tenants  notwithstanding  the  amendment  of  1915. 
Neither  the  deceased  nor  her  husband  had  drawn  any  money 
from  the  account  since  it  was  opened  or  made  any  deposits. 
The  court  reasons  thus:  "A  transfer  to  joint  tenants  gives 
each  of  the  tenants  immediately  the  title  and  right  of  posses- 
sion and  enjoyment  of  the  whole  property  and  the  survivor 
succeeds  to  no  new  title  or  right  on  the  death  of  his  co-tenant 
but  is  merely  relieved  thereby  from  the  co-tenant's  further 
interference. 

Gurnsey's  Estate,  177  Cal.  211,  170  Pac.  402. 

The  McKelway  case  has  recently  been  followed  and  applied 
by  the  New  York  courts  in  several  cases. 

Matter  of  Kelly,  115  Misc.  357. 

Matter  of  Wintjen,  99  Misc.  471 ;  165  Supp.  927. 

Matter  of  Hauser,  166  Supp.  1079. 

Matter  of  Egerton,  170  Supp.  222. 

In  Matter  of  Teller,  178  App.  Div.  450,  165  Supp.  517,  the 
opinion  in  the  McKelway  case  was  held  to  apply  not  only 
to  joint  estates  created  prior  to  the  act  of  1915,  but  to  those 
created  afterwards,  as  well.  The  court  said: 

"When  this  appeal  was  argued  it  seemed  necessary  to 
decide  whether  the  ownership  of  the  property  was  in  the 
testator  and  his  wife  as  tenants  in  common  or  jointly;  but 
a  decision  of  the  Court  of  Appeals  in  Matter  of  McKelway 
on  May  8th,  1917,  I  think,  disposes  of  all  the  questions 
involved  on  this  appeal.  That  proceeding  involved  the  tax- 
ability of  personal  property  held  by  McKelway  and  his  wife 
jointly,  some  of  which  they  acquired  before  and  some  after 
the  enactment  of  this  statute,  and  his  death  was  subsequent 
to  the  time  the  statute  took  effect.  There,  as  here,  the  tax 
appraiser  ruled  that  the  property  was  taxable  for  its  full 
value  as  though  it  passed  under  the  will,  and  the  Surro- 
gate's Court  reversed  the  ruling  on  the  theory  that  the  only 


PART  II  — THE  TRANSFER  199 

transfer  from  McKelway  was  during  his  lifetime  on  the 
creation  of  the  joint  tenancy  and  before  the  enactment  of 
the  statute.  The  Appellate  Division  affirmed  but  the  Court 
of  Appeals  reversed,  holding  that  the  property  was  taxable 
to  the  extent  of  one-half  of  its  value,  on  the  theory  that  a 
joint  owner  of  personal  property  may  dispose  of  his  own 
interest  during  his  lifetime,  and  that  the  doctrine  of  sur- 
vivorship applies  only  if  the  jointure  is  not  thus  severed, 
and  that,  therefore,  the  absolute  ownership  of  the  undivided 
half  of  the  joint  property  which  the  deceased  joint  owner 
might  have  disposed  of  passed  to  the  survivor  upon  his 
death,  and  not  until  then.  The  effect  of  that  decision  is  that 
the  surviving  joint  tenant  has  at  all  times  been  the  owner 
of  an  undivided  half  interest  subject  to  the  right  of  his  co- 
tenant  to  take  by  survivorship,  and  that  therefore  that  un- 
divided interest  was  not  taxable  but  that  the  survivor  suc- 
ceeds to  the  absolute  ownership  of  the  other  undivided  half 
interest  only  by  and  upon  the  death  of  his  cotenant,  and  that, 
therefore,  such  interest  is  taxable.  On  that  construction  of 
the  statute  no  constitutional  question  arises,  for  it  does  not 
become  retroactive;  and  since  an  undivided  half  interest 
would  be  taxable  if  they  held  the  property  as  tenants  in  com- 
mon the  same  result  follows." 

The  appeal  to  the  Court  of  Appeals  in  Matter  of  Teller  was 
dismissed  (223  N.  Y.  565)  on  the  ground  that  no  property  was 
involved  in  which  the  joint  estate  had  been  created  prior  to 
the  statute,  and  the  question  was  therefore  left  open  as  to  the 
application  of  the  act  to  estates  created  subsequent  to  the 
statute. 

A  second  test  case  was  necessary  and  was  taken  to  the 
Court  of  Appeals  in  Matter  of  Dolbeer,  226  N.  Y.  mem. ;  123 
N.  E.  381.  The  opinion  is  per  curiam  and  is  in  full  as  follows : 

"This  appeal  presents  the  question:  Is  the  entire  amount 
of  a  joint  bank  account  in  the  name  of  husband  and  wife,  pay- 
able to  the  survivor,  created  subsequent  to  the  taking  effect  of 
chapter  664  of  the  Laws  of  1915,  taxable  on  the  death  of  the 
husband?  An  appeal  from  a  final  order  is  not  an  appeal 
where  questions  should  be  certified  as  provided  by  the  Code 
of  Civil  Procedure  (§  190,  subd.  3),  and  it  is  unnecessary  to 
answer  the  question  certified. 


200  INHERITANCE  TAXATION 

"In  Matter  of  McKelway,  221  N.  Y.  15,  it  was  held  that  even 
when  the  joint  account  was  created  prior  to  the  adoption  of 
statute,  the  transfer  by  survivorship  was  taxable  to  the  extent 
of  one-half  the  joint  property.  When  the  joint  account  is 
created  subsequent  to  the  adoption  of  the  statute,  the  privi- 
lege of  acquiring  the  entire  property  by  the  right  of  succes- 
sion may  be  subjected  to  the  tax  on  the  method  of  acquisition. 
(Matter  of  Vanderbilt,  172  N.  Y.  69,  73;  Matter  of  Keeney, 
194  N.  Y.  281;  222  U.  S.  525.)  The  right  to  take  property  by 
survivorship  is  the  creation  of  law  upon  which  the  State  may 
impose  conditions  (Matter  of  Dows,  167  N.  Y.  227;  Matter  of 
White,  208  N.  Y.  64,  67),  if  no  vested  or  contract  rights  are 
thereby  violated. 

"The  record  does  not  disclose  who  furnished  the  money 
wThich  was  deposited  to  the  joint  credit.  Nothing  indicates 
that  the  succession  in  this  case  was  not  donative  in  character 
(Matter  of  Orvis,  223  N.  Y.  1,  7),  and  we  may  well  reserve 
consideration  of  the  application  of  the  statute  to  a  case  where 
the  survivor  had  previously  acquired  his  interest  for  value. 

"The  order  of  the  Appellate  Division  should  be  reversed, 
with  costs  in  this  court  and  in  the  Appellate  Division,  and 
the  proceeding  remitted  to  the  Surrogate 's  Court  for  the  pur- 
pose of  imposing  a  tax  in  accordance  with  this  opinion." 

Notwithstanding  the  statute,  however,  the  New  York  courts 
still  hold  that  the  fact  of  joint  tenancy  merely  creates  a  pre- 
sumption as  to  actual  ownership  and  that  the  Comptroller 
may  still  prove  actual  ownership  in  the  decedent  of  the  joint 
fund. 

Matter  of  Maguire,  99  Misc.  466. 

Conversely  the  estate  may  prove  actual  ownership  of  the 
joint  fund  in  the  surviving  joint  tenant.  So,  where  an  attor- 
ney had  a  joint  account  with  his  client  merely  for  mutual  con- 
venience, but  the  money  actually  belonged  to  the  client,  the 
interest  of  the  attorney  was  held  not  taxable  on  his  demise. 

Matter  of  Buchanan,  184  App.  Div.  237;  171  Supp.  708. 

NOTE  ON  CONSTRUCTION  OF  NEW  YORK  STATUTE. 

Since  the  second  edition  of  this  work  there  have  been  sev- 
eral important  litigations  turning  on  the  construction  of  the 


PART  II  — THE  TRANSFER  201 

statute  taxing  joint  holdings  and  joint  bank  accounts.    These 
may  be  classified  as  follows : 

(1)  WHERE  REVOCABLE. 

The  customary  form  of  deposit,  "either  or  the  survivor  may 
draw,"  in  the  absence  of  special  circumstances  or  evidence  as 
to  actual  ownership  has  been  held  to  be  a  revocable  gift  tak- 
ing effect  at  death  and  therefore  wholly  taxable. 

Matter  of  Bigelow,  177  Supp.  847. 

Where  the  deposit  was  in  the  form  of  a  revocable  trust  the 
whole  amount  was  held  taxable  at  death. 

Matter  of  Bender,  182  Supp.  217. 

(2)  WHERE  JOINT  DEPOSITORS  EQUAL  CONTRIBUTORS. 

Where  the  joint  depositors  were  shown  to  have  contributed 
equally  to  the  fund  one-half  the  fund  was  held  to  be  taxable 
on  the  succession  of  one  of  the  joint  tenants  at  the  death  of 
the  other. 

Matter  of  Weissbach,  111  Misc.  501 ;  183  Supp.  771. 
Matter  of  Reardon,  182  Supp.  218. 

(3)  DEPOSITS  IN  FOREIGN  STATES. 

Joint  bank  accounts  deposited  in  foreign  States  are  held  to 
be  subject  to  the  provisions  of  the  New  York  Statutes. 
"Residents  cannot  be  permitted  to  evade  the  tax  by  making 
their  deposits  in  a  foreign  jurisdiction." 

Matter  of  Lydig,  113  Misc.  542. 

(4)  TRUST  ACCOUNTS  NOT  TAXABLE. 

A  deposit  by  a  mother  in  trust  for  two  sons  was  held  not  to 
be  an  irrevocable  gift;  but,  where  a  large  part  of  such  de- 
posits consisted  of  the  sons'  earnings  and  gifts  to  them  by 
their  parents  it  was  held  to  constitute  an  equitable  title  in 
them  and  therefore  the  transfer  was  not  taxable  on  the  death 
of  their  mother. 

Matter  of  Wille,  111  Misc.  61 ;  183  Supp.  366. 

Where  money  deposited  by  the  deceased  in  trust  for  her 
daughter  actually  belonged  to  her  daughter,  held  not  taxable. 

Matter  of  Kolb,  114  Mise.  361;  186  Supp.  670. 


202  INHERITANCE  TAXATION 

Where  an  old  man,  unable  to  write  well  deposited  his  money 
in  the  name  of  himself  and  Van  Vranken,  so  that  the  latter 
could  draw  the  money  for  him,  on  the  death  of  Van  Vranken 
there  was  no  succession  as  the  joint  account  was  not  a  true 
joint  tenancy,  but  Van  Vranken  was  in  fact  a  trustee  and  the 
equitable  title  to  the  whole  joint  fund  was  in  the  depositor. 

Matter  of  Van  Ranken,  110  Misc.  84;  179  Supp.  752. 

To  the  same  effect : 

Matter  of  Van  Deusen,  118  Misc.  212. 

6.  Escheat. 

In  case  of  escheat  the  State  taxes  the  transfer  and  the 
property  is  held  by  the  State  usually  as  a  trust  fund,  while 
the  tax  goes  to  the  treasury.  In  Illinois  the  county  gets  the 
fund  derived  from  escheats,  while  the  State  gets  the  tax. 

People  v.  Richardson,  269  111.  275 ;  109  N.  E.  1033. 

Questions  of  escheat  are  often  involved  with  those  of  pre- 
sumption of  death. 

Where  a  public  administrator  had  obtained  letters  of  ad- 
ministration over  an  estate  consisting  of  a  savings  bank 
account  deposited  in  1819,  there  is  no  presumption  from  the 
fact  that  this  money  had  never  been  demanded  that  decedent 
died  prior  to  the  inheritance  tax  act  of  1885.  No  proof  was 
presented  or  could  be  discovered  as  to  what  had  become  of 
the  woman,  but  as  there  was  no  presumption  of  death  there 
could  be  no  escheat.  Tax  assessed  and  order  affirmed. 

Matter  of  Bernard,  89  Misc.  705 ;  152  Supp.  716. 

The  intestate,  a  native  of  Sweden,  died  on  November  17, 
1904,  in  the  city  of  New  York,  leaving  a  small  amount  of 
money  in  a  savings  bank,  and,  so  far  as  appears,  no  widow 
or  next  of  kin  in  this  State.  Inquiry  failed  to  disclose  any 
knowledge  of  him,  his  family  or  next  of  kin.*  Letters  of  ad- 
ministration were  issued  to  the  public  administrator,  where- 
upon the  Comptroller  of  the  State  of  New  York  applied  to  the 
Surrogate  to  have  an  appraisal  of  the  property  subject  to  a 
transfer  tax. 

It  was  held  that  there  was  no  escheat  but  that  the  deceased 
was  presumed  to  have  next  of  kin.  The  court  said : 


PART  II  —  THE  TRANSFER  203 

"  *  *  *  Upon  the  death  of  the  decedent  his  personal 
property  vested  in  the  administrator,  and  his  next  of  kin 
were  entitled  to  the  property  upon  proving  their  relation- 
ship to  the  deceased.  No  such  person  has  appeared  and  no 
such  person  has  been  found  to  be  in  existence.  There  has 
been  no  transfer  'dependent  upon  contingencies  or  conditions 
whereby  they  may  be  wholly  or  in  part  created,  defeated,  ex- 
tended or  abridged.'  Matter  of  Vanderbilt,  172  N.  Y.  69;  64 
N.  E.  782,  had  relation  to  a  trust  estate  in  which  the  ultimate 
beneficiaries  were  uncertain,  and  what  is  said  in  that  case 
relates  to  such  an  estate.  T*he  only  uncertainty  as  to  the 
ownership  of  this  property  depends  upon  the  fact  as  to 
whether  the  deceased  left  next  of  kin.  The  presumption  is 
that  the  deceased  left  next  of  kin,  but  there  is  no  presumption 
that  he  left  a  widow  or  descendants.  It  is  presumed,  there- 
fore, that  the  property  vested  in  the  next  of  kin  of  the  de- 
ceased, and  is  therefore  taxable  under  section  220  of  the  Tax 
Law,  and  as  it  does  not  appear  that  it  is  exempt  under  section 
221  of  the  Tax  Law,  the  tax  imposed  by  subdivision  6  (now 
subd.  7)  of  section  220  applies,  and  it  is  taxable  at  the  rate 
of  5%." 

Matter  of  Land,  132  App.  Div.  321;  117  Supp.  49;   aff.  196  N.  Y.  570; 
90  N.  E.  1161. 

G.— CIVIL  LAW  TRANSFERS. 

Under  the  civil  law  the  wife  has  a  one-half  interest  in  the 
gains  or  profits  of  the  matrimonial  partnership  and  succeeds 
thereto  at  her  husband's  demise,  under  an  implied  contract 
at  marriage. 

1.  Taxable. 

In  California  it  was  held  that  the  wife  succeeds  as  heir  to 
her  husband  and  that  the  transfer  is  taxable  under  the  Cali- 
fornia inheritance  tax  law. 

Estate  of  Moffit,  153  Cal.  359;  95  Pac.  653;  sustained  sub.  nom.  Moffit  v. 
Kelly,  218  U.  S.  400. 

Held  taxable  as  an  inheritance  in  California  under  the  law 
at  the  date  of  husband's  death. 

McDougald  v.  First  Fed.  Trust  Go.  (Cal.),  199  Pac.  11. 


204  INHERITANCE  TAXATION 

When  created  by  act  of  husband  held  a  transfer  in  con- 
templation of  death. 

Chambers  v.  Lamb  (CaL),  199  Pac.  33. 

But  the  new  California  statute  (see  Appendix)  in  effect 
July  27,  1917,  exempts  a  widow's  community  interest  in  her 
husband's  property  in  all  cases  where  death  occurs  subse- 
quent to  that  date. 

2.  Not  Taxable. 

In  Louisiana  it  is  held  that  the  succession  is  not  as  heir  or 
under  the  intestate  law,  and  although  the  husband  could  defeat 
the  wife's  interest  in  his  will,  as  he  did  not  do  so  the  succes- 
sion is  not  taxable. 

The  court  said:  "It  is  true  that  the  right  of  usufruct 
which  is  vested  in  the  surviving  spouse  is  defeasible  at  the 
will  of  the  deceased ;  but  it  is  nevertheless  a  right  confirmed 
by  the  law  which  enters  into  and  forms  part  of  the  marriage 
contract  and  of  which  the  survivor  can  be  deprived  by  no  one 
save  the  deceased  spouse." 

Succession  of  Marsal,  118  La.  212 ;  42  So.  778. 
See  also  Succession  of  Baker  (La.),  55  So.  714. 

In  Nevada  and  Idaho  community  interests  are  neither 
defeasible  nor  is  the  succession  taxable. 

William's  Estate,  40  Nev.  241;  161  Pac.  741. 
Kohny  v.  Dunbar  (Idaho),  121  Pac.  544. 

3.  Gains  Acquired  in  Foreign  Country  Exempt. 

Still  another  view  of  the  widow's  civil  law  right  to 
"Gananciales"  or  joint  gains  of  the  marriage  is  found  under 
the  laws  of  Cuba  as  applied  by  the  courts  of  New  York. 

The  Cuban  courts  held  that  the  husband  could  not  defeat 
his  wife's  right  to  joint  gains  by  will  and  at  her  suit  awarded 
her  one-half  of  his  property.  The  husband  had  become  a 
citizen  of  the  United  States  though  neither  he  nor  his  wife 
actually  resided  here.  By  his  will,  drawn  in  English  and 
probated  in  New  York,  he  recited  that  he  was  a  resident  of 
New  York  and  attempted  to  defeat  his  wife's  right  under  the 
Cuban  law.  The  New  York  courts  followed  the  Cuban  de- 


PAET  II  —  THE  TRANSFER  205 

cision  and  allowed  a  deduction  of  one-half  from  all  the  hus- 
band's property  within  the  State,  on  the  ground  that  decedent 
was  a  resident  of  Cuba. 

Matter  of  Tirao  Mesa  y  Hernandez,  172  App.  Div.  467;   159  Supp.  59; 
aff.  219  N.  Y.  566. 

4.  Gains  Acquired  in  this  Country  Taxable. 

Still  another  result  was  reached  where  a  couple,  citizens  of 
France,  emigrated  to  this  country  in  1885  and  lived  here  until 
the  husband's  death  in  1907  but  never  became  citizens.  All 
their  property  was  acquired  in  this  country. 

The  court  said:  "As  to  whether  the  community  interest  of 
a  wife  in  the  property  of  her  husband  under  the  French  law 
is  such  as  to  constitute  her  the  present  and  continuing  owner 
during  their  married  life  of  an  undivided  one-half  interest  in 
his  personal  property  acquired  during  his  residence  in 
France  we  do  not  now  deem  it  necessary  to  determine;  for, 
as  we  understand,  all  of  the  decedent's  property,  both  real 
and  personal,  of  which  he  died  seized  or  possessed,  was  ac- 
quired after  the  removal  of  himself  and  wife  to  this  State. 
While  it  must  be  conceded  that  some  conflict  exists  in  the 
decisions  of  courts  in  foreign  jurisdictions,  we  have  no 
hesitancy  in  reaching  the  conclusion  that  as  to  the  property 
acquired  by  the  decedent  here  during  Ms  residence  with  his 
wife  in  this  State,  it  is  controlled  by  our  laws,  and  upon  his 
death  it  is  transferred  within  the  meaning  of  our  tax  laws." 

Matter  of  Majot,  199  N.  Y.  29;  92  N.  E.  402. 


206  INHERITANCE   TAXATION 


PART  III -THE  PARTIES 


PAGE 

A.  The    Decedent 206 

1.  Residence  and  Domicile  Synonymous 209 

2.  Rules  as  to  Domicile 210 

3.  Application  of  the  Rules 211 

a.  Factum   Without   Animus 211 

b.  Animus  Without   Factum 212 

c.  Animus  With  Factum 213 

d.  As  to  a  Married  Woman 214 

e.  As  to  a  Widow 214 

f .  As  to  an  Army  Officer 215 

g.  The   Burden  of   Proof 216 

h.  Construction  as  Affected  by  Statute 217 

B.  The   Beneficiaries — Generally 219 

1.  As   to   Domicile 219 

a.  Resident   Beneficiaries   of   Non-Resident   Decedent 219 

b.  Where  Both  Testator  and  Beneficiary  are  Non-residents 219 

2.  Relationship   to    Decedent 221 

a.  Grandchildren 221 

b.  Step-Children 221 

c.  Illegitimate    Children 222 

d.  Adopted    Children 222 

( 1 )  Adoption  by  Formal  Act 222 

(2)  Mutually   Acknowledged   Children 223 

e.  Effect  of   Adoption 225 

f .  Other    Relationships 226 

3.  Effect  of  Divorce 227 

4.  Personal    Exemptions 227 

5.  Exemptions  to  Charities 229 

a.  Charter  Powers  the  Test 230 

b.  Purposes  Must  be  Brought  Within  the  Language  of  the  Statute . .  234 

c.  Bequests    Held    Exempt 238 

d.  Bequests   Held   Taxable 239 

C.  Heirs    and    Legatees 241 

1.  Heirs    of    Real    Estate 241 

a.  Lien  of  the  Tax 241 

b.  Partition '. 243 

c.  Equitable    Conversion 244 

d.  Sale  to  Pay  the  Tax 245 

e.  When  Charged  With  a  Legacy 245 

f .  As  to  Aliens 246 

2.  Legatees  of  Personal  Property 246 


PART  III  — THE  PARTIES  207 

C.  Heirs   and  Legaties — Continued.  PAG* 

a.  Renunciation  and  Assignment 245 

b.  Legacy  Impressed  With  a  Trust 246 

c.  Lapsed  Legacies 247 

3.  While  the  Legacy  is  in  Custodia  Legis 249 

4.  From    What    Fund    Payable 250 

D.  Life  Estates  and  Remainders 252 

1.  Life    Estates 252 

a.  Fund  from  Which  the  Tax  is  Payable 252 

b.  Charged  With  an  Annuity 254 

c.  Power  to  Invade  Principal 255 

d.  The  New  York  Rule 256 

e.  With  Power  of  Appointment 259 

f.  Tax  Assessed  on  Theoretical,  Not  Actual  Value 260 

2.  Remainders 261 

a.  The  Law  in  Force  at  Death  of  Testator  Governs 262 

b.  Vested  Remainders  Not  Taxable  When  Testator  Died  Before  the 

Statute ! 262 

c.  Taxation  Postponed  Until  Remainderman  Gets  Possession 263 

d.  Presently   Taxable 263 

e.  When  Beneficiary  is  Uncertain 264 

1 .  Highest   Possible    Rate 266 

g.  Maximum  and  Minimum  Rate 271 

h.  Where  Amount  of  Remainder  is  Uncertain 272 

i.  Under  Powers  of  Appointment 273 

j.  Taxation  at  Full  Undiminished  Value 276 

E.  Computations 277 

1.  The  Basis  of  Calculation 277 

a.  Mortality  Tables  and  Interest  Rate 277 

b.  Compound  Interest  Rule 280 

c.  Present    Worth    Rule 281 

d.  The  Law  of  Discount 281 

e.  Law  of  the  Chance  of  Death 282 

f .  Rule  of  the  Chance  of  Death,  as  Affecting  Present  Worth ......  282 

g.  Rule  for  Calculating  Present  Value  of  Life  Estates 282 

2.  Tables  for  Computing  the  Present  Worth  of  Annuities 283 

a.  Actuaries  Combined  Table  at  4% 285 

b.  Actuaries  Combined  Table  at  5% 286 

c.  American  Experience  Table  at  4% 287 

d.  American  Experience  Table  at  5% 288 

e.  Carlisle  Table  at  5% 289 

f.  Carlisle  Table  at  6% 290 

g.  American  Experience  Table  of  Mortality 291 

3.  How  to  Use  the  Tables 292 

a.  The   Necessary    Factors 292 

b.  Ascertaining   the   Value 292 

4.  Application  to  the  Problems  of  Inheritance  Taxation .  .                             .  292 


208  INHERITANCE  TAXATION 


PART  in  — THE  PARTIES 


A.— THE  DECEDENT. 

As  far  as  inheritance  tax  laws  are  concerned  with  the 
decedent,  apart  from  the  property  he  leaves  behind  and  the 
personal  representatives  who  administer  it,  the  question  of 
his  former  residence  is  chiefly  important.  The  tax  is  gen- 
erally imposed  as  to  resident  decedents  upon  all  personal 
property  wherever  situated. 

Thompson  v.  Ld.  Advocate,  12  Clark  &  Finley,  1. 

As  to  real  estate,  only  that  within  the  State  is  ordinarily 
subject  to  tax,  and  some  modern  statutes  have  given  tangible 
personal  property  without  the  State  the  same  status  as  real 
property.  The  theory  as  to  personalty  is  that  movables  fol- 
low the  person  and,  being  intangibles,  have  the  situs  of  their 
owner. 

This  produces  an  anomaly  where  the  statute  taxes  intan- 
gibles of  nonresident  decedents  found  within  the  jurisdiction 
of  the  State.  It  was  thus  explained  in  Matter  of  Whiting, 
150  N.  Y.  27,  30,  where  the  court  says:  "Thus  the  Legis- 
lature intended,  I  think,  to  repeal  the  maxim  mobilia  personam 
sequuntur  so  far  as  it  was  an  obstacle  and  to  leave  it  un- 
changed so  far  as  it  was  an  aid  to  the  imposition  of  the 
transfer  tax  upon  all  property  in  any  respect  subject  to  the 
laws  of  this  State. ' ' 

The  truth  is  that  the  entire  personal  estate  is  taxed  at  the 
last  domicile  because  it  is  there  that  the  entire  personal  estate 
is  administered  and  is  within  the  power  of  the  court. 

Snyder  v.  Brettman,  190  U.  S.  429 ;  23  S.  Ct.  Rep.  803. 

The  courts  also  seem  to  be  getting  away  from  this  legal 
fiction.  The  maxim,  declared  the  Illinois  court,  "is  the  out- 
growth of  conditions  that  have  long  ceased  to  exist." 

Davis  v.  Upson,  230  111.  327;  82  N.  E.  824. 


PART  III  — THE  PARTIES  209 

*  *  It  is  a  fiction  due  to  historic  conditions ' '  declared  Justice 
Holmes. 

Blaekstone  v.  Miller,  188  U.  S.  189;  23  S.  Ct.  Rep.  277. 

It  is  a  legal  fiction  which  cannot  defeat  the  operation  of  a 
statute. 

Colorado  v.  Harbeck,  232  N.  Y.  71 ;  133  N.  E.  357. 
Succession  of  Popp,  146  La.  464;  83  So.  765. 

The  truth  seems  to  be,  under  the  trend  of  recent  authorities 
that  the  mobilia  rule  is  applied  in  the  absence  of  statute ;  but 
even  then  it  is  not  inflexible.  For  example,  in  Pennsylvania 
where  the  estate  of  a  nonresident  was  in  the  custody  and 
control  of  a  Pennsylvania  trustee  subject  to  the  direction  of 
Pennsylvania  courts,  the  devolution  through  the  trustee  was 
held  taxable  in  Pennsylvania. 

Hostetter's  Estate,  267  Pa.  193;  109  A.  920. 

And  the  California  court  holds,  under  the  mobilia  doctrine, 
that  a  promissory  note  of  a  nonresident  payable  to  a  resident 
decedent  is  property  within  the  State  of  his  domicile  and  tax- 
able there. 

Chambers  v.  Mumford  (Cal.),  201  Pac.  588. 

1.  Residence  and  Domicile  Synonymous. 

The  word  ' '  residence  as  used  in  the  inheritance  tax  statutes 
is  synonymous  with  domicile;"  and  although  the  statutes  use 
the  word  "resident"  the  residence  is  determined  by  applying 
the  principles  relating  to  domocile. 

People  v.  Moir,  207  111.  180 ;  69  N.  E.  905. 

Matter  of  Martin,  173  App.  Div.  1 ;    158  Supp.  915.     Appeal  dismissed, 
219  N.  Y.  557;  114  N.  E.  1071. 

The  above  paragraph  was  cited  and  quoted  with  approval 
by  the  Kentucky  court. 

Staiar's  Admr.  v.  Commonwealth  (Ky.),  239  S.  W.  40. 

This  is  obviously  just,  for  a  man  may  have  half  a  dozen 
residences  and  the  estate  of  a  decedent  might  be  taxed  as  the 
estate  of  a  resident  in  half  a  dozen  States. 
14 


210  INHERITANCE  TAXATION 

2.  Rules  as  to  Domicile. 

The  rules  by  which  domicile  is  determined  were  well  estab- 
lished before  the  inheritance  tax  statutes  were  generally 
enacted.  They  are : 

a.  That  a  person  must  have  a  domicile  somewhere. 

b.  That  he  can  have  but  one. 

c.  That  a  married  woman 's  domicile  is  that  of  her  husband 
unless  she  lives  apart  from  him  and  acquires  a  separate 
residence. 

d.  That  the  domicile  of  origin  is  presumed  to  continue  until 
a  new  one  is  acquired. 

e.  That  the  burden  of  proof  rests  upon  the  party  alleging 
a  change  of  domicile. 

f.  That  to  sustain  this  burden  both  a  change  of  residence 
(factum)  and  intent  to  change  the  domicile  (animus)  must  be 
shown. 

"The  existing  domicile,  whether  of  origin  or  selection,  con- 
tinues until  a  new  one  is  acquired  and  the  burden  of  proof 
rests  upon  the  party  who  alleges  a  change.  The  question  is 
one  of  fact  rather  than  law  and  it  frequently  depends  upon  a 
variety  of  circumstances  which  differ  as  widely  as  the 
peculiarities  of  individuals." 

Matter  of  Newcomb,  192  N.  Y.  238 ;  84  N.  E.  950. 

"To  effect  a  change  of  domicile  for  the  purpose  of  succes- 
sion there  must  be  not  only  a  change  of  residence  but  an  in- 
tention to  abandon  the  former  domicile  and  acquire  another 
as  the  sole  domicile.  There  must  be  both  residence  in  the 
alleged  adoption  domicile  and  intention  to  adopt  such  place 
of  residence  as  the  sole  domicile.  Residence  alone  has  no 
effect  per  se,  though  it  may  be  most  important  as  a  ground 
from  which  to  infer  intention.  Length  of  residence  will  not 
alone  effect  the  change.  Intention  alone  will  not  do  it,  but 
the  two  taken  together  do  constitute  a  change  of  domicile. ' ' 

Dupuy  v.  Wurtz,  53  N.  Y.  556. 

Decedent  was  born  in  New  York,  and  owned  a  house  there 
at  the  time  of  his  death.  His  wife  owned  a  house  in  Massa- 
chussets  where  the  deceased  voted  and  paid  taxes  on  personal 


PART  III  — THE  PARTIES  211 

property.    Held  not  sufficient  proof  of  change  of  residence 
and  deceased  held  a  resident  of  New  York. 

Matter  of  Lydig,  191  App.  Div.  117;  180  Supp.  843. 

Domicile  is  always  a  question  of  fact. 

Matter  of  Martin,  219  N.  Y.  557;  114  N.  E.  1071. 

And  the  fact,  in  the  last  analysis,  turns  on  a  question  of 
intent. 

Chambers  v.  Hathaway  (Cal.),  200  Pac.  931. 

3.  Application  of  the  Rules, 
a.    FACTUM  WITHOUT  ANIMUS. 

Where  a  resident  of  Illinois  had  decided  to  remove  from 
the  State  to  the  home  of  his  daughter  as  soon  as  he  had  settled 
his  business;  but  before  he  did  so  was  taken  ill  and  was  re- 
moved to  his  daughter 's  home  for  care  and  medical  treatment 
and  died  soon  after,  everything  being  left  undisturbed  at  his 
old  home, — held  a  resident  of  Illinois. 

People  v.  Moir,  207  111.  180 ;  69  N.  E.  905. 

*  *  The  mere  fact  that  a  person  who  had  resided  chiefly  in  the 
city  of  New  York,  having  been  left  a  bequest  of  household 
furniture,  leased  a  house  in  the  city  of  London  for  the  pur- 
pose of  storing  it,  did  not  make  him  a  resident  of  England  so 
as  to  exempt  his  estate  from  a  transfer  tax,  especially  when 
letters  written  shortly  before  his  death  show  that  he  con- 
sidered himself  to  be  an  American  citizen  and  regarded  New 
York  as  his  home." 

Matter  of  Martin,  173  App.  Div.  1 ;   158  Supp.   915.     Appeal  dismissed, 
219  N.  Y.  557;  114  N.  E.  1071. 

Where  deceased  had  frequently  declared  that  he  regarded 
New  York  as  his  home  though  he  lived  in  Paris,  the  court 
said : 

4 'The  fact  that  he  resided  in  Paris  most  of  the  time  from 
1880,  while  important  to  be  considered,  certainly  is  not  con- 
trolling, because  domicile  may  exist  without  actual  residence 
but  never  without  intent." 

Matter  of  TJ.  S.  Trust  Co.  v.  Hart,  150  App.  Div.  413;    135  Supp.   81; 

aff.  208  N.  Y.  617;  102-  N.  E.  1115. 
Matter  of  Blumenthal,  101  Misc.  83. 


212  INHERITANCE  TAXATION 

So  the  residence  of  a  "commuter"  was  held  to  be  his  coun- 
try home  in  New  Jersey. 

Matter  of  McCullough,  N.  Y.  L.  J.,  October  27,  1914. 

b.    ANIMUS  WITHOUT  FACTUM. 

The  deceased,  an  Episcopal  Bishop  in  charge  of  the  branch 
of  the  church  in  Mexico,  described  himself  in  his  will  as  "now 
in  the  City  of  New  York  but  for  many  years  a  resident  of 
Mexico."  After  making  the  will  he  returned  to  Mexico  and 
resumed  his  labors, — held  not  a  resident  of  New  York. 

Matter  of  Eiley,  86  Misc.  628 ;  148  Supp.  623. 

The  deceased  several  times  prior  to  his  death  declared  that 
he  was  a  resident  of  Grand  Island,  Vermont,  and  the  evidence 
showed  that  he  intended  to  move  there  but  he  never  actually 
did  so.  His  brother  owned  a  home  there  and  died  devising  it 
to  the  decedent,  who  made  all  preparations  to  go  there  and 
live,  but  never  wrent  and  died  at  his  home  in  New  York.  Held, 
a  resident  of  New  York. 

Matter  of  Rutherford,  88  Misc.  414;   150  Supp.  734;  aff.  171  App.  Div. 
900;  155  Supp.  1138. 

The  will  of  the  deceased  was  probated  in  Washington, 
where  she  expressed  her  desire  to  reside.  The  court  said: 
"There  is  no  doubt  in  my  mind  that  Mrs.  Morgan  desired 
to  have  her  legal  domicile  with  all  its  advantages  in  Wash- 
ington, D.  C.,  and  at  the  same  time  she  wished  to  resume  her 
original  residence  in  New  York.  There  is  very  little  conten- 
tion as  to  the  fact  that  Mrs.  Morgan  at  the  time  of  her  death 
was  actually  physically  resident  in  the  City  of  New  York  and 
that  her  sojourns  elsewhere  were  not  in  law  tantamount  to 
residence. ' ' 

Matter  of  Morgan,  95  Misc.  451;  159  Supp.  105. 

The  deceased  lived  with  his  family  in  Cuba,  but  to  protect 
his  property  he  fraudulently  procured  citizenship  papers 
upon  affidavits  that  he  had  lived  in  New  York  City  for  the 
necessary  length  of  time.  He  drew  his  will  in  English  and 
therein  recited  that  he  was  a  resident  of  New  York  and  his 
will  was  probated  in  that  State.  He  did  all  that  a  man  could 
do  to  establish  a  "legal"  domicile  in  New  York  without  living 


PART  III  — THE  PARTIES  213 

there.  Held  a  resident  of  Cuba.  The  adjudication  as  to 
citizenship  could  not  be  attacked  and  it  was  held  that  even 
though  the  deceased  fraudulently  established  a  domicile  in 
New  York  for  that  purpose,  his  continued  actual  residence 
in  Cuba  changed  it  back  to  that  domicile  of  origin  after 
citizenship  had  been  acquired. 

Matter  of  Hernandez,  172  App.  Div.  467;   159  Supp.  59;  aff.  219  N.  Y. 
(mem.). 

So  it  was  held  that  where  testator  had  a  home  in  New 
Jersey  that  he  was  a  nonresident  of  this  State,  although  he 
described  himself  in  his  will  and  codicils  as  a  resident  of  the 
city  and  county  of  New  York. 

Matter  of  Rogers,  83  App.  Div.  642 ;  82  Supp.  1113 ;  affirming  N.  Y.  L.  J., 
January  24,  1903. 

c.    ANIMUS  WITH  FACTUM. 

Statements  by  a  decedent  in  his  will  as  to  his  domicile  have 
an  important  bearing  on  his  intent  and  if  made  within  two 
years  of  death  are  presumed  conclusive  by  the  New  York 
statute.  But  the  place  of  execution  is  of  no  consequence ;  so, 
if  one  domiciled  abroad  executed  a  will  while  temporarily 
sojourning  in  this  country  it  does  not  follow  that  it  is  the  will 
of  a  resident. 

Moore  v.  Puckgaber,  184  U.  S.  593;  22  S.  Ct.  Rep.  521. 

And  this  may  be  so  even  if  there  is  a  recital  in  the  will  to 
the  contrary. 

Matter  of  Hernandez,  172  App.  Div.  467;  159  Supp.  59;  aff.  219  N.  Y. 
(mem.). 

Deceased  moved  to  France  in  1905  and  remained  there  until 
his  death.  There  was  no  evidence  of  any  intention  to  return. 
Held  a  nonresident. 

Matter  of  Rothschild,  86  Misc.  364 ;  148  Supp.  368. 

The  deceased  had  been  a  resident  of  New  York.  For  some 
years  she  was  confined  in  an  insane  asylum  in  that  State. 
In  1911  she  was  discharged  and  on  the  next  day  made  a  trust 
deed  of  her  property,  reserving  a  life  interest.  She  then 
went  to  California,  where  she  resided  until  her  death,  three 
years  later.  After  her  death  the  trust  deed  was  set  aside  bv 


214  INHERITANCE  TAXATION 

the  California  court  on  the  ground  that  the  donor  was  insane 
when  she  made  it.  The  State  Comptroller  contended  that  if 
the  deceased  was  not  competent  to  make  a  deed  she  could  not 
have  the  necessary  intent  to  change  her  residence;  but  the 
Surrogate  held  to  the  contrary  and  was  sustained  on  appeal. 

Matter  of  Balch,  93  Misc.  419;  156  Supp.  1006;  aff.  175  App.  Div.  933. 

Decedent  had  lived  in  an  apartment  hotel  in  New  York 
City,  where  his  business  was.  In  1910  he  bought  land  at  Long 
Branch  and  began  building  a  house.  In  April,  1911,  he  went 
to  live  with  his  son  at  Long  Branch  and  did  not  return  to  New 
York  until  his  death  the  following  September.  Held  that  the 
intent  and  act  were  sufficient  to  change  his  residence  to  New 
Jersey. 

Matter  of  Wise,  165  App.  Div.  420 ;  150  Supp.  782. 

d.  As  TO  A  MARRIED  WOMAN. 

Ordinarily,  in  the  absence  of  any  special  circumstances, 
the  domicile  of  a  wife  is  established  by  that  of  her  husband. 

Matter  of  Brooks,  105  Misc.  559;  174  Supp.  765. 

Matter  of  Bain,  104  Misc.  508. 

Matter  of  Gates,  117  Misc.  800;  191  Supp.  757. 

When  a  wife,  though  not  legally  separated  from  her  hus- 
band, had  lived  apart  from  him  in  West  Virginia  for  26  years, 
and  he  never  visited  her  save  on  the  occasion  of  their  daugh- 
ter's marriage,  and  the  husband  lived  in  New  York.  Held, 
that  the  wife  had  acquired  a  separate  domicile  and  was  a 
nonresident. 

Matter  of  Crosby,  85  Misc.  679 ;  148  Supp.  1045. 

e.  As  TO  A  WIDOW. 

"Marriage  is  an  international  institution  and  more  than  a 
contract.  It  is,  as  Lord  Stowell  said  in  Dalrymple  v. 
Dalrymple,  2  Hagg.  Con.  63,  '  prmcipium  urbis  et  quasi 
seminarium  reipublicae.'  Story  confirms  this  conception  of 
the  marital  relation.  (Conf.  Laws,  §  108;  Wharton,  Conf. 
Laws,  §  127,  and  see  Hyde  v.  Hyde,  1  P.  &  D.  130,  133.)  Con- 
sequently in  all  systems  of  law  marriages  creates  a  novel 
matrimonial  domicile  for  the  wife  wherever  her  prior  domicile 
may  have  been.  At  common  law  the  matrimonial  domicile  of 


PART  III  — THE  PARTIES  215 

a  wife  is  that  of  the  husband  at  the  time  of  her  marriage. 
(Westlake,  Priv.  Internat.  Law,  §§  361,  366;  Wharton,  Conf. 
Laws,  §  189;  Dicey,  Conf.  Laws,  p.  511;  Bentwich,  Domicile, 
p.  33;  Merrill,  Conf.  Laws,  68.) 

Whatever  Mrs.  Green's  domicile  of  origin,  or  her  later  im- 
puted domicile  of  her  father's  subsequent  choice,  may  have 
been,  it  was  fully  supplanted  by  her  matrimonial  domicile, 
which  was  Vermont.  (Story,  Conf.  Laws,  §  46;  Wharton, 
Conf.  Laws,  §  189;  Dicey,  Conf.  Laws,  pp.  640,  643;  Savigny, 
Priv.  Internat.  Law,  p.  56;  Dalhousie  v.  M'Doual,  7  C.  &  F. 
817;  Yelverton  v.  Yelverton,  1  Sw.  &  Tr.  574;  Whitcomb  v. 
Whitcomb,  2  Cur.  351;  Hunt  v.  Hunt,  72  N.  Y.  217,  242.) 

' '  The  husband  of  decedent  lived  at  the  matrimonial  domicile 
prior  to  the  time  of  his  death,  and  there  he  died  and  was 
interred  in  the  last  resting  place  of  his  respected  and  respect- 
able fathers.  A  widow,  in  the  absence  of  adequate  proof  to 
the  contrary,  retains  the  last  domicile  of  her  husband.  The 
Roman  Law  on  this  point,  'vidua  mulier  amissi  mariti  domi- 
cilium  retinet'  (D.  30,  1,  22),  is  cited  by  Story  with  express 
approval,  and  it  is  adopted  in  all  countries  without  exception. 
It  is  needless  to  enlarge  on  a  proposition  so  universally 
accepted  in  all  systems  of  law. 

* '  That  a  widow,  being  again  sui  juris  and  no  longer  in  law 
or  in  fact  sub  pot  estate  viri,  may  change  her  domicile  (Gout  v. 
Zimmerman,  5  N.  C.  440 ;  Warrender  v.  Warrender,  2  C.  &  F. 
488)  is  not  now  questionable." 

Matter  of  Hettie  Green,  99  Misc.  582;  aff.  179  App.  Div.  890. 

f.    As  TO  AN  ARMY  OFFICER. 

The  late  General  Frederick  Dent  Grant  had  his  -domicile 
for  many  years  in  New  York  City,  where  he  held  public  office. 
He  then  returned  to  the  United  States  army.  It  had  been  a 
rule  that  one  cannot  gain  or  lose  a  residence  while  in  the 
army  or  navy.  Thereafter  the  General  had  his  headquarters 
at  the  Federal  station  on  Governor's  Island  in  New  York 
harbor,  where  he  lived  with  his  family.  He  was  about  to 
retire,  intended  to  buy  a  house  at  Washington,  D.  C.,  and  had 
shipped  some  of  his  furniture  and  his  uniforms  thither.  While 
on  his  way  to  Washington  he  was  taken  ill  and  died  at  a  hotel 
in  New  York  City.  The  court  said : 


216  INHERITANCE  TAXATION 

"When  General  Grant  gave  up  his  home  in  New  York  City 
and  took  up  his  permanent  and  only  residence  with  his  entire 
family  at  his  headquarters  at  Governor's  Island  he  was  there- 
after actually  living  in  Federal  territory.  In  the  judicial 
determination  of  the  last  domicile  of  a  general  officer  in  the 
regular  military  service  of  our  Federal  government  many 
things  are  entitled  to  consideration  which  would  not  be  per- 
tinent to  a  determination  of  the  domicile  of  a  civilian.  The 
private  courts  of  all  the  great  nations  do,  I  think,  recognize 
a  distinction  in  their  application  of  the  principle  of  domicile 
to  the  military  status.  I  am  quite  aware  that  it  is  now  a 
general  rule  that  a  soldier  does  not  acquire  a  domicile  in  the 
place  where  he  is  stationed,  but  this  is  not  to  say  that  an 
American  officer  may  not  acquire  a  domicile  in  Federal  terri- 
tory of  the  United  States  if  his  actual  residence  in  such  Federal 
territory  is  coupled  wtih  animus  manendi  there  after  his  duty 
expires.  The  ordinary  modern  rule — that  a  soldier  does  not 
change  his  domicile  by  foreign  service — is  in  any  event  a 
mere  presumption  which  may  be  rebutted  in  any  case;  it  is 
not  properly  a  rule  of  law.  (Ames  v.  Duryea,  6  Lans.  155 ;  aff. 
61  N.  Y.  609.)" 

Matter  of  Grant.  83  Misc.  257;  144  Supp.  567;  aff.  166  App.  Div.  921; 
151  Supp.  1119. 

g.     THE  BURDEN  OF  PROOF. 

The  burden  of  proof  rests  upon  the  party  asserting  change 
of  domicile. 

Heaton  on  Surrogate's  Courts  (3d  ed.),  p.  78. 

So,  where  the  deceased  lived  part  of  the  time  in  New  York 
and  part  of  the  time  in  Bermuda,  and  made  conflicting  state- 
ments as  to  his  intent,  the  court  said:  "It  appears  that  the 
decedent  in  or  about  1904  acquired  a  domicile  of  choice  in  the 
State  of  New  York.  This  being  so,  the  onus  of  proving  a 
change  of  domicile  is  upon  those  asserting  it.  The  burden  has 
not  been  sustained;  and,  therefore,  the  last  established 
domicile  of  choice  is  presumed  to  continue." 

Matter  of  Norton,  96  Misc.  152;  159  Supp.  619;  aff.  175  App.  Div.  981; 
162  Supp.  1133. 

The  decedent  had  a  house  on  Fifth  avenue,  where  he  lived 
with  his  wife  until  her  death  in  1905.  After  that  he  traveled 


PART  III  — THE  PARTIES  217 

much.  He  swore  off  his  personal  taxes  in  New  York  and  made 
conflicting  statements  as  to  his  residence  on  various  occasions. 
He  had  a  farm  in  Kentucky  and  was  building  a  summer  home 
at  Easthampton.  He  was  seldom  at  his  house  in  New  York, 
which  was  occupied  by  members  of  his  family  occasionally  and 
was  in  charge  of  a  caretaker.  All  this  was  held  by  the  New 
York  County  Surrogate  insufficient  to  sustain  the  burden  of 
proof  required  to  show  a  change  of  domicile ;  but  the  Appel- 
late Division  reversed  on  the  facts,  holding  that  the  intent  to 
abandon  the  New  York  domicile  was  clearly  established,  and 
that  the  estate  was  not  taxable  as  that  of  a  resident. 

Matter  of  Harkness,  183  App.  Div.  396;  170  Supp.  1024. 

h.     CONSTRUCTION  AS  AFFECTED  BY  STATUTE. 

So  many  important  estates  escaped  taxation  because  the 
decedent,  while  doing  business  in  New  York  or  coming  there 
for  pleasure,  maintained  a  "domicile"  in  another  State,  that 
an  attempt  was  made  by  chapter  551,  L.  1916,  to  declare  that 
a  person  should  be  "deemed"  a  resident  "if  and  when  such 
person  shall  have  dwelt  or  shall  have  lodged  in  this  State 
during  and  for  the  greater  part  of  any  period  of  12  con- 
secutive months  in  the  24  months  next  preceding  his  or  her 
death." 

This  section  came  before  the  New  York  Surrogate's  Court 
for  construction  in  the  Matter  of  Hettie  R.  Green,  supra, 
where  the  amount  of  tax  sought  to  be  collected  by  the  State 
Comptroller  is  $5,000,000,  an  amount  equal  to  one-fifth  of  all 
the  inheritance  taxes  collected  by  all  the  States  in  1913. 

The  evidence  showed  that  the  24  months  immediately  prior 
to  her  death  she  spent  approximately  as  follows:  She  left 
New  York  City  for  Bellows  Falls  early  in  July,  1914,  and 
remained  there  until  about  August  18;  she  returned  to  New 
York  City  on  August  18,  1914,  and  stayed  here  until  about 
July,  1915 ;  from  July  20  to  September  1,  1915,  she  stayed  at 
Bellows  Falls  and  vicinity;  she  returned  to  New  York  about 
September  1,  1915,  and  stayed  here  until  about  October  1, 
when  she  went  to  Hoboken  and  remained  there  until  Novem- 
ber 24,  1915;  from  November  24,  1915,  until  the  date  of  her 
death,  July  3,  1916,  she  stayed  in  New  York  City. 


218  INHERITANCE  TAXATION 

The  Comptroller  contended  that  this  brought  the  case 
squarely  within  the  statute,  but  the  learned  Surrogate  of  New 
York  county  held  otherwise.  In  the  course  of  his  opinion  he 
said: 

"I  cannot,  however,  agree  with  the  contention  of  the  State 
Comptroller  that  the  Legislature  by  the  amendment  above 
quoted  intended  that  a  person  who  dwelt  or  lodged  here  for  a 
period  of  six  months  and  one  day  of  the  twenty-four  months 
immediately  preceding  such  person's  death  is  to  be  deemed  a 
resident  of  this  State  for  the  purpose  of  the  transfer  tax. 
Such  an  interpretation  would  result  in  such  manifest  in- 
justice that  I  should  be  unwilling  to  accept  it,  unless  the  words 
of  the  statute  were  so  clear  and  unequivocal  as  to  admit  of 
no  other  interpretation.  It  would,  for  instance,  make  a  person 
a  resident  of  this  State,  and  his  estate  subject  to  taxation  as 
such,  if  he  lived  here  for  six  months  and  one  day  and  then 
sold  his  home  here,  bought  a  home  in  New  Jersey  and  went 
immediately  to  live  in  the  New  Jersey  home  and  lived  there 
until  the  date  of  his  death,  17  months  and  29  days  afterwards. 
I  will  not,  therefore,  assume  that  the  Legislature  intended  the 
effect  which  would  necessarily  result  from  the  interpretation 
contended  for  by  the  State  Comptroller.  I  think  that  the  use 
of  the  word  'consecutive'  shows  that  it  was  the  intention  of 
the  Legislature  to  make  it  essential  that  a  person  live  in  this 
State  some  part  of  each  of  12  consecutive  months,  and  in  the 
aggregate  the  greater  part  of  such  12  months  of  the  24  imme- 
diately prior  to  his  death  before  he  would  be  deemed  a  resi- 
dent for  the  purpose  of  the  Transfer  Tax  Act.  As  the  statute 
was  not  intended  to  apply  to  a  case  where  the  residence  of  the 
decedent  was  not  in  dispute,  but  only  to  those  cases  where  it 
was  contended  on  behalf  of  the  estate  of  a  decedent  that  he 
was  a  nonresident,  this  interpretation  would  apply  only  to 
cases  where  the  question  of  residence  was  in  dispute,  and  as 
the  Legislature  makes  the  legal  effect  of  the  facts  conclusive 
upon  the  question  of  residence,  I  am  inclined  to  that  interpre- 
tation which  bears  less  heavily  upon  the  taxpayer. ' ' 

Matter  of  Green.  99  Misc.  582;  aff.  179  App.  Div    890. 


PART  III  — THE  PARTIES  219 

B.— THE  BENEFICIARIES— GENERALLY. 

1.  As  to  Domicile. 

a.  BESIDENT  BENEFICIARIES  OF  NONRESIDENT  DECEDENT. 

It  is  not  the  general  practice  to  tax  the  beneficiaries  of  a 
nonresident  decedent  merely  because  they  are  domiciled 
within  the  State  imposing  the  tax,  and  some  courts  have  held 
that  the  State  has  no  constitutional  power  to  impose  such  a 
tax. 

State  v.  Brim,  57  N.  C.  300. 

But  if  the  testator  is  a  resident  it  is  not  important  where 
the  beneficiaries  may  reside. 

Matter  of  Green,  153  N.  Y.  223 ;  47  N.  E.  292. 

Obviously,  however,  if  the  tax  is  on  the  right  to  receive,  the 
resident  legatees  of  a  nonresident  testator  might  be  subject 
to  the  tax.  This  was  pointed  out  in  Bitting er's  Estate,  129 
Pa.  St.  338,  345 ;  18  A.  132,  where  the  court  said : 

"It  may  be  that  the  State  might  impose  a  succession  tax 
upon  every  citizen  of  the  State  who  succeeds  to  either  real  or 
personal  estate  from  whatever  source  received." 

And  the  reasoning  of  the  court  in  People  v.  Griffith,  245 
111.  532;  92  N.  E.  313,  would  seem  to  be  in  accord  with  the 
theory. 

But  in  practice  no  such  tax  has  as  yet  been  imposed. 

Re  Hood,  21  Pa.  St.  106. 

Jackson  v.  Forbes,  2  Cromp.  &  J.  382 ;  1  L.  J.  Exch.  159. 

b.  WHERE  BOTH  TESTATOR  AND  BENEFICIARY  ARE  NONRESIDENTS. 
Personal  property  deposited  in  a  private  bank  in  New 

Orleans  was  held  not  subject  to  the  tax  when  it  was  devised 
by  a  nonresident  testator  to  nonresident  beneficiaries. 

Succession  of  Harrow,  140  La.  570;  73  So.  683. 

The  question  becomes  important  in  imposing  a  tax  upon  the 
transfer  in  stock  of  foreign  corporations  owning  real  estate 
or  other  tangible  property  within  the  State  where  both  the 
testator  and  the  beneficiaries  are  nonresidents.  The  problem 
was  thus  solved  by  the  Supreme  Court  of  Illinois  in  Oakman 


220  INHERITANCE  TAXATION 

v.  Small,  282  111.  360;  118  N.  E.  775,  where  the  estate  of 
Andrew  Freedman,  a  resident  of  New  York,  held  stock  in 
foreign  corporations  devised  to  nonresident  legatees.  The 
Illinois  statute  attempts  to  impose  a  proportional  tax  on  the 
transfer  of  corporate  property  within  the  State ;  but  the  court 
held  there  was  no  jurisdiction  to  impose  the  tax,  reasoning 
thus: 

"A  judgment  cannot  effect  title  to  property  beyond  the 
limits  of  the  State  except  where  the  court  may  compel  one 
who  is  subject  to  its  jurisdiction  to  do  some  act  in  relation 
to  the  property  in  accordance  with  the  laws  of  the  State  where 
the  property  may  be.  The  inheritance  or  succession  tax  is 
not  levied  upon  the  property  but  upon  the  right  to  take  the 
property  by  descent  or  devise.  It  is  not  a  tax  upon  the  prop- 
erty itself  but  upon  the  right  to  succeed  to  it,  and  a  proceed- 
ing to  fix  the  tax  is  not  a  suit  or  controversy  between  the 
parties.  As  the  judgment  does  not  act  upon  the  property,  it 
is  not  essential  to  the  jurisdiction  that  the  property  should 
be  within  the  State.  The  State  has  power  to  impose  a  tax 
either  upon  a  beneficiary  or  property  within  its  jurisdiction. 
A  tax  upon  property  within  the  jurisdiction  of  the  State, 
whether  belonging  to  residents  or  not,  passing  by  laws  of  the 
State  to  residents  of  the  State,  is  valid.  (Greves  v.  Shaw, 
173  Mass.  205;  53  N.  E.  372.)  It  is  dear,  however,  that  to 
enable  the  County  Court  to  hear  and  determine  whether  an 
inheritance  tax  is  due  on  the  succession  to  property  it  must 
have  jurisdiction  over  the  beneficiary,  or  the  property.  In 
this  case  it  had  neither/' 

It  appears,  therefore,  that,  if  the  beneficiaries  under  the 
will  of  Andrew  Freedman  had  been  residents  of  Illinois,  they 
would  have  been  subject  to  the  tax,  but,  due  to  the  fact  that 
they  were  nonresidents,  the  court  had  no  jurisdiction  to 
impose  it.  The  New  York  Appellate  Division  has  followed 
the  Illinois  rule  in  a  recent  case. 

Matter  of  McMullen,  199  App.  Div.  393;  192  Supp.  49. 

But  the  fact  that  a  resident  is  executor  of  a  nonresident's 
estate  does  not  make  that  estate  taxable. 

Commonwealth  v.  Peebles,  134  Ky.  121;  119  S.  W.  774. 
Dana  v.  Treasurer,  227  Mass.  562 ;  116  N.  E.  941. 


PART  III  — THE  PARTIES  221 

2.  Relationship  to  Decedent. 

The  nature  of  the  relationship  of  beneficiaries  or  distribu- 
tees to  the  decedent  often  involves  perplexing  questions  under 
the  inheritance  tax  laws.  What  the  word  "child"  includes  is 
matter  of  frequent  litigation. 

a.  GRANDCHILDREN. 

In  the  construction  of  wills  it  is  often  important  to  deter- 
mine whether  the  testator  intended  to  include  grandchildren 
when  he  speaks  of  "children."  They  may  be  held  to  be 
included, 

Matter  of  Bender,  44  Misc.  79 ;  89  Supp.  731. 

Or  excluded,  according  to  the  intent  of  the  testator. 

Matter  of  King,  217  N.  Y.  358. 

This  does  not,  however,  affect  the  rate  of  tax,  as  the  actual 
relationship  in  that  event  controls  unless  the  grandchildren 
have  been  adopted  or  mutually  acknowledged  as  children. 

It  has  been  further  held  in  Pennsylvania  that  when  a  grand- 
father adopts  a  grandchild  that  at  the  death  of  the  grand- 
father, who  died  intestate,  that  such  adopted  child  would  in- 
herit his  property  only  as  a  child  and  not  both  as  child  and 
grandchild.  This  opinion  seems  to  be  based  upon  a  statutory 
provision  that  such  adopted  child  should  share  the  inheritance 
only  as  one  of  * '  the  other  children. ' '  Since  an  own  child  could 
not  inherit  except  as  child,  therefore  this  adopted  grandchild 
was  limited  to  the  rights  of  an  "own  child." 

Morgan  v.  Reel,  213  Pa.  90;  62  A.  253. 

b.  STEPCHILDREN. 

These  are  not  included  in  the  word  "children"  as  used  in 
the  taxing  statutes  and  are  not  so  classed  unless  proved  to 
have  been  legally  adopted  or  to  have  stood  in  the  mutually 
acknowledged  relation  of  parent  and  child. 

Matter  of  Wheeler,  115  App.  Div.  616 ;  100  Supp.  1044. 
Matter  of  Hardner,  144  App.  Div.  77. 


222  INHERITANCE  TAXATION 

But  of  course  the  Legislature  has  power  to  class  them  as 
lineals  and  has  done  so  in  Pennsylvania. 

Be  Bandell,  225  Pa.  St.  197 ;  73  A.  1109. 

A  child  of  former  husband  of  testatrix  not  included. 

Butcher's  Estate,  266  Pa.  St.  479;  110  A.  163. 

A  stepdaughter  inherited  from  her  stepfather  property 
which  he  in  turn  had  received  from  her  mother ;  but  the  step- 
child none  the  less  was  a  stranger  in  blood  to  the  stepfather 
and  therefore  was  taxed  at  5%. 

Marshall 's  Estate,  42  Cal.  App.  683 ;  184  Pac.  43. 

c.  ILLEGITIMATE  CHILDREN. 

Children  of  an  illegitimate  daughter  are  not  "lineal 
descendants,"  although  themselves  born  in  lawful  wedlock. 

Matter  of  Roebuck,  79  Misc.  589 ;  140  Supp.  1107. 
Matter  of  Beach,  154  N.  Y.  252 ;  48  N.  E.  516. 

But  illegitimate  children  may  be  so  acknowledged  by  the 
father  as  to  stand  in  the  relationship  of  an  adopted  child. 

Wirringer  v.  Morgan,  12  Cal.  App.  26;  106  Pac.  425. 

An  illegitimate  child  must  pay  the  inheritance  tax  on  suc- 
cession to  a  legacy  from  his  putative  father. 

Commonwealth  v.  Ferguson,  137  Pa.  595;  20  A.  870;  10  L.  R.  A.  240. 

d.  ADOPTED  CHILDREN. 

Adoption  must  always  be  pursuant  to  some  statute,  and  in 
the  absence  of  any  such  statute  an  adopted  child  is  a 
stranger. 

Commonwealth  v.  Nancrede,  32  Pa.  St.  289. 

Kerr  v.  Goldsborough,  150  Fed.  289 ;  80  C.  C.  A.  177. 

Most  of  the  statutes  provide  two  methods,  formal  act  of 
adoption  and  adoption  by  the  mutual  acknowledgment  of  the 
relation  by  the  child  and  the  foster  parent. 

(1)     Adoption  by  Formal  Act. 

The  word  child  includes  such  a  child  within  the  intent  of 
the  statute. 

Matter  of  Barnaby,  104  Misc.  362;  171  STipp.  989. 


PART  III  — THE  PARTIES  223 

It  is  included  in  the  exemptions  accorded  to  direct  lineal 
descendants  under  a  statute  which  confers  "all  privileges" 
of  children  upon  the  child  so  adopted. 

State  ex  rel.  Walton  v.  Yturria  (Tex.),  204  S.  W.  315. 
Commonwealth  v.  Henderson,  172  Pa.  St.  135 ;  33  A.  368. 
Cupple's  Estate,  272  Mo.  465;  199  S.  W.  556. 
Winchester's  Estate,  140  Cal.  468;  74  Pac.  10. 
Matter  of  Cook,  187  N.  Y.  253;  79  N.  E.  991. 

A  contrary  view  seems  to  have  been  held  by  the  courts  in 

Kerr  v.  Goldsborough,  150  Fed.  289 ;  80  C.  C.  A.  177. 

(2)     Mutually  Acknowledged  Children, 

The  statutes  providing  that  children  may  be  deemed  adopted 
where  they  stood  in  the  mutually  acknowledged  relation  of 
parent  and  child  have  occasioned  much  litigation. 

The  mutually  acknowledged  relation  was  held  to  exist 
where  a  child  of  six  was  taken  from  its  parents  and  reared 
by  its  aunt  and  uncle,  with  whom  the  child  lived  for  thirty 
years;  though  she  always  addressed  them  as  "aunt"  and 
"uncle."  The  court  said:  "We  think  it  would  be  difficult  to 
find  a  stronger  case  of  a  person  taking,  without  formal  adop- 
tion, a  friend  or  relative  into  his  household  standing  to  such 
person  in  loco  parentis  or  as  a  parent  and  receives  in  return 
filial  affection  and  service,  than  is  presented  by  the  case  at 
bar.  It  is  objected  that  the  appellant  did  not  address  her 
uncle  and  aunt  as  father  and  mother,  nor  did  they  call  her 
daughter.  This  is  of  but  slight  importance.  To  give  effect 
to  it  would  be  to  sacrifice  conduct  and  acts  to  appellations 
which  are  often  the  result  of  accident.  Had  the  appellant  been 
an  entire  stranger  both  in  blood  and  affinity  it  is  probable 
that  she  would  have  called  the  testator  and  his  wife  father  and 
mother;  but  still  other  terms  denoting  affection  might  have 
been  used." 

Where  the  statute  required  that  both  the  parents  of  the 
child  must  be  dead  before  it  could  become  the  child  of  adopted 
parents  by  mutual  acknowledgment,  mutually  acknowledged 
nieces  whose  mother  was  still  living  were  taxed  at  the  rate 
of  5%. 

Matter  of  Bolton,  210  N.  Y.  618;  104  N.  E.  1127. 


224  INHERITANCE  TAXATION 

A  stepdaughter,  who  later  married  decedent's  brother  had 
stood  in  the  relation  of  child  for  more  than  ten  years.  The 
fact  that  she  so  married  held  not  inconsistent  with  the  relation- 
ship; the  bequest  was  taxed  at  the  rate  and  exemption  of  a 
child  and  not  of  a  stranger. 

Matter  of  Downey,  182  Supp.  223. 

"The  word  'mutual'  in  this  statute  has  no  abstruse  signi- 
fication. It  means  and  requires  reciprocity  of  action,  correla- 
tion, and  interdependence,  and  finds  its  best  illustration  and 
application  in  the  relations  existing  between  parents  and  chil- 
dren which  are  always  mutual. ' ' 

Matter  of  Butler,  58  Hun,  400;  12  Supp.  201;  aff.  136  N.  Y.  649;  32  N.  E. 
1016. 

To  the  same  effect  is : 

Matter  of  Stilwell,  34  Supp.  1123. 

The  fact  that  the  beneficiaries  were  taken  into  their  testa- 
tor's family  in  their  infancy,  were  reared,  educated  and  pro- 
vided for  as  children,  were  called  by  her  name  and  adopted 
the  same,  and  were  treated  as  her  children,  and  that  the  tes- 
tatrix spoke  of  and  to  them  as  her  daughters,  and  furnished 
them  on  their  marriage  with  their  wedding  and  outfit  as  is 
customary,  is  sufficient  to  bring  them  within  the  words  of  the 
statute. 

Matter  of  Nichol,  91  Hun,  134 ;  36  Supp.  538. 

Stepdaughters  of  a  testatrix  who  had  lived  with  her  for 
a  long  time  and  called  her  "mother"  were  found  to  stand  in 
the  mutually  acknowledged  relation  of  parent,  while  another 
stepdaughter  who  was  married  and  did  not  live  with  her  did 
not  come  within  that  class  in 

Matter  of  Capron,  10  Supp.  23. 

Where  a  legatee  was  an  orphan  and  had  lived  in  a  family 
of  the  testator  since  the  age  of  six  years,  and  was  always 
treated  like  one  of  the  family,  she  is  one  to  whom  the  testator 
stood  in  the  mutually  acknowledged  relation  of  a  parent, 
although  she  was  designated  by  the  will  as  a  "friend"  and 
not  a  "daughter." 

Matter  of  Wheeler,  1  Misc.  450;  22  Supp.  1075. 


PABT  in  — THE  PARTIES  225 

The  mere  fact  that  the  testator  lived  with  his  sister  and 
her  children  as  one  family,  that  the  household  expenses  were 
met  out  of  a  common  fund  to  which  each  contributed,  and  that 
the  sister  died,  and  from  that  time  one  of  the  children  had 
charge  of  the  household  affairs  and  they  continued  to  live 
together  as  one  family  down  to  the  death  of  the  testator,  and 
that  the  testator  was  very  affectionate  with  his  nieces,  is  not 
enough  to  show  the  mutually  acknowledged  relation  of  a 
parent,  as  the  testator  did  not  take  them  into  his  family  and 
support,  educate  and  maintain  them. 

Matter  of  Moulton,  11  Misc.  694;  33  Supp.  578. 

c.     EFFECT  OF  ADOPTION. 

Where  there  was  a  bequest  of  a  life  estate  to  a  nephew  with 
a  remainder  over  in  case  he  left  "no  children  him  surviving," 
and  the  nephew  adopted  a  child,  it  was  held  that  such  child 
could  not  be  deemed  the  child  of  testator's  nephew  so  as  to 
defeat  the  rights  of  the  remaindermen. 

Matter  of  Leask,  130  App.  Div.  898;  197  N.  Y.  193;  80  N.  E.  652. 

A  grandniece  proved  to  have  been  adopted  is  taxable  as  a 
child. 

Matter  of  Kirtland,  94  Misc.  58 ;  157  Supp.  378. 

The  proceeding  of  adoption  and  the  relation  established 
is  personal  to  the  foster  parent  and  the  child.  The  statute 
gives  to  them  all  the  rights  to  be  derived  from  the  legal  rela- 
tion of  parent  and  child,  including  the  "right  of  inheritance 
from  each  other."  The  right  is  not  given,  however,  either 
expressly  or  by  implication,  to  the  child  to  inherit  through  the 
foster  parent  from  his  collateral  kin.  In  other  words,  the 
child  becomes  heir  only  to  the  foster  parent.  But  a  stranger 
to  the  adoption  proceedings,  who  has  never  recognized  the 
existence  of  any  artificial  relation,  should  not  have  his  prop- 
erty diverted  from  the  natural  course  of  descent. 

Kettell  v.  Baxter,  50  Misc.  428 ;  100  Supp.  529. 

It  was  held  in  a  recent  New  York  case  that  the  word 

"sister"  was  not  intended  to  include  a  person  adopted  by 

decedent's  parents.    Robert  Benson  described  Miss  Browne 

in  his  will  as  his  niece.    She  was  the  grandchild  of  his  mother, 

16 


226  INHERITANCE  TAXATION 

by  whom  she  had  been  legally  adopted.  It  was  held,  how- 
ever, that  this  act  of  the  mother's  did  not  make  her  a  sister 
of  the  decedent  by  adoption. 

Matter  of  Benson,  99  Misc.  222 ;  decision  on  re-argument,  164  Supp.  933. 

Where  the  adopted  child  of  a  deceased  legatee  who  took  his 
adopted  father's  legacy  the  bequest  was  held  taxable  as 
against  a  stranger.  He  was  not  the  adopted  child  of  the 
testator. 

State  v.  Goetleman's  Estate  (la.),  185  N.  W.  468. 

f .     OTHER  RELATIONSHIPS. 

It  was  held  in  Pennsylvania  that  a  daughter-in-law  who 
remarries  is  taxable  as  a  stranger. 

Commonwealth  v.  Powell,  51  Pa.  St.  438. 

" Widow"  of  son  held  to  read  ''wife"  of  son,  in  granting 
an  exemption. 

Commonwealth  v.  Fenley,  189  Ky.  480 ;  225  S.  W.  154. 

The  widow  of  an  adopted  son  is  "widow  of  a  son." 

Matter  of  Duryea,  128  App.  Div.  205 ;  112  Supp.  611. 

But  a  divorced  wife  of  a  son  is  not. 

Matter  of  Merritt,  155  App.  Div.  228 ;  140  Supp.  13. 

A  legacy  to  the  husband  of  a  daughter  was  held  exempt 
under  an  early  statute  although  the  daughter  died  before  the 
testator. 

Matter  of  Woolsey,  19  Abb.  N.  C.  232. 
Matter  of  McGarvey,  6  Dem.  145. 

And  this  was  so  even  if  the  husband  remarried  prior  to 
the  transfer  to  him. 

Matter  of  Ray,  13  Misc.  480;  35  Supp.  481. 

But,  in  the  absence  of  statute,  a  son-in-law  is  a  stranger. 

King  v.  Eidman,  128  Fed.  815. 

Half  brothers  were  included  in  the  exemption  of  brothers 
under  the  Ohio  Statute. 

Ormsby's  Estate,  7  Ohio  N.  P.  542. 


PART  III  — THE  PARTIES  227 

Nephews  and  nieces  by  marriage  are  not  included  in  the 
rates  as  to  nephews  and  nieces. 

Bates'  Estate,  7  Ohio  N.  P.  625. 

3.  Effeet  of  Divorce. 

An  absolute  divorce  severs  the  relationship  for  all  pur- 
poses of  inheritance  taxation.  Treasurer  Edwin  H.  Hoyt,  of 
Iowa,  discusses  thus  the  question  in  his  pamphlet  on  the 
inheritance  tax  law  of  that  State :  '  *  The  question  of  the  right 
of  the  State  to  collect  the  tax  from  a  divorced  wife  who  has 
been  named  a  legatee  in  her  former  husband's  will  has  not 
been  determined  in  this  State.  However,  there  is  a  well  estab- 
lished line  of  authorities  in  this  State  holding  that  an  absolute 
divorce  puts  an  end  to  all  rights  resting  upon  the  marriage 
and  not  actually  vested,  and  that  upon  divorce  all  interests, 
or  rights,  in  property  of  the  other  are  fully  barred  and 
terminated.  See  Marvin  v.  Marvin  (1882),  59  Iowa  699;  13 
N.  W.  851;  Hamilton  v.  McNeil  (1911),  150  Iowa  470;  129 
N.  W.  480.  It  would  therefore  appear  that  in  case  a  divorced 
wife  is  made  a  beneficiary  under  the  will  of  her  former  hus- 
band that  she  should  be  subject  to  the  tax  fixed  by  law  upon 
succession  to  the  property." 

4.  Personal  Exemptions. 

Most  of  the  statutes  allow  an  exemption  of  $5,000  or  more 
no  bequests  to  near  relatives  and  from  $500  to  $1,000  to  col- 
laterals and  strangers.  Though  the  lawmakers  often  use 
language  inexcusably  obscure  these  are  generally  construed  to 
apply  to  each  beneficiary  unless  specifically  declared  otherwise. 

McDaniel  v.  Hearn,  120*  Ark.  288;  179  S.  W.  337. 

Under  Washington  Statute  there  is  but  one  exemption  of 
$10,000,  although  the  property  passes  to  both  widow  and  part 
to  child. 

Fen-ell's  Estate,  112  Wash.  231;  192  Pac.  10. 
Weller's  Estate,  113  Wash.  100;  194  Pac.  541. 

The  Tennessee  act  of  1919  did  not  mention  a  husband  when 
granting  the  wife  and  direct  heirs  an  exemption  of  $10,000, 
but,  in  imposing  the  tax,  it  provided  that  the  husband  as  well 


228  INHERITANCE  TAXATION 

as  the  wife  and  direct  heirs  should  pay  \.%  on  all  amounts 
from  $10,000  to  $25,000;  held  that  the  husband  was  entitled 
to  the  $10,000  exemption. 

State  v.  Temple,  142  Tenn.  166;  220  S.  W.  1084. 

In  Ohio  the  exemption  is  estimated  on  the  aggregate  of  the 
items  in  the  will. 

Ee  Inheritance  Tax,  7  Ohio  N.  P.  547. 

Prior  to  the  New  York  amendment  of  1915  and  under 
chapter  732,  L.  1911,  property  passing  by  gift  in  contempla- 
tion of  death  was  regarded  as  a  distinct  transfer  from  the 
bequests  under  the  will.  This  resulted  in  a  second  exemption 
to  the  same  beneficiary,  and  the  graded  rates  were  fixed  as 
though  there  were  two  distinct  estates. 

Matter  of  Hodges,  215  N.  Y.  447 ;  109  N.  E.  559. 

The  same  rule  was  applied  to  transfers  by  trust  deed 
reserving  a  life  estate  but  no  power  of  revocation.' 

Matter  of  Meserole,  98  Misc.  105 ;  162  Supp.  414. 

It  was  held  to  apply  to  all  transfers  not  by  will  or 
intestacy. 

Matter  of  Hermann!,  N.  Y.  L.  J.,  January  16,  1915;  »ff.  168  App.  DiT. 
964;  153  Supp.  1119. 

Although  the  tax  was  to  be  assessed  in  one  proceeding  at 
the  death  of  the  donor  or  grantor. 

Matter  of  Leeds,  N.  Y.  L.  J.,  April  23,  1913. 

But  this  rule  was  limited  by  the  Court  of  Appeals  to  trans- 
fers by  deed,  as  in  the  Meserole  case,  and  transfers  in  con- 
templation of  death,  which  accrue  prior  to  the  death  of  the 
testator.  So,  where  property  passed  by  will  which  also  exer- 
cised a  power  of  appointment;  held,  that  the  exemption  and 
graded  rates  were  to  be  fixed  on  the  basis  of  one  transfer 
only — not  on  two. 

Matter  of  Winthrop,  164  App.  Div.  898 ;  148  Supp.  1151 ;  aff.  214  N.  Y.  712. 

The  same  ruling  was  made  where  there  was  a  gift  to  take 
effect  at  death. 

Matter  of  Dana,  215  N.  Y.  461. 


PART  III  — THE  PARTIES  229 

Where  there  is  a  devise  to  remaindermen  as  a  class  but  one 
exemption  is  allowed  under  the  New  York  rule  for  taxation 
at  the  highest  possible  rate. 

Matter  of  Hogg,  156  App.  Div.  301 ;  141  Supp.  119. 

And  where  remaindermen  who  may  possibly  succeed  have 
already  received  an  exemption  under  bequests  received  from 
other  provisions  of  the  will,  no  exemption  is  allowed,  as  it 
may  turn  out  there  will  be  none  in  addition  to  that  already 
received. 

Matter  of  Coutts,  N.  Y.  L.  J.,  December  15,  1914. 

For  further  discussion  of  taxation  at  highest  possible  rate, 
see  Eemainders,  post,  p.  266, 

The  New  York  statute  now  gives  each  beneficiary  but  one 
exemption  no  matter  whether  the  transfer  was  partly  by  will 
and  partly  by  trust  deed  or  gift  in  contemplation  of  death. 
(Ch.  664,  L.  1915.) 

So  it  was  held  that  where  there  was  a  trust  deed  reserving 
a  life  use  that  the  transfer  under  the  deed  and  the  transfer 
under  the  will  entitled  the  beneficiary  to  but  one  exemption. 

Matter  of  Garcia,  183  App.  Div.  712,  717;  170  Supp.  980. 

When  the  legatee  receives  both  a  legacy  presently  payable 
and  an  interest  in  remainder  the  exemption  is  pro  rata. 

Matter  of  Title  Guarantee  &  Trust  Co.,  81  Misc.   106;    142  Supp.   1070; 
mod.  159  App.  Div.  903. 

5.  Exemptions  to  Charities. 

It  is  a  general  rule  that  these  must  be  expressed  in  the 
inheritance  tax  statute  and  are  not  to  be  read  into  it  by 
implication. 

Barringer  v.  Cowan,  55  N.  C.  486. 

Leavell  v.  Arnold,  131  Ky.  426;  115  S.  W.  232. 

Miller  v.  Commonwealth,  27  Gratt.  (Va.)  110. 

Under  this  rule  such  exemptions  are  generally  confined  to 
domestic  corporations  unless  foreign  charitable  corporations 
are  specified  in  the  act. 

People  v.  Western  Seamen's  Society,  87  111.  246. 

Re  Speed,  216  111.  23 ;  74  N.  E.  806 ;  aff.  203  U.  S.  553 ;  27  S.  Ct.  Rep.  171. 

Matter  of  Crawford,  148  la.  60 ;  126  N.  W.  774. 

Minot  v.  Winthrop,  162  Mass.  113 ;  38  N.  E.  512. 

Alfred  University  v.  Hancock,  69  N.  J.  Eq.  470;  46  A.  178. 

Humphreys  v.  State,  70  Ohio  St.  67;  70  N.  E.  957. 

Re  Hicock,  78  Vt.  259 ;  62  A.  724. 


230  INHERITANCE  TAXATION 

California  seems  to  have  adopted  a  more  liberal  doctrine 
under  L.  1915,  art.  1,  §  7,  according  an  exemption  to  foreign 
charitable  corporations  under  that  statute  although  they  are 
not  specifically  mentioned  in  the  act.  But  this  seems  against 
the  weight  of  authority. 

Fiske's  Estate,  178  Gal.  116;  172  Pae.  390. 

And  the  Supreme  Court  of  Iowa  held  that  an  educational 
society,  incorporated  under  the  laws  of  New  York,  was 
exempt  from  the  tax  in  Iowa. 

Be  Peterson's  Will,  166  N.  W.  168. 

The  constitution  of  Kentucky  exempts  from  taxation  "  in- 
stitutions of  purely  public  charity."  In  view  of  this  provi- 
sion it  has  been  held  that  the  property  of  a  commandery  of 
the  Knights  Templar  is  not  exempt  even  though  it  frequently 
makes  gifts  for  charitable  purposes.  In  discussing  the  defini- 
tion of  a  "public  charity"  the  court  considers  the  generally 
accepted  classification  of  charitable  gifts  as  follows:  "(1) 
gifts  for  eleemosynary  purposes;  (2)  gifts  for  educational 
purposes;  (3)  gifts  for  religious  purposes;  and  (4)  gifts  for 
public  purposes."  It  is  manifest  the  Knights  Templar  could 
not  be  classed  as  a  purely  charitable  institution  under  any  of 
the  four  classifications. 

Vogt  v.  City  of  Louisville,  173  Ky.  119. 

Where  a  decedent  devised  more  than  one-half  of  his  estate 
to  charitable  and  educational  corporations,  held  exempt  from 
taxation  only  as  to  one-half.  The  excess  passed  to  a  daughter 
under  the  provisions  of  section  17  of  the  Decedents'  Estate 
Law  and  was  taxable  as  against  her  accordingly. 

Matter  of  DeLamar,  118  Misc.  127;  192  Supp.  412. 

Bequest  of  more  than  one-half  of  the  estate  to  Cornell 
University  where  there  was  a  widow  held  invalid  as  to  excess. 

linger  v.  Loewi,  116  Misc.  628 ;  191  Supp.  38. 

a.     CHARTER  POWERS  THE  TEST. 

In  order  to  determine  the  status  of  a  corporation  and  to 
ascertain  the  purposes  for  which  it  was  incorporated,  re- 
course must  be  had  to  the  act  by  which  it  was  incorporated  or 


PART  III  — THE  PARTIES  231 

to  its  charter  and  the  statute  under  the  authority  of  which 
it  was  framed. 

Matter  of  Watson,  171  N.  Y.  256;  63  N.  E.  1109. 
Matter  of  White,  118  App.  Div.  869,  870;  103  Supp.  688. 
Matter  of  Moses,  138  App.  Div.  525;  123  Supp.  443. 
Matter  of  DePeyster,  210  N.  Y.  216. 

Gerard  Beekman  devised  nearly  a  million  dollars  to  the 
Be^kman  Association  formed  to  care  for  needy  members  of 
the  Beekman  family  and  to  improve  and  embellish  burial  lots 
of  that  family  in  cemeteries.  Without  deciding  that  a  trust 
for  the  benefit  of  the  members  of  one  family  is  not  a  charitable 
corporation  within  the  meaning  of  the  statute  the  Court  of 
Appeals  held  the  bequest  taxable  on  the  ground  that  the  trus- 
tees of  the  fund  under  the  corporate  charter,  might  devote  the 
entire  bequest  to  purposes  not  charitable.  (Citing  Saltonstall 
v.  Sanders,  93  Mass.  446,  451.) 

Matter  of  Beekman,  232  N.  Y.  365 ;  134  N.  E.  183. 

In  Matter  of  Rockefeller,  177  App.  Div.  786 ;  165  Supp.  154 ; 
aft.  223  N.  Y.  563.  Laura  S.  Rockefeller,  the  deceased  wife 
of  John  D.  Rockefeller,  devised,  through  trustees,  $438,000 
to  the  Rockefeller  Foundation,  and  it  was  cliamed  by  the 
Comptroller  that  moneys  of  that  Foundation  are  not  in  fact 
applied  to  purposes  exempt  from  taxation  within  the  intent  of 
the  statute,  but  are  used  to  influence  legislation  and  in  other 
ways  of  doubtful  public  policy.  In  sustaining  the  exemption 
of  this  bequest  from  taxation,  the  court  said  through  Mr. 
Justice  Page: 

* '  The  Rockefeller  Foundation  was  incorporated  by  a  special 
act  of  the  Legislature  (Laws  1913,  ch.  488)  'for  the  purpose 
of  receiving  and  maintaining  a  fund  or  funds  and  applying 
the  income  and  principal  thereof  to  promote  the  well-being 
of  mankind  throughout  the  world.  It  shall  be  within  the  pur- 
poses of  said  corporation  to  use  as  means  to  that  end  re- 
search, publication,  the  establishment  of  charitable,  benevo- 
lent, religious,  missionary  and  public  educational  activities, 
agencies  and  institutions,  and  the  aid  of  any  such  activities, 
agencies  and  institutions  already  established,  and  any  other 
means  and  agencies  which  from  time  to  time  shall  seem 
expedient  to  its  members  and  trustees.'  Section  3  of  said  act 


232  INHERITANCE  TAXATION 

provides :  '  No  officer,  members  or  employee  of  this  corpora- 
tion shall  receive  or  be  lawfully  entitled  to  receive  any 
pecuniary  profit  from  the  operations  thereof,  except  reason- 
able compensation  for  services  in  effecting  one  or  more  of 
its  purposes,  or  as  a  proper  beneficiary  of  its  strictly  charit- 
able purposes.'  Upon  the  hearing  before  the  appraiser  the 
Kockefeller  Foundation  claimed  that  the  legacy  to  it  was 
exempt  from  taxation,  and  put  in  evidence  its  charter  and  an 
affidavit  of  its  secretary,  'That  ever  since  the  corporation 
was  organized  and  up  to  the  present  time,  said  corporation 
has  been  engaged  exclusively  in  carrying  out  its  strictly 
charitable  and  benevolent  purposes.  *  *  *  That  no  officer, 
member  or  manager  of  said  corporation  receives  or  has  re- 
ceived any  pecuniary  profit  from  the  operation  thereof.  That 
the  only  persons  who  now  receive  or  who  have  received  any 
compensation  or  pecuniary  profit  whatsoever  from  the  opera- 
tions thereof  are  hired  assistants  and  clerks,  who  receive 
reasonable  compensation  for  the  services  performed  by  them 
for  said  corporation.' 

"It  is  well  settled  that  the  character  of  a  corporation  may 
be  determined  by  its  charter.  (Matter  of  White,  118  App. 
Div.  869;  103  Supp.  688;  Matter  of  Mergentime,  129  id.  367, 
374;  113  Supp.  948;  aff.  195  N.  Y.  572;  Matter  of  Loeb,  167 
App.  Div.  588,  589;  152  Supp.  879;  Matter  of  DePeyster,  210 
N.  Y.  216,  219.) 

"The  character  of  this  corporation  is  shown  from  its  pur- 
poses as  stated  in  its  charter:  'For  the  purpose  of  receiving 
and  maintaining  a  fund  or  funds,  and  applying  the  income 
and  principal  thereof  to  promote  the  well-being  of  mankind 
throughout  the  world. '  What  follows  relates  to  the  means  of 
accomplishing  that  purpose.  The  test  of  a  charitable  gift  or 
use  and  a  charitable  corporation  are  the  same.  (Matter  of 
Altman,  87  Misc.  256,  260;  149  Supp.  601.)  The  former  has 
been  thus  defined  'a  charitable  use,  where  neither  law  or 
public  policy  forbids,  may  be  applied  to  almost  anything  that 
tends  to  promote  the  well  doing  and  well  being  of  mortal  man. ' 
(Quid  v.  Washington  Hospital,  95  U.  S.  303,  311;  Tilden  v. 
Green,  130  N.  Y.  29,  46 ;  28  N.  E.  880.)  Our  Court  of  Appeals 
has  recently  said:  'Many  definitions  of  a  charitable  trust 
have  been  formulated,  but  all  definitions  that  have  been 


PART  HI  —  THE  PARTIES  233 

attempted  carry  the  implication  of  public  utility  in  its  pur-, 
pose.  *  *  *  If  the  purpose  to  be  attained  is  personal, 
private  or  selfish,  it  is  not  a  charitable  trust.  Where  the  pur- 
pose accomplished  is  that  of  public  usefulness,  unstained  by 
personal  or  selfish  consideration,  its  charitable  character  in- 
sures its  validity.'  (Matter  of  McDowell,  217  N.  Y.  454,  460.) 
In  its  popular  acceptation  a  charitable  corporation  is  one, 
that  freely  and  voluntarily  ministers  to  the  physical  needs  of 
those  pecuniarily  unable  to  secure  for  themselves,  while  a 
benevolent  corporation  is  one  that  ministers  to  all,  and  the 
purpose  may  be  anything  that  promotes  the  mental,  physical 
or  spiritual  welfare  of  man.  Considered  in  the  light  of  the 
legal  definitions  above  set  forth,  the  Rockefeller  Foundation 
is  a  charitable  corporation  while  considered  in  the  popular 
meaning  of  the  words  it  is  both  charitable  and  benevolent  in 
its  purposes. 

1  'If,  as  claimed  by  the  Comptroller,  some  of  the  funds  of 
the  corporation  have  been  used  by  it  for  uses  foreign  to  its 
corporate  powers,  or  if  it  has  exceeded  its  corporate  powers 
in  assuming  to  act  as  trustee  for  other  charities,  this  would 
not  affect  its  status  as  a  charitable  and  benevolent  corpora- 
tion unless  these  uses  were  for  the  purpose  of  the  personal 
enrichment  of  its  officers  or  members.  If  these  acts  were 
ultra  vires,  on  a  proper  application  by  the  Attorney-General, 
the  power  of  the  Supreme  Court  over  such  corporation  could 
be  invoked,  and  the  trustees  called  upon  to  account.  But  such 
matters  are  not  within  the  jurisdiction  of  the  Surrogate's 
Court,  nor  do  they  properly  arise  in  a  transfer  tax  proceed- 
ing." 

*  The  court  concludes:  "It  has  been  the  settled 
policy  of  the  State  of  New  York  to  encourage  the  benevo- 
lently inclined  to  dedicate  a  portion  of  their  property  to 
charitable  and  benevolent  purposes  for  the  relief  of  the  sick 
or  distressed,  the  amelioration  of  the  condition  of  the  unfor- 
tunate or  the  advancement  of  the  physical,  mental  or  spiritual 
well  being  of  its  inhabitants,  and  to  that  end  to  free  the  prop- 
erty thus  dedicated,  so  long  as  it  shall  be  used  for  those  pur- 
poses, from  taxation.  The  Transfer  Tax  Law,  in  harmony 
with  this  general  purpose,  has  provided  that  bequests,  de- 
vises and  gifts  to  take  effect  after  the  death  of  the  testator 


234  INHERITANCE  TAXATION 

or  donor  shall  not  be  diminished  by  a  tax  upon  the  transfer 
to  the  charitable  or  benevolent  corporation.  The  decision  of 
the  learned  Surrogate  was  right  and  the  order  should  be 
affirmed  with  costs." 

b.     PURPOSES  MUST  BE  BROUGHT  WITHIN  THE  LANGUAGE  OF 
THE  STATUTE. 

The  cases  decided  since  the  second  edition  of  this  work 
would  seem  to  indicate  a  trend  to  a  somewhat  more  strict  con- 
struction of  charitable  exemptions. 

In  Washington  it  has  been  held  that  where  there  is  a  dis- 
cretion in  the  executors  to  apply  the  fund  to  other  than 
charitable  purposes  there  can  be  no  exemption. 

Duncan's  Estate,  113  Wash.  165;  193  Pac.  694. 

A  bequest  of  funds  to  a  city  for  a  hospital  was  held  tax- 
able on  the  theory  that  it  is  the  identity  of  the  beneficiary 
and  not  the  purpose  of  the  bequest  that  is  the  test  of  taxability. 

Matter  of  Miller,  109  Misc.  267;  178  Supp.  554. 

So  it  was  held  that  a  bequest  to  the  Title  Guarantee  and 
Trust  Company  for  a  benevolent  purpose  is  none  the  less 
taxable  as  the  purpose  of  the  corporation  and  not  the  purpose 
of  the  bequest  is  the  test  to  be  applied. 

Matter  of  Cash,  186  Supp.  246. 

A  fund  to  be  paid  to  an  unincorporated  association  is  not 
exempt,  whatever  its  purpose. 

Matter  of  Falk,  102  Misc.  504;  169  Supp.  203. 

The  purpose  of  the  gift  is  the  purpose  of  the  testator  at  the 
time  of  his  death,  and  a  bequest  to  a  World  Peace  Foundation 
is  exempt  under  the  Massachusetts  statute. 

Parkhurst  v.  Burrill,  228  Mass.  196;  117  N.  E.  39. 

So  it  was  held  in  Louisiana  that  a  bequest  to  a  French 
religious  corporation  was  exempt. 

Succession  of  Ribet,  141  La.  572 ;  75  So.  414. 

But  not  a  bequest  to  the  inhabitants  of  a  commune  who 
"had  met  with  reverses  in  the  service  of  France  or  been  of 
exemplary  conduct." 

Succession  of  Frain,  141  La.  932 ;  75  So.  847. 


PART  III  — THE  PARTIES  235 

It  is  the  language  of  the  statute  at  the  time  of  the  death  of 
the  testator  that  controls. 

Matter  of  Daly,  79  Misc.  586;  141  Supp.  199;  aff.  215  N.  Y.  (mem.)- 

And  burden  of  proof  is  on  the  corporation  claiming 
exemption. 

Matter  of  Townsend,  215  N.  Y.  442. 

Where  the  court  said :  ' '  The  respondent,  having  been  duly 
served  with  the  notice  of  the  hearing  before  the  appraiser  and 
having  failed  to  appear  in  response  thereto,  the  appraiser 
had  jurisdiction  of  the  proceeding,  and  upon  the  record  then 
before  him  could  not  do  other  than  determine  the  tax  payable 
upon  the  legacy  to  respondent.  The  title  of  respondent,  'The 
New  York  Exchange  for  Woman's  Work,'  was  not  notice  to 
him  that  the  corporation  was  one  entitled  to  exemption,  and 
even  did  the  name  indicate  that  the  corporation  might  be 
charitable  in  its  purpose,  he  would  not  be  justified  therefrom 
in  assuming  the  other  facts  required  by  statute  to  secure  the 
benefits  of  exemption  from  taxation.  Neither  is  it  incumbent 
upon  an  appraiser  to  devote  the  time  necessary  to  investiga- 
tion of  corporate  legatees  under  wills  in  order  to  ascertain 
the  status  of  the  same.  It  was  the  duty  of  the  respondent  to 
appear  before  the  appraiser  and  the  burden  was  upon  it  to 
produce  evidence  to  show  that  it  was  entitled  to  exemption. ' ' 

But  when  the  purpose  is  clearly  benevolent  and  the  charter 
brings  the  case  within  the  statutory  provision  the  corporation 
is  exempt  from  the  tax. 

Matter  of  Loeb,  167  App.  Div.  588;  152  Supp.  879. 

Exemption  from  general  taxation  does  not  exempt  from 
transfer  tax. 

Matter  of  McCormiek,  206  N.  Y.  100;  99  N.  E.  177. 

Matter  of  Saunders,  77  Misc.  54;  137  Supp.  438;  aff.  211  N.  Y.  541. 

But  under  a  statute  which  exempted  educational  corpora- 
tions receiving  "State  Aid"  an  exemption  from  ordinary 
taxation  was  held  in  Connecticut  to  be  "State  Aid"  and  there- 
fore to  bring  Yale  College  within  the  exemption.  The  court 
expressly  repudiates  strict  construction  of  charitable  and 
educational  exemptions. 

Corbin  v.  Baldwin,  92  Conn.  99 ;  101  A.  834. 


236  INHERITANCE  TAXATION 

But  until  such  corporation  is  formed  the  title  to  the  be- 
quest is  in  the  trustees  and  the  tax  must  be  assessed  against 
them,  subject  to  a  motion  to  modify  the  order  or  refund  the 
tax,  if  paid,  when  the  corporation  is  formed  and  the  funds 
turned  over  to  it  for  the  charitable  purposes  of  the  testator. 

Matter  of  Robinson,  80  Misc.  458;  142  Supp.  456;  aff.  212  N.  Y.  548. 
Matter  of  Cary,  N.  Y.  L.  J.,  January  20,  1914. 
Matter  of  Neustadter,  N.  Y.  L.  J.,  August  16,  1913. 

This  was  the  practice  recently  adopted  in  New  York  on 
motion  to  modify  the  order  taxing  the  transfer  to  trustees 
who  subsequently  turned  over  the  bequest  to  the  exempt 
corporation. 

Matter  of  Telefeyan,  N.  Y.  L.  J.,  January  31,  1917. 

An  important  exception  to  this  rule  has  been  made  by 
the  New  York  Court  of  Appeals.  Where  there  is  no  dis- 
cretion in  the  executor  under  the  will  and  the  devise  is  to 
a  corporation  which  must  be  formed  and  which  is  of  undoubted 
charitable  character  the  exemption  should  be  made  at  once. 
So  where  the  devise  was  to  a  corporation  to  be  formed  to 
found  a  "Home  for  Needy  Children"  and  the  executor  had 
no  discretion,  held  at  once  exempt. 

Matter  of  Le  Fevre,  233  N.  Y.  138. 

But  where  the  executor  has  any  discretion  until  such  a  cor- 
poration is  formed  and  the  transfer  to  it  becomes  binding  on 
the  executor,  it  must  be  assessed  at  the  highest  rate  under  the 
statute.  Under  this  principle  the  court  held  in  Matter  of  Falk, 
102  Misc.  504;  169  Supp.  203,  as  follows: 

"Section  221  of  the  Tax  Law  provides  that  any  property 
devised  or  bequeathed  to  a  charitable  corporation  shall  be 
exempt  from  taxation,  provided  that  no  officer  or  employee 
shall  be  entitled  to  receive  any  pecuniary  profit  from  the 
operations  of  the  corporation  except  reasonable  compensation 
for  services  in  connection  with  its  strictly  charitable  purposes, 
and  provided,  further,  that  the  corporation  be  organized  and 
conducted  exclusively  for  such  charitable  purposes.  The 
trustees  have  not  yet  formally  decided  upon  the  institutions 
or  corporations  to  which  they  will  pay  the  remainder,  and 


PART  III  — THE  PARTIES  237 

until  such  decision  is  made  the  court  cannot  determine  whether 
the  corporations  or  institutions  that  will  be  the  recipients  of 
the  property  constituting  the  remainder  are  entitled  to  exemp- 
tion under  section  221  of  the  Tax  Law.  If  it  should  be  paid 
to  an  unincorporated  association  it  would  not  be  exempt;  if 
it  should  be  given  to  a  corporation  that,  while  ostensibly 
charitable,  nevertheless  pays  its  officers  a  compensation  in 
excess  of  the  value  of  the  services  rendered  by  them,  it  would 
not  be  exempt.  Until,  therefore,  the  remainder  is  paid  over, 
or  an  agreement  is  entered  into  by  the  trustees  binding  them 
to  pay  it  to  some  corporation,  the  court  cannot  determine 
whether  it  is  exempt  from  taxation,  and  must  impose  a  tax 
at  the  highest  rate  which  in  any  contingency  would  be  assess- 
able against  it.  (Matter  of  ZborowsU,  213  N.  Y.  109;  107 
N.  E.  44.)  The  order  fixing  tax  will  therefore  be  affirmed." 

Such  a  corporation,  so  formed  is  not  bound  by  the  original 
appraisal  because  no  notice  thereof  was  or  could  be  served 
on  it. 

People  v.  Kellogg,  268  111.  489;  109  N.  E.  304. 

On  the  other  hand,  the  accumulations  of  the  fund  in  the 
interim  between  the  death  of  the  testator  and  the  formation 
of  the  corporation  cannot  be  held  for  its  benefit.  That  is  the 
general  rule  and  is  forbidden  by  statute  in  New  York.  Such 
accumulations  pass  under  the  will  to  the  residuaries  or,  if  the 
will  is  silent,  under  the  intestate  laws.  Whether  or  not  they 
are  taxable  as  a  transfer  from  the  decedent  to  such  bene- 
ficiaries remains  a  nice  question.  Although  such  accumula- 
tions accrue  after  death  they  relate  back  to  the  will  or  pass 
by  intestacy  and  do  not  go  to  the  alternative  legatee. 

St.  John  v.  Andrews'  Institute,  191  N.  Y.  254;  83  N.  E.  981. 

Under  the  New  York  Constitution  the  Legislature  may 
exempt  a  charitable  bequest  retroactively. 

Church  of  Transfiguration  v.  Niles,  86  Hun,  221;  33  Supp.  944. 

Under  a  similar  provision  of  the  California  Constitution 
forbidding  the  giving  away  of  money  of  the  State  it  is  held 
that  such  legislation  is  void. 

Matter  of  Stanford's  Estate,  126  Cal.  112;  54  Pac.  259;  58  Pac.  462. 


238  INHERITANCE  TAXATION 

Prior  to  New  York  statute  732,  L.  1911,  bequests  to  foreign 
charitable  corporations  were  taxable. 

Matter  of  Julia  A.  Smith,  77  Hun,  134. 
Matter  of  Prime,  136  N.  Y.  347 ;  32  N.  E.  1091. 
Matter  of  Wolfe,  23  Misc.  439;  52  Supp.  415. 
Matter  of  McCartin,  N.  Y.  L.  J.,  December  5,  1913. 
Matter  of  Crittenton,  N.  Y.  L.  J.,  April  5,  1911. 

Since  that  enactment  such  bequests  have  been  exempted. 

Matter  of  Lyon,  144  App.  Div.  104 ;  128  Supp.  1004. 

c.    BEQUESTS  HELD  EXEMPT. 

Generally  the  courts  have  favored  exemptions  to  charitable 
institutions,  though  theoretically  construing  the  statutes 
strictly  against  them.  Under  the  language  of  the  specific 
statute  in  question  and  the  particular  articles  of  incorporation 
of  the  beneficiary  the  following  bequests  have  been  held 
exempt : 

To  American  Baptist  Foreign  Missionary  Society : 

Matter  of  Lyon,  144  App.  Div.  104 ;  128  Supp.  1004. 

To  an  art  gallery: 

Matter  of  Arnot,  145  App.  Div.  708;  aff.  203  N.  Y.  627. 

To  a  bishop : 

Matter  of  Higgins,  N.  Y.  L.  J.,  December  16,  1914. 
Matter  of  Kelly,  29  Miac.  169 ;  60  Supp.  1005. 

Matter  of  Palmer,  33  App.  Div.  307;  53  Supp.  847;  aff.  158  N.  Y.  669; 
52  N.  E.  1125. 

To  Congregational  and  Baptist  churches : 

Carter  v.  Eaton,  75  N.  H.  560;  78  A.  643. 

To  First  Universalist  Society: 

First  Universalist  Society  v.  Bradford,  185  Mass.  310;  70  N.  E.  204. 

To  Methodist  church: 

Carter  v.  Whitcomb,  74  N.  H.  482 ;  69  A.  779. 

To  New  York  Metropolitan  Museum: 

Matter  of  Mergantime,  129  App.  Div.  367;  113  Supp.  948;  aff.  195  N.  Y. 
572;  88  N.  E.  1125. 

To  public  officers  as  trustees  for  charitable  purposes : 

In  re  Spangler,  148  la.  333;  127  N.  W.  625. 


PART  III  — THE  PARTIES  239 

To  a  village  in  trust  for  indigent  women: 

Matter  of  Albright,  93  Misc.  388 ;  156  Supp.  821. 

> 

To  found  a  home  for  the  aged: 

Matter  of  Graves,  171  N.  Y.  40;  63  N.  E.  787. 

For  a  drinking  fountain  for  horses: 

Matter  of  Graves,  242  111.  212;  89  N.  E.  978. 

To  a  library : 

Essex  v.  Brooks,  164  Mass.  79 ;  41  N.  E.  119. 

To  a  university: 

Alfred  University  v.  Hancock,  69  N.  J.  Eq.  470;  46  A.  178. 

To  hospitals: 

Matter  of  Higgins,  55  Misc.  175;  106  Supp.  465. 
Matter  of  Howell,  34  Misc.  40;  69  Supp.  505. 

To  a  Masonic  lodge: 

Matter  of  Hiteman,  110  Misc.  617;  180  Supp.  880. 
Matter  of  Woolsey,  N.  Y.  L.  J.,  June  5,  1915. 
Matter  of  Allen,  76  Mise.  88;  136  Supp.  327. 
Morrow  v.  Smith,  145  la.  514;  124  N.  W.  316. 

ToW.  C.  T.  U.: 

Matter  of  Field,  71  Misc.  396;   130  Supp.  195;   aff.  147  App.  Div.  927; 
131  Supp.  1114. 

To  Y.  M.  C.  A. : 

Matter  of  Moses,  138  App.  Div.  525;  123  Supp.  443. 
Little  v.  Newburyport,  210  Mass.  414 ;  96  N.  E.  1032. 

To  a  city  to  provide  fuel  for  poor  persons. 

Maynes  Estate  (Wash.),  204  Pac.  596. 

To  a  town  for  municipal  purposes  in  a  foreign  State. 

Matter  of  Burnham,  112  Misc.  560;   183  Supp.  539;   aff.  196  App.  Div. 

948;  aff.  232  N.  Y.  (mem.). 
Matter  of  Guitera,  113  Mise.  196;  184  Supp.  190. 

d.     BEQUESTS  HELD  TAXABLE. 

On  the  other  hand,  under  the  particular  statute  in  force  at 
the  date  of  the  death  of  the  testator  and  the  articles  of  incor- 
poration in  question  these  bequests  for  charitable  or  allied 
purposes  have  been  held  taxable : 


240  INHERITANCE  TAXATION 

American  Institute  of  Scientific  Eesearch  (1921) : 

Matter  of  Miller,  229  N.  Y.  619. 

To  foreign  religions  corporations,  in  New  York  (prior  to 
1911) : 

Matter  of  Balleis,  144  N.  Y.  132;  38  N.  E.  1007. 

To  New  York  Cooper  Union  (1901) : 

Matter  of  Kucielski,  144  App.  Div.  100;  128  Supp.  768. 

For  "masses,"  prior  to  amendment  of  statute: 

Matter  of  McAvoy,  112  App.  Div.  377;  98  Supp.  437. 

To  United  States  Government: 

Matter  of  Merriam,  141  N.  Y.  479;   36  N.  E.  505;   aff.  163  U.  8.  625; 
16  S.  Ct.  Rep.  1073. 

To  Society  for  Prevention  of  Cruelty  to  Animals  (prior  to 
1912) : 

Matter  of  Daly,  79  Misc.  586;  141  Supp.  199;  aff.  215  N.  Y.  (mem.). 

To  New  York  Historical  Society : 

Matter  of  DePeyster,  210  N.  Y.  216. 

To  a  library  (under  N.  Y.  Statute  of  1905) : 

Matter  of  Francis,  121  App.  Div.  129 ;  105  Supp.  643 ;  aff.  189  N.  Y.  554 ; 
82  N.  E.  1126. 

To  McAuley  Water  Street  Mission : 

Matter  of  White,  118  App.  Div.  869;  103  Supp.  688. 

To  Home  Missionary  Society  (N.  H.  Statute  1905) : 

Carter  v.  Whitcomb,  74  N.  H.  482;  69  A.  779. 

To  Trinity  College  (N.  Y.  Statute  of  1887) : 

Catlin  v.  Trustees,  113  N.  Y.  133;  20  N.  E.  864. 

To  a  corporation  to  "promote  Temperance:" 

Corbin  v.  American  Industrial  Bank,  95  Conn.  50;  110  A.  459. 

Gift  of  Egyptian  Antiquities  to  Brooklyn  Institute  of  Arts 
and  Sciences : 

Matter  of  Wilbour,  107  Misc.  315;  176  Supp.  228. 


PAET  III  — THE  PARTIES  241 

To  Bowdoin  College: 

Batt  v.  Treasurer,  209  Mass.  459 ;  95  N.  E.  854. 
Bice  v.  Bradford,  180  Mass.  545 ;  63  N.  E.  7. 

Bequest  to  trustees  for  education  of  children  in  Turkey : 

Pierce  v.  Stevens,  205  Mass.  219 ;  91  N.  E.  319. 

To  city  for  ornamental  fountain: 

Matter  of  Hamilton,  148  N.  Y.  310;  42  N.  E.  717. 

To  Vivisection  Investigation  League  (1916) : 

Matter  of  Howard,  94  Misc.  560;  157  Supp.  1114. 

These  citations,  while  not  particularly  instructive,  are  given 
for  what  they  are  worth.  Each  case  must  turn  on  the  lan- 
guage of  the  statute  and  the  provisions  of  the  corporate 
charter  or  the  purpose  of  the  corporation  proposed  to  be 
formed.  As  usual,  the  principle  is  simple  enough  and  the 
application  to  concrete  facts  alone  is  difficult. 


C.— HEIRS  AND  LEGATEES. 
1.  Heirs  of  Real  Estate, 
a.    LIEN  OF  THE  TAX. 

Most  of  the  statutes  make  the  tax  a  lien  on  the  land  even 
as  against  purchasers  in  good  faith.  They  also  provide  that 
the  tax  shall  be  presumed  to  be  paid  after  six  years. 

Matter  of  Strail,  195  N.  Y.  575. 

But  this  is  only  as  to  a  purchaser  for  value.  As  to  the 
beneficiary  the  lien  remains. 

Matter  of  Strang,  117  App.  Div.  796;  102  Supp.  1062. 

Several  recent  litigations  have  turned  on  the  question 
of  the  lien  of  the  tax.  In  Iowa  it  was  held  that  the  lien  is 
on  each  share  transferred  and  not  on  the  entire  estate. 

Eddy  v.  Short,  190  la.  1376;  179  N.  W.  818. 

The  lien  of  the  tax  continues  until  it  is  settled  and  satisfied 
except  that  the  lien  ceases  or  terminates  at  the  end  of  five 
years  as  against  the  purchaser  of  the  property. 

People  v.  Baldwin,  287  111.  87,  90. 

16 


242  INHERITANCE  TAXATION 

Where  specific  property  is  charged  with  the  lien  of  the 
tax  it  is  not  a  lien  on  the  residuary  estate. 

Nation  v.  Green,  188  Ind.  697;  m  N.  E.  163. 

As  the  tax  is  on  the  transfer  and  not  on  the  property  the 
imposition  of  the  tax  does  not  imply  a  lien  and  such  lien  only 
accrues  when  the  statutory  steps  to  create  it  have  been  com- 
plied with. 

Archibald  v.  Maurath,  92  N.  J.  Eq.  357;  113  A.  6. 

The  difficulties  that  beset  the  courts  in  the  interpretation 
of  the  transfer  tax  statute  is  illustrated  in  the  case  of  Smith 
v.  Browning,  where  the  Appellate  Division  held  that  the  lien 
of  the  tax  is  on  the  entire  estate  and  not  on  property  trans- 
ferred to  any  one  individual.  This  was  reversed  by  the  Court 
of  Appeals,  which  has  just  decided  that  the  lien  is  on  the  ap- 
praised value  of  each  interest  bequeathed  and  not  upon  the 
gross  amount  of  several  bequests  to  one  individual,  and  that 
therefore  the  tax  due  on  personal  property  is  not  a  lien  on 
the  real  estate. 

Smith  v.  Browning,  171  App.  Div.  279 ;  157  Supp.  71 ;  reversed  225  N.  Y. 
358. 

So,  where  the  tax  has  not  been  fixed,  a  motion  to  compel  a 
purchaser  to  take  title  will  be  denied. 

Kitching  v.  Shear,  26  Misc.  436. 

Even  where  the  tax  remains  a  lien  as  against  a  bona  fide 
purchaser  there  is  no  personal  liability  upon  him. 

Wilhelmi  v.  Wade,  65  Mo.  39. 

The  lien  is  no  bar  to  an  action  to  recover  the  land  from  a 
third  person  even  though  it  is  subject  to  sale  in  default  of  the 
payment  of  the  tax. 

Weller  v.  Wheelock,  155  Mich.  698;  118  N.  W.  609. 

Nor  does  it  render  the  title  defective  so  as  to  avoid  the 
sale  when  the  proceeds  of  the  sale  are  in  the  hands  of  the 
executor;  in  that  case  the  lien  applies  to  the  proceeds  and 
not  to  the  land. 

Mandel  v.  Fidelity  Trust  Co.,  128  Ky.  239;  107  S.  W.  775. 


PART  III  — THE  PARTIES  243 

So,  where  a  will  directs  the  sale  of  property  within  five  years 
to  pay  certain  legacies  in  cash,  the  lands  themselves  are  not 
subject  to  a  lien  for  payment  of  transfer  taxes,  but  it  attaches 
to  the  funds  so  realised. 

Brown  v.  Laurence  Park  Realty  Co.,  133  App.  Div.  753 ;  118  Supp.  132. 

When  the  representatives  of  the  estate  have  paid  the  trans- 
fer tax  on  real  property  to  which  the  heirs  succeed  out  of  per- 
sonalty, they  are  subrogated  for  the  benefit  of  creditors  to 
the  claim  of  the  State  to  the  amount  of  the  tax  so  paid  against 
those  to  whom  the  property  descends. 

Hughes  v.  Golden,  44  Misc.  128 ;  89  Supp.  769. 

Where  the  decedent  was  a  cotenant  of  land  on  which  other 
cotenants  had  made  improvements,  and  where  each  cotenant 
presumed  and  knew  what  the  others  were  doing,  and  the  im- 
provements were  made  under  such  conditions  that  on  parti- 
tion the  cotenants  would  be  entitled  to  allowance  for  the  im- 
provements, only  the  balance  of  the  interest  of  the  decedent 
should  be  taxed,  notwithstanding  the  fact  that  no  proceeding 
for  contribution  had  been  commenced,  and  notwithstanding 
the  fact  that  it  might  be  claimed  that  no  contribution  would 
ever  be  asked.  Still  this  does  not  justify  the  taxation  of  prop- 
erty that  the  decedent  did  not  own,  which  does  not  pass  to  the 
heirs  at  law  as  her  property. 

Matter  of  Wood,  68  Misc.  267 ;  123  Supp.  574. 

In  a  suit  to  quiet  title  it  is  held  that  the  tax  need  not  be 
paid  as  a  condition  precedent  under  the  California  practice. 
This  seems  contrary  to  the  general  rule. 

Nickel  v.  State,  179  Cal.  126;  175  Pac.  640. 

b.     PARTITION. 

The  fact  that  under  partition  proceedings  the  plaintiff's 
equitable  interest  in  certain  real  estate  was  satisfied  by  an 
assignment  to  him  of  personal  property,  does  not  relieve  him 
from  the  payment  of  a  succession  tax  on  his  share  of  the 
estate,  for  the  reason  that  he  received  the  full  value  of  the 
real  estate  in  other  property  assigned  to  him  belonging  to  the 
same  estate. 

Seholey  v.  Rew,  90  U.  S.  (23  Wall.)  331,  349. 


244  INHERITANCE  TAXATION 

Where  a  decedent  owned  an  undivided  third  of  an  entire 
tract  of  land,  partition  of  his  interest  could  not  have  the  effect 
of  apportioning  the  lien  and  fixing  a  part  thereof  exclusively 
on  any  one  lot. 

Appeal  of  Mellon,  114  Pa.  St.  564,  574 ;  8  A.  183. 

c.     EQUITABLE  CONVERSION. 

This  term  has  been  denned  as  "a  change  in  the  nature  of 
property  by  which,  for  certain  purposes,  real  estate  is  con- 
sidered as  personal,  and  personal  estate  as  real,  and  trans- 
missible and  descendible  as  such." 

Haward  v.  Peavey,  128  HI.  430;  21  N.  E.  503. 

Except  in  Pennsylvania  the  doctrine  of  equitable  conver- 
sion is  not  applied  in  transfer  tax  law. 

Council  v.  Crosby,  210  HI.  380;  71  N.  E.  350. 
McCurdy  v.  McCurdy,  197  Mass.  248;  83  N.  E.  881. 
Matter  of  Bartow,  30  Misc.  27;  62  Supp.  1000. 

But  where  decedent's  will  directed  that  his  real  estate  be 
converted  into  cash  and  so  distributed,  one  of  the  beneficiaries 
died  before  the  sale  of  the  real  estate,  leaving  a  will  disposing 
of  her  interest  in  her  father's  estate  to  her  husband,  held, 
that  for  purposes  of  the  Transfer  Tax  Law  it  should  be 
treated  as  personalty. 

Matter  of  Mills,  86  App.  Div.  555;   67  Supp.  956;   84  Supp.   1135;   aff. 
177  N.  Y.  562 ;  69  N.  E.  1127. 

The  proceeds  of  a  partition  sale  held  by  an  infant  at  the 
time  of  her  death  are  personal  property. 

Matter  of  Stiger,  7  Misc.  268;  28  Supp.  163. 

In  Pennsylvania  the  doctrine  of  equitable  conversion  is  ap- 
plied. Under  it  the  State  may  subject  to  tax  transfers  of  real 
property  outside  the  State. 

Re  Hale,  161  Pa.  St.  161;  28  A.  1071. 

Conversely  it  may  operate  to  exempt  from  tax  transfers 
of  real  estate  in  Pennsylvania  belonging  to  a  nonresident. 

Be  Coleman,  159  Pa.  St.  231 ;  28  A.  137. 

Re  Schoenberger,  221  Pa.  St.  112;  70  A.  579. 


PART  III  — THE  PARTIES  245 

d.  SALE  TO  PAY  THE  TAX. 

If  the  personal  property  is  not  sufficient  then  the  real  estate 
may  be  subjected  to  the  payment  of  the  claim  of  the  State, 
and  the  trial  court  can  make  such  order  with  the  entire  estate 
under  its  control  as  is  necessary  to  satisfy  any  claim  of  the 
State  against  the  estate  for  taxes,  inheritance  or  otherwise. 

Handel  v.  Fidelity  Trust  Co.,  128  Ky.  239;  107  S.  W.  775. 

Where  real  estate  was  left  to  a  life  tenant  with  remainder 
to  the  brothers  and  sisters  who  survived,  with  a  contingent 
remainder  over,  the  court  held  that  the  property  was  subject 
to  a  lien  for  the  payment  of  the  whole  tax,  and  that  if  there 
was  no  money  forthcoming  to  pay  the  whole  tax,  it  was  the 
duty  of  the  executor  to  pay  it.  And  the  court  directed  the 
sale  of  so  much  of  the  property  as  might  be  necessary  to  raise 
the  fund  to  pay  the  tax. 

Matter  of  Wilcox,  118  Supp.  254. 

e.  WHERE  CHAKGED  WITH  A  LEGACY. 

The  statutes  usually  provide  that  where  a  legacy  is  charged 
upon  real  estate  the  heir  must  deduct  the  tax  before  paying 
the  legacy  and  makes  him  liable  personally  if  he  fails  to  do  so. 

So,  where  a  devise  of  real  estate  required  the  beneficiary 
to  pay  $2,000  a  year  out  of  the  future  rents  and  profits  to 
an  annuitant  the  devisee  of  the  real  estate  was  required  to 
pay  the  tax  out  of  the  rents  and  profits. 

Re  Lea,  194  Pa.  St.  524;  45  A.  337. 

f .  As  TO  ALIENS. 

"Every  alien  holding  real  property  in  this  State  is  subject 
to  duties,  assessments,  taxes  and  burdens  as  if  he  were  a 
citizen  of  the  State. ' ' 

Section  16  (formerly  section  8)  of  the  New  York  Real  Prop- 
erty Law,  being  chapter  52,  Laws  of  1909. 

2.  Legatees  of  Personal  Property, 
a.     RENUNCIATION  AND  ASSIGNMENT. 
A  legatee  may  renounce  and  thus  avoid  the  tax. 

Matter  of  Wolfe,  89  App.  Div.  349;  85  Supp.  949;  aff.  179  N.  Y.  599; 

72  N.  E.  1152. 
Matter  of  Stone,  132  la.  136;  109  N.  W.  465. 


246  INHERITANCE  TAXATION 

This  seems  to  be  the  general  rule,  although  the  Pennsyl- 
vania courts  arrive  at  the  contrary  and  perhaps  more  logical 
doctrine. 

Re  Frank,  9  Pa.  Co.  Ct.  662. 
Re  Small,  11  Pa.  Co.  Ct.  1. 

Of  course  the  beneficiary  may  renounce  under  a  power  of 
appointment  just  as  he  may  renounce  under  a  will. 

Matter  of  Chauncey,  168  Supp.  1019. 

While  if  he  assigns  the  legacy  the  tax  must  be  paid  at  the 
same  rate  as  though  it  passed  to  the  legatee. 

Matter  of  Cook,  187  N.  Y.  253 ;  79  N.  E.  991. 

And  it  is  taxable  though  the  legatee  dies  before  receiv- 
ing it. 

Matter  of  Clinch,  180  N.  Y.  300 ;  73  N.  E.  35. 

b.     LEGACY  IMPRESSED  WITH  A  TRUST. 

A  legacy  impressed  with  a  secret  trust  is  held  taxable 
against  the  legatee  for  its  full  value  in  New  York.  The  will 
gave  an  absolute  bequest  of  one-third  of  the  property  to  Mr. 
Parsons,  the  executor.  Though  extrinsic  evidence  showed  he 
took  it  in  trust  for  the  next  of  kin,  the  bequest  to  him  was 
held  liable  to  the  tax.  The  court  said: 

"The  question  is,  therefore,  whether  Mr.  Parsons  or  the 
brother  of  the  testatrix  took  the  one-third  interest  which  it 
is  here  sought  to  tax  under  the  will.  If  Mr.  Parsons,  then, 
under  the  Collateral  Inheritance  Tax  Law  (ch.  713,  Laws  of 
1887),  such  interest  is  subject  to  the  tax.  Disregarding  the 
form  of  the  final  judgment  in  the  Supreme  Court  as  not  bind- 
ing upon  the  State,  we  find  that,  under  the  decision  of  the 
Court  of  Appeals,  the  one-third  of  the  residuary  estate  passed 
under  the  will  and  vested  in  Mr.  Parsons  absolutely,  and  that 
no  trust  was  imposed  thereon  by  the  will,  and  although  it  was 
held  that,  as  the  result  of  the  extrinsic  evidence  introduced, 
he  took  it  impressed  with  a  trust  in  favor  of  the  brother,  this 
would  not  relieve  him  from  the  payment  of  the  tax. 

Matter  of  Edson,  38  App.  Div.  19;   56  Supp.  409;   aff.   159  N.  Y.  568; 
54  N.  E.  1092. 

This  is  also  the  English  rule. 

Cullen  v.  Attorney-General,  L.  H.  1  H.  L.  190;  144  L.  T.  Rep.  N.  S.  44. 


PART  III  — THE  PARTIES  247 

The  contrary  is  held  in  Illinois. 

People  v.  Schaefer,  266  111.  334;  107  N.  E.  617. 

And  the  rule  has  not  always  been  strictly  applied  in  New 
York.  Where  there  was  a  bequest  with  precatory  words  to 
use  the  legacy  for  charitable  purposes  with  an  agreement  by 
the  legatee  with  the  testator  so  to  use  it,  and  the  agreement 
was  fulfilled,  held  exempt. 

Matter  of  Murphy,  4  Misc.  230;  25  Supp.  107. 

In  Pennsylvania  it  is  held  that  a  legacy  on  condition  that 
certain  payments  should  be  made  out  of  it  to  collaterals 
should  be  taxed  as  a  collateral  bequest,  and  this  would  seem 
to  be  the  juster  rule. 

Re  Lauman,  131  Pa.  St.  346;  19  A.  900. 

c.     LAPSED  LEGACIES. 

The  rule  is  well  established  that  a  legacy  or  devise,  even 
with  or  without  words  of  limitation,  lapses  in  case  of  the  death 
of  the  legatee  or  devisee  before  the  testator,  in  the  absence 
of  express  words  to  prevent  a  lapse,  or  of  something  in  the 
context  of  the  will  indicating  a  contrary  intent,  with  the  single 
statutory  exception  of  a  legacy  to  a  child  or  other  descendant 
of  the  testator,  or  to  testator's  brother  or  sister.  (N.  Y. 
Decedents'  Estate  Law,  §  29,  as  amended  by  ch.  384,  L.  1912.) 
This  is,  also,  true  where  the  gift  is  to  several  as  tenants  in 
common  and  not  as  a  class. 

Matter  of  Kimberly,  150  N.  Y.  90;  44  N.  E.  945. 

Where  the  transfer  is  under  a  lapsed  legacy,  or  power  of 
appointment  or  the  vesting  of  a  remainder  after  the  expira- 
tion of  a  life  estate  the  relationship  which  regulates  the  im- 
position of  the  tax  is  to  the  original  testator  and  not  to  the 
deceased  beneficiary,  the  donee  of  the  power  or  the  life 
tenant. 

Dow  v.  Abbott,  197  Mass.  283 ;  84  N.  E.  96. 

Parke's  Estate,  3  Pa.  Dist.  196. 

Commonwealth  v.  Sharpless,  2  Chest.  Co.  (Pa.)  246. 

Where  there  is  a  general  residuary  bequest,  the  legatee 
takes  not  only  the  property  which  the  testator  has  not  other- 


248  INHERITANCE  TAXATION 

wise  disposed  of,  but  also  every  part  of  the  estate  which  by 
lapse  or  otherwise  is  not  effectually  bequeathed  to  others. 
Where  testator  gives  residuary  estate  to  certain  persons 
named,  they  take,  not  as  joint  tenants,  but  as  tenants  in  com- 
mon, and  where  the  testator  made  no  change  in  his  will  after 
the  death  of  a  residuary,  the  residuary  share  passes  to  his 
next  of  kin  and  not  to  the  remaining  residuaries. 

Matter  of  Barrett,  132  App.  Div.  134;  116  Supp.  756. 

In  the  case  of  a  lapsed  legacy  the  tax  is  on  the  succession 
as  it  actually  occurs. 

Luydom  v.  Voorhees,  58  N.  J.  Eq.  157;  43  A.  4. 

In  the  case  of  Re  Hulett's  Estate,  121  Iowa  423;  96  N.  W. 
952,  Sarah  J.  Hulett  executed  a  will  in  favor  of  her  son,  Win. 
M.  Hulett,  making  him  the  sole  beneficiary  to  the  exclusion  of 
another  son  and  a  daughter.  Wm.  M.  Hulett  executed  a  will 
in  favor  of  his  mother.  Thereafter,  Sarah  J.  Hulett  died  and 
shortly  following  Wm.  M.  Hulett  died  without  changing  the 
terms  of  his  will  whereby  his  mother  was  made  sole  bene- 
ficiary. The  question  was  then  raised  whether  the  brother 
and  sister  of  Wm.  M.  took  as  his  heirs,  and  were  subject  to  the 
tax,  or  whether  they  received  the  property  as  the  heirs  of 
the  mother  and  were  thus  exempt.  Our  court  adhered  to  the 
view  that  they  received  the  property  as  heirs,  not  of  their 
mother,  but  as  heirs  of  Wm.  M.  Hulett,  and  that  therefore 
they  were  subject  to  the  collateral  inheritance  of  this  State. 

This  would  seem  to  be  the  general  rule  where  the  legacy 
lapses.  Where  it  does  not  lapse  two  taxes  are  levied  in  Eng- 
land. To  illustrate :  John  Scott,  Jr.,  made  a  will  in  favor  of 
his  executors  conveying  all  of  his  property,  amounting  to 
approximately  $400,000,  to  be  held  in  trust  for  his  daughter 
Muriel  Elsie  Scott.  Shortly  after  the  death  of  John  Scott, 
Jr.,  his  father  John  Scott,  Sr.,  died  leaving  a  will  disposing 
of  his  property  amounting  to  about  $400,000  to  John  Scott,  Jr. 
The  question  was  then  raised  whether  Muriel  Elsie  Scott 
would  be  required  to  pay  one  succession  tax  on  taking  her 
father's  interest  in  the  estate  of  John  Scott,  Sr.,  or  whether 
she  would  be  required  to  pay  the  tax  twice.  The  English  court 
held  that,  in  view  of  their  fiction  in  such  cases  that  the  tax 


PART  III  — THE  PARTIES  249 

should  be  levied  twice,  once  when  the  property  descended  from 
John  Scott,  Sr.,  to  his  son,  and  again  when  the  property 
descended  from  this  son,  John  Scott,  Jr.,  to  his  daughter. 

In  re  Scott,  1  Q.  B.  228 ;  5  British  Ruling  Case,  840 ;  70  L.  J.  Q.  B.  N.  8. 
66;  65  J.  P.  84;  49  Week.  Rep.  178;  83  L.  T.  N.  S.  613;  17  Time* 
L.  R.  148. 


3.  While  the  Legacy  is  in  Custodia  Legis. 

As  we  have  seen,  there  are  conflicting  theories  as  to  the 
estate  of  a  legatee  during  the  distribution  and  while  the  prop- 
erty of  the  decedent  is  "in  custodia  legis." 

This  is  still  further  complicated  when  the  legatee  himself 
dies  and  is  a  nonresident.  What  then  is  the  situs  of  the  prop- 
erty and  what  is  the  nature  of  the  estate  of  the  deceased  non- 
resident legatee  in  the  estate  of  the  original  testator? 

In  New  York  a  distinction  has  been  made  between  the  un- 
ascertained right  of  a  legatee  before  the  settlement  of  an 
executor's  accounts. 

Matter  of  Zefita,  167  N.  Y.  280;  60  N.  E.  598. 

Matter  of  Phipps,  77  Hun,  325;  28  Supp.  330;  aff.  143  N.  Y.  641;  37  N.  E. 
823. 

And  the  situation  after  inventory  and  accounting. 

Matter  of  Clinch,  180  N.  Y.  300;  73  N.  E.  35. 

The  theory  being  that  the  legatee  has  but  a  * '  naked  right. ' ' 

Its  logic  was  rather  exploded  by  the  Pennsylvania  court  in 

Milliken's  Estate,  206  Pa.  St.  149;  55  A.  853.    In  this  case  a 

brother  died  in  New  York  and  his  sister  died  a  resident  of 

Pennsylvania  ten  days  later.    The  court  said: 

"His  securities  were  there  (in  New  York)  deposited  in  a 
trust  company;  they  were  not  in  his  physical  possession; 
could  not  well  have  been;  his  right  to  custody  over  them,  to 
the  extent  of  her  share,  nominally  passed  at  once  to  her  on 
his  death,  subject  only  to  the  incident  of  administration  in 
New  York.  Her  share  from  that  moment  was  subject  of 
bargain,  sale  or  transfer  by  her  in  Pennsylvania,  subject  only 
to  her  share  of  the  expenses  of  administration  in  New  York. 
For  two  weeks  then  she  was  not  only  in  full  constructive  pos- 
session, she  was  to  a  degree  in  actual  possession ;  that  is,  she 
could  exercise  every  right  of  an  owner  in  actual  possession 


250  INHERITANCE  TAXATION 

except  that  of  determining  the  amount  of  charges  for  adminis- 
tration ;  she  was  the  absolute,  uncontrolled  owner  subject  to  a 
trifling  lien. ' ' 

As  the  State's  right  to  the  tax  vests  at  the  same  moment 
that  the  right  of  the  legatee  vests  in  his  legacy,  some  authori- 
ties have  been  inclined  to  hold  that  what  the  legatee  gets  is 
what  remains  after  the  tax  has  been  subtracted,  and  his  legacy 
is  therefore,  in  reality,  not  taxed  at  all. 

Finnen's  Estate,  196  Pa.  St.  72;  46  A.  269. 

The  New  York  rule  has  been  somewhat  modified  by  the 
more  recent  decisions,  and  it  now  seems  to  be  the  doctrine 
that  the  tax  accrues  after  death  as  soon  as  the  interest  of 
the  legatee  is  ascertained,  and  it  is  then  due  and  payable  and 
interest  thereon  begins  to  run  from  that  date. 

Matter  of  Armstrong,  N.  Y.  L.  J.,  February  20,  1912. 
Matter  of  Cans,  N.  Y.  L.  J.,  April  13,  1912. 
Matter  of  Sterry,  N.  Y.  L.  J.,  April  30,  1912. 

4.  From  What  Fund  Payable. 

Each  legacy  must  bear  its  own  share  of  the  tax,  unless  the 
will  otherwise  directs ;  and  even  where  it  does  so  provide  each 
of  the  distributive  shares  of  the  residuary  estate  must  bear 
its  proportionate  burden. 

Matter  of  Smith,  85  Misc.  636;  149  Supp.  24. 

As  to  directions  in  the  will  providing  for  the  payment  of 
taxes  on  specific  bequests  out  of  the  residuary  estate,  the 
Court  of  Appeals  said  in  Matter  of  Gihon,  169  N.  Y.  443; 
62  N.  E.  561: 

11  Therefore,  though  the  administrator  or  executor  is  re- 
quired to  pay  the  tax,  he  pays  it  out  of  the  legacy  for  the 
legatee,  not  on  account  of  the  estate.  *  *  No  one  ques- 

tions that  where  a  legacy  is  given  for  a  specified  amount  the 
tax  must  be  deducted  from  the  amount  of  the  legacy  and  the 
balance  only  given  to  the  legatee.  A  testator  may  direct  that 
the  tax  on  a  particular  legacy  shall  be  paid  out  of  the  estate, 
nevertheless,  in  reality  the  tax  is  still  paid  out  of  the  legacy, 
the  effect  of  the  direction  of  the  testator  being  merely  to 
increase  the  legacy  by  the  amount  of  the  tax.  *  *  *  The 


PAKT  III  — THE  PARTIES  251 

full  amount  of  the  legacy  is  in  law  paid  to  the  legatee  and  the 
deduction  made  from  it  and  paid  to  the  State  or  Federal  Gov- 
ernment is  paid  on  account  of  the  legatee  from  the  legacy 
which  he  receives. ' ' 

Where  the  will  directed  that  the  tax  on  the  specific  legacies 
be  paid  out  of  the  residuary  and  a  codicil  making  other 
bequests  made  no  such  direction,  held,  that  the  provision  in 
the  will  did  not  apply  to  the  codicil. 

Matter  of  Myers,  N.  Y.  L.  J.,  November  22,  1913. 

Where  will  authorized  executor  to  pay  legacy  "without  any 
rebate  or  reduction  whatever"  and  the  will  was  executed 
before  the  enactment  of  the  transfer  tax,  the  court  held  that 
an  action  to  compel  payment  of  tax  out  of  residuary  would 
not  lie. 

Jackson  v.  Taller,  41  Misc.  36 ;  aff.  96  App.  Div.  625 ;  184  N.  Y.  603. 

And  where  the  will  directed  tax  on  legacies  to  be  paid  out 
of  the  residuary,  held  not  to  include  legacies  given  under  a 
power  of  appointment  vested  in  testator. 

Loring  v.  Gardner,  221  Mass.  571;  109  N.  E.  635. 

The  contrary  was  held  in  New  York  under  a  similar  will. 

Isham  v.  N.  Y.  Assn.  for  the  Poor,  177  N.  Y.  218 ;  69  N.  E.  367. 

In  the  absence  of  a  provision  in  the  will  to  the  contrary 
the  amount  of  the  tax  must  be  deducted  from  each  legacy 
and  the  balance  paid  to  the  legatee. 

Sherman  v.  Moore,  89  Conn.  190;  93  A.  241. 

But  it  has  been  held  that  taxes  imposed  in  a  foreign  juris- 
diction must  be  charged  against  the  property  in  the  foreign 
State  and  cannot  reduce  the  amount  of  a  legacy  payable  from 
property  within  the  State.  "To  hold  that  the  effect  of  the 
foreign  law  is  to  reduce  the  legacy  given  by  the  will  construed 
in  accordance  with  the  law  of  the  testator's  domicile  is  to 
permit  the  foreign  law  to  regulate  the  testamentary  capacity 
of  a  resident ;  as  the  foreign  tax  depends  upon  the  jurisdiction 
over  the  property  and  is  not  sustainable  as  a  regulation  of 
the  exercise  of  testamentary  power  by  the  citizen  of  another 
State,  it  follows  that  the  tax  is  merely  a  charge  upon  the  par- 


252  INHERITANCE  TAXATION 

ticular  property  and  not  upon  the  pecuniary  legacies  given 
by  the  will." 

Kingsbnry  v.  Bazeley,  75  N.  H.  IS ;  70  A.  916. 

D.— LIFE  ESTATES  AND  REMAINDERS. 
1.  Life  Estates. 

Whether  the  life  estate  be  absolute  or  defeasible,  as  by 
remarriage,  or  per  autre  vie,  whether  subject  to  dower  and 
curtesy,  or  whether  it  is  coupled  with  a  power  to  invade  the 
principle  or  power  of  appointment,  or  limited  by  time,  as 
surviving  to  a  certain  age ;  it  is,  in  the  contemplation  of 
inheritance  tax  law,  a  present  right  presently  valuable  and 
taxable. 

The  same  is  true  of  annuities. 

People  v.  McConnick,  208  111.  437;  70  N.  E.  350. 

Be  De  Hoghton,  1  Ch.  855 ;  65  L.  J.  Ch.  528 ;  74  L.  T.  Rep.  N.  8.  297. 

Where  a  life  tenant  bought  in  the  remainder  and  the  life 
estate  was  exempt  under  the  statute  it  was  held  that  she 
took  the  remainder  subject  to  the  lien  of  the  tax. 

Harrison  v.  Johnston,  109  Tenn.  245;  70  S.  W.  414. 

In  another  case,  where  the  life  tenant  bought  in  the  re- 
mainder and  both  the  life  estate  and  the  remainder  were 
taxable,  a  merger  was  held  to  have  taken  place,  and  the  tax 
was  assessed  accordingly. 

Brune  v.  Smith,  Fed.  Gas.  No.  2,053. 

Where  the  tax  is  levied  on  the  entire  estate  and  paid  out  of 
the  corpus,  no  separate  computation  of  the  tax  on  the  life 
estate  and  that  on  the  remainder  may  be  necessary. 

Re  De  Bourbon,  211  Pa.  Sf.  623;  61  A.  244. 

Appeal  of  Commonwealth,  127  Pa.  St.  435;  17  A.  1094. 

a.  FUND  FROM  WHICH  THE  TAX  is  PAYABLE. 

Where  the  succession  tax  against  a  life  tenant  is  assessed 
against  the  property  as  a  whole  it  is  chargeable  to  principal. 

Bishop  v.  Bishop.  81  Conn.  509;  71  A.  583. 

In  Minot  v.  Winthrop,  162  Mass.  113 ;  38  N.  E.  512,  the  life 
tenant  claimed  that,  as  the  remainder  is  also  presently  valued 


PART  III  — THE  PARTIES  253 

and  the  tax  thereon  paid  out  of  the  principal  fund,  the  income 
of  the  life  tenant  must  be  thereby  reduced  and  it  was  claimed 
that  he  should  be   reimbursed.     Under  the   Massachusetts 
statute  then  in  force  the  life  tenant  was  exempt. 
The  court  said : 

'  *  The  life  legacy  to  Mr.  Winthrop  is  not  taxable  under  the 
statute,  because  he  is  the  husband  of  the  testatrix.  The  ques- 
tion is  whether  his  loss  of  income  is  to  be  made  up  to  him  out 
of  the  principal  of  the  fund,  or  out  of  the  estate  generally,  or 
is  to  be  borne  by  him  as  a  consequence  of  the  tax  levied  on  the 
legatee  of  the  remainder.  There  is  nothing  in  the  statute 
which  authorizes  any  burdens  to  be  imposed  upon  the  legatee 
of  the  remainder  in  addition  to  the  tax,  and  we  find  no  warrant 
in  the  statute  for  taking  any  part  of  the  principal  of  the  trust 
fund,  or  of  the  estate  generally,  to  make  up  the  loss  of  the  life 
tenant.  There  is  no  provision  in  the  will  for  making  good  this 
loss  out  of  the  estate.  We  think  that  Mr.  Winthrop  must 
bear  the  loss.  Perhaps  a  simpler  way  than  that  prescribed 
by  the  statute  would  have  been  to  levy  the  tax  at  the  end  of 
the  life  estate  upon  the  whole  of  the  fund  to  be  paid  to  the 
legatee  in  remainder,  but  the  plan  adopted  is,  we  think, 
within  the  power  of  the  Legislature,  and  Mr.  Winthrop  must 
be  held  to  take  his  life  interest  subject  to  the  law.  While 
legacies  to  a  husband  are  exempt  from  the  tax,  the  conse- 
quences to  a  tenant  for  life  of  imposing  a  tax  upon  a  legatee 
in  remainder  and  deducting  from  the  legacy  must  be  held 
to  have  been  intended,  and  no  way  of  reimbursement  to  the 
tenant  for  life  has  been  provided." 

Since  this  case  many  statutes  require  the  payment  of  the 
tax  out  of  the  corpus,  both  as  to  the  life  tenant  and  the 
remainderman.  The  life  tenant  loses  the  income  on  the 
amount  of  the  tax  paid  on  the  remainder  interest  and  this  is 
held  to  counterbalance  the  loss  to  the  remainderman  by  reason 
of  paying  the  tax  on  the  life  estate  and  not  out  of  income. 
Under  these  circumstances  the  life  tenant  does  not  refund  the 
tax  but  takes  the  income  on  the  net  estate  less  the  tax  on 
both  remainder  and  life  interest. 

Matter  of  Hoyt,  44  Misc.  76;  89  Supp.  744. 

Matter  of  Bass,  57  Misc.  531 ;  109  Supp.  1084. 

Title  Guarantee  &  Trust  Co.  v.  Lohrke   (N.  J.),  102  A.  660. 


254  INHERITANCE  TAXATION 

Though  one  Surrogate  held  the  tax  payable  from  income. 

Matter  of  Day,  86  Misc.  131 ;  149  Supp.  221. 

And  this  is  the  rule  in  Pennsylvania. 

Be  Brown,  208  Pa.  St.  161 ;  57  A.  360. 

Where  the  will  declared  that  the  life  estate  should  be  "free 
from  inheritance  taxes,"  it  was  held  that  the  testator  intended 
to  preserve  to  the  life  tenant  the  income  on  the  entire  fund, 
and  that  the  tax  must  be  paid  out  of  the  residuary. 

Matter  of  Bingham,  86  Misc.  566;  148  Supp.  918. 

b.  CHARGED  WITH  AN  ANNUITY. 

In  case  of  an  annuity  the  amount  received  by  the  life  tenant 
is  arbitrarily  fixed  and  does  not  depend  upon  the  amount  of 
the  principal  fund. 

In  such  case  the  payments  must  be  reimbursed  on  the 
rule  in 

Matter  of  Tracy,  179  N.  Y.  501,  510;  72  N.  E.  519. 

"The  method  of  restoring  to  the  residuary  estate  the  tax 
so  paid  by  the  trustee  is  as  follows :  Take  for  illustration  an 
annuitant  whose  probable  duration  of  life  is  ten  years.  The 
trustees  would  deduct  from  each  annual  payment  as  made 
one-tenth  of  the  tax  and  restore  it  to  the  residuary  estate. 
In  the  case  at  bar  the  death  of  the  annuitant  was  suggested 
on  the  argument  as  having  taken  place  since  that  of  the  testa- 
tor. Any  portion  of  the  transfer  tax  not  restored  to  the 
estate  by  the  process  indicated  at  the  time  of  the  annuitant's 
death  would  be  a  loss  which  the  residuary  estate  must  sus- 
tain." 

When  a  life  estate  is  charged  with  an  annuity  the  present 
theoretical  value  of  the  annuity  should  be  computed  and 
deducted  and  not  the  amount  necessary  to  set  aside  to  produce 
the  annuity. 

Matter  of  Maresi,  74  App.  Div.  76;  77  Supp.  76. 

But  when  the  will  directs  an  annuity  to  be  purchased  from 
specified  insurance  companies  there  is  no  remainder,  and  the 
value  of  the  annuity  is,  in  that  case,  a  specific  bequest  to  be 
measured  by  its  actual  cost  to  the  estate.  So  held  when  the 


PAST  III  — THE  PARTIES  255 

actual  annuity  cost  was  $19,000  more  than  the  appraised 
theoretical  value.  The  cost  was  deducted  from  the  value  of 
the  residuary  estate. 

Matter  of  Hutchinson,  105  App.  Div.  487;  94  Supp.  354. 

c.  POWER  TO  INVADE  PRINCIPAL. 

When  the  will  gives  the  life  tenant  power  to  invade  the 
principal  or  a  trustee  power  so  to  do  on  behalf  of  the  life 
tenant  the  courts  have  been  somewhat  confused  as  to  what 
method  of  taxation  should  be  adopted. 

Originally  in  New  York  it  was  the  practice  to  value  the 
life  estate  and  tax  it  and  suspend  taxation  as  to  the  remainder 
because  its  amount  was  uncertain. 

Matter  of  Babcock,  37  Misc.  445;   75  Supp.  926;  aff.  81  App.  Div.  645; 

81  Supp.  1117. 

Matter  of  Granfield,  79  Misc.  374;  140  Supp.  922. 
Matter  of  Blynn,  N.  Y.  L.  J.,  January  29,  1915 ;  160  Supp.  730. 
Matter  of  Neher,  95  Misc.  68;  158  Supp.  454. 

In  the  Blyrni  case  the  New  York  Surrogate  said : 
"This  is  an  appeal  by  the  State  Comptroller  from  the 
appraiser's  report  and  the  order  entered  thereon,  upon  the 
ground  that  the  taxation  of  certain  remainder  interests  pass- 
ing under  the  will  of  decedent  was  improperly  suspended. 
The  executors  contend  that  there  was  not  improper  suspen- 
sion of  taxation,  inasmuch  as  the  life  tenant  is  given  a  power 
to  use  the  principal  of  the  fund.  The  power  is  found  in  the 
will  of  decedent.  If  it  should  be  exercised  by  the  executors 
to  its  fullest  extent,  i.  e.,  to  the  exhaustion  of  the  principal, 
there  would  be  nothing  that  could  be  transferred  to  the  re- 
mainderman at  the  death  of  the  life  tenant.  In  the  Matter  of 
Granfield,  79  Misc.  374 ;  140  Supp.  922,  a  case  very  similar  to 
the  one  under  discussion,  the  court  said,  at  page  381:  'To 
tax  the  estate  at  the  present  time,  in  the  event  nothing  should 
ultimately  pass  to  the  remaindermen,  would  be  imposing  a 
tax  upon  the  property  and  not  upon  the  transfer,  in  direct 
conflict  with  the  whole  theory  of  the  transfer  tax. '  Applying 
this  rule  to  the  situation  herein,  I  find  that  the  contention  of 
the  executors  should  be  sustained.  The  appeal  is  therefore 
dismissed  and  the  order  fixing  tax  affirmed. ' ' 


256  INHERITANCE  TAXATION 

This  is  the  rule  that  has  been  generally  adopted  in  other 
States : 

People  v.  Freese,  267  111.  164;  107  N.  E.  857. 
Nieman's  Appeal,  131  Pa.  St.  346;  18  A.  900. 

Under  this  method  it  is  obvious  that  if  the  life  tenant  uses 
part  or  all  of  the  principal,  part  of  the  estate  will  escape 
taxation,  but  where  the  discretion  is  vested  in  the  trustee 
to  use  part  or  all  of  the  principal  no  remedy  has  as  yet  been 
discovered. 

d.  THE  NEW  YORK  RULE. 

By  the  decision  in  Matter  of  Zborowski,  213  N.  Y.  109,  all 
the  prior  cases  in  New  York  were  overruled,  and  the  remainder 
is  now  taxed  immediately  at  the  highest  possible  rate. 

Matter  of  Blun,  176  App.  Div.  189;  160  Supp.  731. 

When  the  life  tenant  has  power  to  use  the  principal  at  his 
own  discretion  the  New  York  Surrogates'  Court  held  that  a 
base  fee  had  been  created  and  that  the  life  tenant  should  be 
taxed  for  the  entire  estate. 

Matter  of  Post,  96  Misc.  531. 

Where  there  was  a  life  use  to  the  widow,  with  power  in  the 
trustee  to  pay  the  principal  to  the  life  tenant  the  remainder 
should  be  added  to  the  value  of  the  life  estate  in  fixing  the  tax. 

Matter  of  Rowland,  109  Misc.  16;  178  Supp.  368. 

See  also : 

Matter  of  Rogers,  149  Supp.  462. 

A  trust  accompanied  by  a  discretionary  power  to  the  life 
beneficiary  of  the  income,  to  use  such  part  of  the  principal 
as  she  may  demand  or  need  for  her  own  use  or  that  of  her 
children,  gives  her  the  absolute  ownership  of  the  principal,  if 
she  so  elects,  and  makes  the  trust  voidable. 

Solley  v.  Westcott,  43  Misc.  188 ;  88  Supp.  297. 

There  is  sometimes  a  close  question  whether  there  is  any 
estate  at  all  in  the  remainderman,  as  where  there  is  an  abso- 
lute bequest  with  a  remainder  over  of  such  portion  as  is  not 
used.  In  such  case  the  remainder  over  is  void. 

Campbell  v.  Beaumont,  91  N.  Y.  464. 


PART  III  — THE  PARTIES  257 

On  the  other  hand,  there  may  be  an  equally  close  question 
whether  the  will  in  fact  gives  the  power  to  invade  the  prin- 
cipal. Where  a  devise  by  a  testator  of  all  "the  rest,  residue, 
and  remainder"  of  his  estate,  to  his  wife  during  her  life, 
"and  after  death  I  give  and  bequeath  the  remainder  thereof 
as  follows-  '  affords  no  basis  for  the  contention  that  the 
words  "the  remainder  thereof"  by  implication  give  the  wife 
a  right  to  use  the  principal,  and  the  interests  of  remaindermen 
are  presently  determinable  and  subject  to  transfer  tax. 

Matter  of  Runice,  36  Misc.  607;  73  Supp.  1120. 

A  gift  of  the  income  without  remainder  over  creates  a  fee. 

Hatch  v.  Bassett,  52  N.  Y.  359. 

And  a  fee  is  created  where  the  nature  of  the  property  is 
such  that  to  use  it  means  to  consume  it. 

Bell  v.  Warn,  4  Hun,  406. 

Baumgrass  v.  Baumgrass,  5  Misc.  8;  24  Supp.  767. 

The  rule  adopted  by  the  New  York  Surrogate  in  the  Post 
case  is  that  adopted  by  the  Tax  Commission  of  Wisconsin, 
citing  as  authority: 

Larsen  v.  Johnson,  78  Wis.  300;  47  N.  W.  615. 

The  case  relied  on  was  not  a  transfer  tax  matter  but  sub- 
stantially held  that,  where  there  was  a  power  to  invade,  the 
principal  vested  in  the  life  tenant  and  a  base  fee  was  created. 

The  perplexing  question  as  to  the  nature  of  the  title  where 
there  is  a  life  use  with  discretion  in  the  life  tenant  to  use  the 
entire  principal  is  thoroughly  discussed  in  Heaton  on  Surro- 
gate's Courts,  3d  Ed.,  §  280,  though  it  should  be  borne  in 
mind  that  the  learned  author  was  not  considering  it  from  the 
point  of  view  of  inheritance  taxation.  His  discussion  is  as 
follows : 

"A  beneficiary  given  the  income  of  a  fund  with  the  right  to 
encroach  upon  the  principal  may  in  certain  cases  be  the  sole 
judge  of  the  occasion  and  his  necessities. 

"Where  property  is  willed  without  specifying  the  nature 

of  the  estate  and  the  donee  is  given  a  power  of  disposition, 

the  latter  takes  the  absolute  title  to  the  property,  but  where 

the  donee  takes  an  estate  expressly  for  life,  with  a  power  of 

17 


258  INHERITANCE  TAXATION 

disposal  during  life,  he  takes  a  life  estate  only,  and  whatever 
is  left  of  the  estate  at  the  death  of  the  life  tenant  passes  to 
the  remainderman. 

Tompkins  v.  Fanton,  3  Dem.  4-7. 

''Will  gave  the  widow  the  right  to  possess  and  enjoy  the 
fund  during  life,  and  if  necessary  to  use  the  principal  for  her 
support.  No  trustee  was  provided  for.  Held,  that  the  widow 
was  entitled  to  the  possession  of  the  estate,  and  had  the  right 
to  determine  how  much  of  the  principal  she  should  use. 

Matter  of  Grant,  16  Supp.  716;  re-examined,  86  Hun,  617. 
Matter  of  McDougall,  141  N.  Y.  21,  distinguished. 

"Upon  payment  of  the  fund  to  a  widow  who  has  the  right 
to  use  part  or  all  of  the  fund  for  support  she  becomes  trustee 
for  the  remaindermen,  and  that  trust  devolves  upon  her  death 
upon  her  representatives  and  not  upon  those  of  the  first 
testator. 

Leggett  v.  Stevens,  77  App.  Div.  612 ;  79  Supp.  289. 

"Devise  of  a  farm  limited  to  such  part  as  may  remain  after 
the  death  of  the  widow.  No  trust  power  given  to  executor. 
Held,  that  the  widow  was  the  one  to  determine  her  necessity. 

Douglass  v.  Hazen,  8  App.  Div.  27;  40  Supp.  1012. 

"Will  gave  husband  use  of  the  estate  and  'any  part  of 
the  principal  that  may  be  needed  for  his  support.'  Held, 
that  the  husband  was  the  sole  judge  of  the  amount  of  the 
principal  needed  for  his  support. 

Matter  of  Parsons,  39  Misc.  126;  78  Supp.  975. 

"Testator  gave  his  personal  estate  to  widow  for  life  for 
support  of  herself  and  children.  Held,  that  she  should  have 
the  possession  of  the  personal  estate  and  should  use  so  much 
as  she  deemed  necessary  for  their  support. 

Billor  v.  Loundes,  2  Dem.  590. 

"According  to  the  cases,  very  similar  to  this,  which  the 
courts  have  passed  upon,  the  person  having  the  life  estate 
with  power  of  using  the  principal  has  received  and  retained 
the  possession  of  the  corpus  of  the  estate  without  giving 
security. ' ' 

Thomas  v.  Wolf  ord,  49  Hun,  145 ;  1  Supp.  610. 


PART  III  — THE  PARTIES  259 

Judge  Peckham  said  in  Matter  of  McDougall,  141  N.  Y.  21 : 
"In  other  cases  where  it  has  been  held  that  the  legatee  was 
entitled  unconditionally  to  the  possession  of  the  legacy  without 
security,  other  facts  existed,  such  as  where  the  language  of 
the  will  made  it  manifest  that  the  testator  intended  to  give  the 
legatee  power  to  use  in  his  discretion  some  portion  of  the 
corpus  of  the  estate  for  his  support." 

See  also: 

Matter  of  Grant,  86  Hun,  617;  16  Supp.  716. 

Matter  of  Trelease,  49  Misc.  207;  96  Supp.  318;  aff.  115  App.  Div.  654. 

Terry  v.  Rector  St.  S.  Ch.,  79  App.  Div.  527 ;  81  Supp.  119. 

Swarthout  v.  Ranier,  143  N.  Y.  499. 

e.  WITH  POWER  OF  APPOINTMENT. 

This  topic  has  already  been  considered  at  length  ante  under 
"Powers  of  Appointment."  It  is  only  necessary  to  add  here 
that  the  power  does  not  raise  the  life  estate  to  a  fee  and  is 
ignored  as  an  asset  in  the  hands  of  life  tenants.  It  does  not 
seem  to  have  occurred  to  any  appraiser  that  a  power  of 
appointment  may  be  a  very  valuable  right.  On  the  promise  to 
appoint  creditors  and  thus  pay  their  claims  credit  may  be 
secured  to  the  present  worth  of  the  remainder  and  was 
secured  to  the  amount  of  many  thousands  of  dollars  in  a 
recent  case. 

Matter  of  Slosson,  87  Misc.  517;  149  Supp.  797;  aff.  168  App.  Div.  891; 
152  Supp.  690;  reversed,  216  N.  Y.  79. 

This  affords  one  of  the  most  curious  anomalies  in  transfer 
tax  law.  A  life  tenant  with  power  of  appointment  may  at 
once  sell  the  remainder  under  a  valid  contract  to  appoint, 
and  thus  increase  the  cash  value  of  the  bequest  by  the  amount 
received  on  such  sale  in  addition  to  the  life  estate,  and  this 
amount  will  be  free  and  clear  from  the  tax,  as  against  the 
life  use. 

This  view  received  some  support  in  a  recent  case  in  Massa- 
chusetts, where  it  was  held  that  a  life  use  with  a  general 
power  of  appointment  was  subject  to  the  claims  of  the  cred- 
itors of  the  donee  of  the  power  and  that  these  must  be 
deducted  before  the  tax  was  assessed  on  the  exercise. 

Hill  v.  Attorney-General   (Mass.),  118  N.  E.  891. 


260 

On  the  other  hand,  if  the  power  is  exercised  in  favor  of  the 
creditors  the  tax  is  assessed  on  the  transfer  to  them  under 
the  power,  following  the  same  doctrine  as  that  applied  to 
transfers  by  will  in  payment  of  debts.  See  Matter  of  Slosson, 
supra. 

Although  the  life  tenant  was  given  a  power  of  appointment 
held  that  she  did  not  get  a  fee  and  the  remainder  to  a  daughter 
held  taxable. 

Meldrum's  Estate  (Minn.),  183  N.  W.  835. 

f.  TAX  ASSESSED  ON  THEORETICAL  NOT  ACTUAL  VALUE. 

Under  the  statute  the  value  of  the  life  estate  must  be  com- 
puted upon  the  basis  of  5%  interest,  irrespective  of  the  actual 
income  of  the  fund,  whether  higher  or  lower. 

Matter  of  Potter,  139  App.  Div.  905;  124  Supp.  1126;  aff.  199  N.  Y.  561; 
3  N.  E.  378. 

The  theoretical  value  of  a  life  estate  computed  upon  the 
mortality  tables  and  rate  of  interest  fixed  by  the  state  is  the 
value  at  death  of  the  testator,  and  not  the  actual  duration  of 
life,  and  it  is  the  legal  measure  of  the  value  of  a  life  estate, 
although  the  life  tenant  only  survived  the  testator  a  few 
months. 

Howe  v.  Howe,  179  Mass.  546;  61  N.  E.  225. 

Though  it  might  seem  an  injustice  to  tax  the  theoretical 
value  of  a  life  estate  of  a  woman  of  30  whose  expectation  of 
life  is  35  years  and  whose  interest  in  the  fund  is  about  three- 
fourths  its  entire  amount  at  full  value  when  she  actually 
survives  the  testator  only  a  few  hours,  the  logic  that  a  time 
must  be  fixed  for  valuation  and  that  time  is  the  death  of  the 
testator  is  immutable  and  has  thus  far  been  uniformly  sus- 
tained. 

The  Supreme  Court  of  Wisconsin  reasons  thus : 
"The  right  to  receive  being  the  subject  of  inheritance  taxa- 
tion, the  amount  is  regulated,  primarily,  by  the  value  of  the 
right.  The  right  in  the  particular  case  has  reference  to  the 
privilege  to  receive,  for  life,  the  yearly  payments.  There  may 
be  many  payments,  but  the  right  is  an  entirety.  That  vested, 
subject  to  the  burden  on  the  transfer,  as  soon  as  the  will  was 
allowed.  Clearly  it  could  be  valued,  the  transfer  tax  be 


PART  III  —  THE  PARTIES  261 

assessed  thereon,  and  be  wholly  liquidated,  if  such  be  the 
legislative  plan." 

State  ex  rel.  Kempsmith  v.  Widule,  161  Wis.  389 ;  154  N.  W.  695. 

In  New  York  the  Appellate  Division  took  another  view  and 
held  that  where  the  life  tenant  died  shortly  after  the  testator 
the  actual  duration  of  life  should  be  the  measure  of  value ;  but 
this  decision  was  reversed  by  the  Court  of  Appeals  in: 

Matter  of  White,  208  N.  Y.  64;  101  N.  E.  793.    . 

The  court  says,  at  page  68 : 

"The  rule  promulgated  by  the  Legislature  effects  certainty 
and  uniformity  which  the  principle  adopted  by  the  Appellate 
Division  would  tend  to  destroy  *  *  *  while  in  this  case 
the  rule  works  to  the  advantage  of  the  State,  inasmuch  as  the 
remainder  passes  to  a  religious  corporation  which  is  exempt 
from  the  tax,  such  manifestly  is  not  its  necessary  or  uniform 
result  and  it  is  not  subject  to  criticism  as  harsh  or  unjust." 

Where  there  was  a  power  to  invade  the  principal  the  Surro- 
gate deducted  the  actual  and  not  the  theoretical  value  of  the 
life  interest.  The  question  has  not  since  been  raised,  but  the 
authority  is  weakened  if  not  overruled  by  the  subsequent 
cases. 

Matter  of  Hall,  36  Misc.  618;  73  Supp.  1124. 

In  Pennsylvania  it  has  been  held  that  evidence  of  the  present 
health  of  a  beneficiary  may  be  taken  into  consideration  in 
estimating  the  value  of  a  life  estate. 

Re  Goldstein,  14  W.  M.  C.  176  (Pa.). 

2.  Remainders. 

The  immediate  taxation  and  valuation  of  a  life  estate  is 
simple  and  apparently  equitable,  as  far  as  any  tax  on  the 
principal  of  a  fund  can  be  so  regarded.  The  immediate  taxa- 
tion of  remainder  interests  is  neither  as  simple  nor  as  equi- 
table. As  it  reduces  the  fund  the  life  tenant  must  suffer, 
while  to  make  the  remainderman  pay  for  a  benefit  he  may 
never  live  to  enjoy  also  seems  unjust.  Many  States  give  the 
remainderman  an  election  to  pay  at  once  or  file  a  bond  to 
pay  when  the  remainder  accrues.  This  is  more  simple  and 
does  not  deplete  the  fund,  but  it  is  a  hardship  on  the  remain- 


262  INHERITANCE  TAXATION 

derinan  and  works  to  the  disadvantage  of  the  State.  The 
collection  of  the  tax  is  postponed  for  a  generation.  The 
expense  of  watching  bondsmen  and  beneficiaries  is  great,  the 
amount  of  labor  burdensome  and  the  financial  results  not 
commensurate.  This  has  led  many  important  States  to  require 
the  immediate  taxation  of  all  remainders  at  the  highest  pos- 
sible rate,  to  be  paid  out  of  the  principal  fund. 

a.  THE  LAW  IN  FORCE  AT  DEATH  OF  TESTATOR  GOVERNS. 

It  is  the  statute  in  force  at  the  death  of  the  testator  and 
not  that  in  force  at  the  date  of  the  death  of  the  life  tenant 
which  governs  the  taxation  of  remainders.  If  taxation  has 
been  suspended  for  any  reason  this  rule  often  brings  the  case 
under  obsolete  provisions  and  antiquated  authorities. 

Matter  of  Goldenberg,  187  App.  Div.  692;  176  Supp.  201. 

State  ex  rel.  Basting  v.  Probate  Court,  132  Minn.  104 ;  155  N.  W.  1077. 

Matter  of  Mason,  120  App.  Div.  738;  105  Supp.  667;  aff.  189  N.  Y.  556; 

82  N.  E.  1129. 

Matter  of  Roosevelt,  143  N.  Y.  120;  38  N.  E.  281. 
Matter  of  Meserole,  98  Misc.  105;  162  Supp.  414. 

b.  VESTED  REMAINDERS  NOT  TAXABLE  WHEN  TESTATOR  DIED 

BEFORE  THE  STATUTE. 

Remainders  are  deemed  vested  even  though  they  are  subject 
to  be  divested  by  some  remote  possibility. 

Henry  v.  United  States,  251  U.  S.  393. 
Simpson  v.  United  States,  252  U.  S.  547. 

Remainders  that  vested  prior  to  the  statute  are  not  taxable 
at  the  death  of  the  life  tenant,  and  a  statute  declaring  them 
taxable  is  unconstitutional. 

Matter  of  Pell,  171  N.  Y.  48;  63  N.  E.  789. 
Matter  of  O 'Berry,  179  N.  Y.  285;  72  N.  E.  109. 

And  this  is  so  even  though  the  remainder  be  defeasible. 

Matter  of  Smith,  150  App.  Div.  805;  135  Supp.  240. 

Matter  of  Hitchins,  43  Misc.  485;  89  Supp.  472;  aff.  181  N.  Y.  553;   74 
N.  E.  1118. 

The  court  said  in  the  Hitchins  case,  at  page  493 : 
"Where  a  vested  though  defeasible  interest  in  remainder 
passes  under  a  will  to  a  remainderman  on  the  testator's  death, 
though  the  possession  does  not  pass"  until  the  death  of  the  life 


PART  III  — THE  PARTIES  263 

tenant,  the  transfer  or  succession  is  referred  to  the  time  of 
the  death  of  the  testator,  and  if  that  occurred  prior  to  the 
enactment  of  the  act  taxing  transfers  of  property,  the 
remainder  is  not  taxable." 

Matter  of  Seaman,  147  N.  Y.  69;  41  N.  E.  401. 
.Matter  of  Stewart,  131  N.  Y.  274;  30  N.  E.  184. 
Matter  of  Curtis,  142  N.  Y.  219 ;  36  N.  E.  887. 
Matter  of  Langdon,  153  N.  Y.  6 ;  46  N.  E.  1034. 

c.  TAXATION  POSTPONED  UNTIL  REMAINDERMAN  GETS  POSSES- 

SION. 

It  was  formerly  the  rule  in  New  York  and  still  is  in  many 
States  to  postpone  the  taxation  of  the  remainder  until  the 
expiration  of  the  intermediate  estate. 

McLemore  v.  Raines'  Estate,  131  Tenn.  637;  176  S.  W.  109. 
State  ex  rel.  Hale  v.  Probate  Court,  100  Minn.  192 ;  110  N.  W.  865. 
Matter  of  Cager,  111  N.  Y.  343 ;  18  N.  E.  866. 
Matter  of  Hoffman,  143  N.  Y.  327;  38  N.  E.  311. 

Taxation  is  postponed  until  vesting  under  Montana  statute. 

Fratt's  Estate  (Mont.),  199  Pac.  711. 

The  value  when  the  remainder  comes  into  possession  and 
enjoyment  is  the  basis  of  valuation  and  not  the  value  at  death 
where  taxation  was  postponed  under  the  Massachusetts 
statute. 

Moors  v.  Treasurer,  237  Mass.  254 ;  129  N.  E.  364. 

d.  PRESENTLY  TAXABLE. 

By  chapter  76,  L.  1899,  the  rule  was  changed  in  New  York 
so  as  to  provide  for  the  present  taxation  at  the  highest  pos- 
sible rate  of  all  contingent  remainders,  with  a  refund  in  case 
a  lower  rate  ultimately  proves  to  be  due.  This  statute  has 
been  copied  in  many  States  and  is  held  constitutional. 

People  v.  Lowenstein,  284  111.  126;  119  N.  E.  917. 
Matter  of  Vanderbilt,  172  N.  Y.  69;  64  N.  E.  782. 
Matter  of  Brez,  172  N.  Y.  609 ;  64  N.  E.  958. 
Matter  of  Kennedy,  3  App.  Div.  27;  86  Supp.  1024. 

The  taxation  is  against  the  trustees  who  take  the  legal  title. 
Order  of  Surrogate  affirmed  without  opinion. 

Matter  of  Guggenheim,  189  N.  Y.  561 ;  82  N.  E.  1127. 


264  INHERITANCE  TAXATION 

But  where  the  person  to  whom  the  contingent  remainder 
might  pass  is  uncertain,  the  courts  of  some  States  still  sus- 
pend taxation  until  the  uncertainty  is  removed. 

Matter  of  Zborowski,  84  Misc.  342;  145  Supp.  1101;  rev.  213  N.  Y.  109. 
Matter  of  Granfield ;  7  Misc.  374 ;  140  Supp.  922. 
State  ex  rel.  Basting  v.  Probate  Court,  101  Minn.  485 ;  112  N.  W.  878. 
Seme  Case,  132  Minn.  104 ;  155  N.  W.  1077. 

Where  the  remainderman  died  before  the  life  tenant  and 
there  was  an  alternative  bequest  to  issue  no  title  passed  to 
the  remainderman  and  therefore  there  was  no  transfer  from 
him,  the  tax  being  on  the  transfer  from  the  original  testator. 

Matter  of  Eadford,  168  Supp.  1099. 

e.  WHEN  BENEFICIARY  is  UNCERTAIN. 

It  was  held  by  the  New  York  Court  of  Appeals  in  Matter 
of  Zborowski,  supra,  that  even  when  the  ultimate  beneficiary 
was  uncertain  the  remainder  was  taxable  at  the  highest  pos- 
sible rate.  The  decedent  gave  her  residuary  estate  in  trust  to 
pay  the  income  to  her  son  Louis  until  he  attained  the  age  of 
21  years,  but  if  he  did  not  live  to  be  21  then  to  his  issue,  if 
any,  and  in  default  of  issue,  to  persons  taxable  at  5%  rate. 
Under  the  ruling  of  the  Zborowski  decision  the  tax  was 
imposed  at  the  5%  rate  against  the  trustee  for  the  5%  class. 

In  discussing  the  legislative  policy  in  adopting  this  pro- 
vision the  court  said: 

"The  different  statutes  hereinbefore  referred  to  contain 
evidence  of  a  constant  effort  of  the  Legislature  to  enlarge  the 
class  of  transfers  immediately  taxable  upon  the  death  of  the 
transferror.  The  question  of  the  Legislature's  power  in  that 
regard  was  set  at  rest  by  the  decision  of  this  court  in  Matter 
of  Vanderbilt.  In  one  aspect  it  may  be  unjust  to  the  life 
tenant  to  tax  at  once  the  transfer,  both  of  the  life  estate  and 
of  the  remainder  though  contingent,  and  it  may  seem  unwise 
for  the  State  to  collect  taxes  which  it  may  have  to  refund  with 
interest,  but  those  considerations  are  solely  for  the  Legis- 
lature, who  are  to  judge  whether  they  are  more  than  offset  by 
the  greater  certainty  which  the  State  thus  has  of  receiving 
the  tax  ultimately  its  due  under  the  statute.  However  unwise 
or  unjust  it  may  seem  in  a  particular  case  like  this  for  the 
State  to  collect  the  tax  at  the  highest  rate  wnen  in  all  proba- 


PART  III  — THE  PARTIES  265 

bility  the  remainder  will  vest  in  a  class  taxable  at  the  lowest 
rate,  it  is  the  duty  of  this  court  to  give  effect  to  the  statute  as 
it  is  written." 
To  the  same  effect  is : 

Matter  of  Shearson,  174  App.  Div.  866;  aff.  220  N.  Y.  584. 

A  similar  statute  has  been  construed  in  like  manner  by  the 
court  of  Illinois. 

Ayres  v.  Chicago  Title  &  Trust  Co.,  187  111.  42 ;  58  N.  E.  318. 

When  the  remainder  interest  belongs  to  a  decedent  while 
the  life  tenant  still  survives,  it  is  none  the  less  presently 
taxable,  as  in  Matter  of  Huber,  86  App.  Div.  458,  461;  83 
Supp.  769,  where  the  will  read:  "The  interest  which  I  may 
have  in  the  estate  of  my  deceased  father  which  interest  is 
now  subject  to  the  life  estate  of  my  mother." 

Under  the  circumstances  the  value  of  the  life  estate  of  the 
mother  at  the  death  of  the  remainderman  is  valued  and 
deducted  from  the  fund,  the  balance  being  presently  taxable. 

So,  where  a  decedent  had  an  estate  in  a  trust  fund  subject 
to  the  life  use  of  a  brother,  the  lower  courts"  were  reversed 
and  the  matter  remitted  to  the  Surrogate  on  this  theory.  The 
remainder  interest  belonged  to  a  nonresident.  The  Surrogate 
erroneously  suspended  taxation  until  the  death  of  the  life 
tenant.  Meantime  the  statute  taxing  transfers  of  nonresident 
property  was  repealed ;  but  the  court  held  that  the  remainder 
interest,  being  presently  taxable,  the  repealing  act  did  not 
avoid  the  tax. 

Matter  of  Wright,  214  N.  Y.  714;  108  N.  E.  1112. 

There  was  apparently  an  exception  where  the  life  estate 
was  defeasible  by  remarriage  because  it  is  impossible  to  value 
the  life  estate  by  the  use  of  the  mortality  tables.  While  the 
probability  of  death  may  be  estimated  from  these  tables,  there 
are  no  statistics  available  from  which  the  probability  of 
remarriage  may  even  be  conjectured. 

Herold  v.  Shanley,  146  Fed.  20;  76  C.  C.  A.  478. 

New  York,  and  most  of  the  other  State  statutes,  meet  this 
difficulty  by  providing  that  the  life  estate  shall  be  assessed 
without  regard  to  the  possibility  of  its  being  divested  with 


2(J6  INHERITANCE  TAXATION 

permission  for  relaxation  on  the  marriage  of  the  life  tenant. 
This  is  regarded  as  fair  to  the  life  tenant  because  it  is  her 
own  act  that  defeats  the  estate  and  the  remaindermen  cannot 
complain  because  they  get  the  property  all  the  sooner. 

Matter  of  Plum,  37  Mise.  466;  75  Supp.  940. 
Matter  of  Baugham,  172  N.  C.  170;  90  S.  E.  203. 
Stengel  v.  Edwards  (N.  J.),  98  A.  424. 

f.  HIGHEST  POSSIBLE  RATE. 

Even  though  the  possibility  is  remote  that  the  bequest  will 
go  to  anyone  taxable  at  the  higher  rate  the  courts  have 
upheld  the  provision  of  the  statute  requiring  taxation  at  the 
highest  possible  rate.  Thus,  where  there  was  a  trust  for  20 
years  to  pay  the  income  to  a  brother  and  two  sisters,  and  if 
all  should  die  during  that  period  then  to  a  nephew,  the  tax 
was  imposed  at  the  highest  rate. 

People  v.  Starring,  274  111.  289;  113  N.  E.  627. 

People  v.  Donohue,  276  111.  88;  114  N.  E.  513. 

People  v.  Byrd,  253  111.  223. 

People  v.  Camp,  286  111.  511. 

People  v.  Lowenstein,  284  111.  126. 

State  v.  Probate  Court,  St.  Louis  County,  136  Minn.  342;  162  N.  W.  459. 

It  was  error  to  allow  an  exemption  where  the  property 
might  revert  to  those  who  already  had  an  exemption  under 
other  bequests. 

People  v.  Gerlaugh  (111.),  134  N.  E.  175. 

This  rule  seemed  so  drastic  that  the  lower  courts  in  New 
York  attempted  to  modify  it.  In  Matter  of  Ogden,  170  Supp. 
630,  it  was  held  that  it  did  not  apply  to  the  highest  possible 
gradation  of  rates;  and  in  Matter  of  Hathaivay,  103  Misc. 
360 ;  171  Supp.  190,  that  merely  speculative  possibilities  were 
not  comtemplated. 

These  cases  were  overruled  and  the  statute  clearly  ex- 
pounded by  the  Court  of  Appeals  in  Matter  of  Parker,  226 
N.  Y.  260;  123  N.  E.  366;  reversing  186  App.  Div.  300;  173 
Supp.  12,  where  the  whole  subject  was  thoroughly  considered. 
As  this  is  one  of  the  most  intricate  and  perplexing  questions 
in  the  whole  law  of  inheritance  taxation  the  opinion  is  given 
in  full  as  follows: 


PART  III  — THE  PARTIES  267 

"CARDOZO,  J.  By  the  will  of  James  V.  Parker,  who  died 
in  January,  1917,  property  there  described  as  'now  in  the 
hands  and  management  of  Robert  H.  Gardiner,'  is  made  the 
subject  of  a  trust.  The  trustee  is  to  apply  the  income  to  the 
use  of  Edith  Stackpole  Parker,  wife  of  John  Harleston 
Parker,  during  her  life ;  on  her  death  he  is  to  divide  the  prin- 
cipal into  as  many  shares  as  there  are  children  of  hers  then 
living,  and  children  then  deceased  leaving  issue  then  surviv- 
ing; the  issue  of  deceased  children  are  to  receive  their  shares 
absolutely,  per  stirpes ;  the  children  who  survive  are  to  receive 
theirs  in  trust  during  their  respective  lives,  with  remainder  to 
such  persons  as  they  may  appoint  by  their  respective  wills, 
and,  in  default  of  such  appointment,  to  their  heirs  at  law. 
All  the  rest,  residue  and  remainder  of  the  testator's  property, 
including  any  legacy  or  devise  which  may  for  any  reason 
lapse  or  fail,  is  given  to  John  Harleston  Parker,  a  nephew. 
There  is  thus  a  possible  contingency  that  may  make  the  prin- 
cipal of  the  trust  a  part  of  the  residuary  estate.  That  result 
will  come  to  pass  if  no  children  or  issue  of  the  life  tenant 
shall  be  living  at  her  death.  The  property  subject  to  the  trust 
will  then  swell  the  estate  of  the  residuary  legatee.  The  value 
of  the  life  interest  in  the  trust  has  been  appraised  at  $351,475 ; 
the  value  of  the  future  estate  or  remainder  at  $143,890;  and 
the  value  of  the  residuary  estate  (exclusive  of  the  remainder) 
at  $455,941.66.  The  question  to  be  determined  is  the  rate  at 
which  the  remainder  is  to  be  taxed. 

"The  command  of  the  statute  is  that  it  shall  be  taxed  at 
the  highest  rate  that  would  be  possible  on  the  happening  of 
any  of  the  contingencies  or  conditions  which  the  transfer  may 
involve  (Tax  Law,  §  230;  Consol.  Laws,  ch.  60;  Matter  of 
Zborowski,  213  N.  Y.  109).  A  possible  contingency  will  add 
the  remainder  to  the  residuary  estate.  In  that  contingency 
the  rate  of  tax  that  must  be  paid  will  be  higher  than  if  the 
remainder  shall  pass  to  legatees  who  are  given  nothing  else. 
The  rate  does  not  depend  upon  relationship  alone.  It  depends 
also  upon  value.  Transfers  to  father,  mother,  husband,  wife 
or  child  are  taxed  at  rates  which  vary  from  1%  to  4%,  accord- 
ing to  the  value  of  the  gift.  Transfers  to  brother,  sister,  and 
some  other  classes,  are  taxed  at  rates  varying  from  2%  to 


268  INHERITANCE  TAXATION 

5%.  Transfers  to  all  other  persons  are  taxed  at  rates  varying 
from  5%  to. 8%.  (Tax  Law,  §  221a,  as  amended  by  L.  1916, 
ch.  548.)  The  rate  is  5%  on  the  first  $25,000;  6%  on  the  next 
$75,000;  7%  on  the  next  $100,000;  and  8%  on  the  balance.  If 
the  gift  of  a  remainder  valued  at  $143,890  is  considered  by 
itself,  the  tax  will  be  $8,222,  at  which  it  was  assessed  by  the 
Surrogate.  If  the  gift  is  added  to  the  value  of  the  residuary 
estate,  the  rate  will  be  8%,  and  the  tax  will  be  $11,411.20. 

"We  think  the  two  gifts  must  be  combined  in  determining 
their  value  and  measuring  the  tax.  A  possible  contingency 
will  bring  them  together  in  the  ownership  of  the  same  legatee. 
The  remainder  will  then  be  taxable  at  the  rate  of  8%.  That 
is,  therefore,  the  rate  at  which  the  tax  must  be  collected  now. 
The  respondent  draws  some  distinction  between  rates  and 
grades  of  rates.  The  argument  is  that  there  are  only  three 
rates:  \%  for  legatees  of  one  class;  2%  for  those  of  another; 
5%  for  those  of  another;  and  that  progressive  variations  are 
not  rates,  but  grades.  No  such  distinction  appears  in  the 
statute.  The  section  (§  221a)  is  headed  'rates  of  tax/  In  its 
body  the  same  terminology  is  maintained.  A  different 
4 rate'  is  prescribed  for  the  different  increments  of  value.  The 
argument  in  favor  of  the  supposed  distinction  does  violence, 
therefore,  to  the  letter  of  the  law.  But  what  is  more  impor- 
tant, it  does  violence  to  the  spirit.  The  purpose  of  the  statute 
is  not  obscure.  The  purpose  is  to  put  at  once  into  the  treasury 
of  the  State  the  largest  sum  which  in  any  contingency  the  re- 
maindermen may  have  to  pay.  The  remaindermen  do  not 
suffer,  for  when  the  estate  takes  effect  in  possession  there 
will  be  a  refund  of  any  excess.  (Tax  Law,  §  230.)  The  life 
tenant  does  not  suffer,  or,  at  all  events,  not  seriously,  for 
interest  is  paid  by  the  Comptroller  upon  the  difference  be- 
tween the  tax  at  the  highest  rate  and  the  tax  that  would  be 
due  if  the  contingencies  or  conditions  had  happened  at  the 
date  of  the  appraisal.  (Tax  Law,  §  241.)  If  the  trustees 
prefer,  they  may  deposit  securities  of  approved  value  and 
receive,  the  accruing  income.  (§  241.)  To  guard  against 
shrinkage  of  values,  the  statute  bids  them  pay  the  balance,  if 
the  deposit  turns  out  to  be  too  small.  Everywhere  the  scheme 
disclosed  is  absolute  safety  for  the  State  with  a  minimum  of 


PAET  III  — THE  PARTIES  269 

hardship  for  the  life  tenant.  Tax  this  remainder  at  the  rate 
of  8%  and  the  State  is  protected  against  any  possible  con- 
tingency. Tax  it  at  less  and  an  uncollected  balance  will  be 
owing  to  the  State  if  the  remainder  shall  pass  to  the  residuary 
legatee.  That  is  the  very  evil  against  which  the  statute  seeks 
to  guard.  Collection  is  imperiled  when  the  State  must,  keep 
track  of  the  estate  through  all  the  changes  and  chances  of  an 
indefinite  future.  The  path  of  safety  is  followed  when  collec- 
tion is  made  at  once. 

"We  leave,  therefore,  a  needless  hiatus  in  the  framework 
of  the  statute  when  we  yield  to  the  respondent's  argument. 
He  admits  that  in  a  possible  contingency  the  rate  of  tax  on 
the  remainder  will  be  based  on  the  aggregate  value  of  re- 
mainder and  residue.  He  denies  that  it  is  the  duty  of  the 
trustee  to  take  heed  of  that  contingency  to-day.  But  to  say 
that  is  to  ignore  the  statute.  The  trustee  is  to  take  heed  of 
all  contingencies  that  may  affect  the  tax  on  a  remainder  de- 
pendent on  the  trust.  He  is  not  to  pick  and  choose,  allowing 
for  some  contingencies,  and  ignoring  others.  He  is  to  heed 
them  all  or  all  that  the  will  reveals.  Much  is  made  of  the 
point  that  the  contingent  remaindermen  are  not  personally 
liable  for  the  payment  of  the  tax.  We  cannot  see  that  this 
affects  the  duty  of  the  trustee.  He  is  to  pay  the  tax  out  of  the 
property  of  the  trust,  but  he  is  to  pay  with  due  regard  for  the 
possibilities  of  the  future.  Remainders  are  to  be  appraised 
at  their  present  value.  (Matter  of  Zborowski,  supra,  at  p. 
113.)  They  are  gifts,  like  present  interests.  In  fixing  their 
value,  no  distinction  is  to  be  drawn  between  the  classes  of 
remainders,  whether  vested  or  contingent.  For  the  purpose 
of  taxation  the  contingency  is  eliminated,  and  the  gift  is 
classed  as  absolute.  (Matter  of  Terry,  218  N.  Y.  218.)  The 
value  of  other  gifts  to  the  same  legatee  must  be  reckoned  in 
computing  the  tax  when  the  remainder  is  vested.  The  method 
of  computation  is  not  different  when  the  remainder  is  con- 
tingent. It  is  argued  that  in  providing  against  contingencies 
we  should  limit  ourselves  to  those  that  the  testator  may  be 
supposed  to  have  foreseen.  We  need  not  stop  to  inquire 
whether  that  is  so.  There  is  nothing  to  show  that  this  con- 
tingency was  not  foreseen  by  the  testator,  and  covered  by  his 


270  INHERITANCE  TAXATION 

will.  He  might  have  said,  in  so  many  words,  that  the  nephew 
should  receive  the  remainder  in  default  of  issue  of  the  life 
tenant.  He  said  the  same  thing  in  effect  when  he  provided 
that  his  nephew  should  be  the  residuary  legatee.  Gifts  have 
the  same  value  whether  they  are  stated  separately  or  collec- 
tively. The  rate  of  taxation  does  not  vary  with  the  paragraphs 
of  scriveners. 

"This  construction  of  the  statute  maintains  the  consistency 
of  the  law  and  its  singleness  of  purpose.  The  State  has 
secured  itself  against  all  contingencies,  remote  as  well  as 
probable.  That  is  the  dominant  scheme  which  it  is  our  duty 
to  preserve.  In  the  case  before  us  the  contingency  is  in  all 
likelihood  remote,  and  so  the  mind  rebels  a  little  against  the 
tying  up  of  money.  But  in  other  cases  it  may  be  less  remote, 
and  the  need  of  protection  greater.  Whether  in  improbable 
contingencies  the  risk  justifies  the  burden,  it  is  not  for  us  to 
say.  That  is  a  question  for  the  Legislature.  Our  duty  is 
done  when  we  enforce  the  law  as  it  is  written.  (Matter  of 
Zborowski,  supra,  at  p.  116.) 

' '  The  order  should  be  reversed,  with  costs  in  the  Appellate 
Division  and  in  this  court,  and  the  matter  remitted  to  the 
Surrogate  for  further  proceedings  in  conformity  with  this 
opinion. ' ' 

When  by  the  terms  of  a  will  it  is  possible  that  if  all  the 
children  of  testator  named  as  remaindermen  should  die  with- 
out issue  at  the  same  time  in  a  single  catastrophe  the  prop- 
erty would  go  to  a  contingent  remainderman  taxable  at  the 
5%  rate;  held,  that  the  transfer  should  be  assessed  at  the 
higher  percentage,  although  the  possibility  of  the  contingent 
remainderman  taking  is  extremely  remote. 

Matter  of  Hutton,  176  App.  Div.  217;  160  Supp.  223;  aff.  220  N.  Y.  770. 

Where  the  will  created  a  trust  for  a  grandson  until  he  was 
25,  if  he  died  before  25,  to  his  issue,  with  no  provision  in  case 
of  failure  of  issue,  held  that  the  fee  vested  in  the  grandson 
subject  to  be  divested,  therefore  no  remainder  existed  to  be 
taxed  as  a  construction  creating  an  intestacy  was  to  be  avoided. 

Matter  of  Zitzlsperger,  170  App.  Div.  615;  156  Supp.  571. 

In  spite  of  the  apparent  difficulty,  however,  the  method  has 
worked  out  in  practice  and  has  been  adopted  in  other  States. 


PAET  III  — THE  PARTIES  271 

In  New  Jersey  the  problem  of  the  transfer  of  stock  in  New 
Jersey  corporations  subject  to  the  exercise  of  a  power  of 
appointment  came  before  the  Court  of  Errors  and  Appeals 
in  Security  Trust  Co.  v.  Edwards,  90  N.  J.  L.  579;  101  A.  383. 
The  court  said : 

"It  seems  quite  plain  that  in  obeying  this  mandate  the  tax 
on  the  interests  in  remainder  will  normally  await  the  termina- 
tion of  the  particular  estate ;  the  counsel  urge  as  a  ground  of 
invalidity  of  such  tax,  that  it  becomes  impossible  for  the 
executor  or  trustee  to  transfer  shares  in  New  Jersey  corpora- 
tions until  that  time,  without  submitting  to  the  requirement 
of  section  12  for  payment  of  full  5%  tax,  which  was  upheld  in 
Senff  v.  Edwards,  85  N.  J.  L.  67,  or  depositing  a  5%  tax  with 
the  Comptroller  and  taking  out  a  waiver,  as  provided  in 
chapter  58  of  the  Laws  of  1914.  These  provisions  appear  to 
be  aimed  particularly  at  the  transfer  of  the  legal  estate  in 
stock  to  a  purchaser,  or  the  like,  rather  than  at  the  particular 
succession  of  a  legatee  in  remainder.  There  is  also  the  pro- 
vision contained  in  the  last  paragraph  of  section  3,  per- 
mitting the  compounding  on  equitable  terms  of  a  tax  not 
presently  payable,  which  is  evidently  the  'compromise'  men- 
tioned in  Senff  v.  Edwards,  supra.  The  statutory  scheme  is 
not  obscure.  If  the  executor  wishes  to  sell  the  stock,  without 
waiting  for  the  specific  assessment  based  on  interests  created 
by  the  will,  it  can  be  done  by  paying  the  6%  tax  under  section 
12,  or  depositing  it  under  the  Act  of  1914,  p.  97,  subject  to 
refund  of  excess  when  later  ascertained ;  or  by  paying  the  tax 
on  the  particular  interests  as  presently  due,  and  compromis- 
ing that  against  the  remainders  upon  an  equitable  ascertain- 
ment of  its  present  worth,  according  to  section  3.  We  are 
unable  to  see  that  this  scheme  gives  rise  to  any  unjust  or  un- 
constitutional discriminations.  It  may  be  said  that  the  point 
is  not  before  us  except  as  contained  in  the  reasons  for  setting 
aside  a  5%  tax  on  remainders  presently  payable." 

g.     MAXIMUM  AND  MINIMUM  RATE. 

In  order  to  lessen  the  hardship  of  the  rule  as  against  life 
tenants  the  New  York  statute  and  those  of  some  other  States 
provides  that  the  order  assessing  the  tax  should  state  the 


272  INHERITANCE  TAXATION 

amount  due  at  the  highest  possible  rate  and  also  the  amount 
which  would  be  due  if  the  intermediate  estate  terminated 
immediately  at  the  date  of  the  appraisal. 

As,  for  example,  in  the  Zborowski  case,  supra,  if  the  son 
Louis  Zborowski  had  reached  the  age  of  21  at  the  date  of  the 
appraisal  the  amount  of  the  tax  would  be  at  the  1%  rate  in- 
stead of  the  5%  rate  assessed  on  the  possibility  that  the  prop- 
erty would  go  to  distant  relatives. 

The  difference  between  the  tax  assessed  at  the  5%  rate  and 
that  which  would  be  due  at  the  \%  rate  is  required  to  be 
deposited  in  money  or  securities,  and  the  State  pays  interest 
on  the  fund  to  the  trustees,  while  the  minimum  tax  goes  to  the 
treasury  as  part  of  the  tax  collections  for  the  current  year. 

Under  the  complex  provisions  of  some  wills  the  drawing 
of  the  taxing  order  thus  provided  for  has  proved  difficult 
and  so  vexing  that  one  surrogate  refused  to  make  such  a  com- 
putation until  directed  to  do  so  by  the  Appellate  Division. 

Matter  of  Spingarn,  175  App.  Div.  806 ;  162  Supp.  695. 

In  ordinary  cases  the  rule  works  substantial  justice.  It 
only  applies  where  there  is  a  trust  fund  subject  to  a  life 
estate,  and  the  fact  that  a  portion  of  that  fund  is  held  by  the 
State  treasury,  and  pays  interest  during  the  life  estate,  places 
no  unjust  burden  on  the  life  tenant,  while  keeping  the  prop- 
erty intact  for  the  remainderman.  The  only  trouble  is  in  the 
rigid  application  of  maximum  and  minimum  rates  to  small 
estates  where  the  amount  of  bookkeeping  involved  costs  more 
than  the  tax.  For  forms  and  further  discussion,  see  Pt.  V. 

I 

h.    WHERE  AMOUNT  OF  KEMAINDER  is  UNCERTAIN. 

Where  a  legacy  was  devised  to  an  exempt  charitable  cor- 
poration as  long  as  it  should  continue  present  activities  but 
when  it  ceased  so  to  do  then  to  heirs  at  law  of  testatrix  it  was 
held  that  the  legacy  was  to  be  valued  and  exempted  and  taxa- 
tion suspended  on  the  contingent  remainder,  distinguishing 
Matter  of  Zborowski,  on  the  ground  that  it  was  not  only  un- 
certain who  the  remaindermen  would  be;  but,  also,  whether 
there  would  be  any  remainder  to  be  taxed. 

Matter  of  Terry,  218  N.  Y.  218;  112  N.  E.  931. 


PABT  III  — THE  PARTIES  273 

i.     UNDER  POWERS  or  APPOINTMENT. 

There  has  been  some  confusion  as  to  the  present  taxation 
of  remainders  where  the  life  tenant  has  a  power  of  appoint- 
ment. When  the  question  was  first  raised  in  New  York  the 
provision  of  the  statute  taxing  the  transfer  in  the  estate  of 
the  donee  of  the  power  whether  it  was  exercised  or  not  was 
not  attacked  as  unconstitutional,  and  it  was  held  that  where 
an  absolute  power  of  appointment  is  bestowed  upon  the  bene- 
ficiary of  a  trust,  taxation  should  be  suspended  until  the  re- 
mainders fall  in,  as  the  tax  is  on  the  exercise  of  the  power  by 
the  donee  as  a  part  of  the  donee's  estate. 

Matter  of  Howe,  86  App.  Div.  286;   83  Supp.  825;   13  Ann.  Gas.   347; 

aff.  176  N.  Y.  570;  68  N.  E.  1118. 
Matter  of  Field,  36  Misc.  279;  73  Supp.  572. 

In  a  subsequent  case  it  was  pointed  out  that  where  the 
power  was  defeasible  it  might  not  be  exercised  at  all  and 
therefore  taxation  must  be  imposed  in  the  estate  of  the  donor 
at  the  highest  possible  rate  because  the  beneficiaries  might 
take  under  the  will  of  the  donor  as  there  might  be  no  power 
to  exercise. 

Matter  of  Burgess,  204  N.  Y.  265 ;  97  N.  E.  591. 
Matter  of  Gulick,  N.  Y.  L.  J.,  March  20,  1914. 

If  a  limited  or  contingent  power  of  appointment  is  subse- 
quently exercised,  although  the  remainder  has  already  been 
taxed  in  the  estate  of  the  donor,  under  Matter  of  Burgess, 
204  N.  Y.  265,  the  tax  on  the  transfer  by  the  donee  of  the 
power  must  none  the  less  be  imposed  in  the  estate  of  the 
donee.  The  remedy,  if  any,  is  modification  of  the  taxing 
order  in  the  estate  of  the  donor  of  the  power. 

Matter  of  Buckingham,  106  App.  Div.  13;  94  Supp.  130. 
Matter  of  McLean,  N.  Y.  L.  J.,  July  18,  1914;  170  Supp.  224. 

Where  a  husband  died  exercising  a  power  in  his  wife's 
favor  and  she  died  ten  days  after  he  did,  the  property  vested 
in  her  and  was  taxable  as  part  of  her  estate  though  she  never 
came  into  possession. 

Matter  of  Lord,  111  App.  Div.  152;  97  Supp.  553;  aff.  186  N.  Y.  549; 
79  N.  E.  1110. 

In  the  Matter  of  Clarke,  39  Misc.  73 ;  78  Supp.  869,  it  was 
held  that  a  remainder  was  not  presently  taxable  where  it  is 
18 


274  INHERITANCE  TAXATION 

limited  to  children  of  a  life  tenant,  or  her  appointees  by  will, 
and  she  is  not  shown  to  have  any  children,  as,  in  such  case  no 
transfer,  defeasible  or  otherwise,  of  the  remainder  has  yet 
been  made. 

The  complexity  of  the  situation  was  further  increased  in 
New  York  by  the  repeal  of  the  provision  in  1911  which  taxed 
the  transfer  in  the  estate  of  the  donee  on  failure  to  exercise 
the  power.  This  provision  had  been  declared  unconstitutional 
as  to  powers  created  by  decedents  prior  to  the  statute;  but 
the  repeal  makes  it  possible  that  any  transfer  under  a  power 
of  appointment  may  pass  under  the  will  of  the  donor,  if  the 
donee  fails  to  exercise  the  power;  and  the  result  is  that  such 
transfers  must  be  taxed  in  both  estates.  For  a  long  while  it 
was  supposed  that  this  was  so  only  as  to  limited  powers, 
under  the  Burgess  decision,  but  the  Appellate  Division  re- 
cently pointed  out  the  situation  when  the  taxation  of  an  abso- 
lute power  had  been  suspended  in  the  estate  of  the  donor. 
The  question  before  the  court  was  one  of  trustee's  commis- 
sions; but  the  court  said:  "We  are  not  passing  upon  the 
propriety  of  the  suspension  of  the  tax  nor  stating  a  rule  to 
be  applied  when  the  tax  is  not  suspended/' 

Matter  of  Vanneck,  175  App.  Div.  363,  366;  161  Supp.  893. 

The  statute  imposing  a  tax  upon  the  exercise  of  the  power 
applies  where  the  power  is  exercised  by  deed  in  the  same 
way  as  when  the  appointment  is  by  will. 

Matter  of  Wendel,  223  N.  Y.  433;  119  N.  E.  879. 

Where  the  exercise  of  the  power  by  the  donee  does  not 
effectually  dispose  of  all  of  the  property  the  portion  not  dis- 
posed of  must  be  taxed  in  the  estate  of  the  donor. 

Matter  of  Tompkins,  N.  Y.  L.  J.,  August  11,  1913. 

Where  taxed  in  the  estate  of  the  donee  the  property  must 
be  valued  as  of  the  date  of  the  exercise  of  the  power. 

Matter  of  Tucker,  27  Misc.  616;  59  Supp.  699. 

The  difficulties  in  which  the  question  is  involved  are  illus- 
trated in  the  estates  of  William  H.  and  Louise  Tillinghast. 
Under  the  will  of  the  former  a  power  of  appointment  was 


PART  III  — THE  PARTIES  275 

given  to  Louise  Tillinghast  to  be  exercised  "while  she  re- 
mains his  widow."  In  default  of  the  exercise  of  the  power 
the  property  passed  to  residuary  legatees.  It  was  taxed  in 
the  estate  of  William  H.  Tillinghast  on  the  theory  that  the 
power  was  "limited,"  as  Mrs.  Tillinghast  might  remarry 
and  not  exercise  it.  The  tax  was  paid  at  the  5%  rate.  Mrs. 
Tillinghast  did  not  remarry,  but  died  leaving  a  will  exercis- 
ing the  power  in  favor  of  children  by  her  first  husband  who 
were  in  the  \%  class  as  to  her  and  in  the  5%  as  to  W.  H. 
Tillinghast,  her  second  husband. 

The  exercise  of  the  power  was  taxed  in  her  estate  at  1%, 
but  the  court  held  that  the  tax  paid  out  of  the  William  H. 
Tillinghast  estate  could  not  be  applied  nor  could  the  transfer 
under  the  power  escape  taxation  because  there  had  been  a  tax 
paid  in  the  estate  of  the  donor. 

Matter    of    Tillinghast,    Louise,    94    Misc.    50;    157    Supp.    382;    aff.    184 
App.  Div.  886. 

A  motion  was  then  made  to  modify  the  order  made  more 
than  six  years  before  taxing  the  fund  in  the  William  H. 
Tillinghast  estate.  The  Comptroller  opposed  the  motion  on 
the  ground  that  the  statute  of  limitations  had  run  and  also 
on  the  ground  that  the  remedy  was  by  appeal  from  the  original 
order.  The  Surrogate  decided  against  him  and  modified  the 
original  taxing  order. 

Matter   of   Tillinghast,   W.   H.,    94    Misc.    76;    157    Supp.    379;    aff.    184 
App.  Div.  886. 

But  the  tax  is  assessed  upon  the  exercise  of  the  power  in 
the  estate  of  the  donee  in  any  event  notwithstanding  its  pay- 
ment in  the  estate  of  the  donor.  The  remedy  must  be  sought 
in  that  estate. 

Matter  of  McLean,  170  Supp.  224. 
Matter  of  Lewisohn,  171  Supp.  958. 
Matter  of  Hathaway,  171  Supp.  190. 

The  valuation  of  a  remainder  subject  to  a  power  of  appoint- 
ment is  not  binding  upon  the  appraiser  in  the  taxation  of  the 
estate  of  the  donee  of  the  power  upon  its  exercise  for  the 
remainder  is  treated  as  a  part  of  the  estate  of  the  donee. 

Matter  of  Lewisohn,  171  Supp.  958. 


276  INHERITANCE  TAXATION 

j.     TAXATION  or  FULL  UNDIMINISHED  VALUE. 

The  New  York  statute  and  those  of  many  other  States  pro- 
vide as  follows  in  regard  to  the  taxation  of  contingent  re- 
mainders where  taxation  has  been  suspended  or  postponed 
until  the  remaindermen  come  into  possession: 

"Estates  in  expectancy  which  are  contingent  or  defeasible 
and  in  which  proceedings  for  the  determination  of  the  tax 
have  not  been  taken  or  where  the  taxation  thereof  has  been 
held  in  abeyance,  shall  be  appraised  at  their  full,  undiminished 
value  when  the  persons  entitled  thereto  shall  come  into  the 
beneficial  enjoyment  or  possession  thereof,  without  diminution 
for  or  on  account  of  any  valuation  theretofore  made  of  the 
particular  estates  for  purposes  of  taxation,  upon  which  said 
estates  in  expectancy  may  have  been  limited." 

This  provision  was  held  retroactive  in 

Matter  of  Hosack,  39  Misc.  130;  78  Supp.  983. 

and  not  retroactive  in 

Matter  of  Buckham,  N.  Y.  L.  J.,  January  10,  1912. 

To  illustrate:  A  life  estate  in  $100,000  to  a  widow  of  30 
is  valued  on  the  5%  basis  at  $75,421.25  and  taxation  on  the 
value  of  the  remainder  presently  worth  $24,578.75  is  sus- 
pended. When  the  remainder  falls  in,  that  is,  when  the  life 
tenant  dies,  the  tax  must  be  paid  on  the  full  $100,000.  This 
has  caused  much  litigation  on  the  ground  of  double  taxation. 

But  if  the  remainder  is  taxed  at  1%,  the  tax  presently  pay- 
able is  $245.78,  which  is  the  present  worth  of  $1,000  at  the 
end  of  the  life  tenant's  expectation  of  life.  Therefore,  if  the 
tax  is  suspended  or  postponed  to  the  death  of  the  life  tenant, 
it  should  pay  the  tax  on  the  full  amount  which  would  be,  at 
1%,  $1,000.  ' 

This  proposition  has  been  sustained  by  the  authorities. 

Matter  of  Eno,  N.  Y.  L.  J.,  April  24,  1913. 

Matter  of  Seligman,  170  App.  Div.  837;   156  Supp.  648;   aff.  219  N.  Y. 

656 ;  114  N.  E.  853. 

Matter  of  Bueki,  172  App.  Div.  455;  158  Supp.  657. 
Matter  of  Dickey,  174  App.  Div.  467;  160  Supp.  646. 

In  affirming  the  Seligman  case  Judge  Pound,  writing  for 
the  Court  of  Appeals,  said : 


PART  III  — THE  PARTIES  277 

"When  taxation  has  been  held  in  abeyance  the  contingent 
or  defeasible  estate  in  expectancy  is  to  be  appraised  at  its 
full  value  when  the  persons  entitled  thereto  shall  come  into 
the  beneficial  possession  or  enjoyment  thereof.  Thus  in  the 
Terry  case  (218  N.  Y.  218),  if  the  legacy  to  the  McGregor 
home  should  revert  to  the  heirs,  it  would  then  be  appraised 
and  taxed  at  its  full  value  without  any  deduction.  -In  such  a 
case,  because  we  cannot  presently  carve  out  of  one  total  the 
value  of  the  present  and  future  estates,  the  Legislature  has 
established  the  rule  of  giving  both  estates  the  highest  pos- 
sible value  as  the  persons  entitled  thereto  respectively  take 
possession.  In  the  case  at  bar  the  entire  future  interest  of 
the  sons  might,  in  the  first  place,  have  been  appraised  for 
taxation  and  the  tax  then  paid  on  such  valuation ;  but,  as  pay- 
ment was  postponed,  the  tax  should  now  be  upon  the  full 
value. ' ' 

The  importance  of  this  provision  in  the  statute  is  illus- 
trated in  State  ex  rel  Basting,  101  Minn.  485;  112  N.  W.  878, 
where  there  was  a  trust  for  three  daughters  for  ten  years. 
The  tax  was  suspended  because  it  was  uncertain  whether  the 
daughters  would  survive.  This  was  in  1905.  In  1916  the  ten 
years  had  expired  and  the  matter  again  came  before  the  court 
in  State  ex  rel.  Basting,  132  Minn.  104 ;  155  N.  W.  1077.  There 
was  no  provision  in  the  law  in  1905  for  taxing  at  full  un- 
diminished  value.  The  court  valued  the  estate  as  it  existed 
in  1916  and  then  taxed  the  present  worth  of  that  sum  at  the 
death  of  the  testator  in  1905.  Obviously  the  State  lost  the 
interest  on  the  tax  for  ten  years  by  this  method. 

"Full  undiminished  value"  means  the  value  as  of  the  death 
of  the  testator  undiminished  by  any  deduction  for  the  life 
estate;  it  does  not  mean  increase  in  the  value  of  the  estate 
since  the  death  of  the  testator. 

Matter  of  Lawson,  N.  Y.  L.  J.,  January  3,  1914. 

E.—  COMPUTATIONS. 

1.  The  Basis  of  Calculation. 

a.     MORTALITY  TABLES  AND  INTEREST  RATE. 

Computations  of  the  value  of  life  estates  and  annuities, 
remainders,  dower,  curtesy  and  the  like  are  by  the  statutes 


278  INHERITANCE  TAXATION 

required  to  be  made  by  the  judge  of  probate  or  the  insurance 
department  and  are  invariably  referred  to  experts  whose 
computations  are  conclusive  as  to  method. 

Matter  of  Davis,  91  Hun,  53;  36  Supp.  822. 

The  tables  furnish  a  method,  more  or  less  arbitrary,  for 
the  ascertainment  of  values  not  otherwise  possible  to  be  fixed. 
But  after  all  they  are  mere  computations. 

Minton  v.   Burrill,  229  Mass.   140;   118  N.  E.  274. 

The  Supreme  Court  of  the  United  States  has  sustained  such 
computations  and  held  4%,  as  fixed  by  the  Federal  Statute, 
to  be  a  fair  basis. 

Simpson  v.  United  States,  252  U.  S.  547. 

"The  tables  of  mortality  are  at  best  only  slight  evidence 
of  the  expectancy  of  life  of  any  particular  person  to  be  con- 
sidered in  connection  with  the  proof  of  his  health,  constitu- 
tion, habits  and  mode  of  living.  (Schell  v.  Plumb,  55  N.  Y. 
292.)  Such  tables  show  only  the  average  length  of  life  among 
the  classes  whose  lives  are  taken  into  consideration  in  prepar- 
ing the  tables.  There  are  several  tables,  which  differ  quite 
widely,  and  it  goes  without  saying  that  in  any  given  case  the 
habits  and  manner  of  living  of  the  individual  may  be  totally 
different  from  those  considered  in  preparing  the  tables." 

Hartley  v.  Eagle  Insurance  Co.,  222  N.  Y.  178,  186. 

But  the  inheritance  tax  statutes  all  provide  for  the  valua- 
tion of  life  estates  and  remainders  upon  the  basis  of  some 
mortality  table,  and  these  tables  may  be  referred  to  in  the 
statute  without  setting  them  forth,  as  they  merely  prescribe 
a  rule  for  estimating  values. 

Union  Trust  Co.  v.  Durfee,  125  Mich.  487;  84  N.  W.  1101. 

But  the  attorney  is  usually  expected  to  advise  his  client 
what  the  tax  on  such  estates  is  likely  to  be  and  no  lawyer 
likes  to  feel  helpless  in  the  hands  of  the  mathematician, 
though  he  usually  is  so. 

By  the  use  of  prepared  tables  the  more  simple  calculations 
may  be  made  by  any  attorney,  given  the  rate  of  interest,  and 
the  table  of  mortality  prescribed  in  the  particular  State. 


PART  III  — THE  PAETIES  279 

These  mortality  tables,  known  as  the  Actuaries'  Combined 
Experience  table,  the  American  Experience  table  and  the 
Carlisle  table  of  mortality,  are  based  on  the  experience  of 
insurance  companies  in  the  observation  of  a  large  number 
of  lives  and  were  originally  prepared  for  insurance  purposes. 
Lawyers  and  judges  found  them  available  for  the  valuation 
of  life  estates  and  remainders  for  the  purpose  of  inheritance 
taxation. 

The  expectation  of  life  from  year  to  year  being  approxi- 
mated by  these  tables  of  mortality,  the  computation  of  the 
present  worth  of  an  annual  income  at  a  given  rate  of  interest 
becomes  possible. 

The  first  step  is  to  know  what  table  of  mortality  is  used 
in  a  particular  State  and  what  is  the  rate  of  interest  upon 
which  the  computation  is  to  be  based. 

This  can  be  ascertained  by  the  following  table : 

KEY  TABLE 

Showing   rate    of    interest    and    Mortality    Table   used    in    the    Different    States 
for  Inheritance  Tax  Cancellations. 

Bate  of  Table  of  Mortality  Used  and  Initial 
State                                                Interest  Referring  to  Table 

Arkansas 5  B  Actuaries '  Combined  Table. 

Arizona 4  A  Actuaries '  Combined  Table. 

California 5  B  Actuaries '  Combined  Table. 

Colorado 5  B  Actuaries '  Combined  Table. 

Connecticut 5  D  American    Experience   Table. 

Delaware 6           American    Experience    Table. 

Georgia 6  F  Carlisle  Table. 

Hawaii 5  D  American   Experience   Table. 

Idaho 5  B  Actuaries '  Combined  Table. 

Illinois 5  E    Carlisle   Table. 

Indiana 5  D  American    Experience    Table. 

Iowa 4  A  Actuaries '  Combined  Table. 

Kansas 5  D  American   Experience   Table. 

Kentucky 5           Dr.  Wigglesworth 's  Table. 

Louisiana 6           American   Experience    Table. 

Maine 4  A  Actuaries '  Combined  Table. 

Maryland 6  F  Carlisle  Table. 

Massachusetts 4  C  American  Experience  Table. 

Michigan 5  D  American    Experience    Table. 

Minnesota 5  D  American    Experience   Table. 

Missouri 5  B  Actuaries '  Combined  Table. 

Montana 7           Actuaries '  Combined   Table. 

Nebraska 4  A  Actuaries '  Combined  Table, 


280 


INHERITANCE  TAXATION 


Rate  of 

State 

Interest 

Nevada  

7 

New  Hampshire  

4 

New  Jersey  

5 

New  York  

5 

North  Carolina  

5 

North  Dakota  

6 

Ohio  

5 

Oklahoma  

5 

Oregon  

4 

Pennsylvania  

6 

Rhode  Island  

5 

South  Dakota  

5 

Tennessee  

6 

Texas  

4 

Utah  

3% 

Vermont  

3% 

Virginia  

6 

Washington  

4 

West  Virginia  

Wisconsin  

5 

Table  of  Mortality  Used  and  Initial 
Referring  to  Table 

American   Experience   Table. 
A  Actuaries'  Combined  Table. 
D  American    Experience    Table. 
D  American   Experience   Table. 
D  American   Experience   Table. 

American    Experience   Table. 
B  Actuaries'    Combined    Table. 
D  American   Experience    Table. 
A  Actuaries'    Combined    Table. 
F  Carlisle  Table. 
D  American   Experience   Table. 
D  American    Experience   Table. 
F  Carlisle  Table. 
A  Actuaries'  Combined  Table. 
C  American  Experience  Table. 
C  American  Experience  Table. 
F  Carlisle  Table. 
A  Actuaries'  Combined  Table. 

Table  prescribed  by  chap.  65,  §  17, 

W.  Va.  Code,  1913. 
D  American  Experience  Table. 


b.     COMPOUND  INTEREST  RULE. 

To  ascertain  the  value  of  the  principal  at  the  end  of  any 
given  number  of  years  compounded  annually  at  a  given  rate 
of  interest : 

Add  the  rate  of  interest  to  the  principal  and  raise  this  sum 
to  the  power  equal  to  the  number  of  years. 

Example:  What  is  the  value  of  $100  at  the  end  of  five 
years  compounded  annually  at  the  rate  of  5%  ? 

First  year— $100— 5— 105. 
Second  year— 105— 105— 110.25. 
Third  year— 110.25— 105— 115.76. 
Fourth  year— 115.76— 105— 121.55. 
Fifth  year— 121.55— 105— 127.63. 

Answer : 

The  value  of  $100  at  the  end  of  five  years,  compounded 
annually  at  the  rate  of  5%,  is  $127.63. 


PART  III  — THE  PARTIES  281 

c.  PRESENT  WORTH  RULE. 

To  find  the  present  worth  of  any  amount  due  at  any  future 
date  at  a  given  rate  of  interest : 

Divide  the  amount  by  itself  plus  the  accumulation  com- 
pounded annually  at  the  given  rate  of  interest. 

Example : 

To  find  the  present  worth  of  $100  payable  in  five  years  at 
5%  compounded  annually? 

We  know  from  the  previous  example  that  $100  compounded 
annually  at  5%  for  five  years  will  produce  $127.63  at  the  end 
of  that  period. 

Under  the  above  rule  $100  divided  by  $127.63=$78.35. 

Answer : 

The  present  worth  of  $100  payable  in  five  years  with 
interest  at  5%  is  $78.35. 

In  the  same  way  the  present  worth  of  $100  payable  in  one 
year  with  interest  at  5%  is  $95.2381. 

d.  THE  LAW  OF  DISCOUNT. 

Employing  the  two  previous  rules,  we  find  that  the  present 
worth  of  $100  payable  in  five  years  at  4%  is  $82.19,  while  at 
6%  the  present  worth  is  $74.7258. 

Obviously  the  higher  the  discount  the  lower  the  present 
worth,  the  lower  the  discount  the  higher  the  present  worth. 

It  is  important  to  bear  this  in  mind  as  it  is  a  common  error 
to  suppose  that  the  value  of  a  life  estate  may  be  computed  by 
multiplying  the  theoretical  expectation  of  life  by  the  annual 
income — which  is  an  egregious  error  leading  to  absurd  results. 

For  example,  the  expectation  of  life  of  a  widow  of  30  is  35 
years.  If  she  has  a  life  estate  in  $100,000  her  annual  income 
at  5%  is  $5,000.  So,  if  $5,000  be  multiplied  by  the  expectation 
of  life,  35  years,  the  result  is  $175,000  as  the  value  of  a  life 
interest  in  $100,000!  Wrong  and  absurd  as  this  method  is, 
it  has  too  frequently  been  employed  in  actual  practice  in 
estimating  dower,  etc.,  through  sheer  ignorance. 


282  INHERITANCE  TAXATION 

e.  LAW  OF  THE  CHANCE  OF  DEATH. 

But  the  present  worth  of  $100  payable  at  the  end  of  one 
year  and  annually  thereafter  is  affected  by  another  element 
when  the  beneficiary  is  a  life  tenant  or  annuitant.  He  may 
never  live  the  year  out  to  get  his  $100. 

His  chance  of  dying  before  it  is  payable  therefore  becomes 
another  element  in  ascertaining  its  present  worth,  and  here 
we  must  use  the  mortality  table. 

And  here  we  are  met  with  another  error  almost  universal. 
The  tables  give  the  average  expectation  of  life  as  a  matter 
of  information,  but  this  average  expectation  has  little  to  do 
with  the  calculation  of  the  value  of  a  life  estate  or  annuity, 
though  derived  from  the  same  tables. 

By  referring  to  the  appended  American  Experience  table 
of  mortality,  Table  G,  it  will  be  seen  that  it  starts  with  100,000 
persons  living  at  10  years  of  age  and  shows  how  many  may 
be  expected  to  die  within  the  year  and  how  many  will  survive 
to  the  age  of  11  and  so  on  until  95  years. 

f.  RULE  OF  THE  CHANCE  OF  DEATH  AS  AFFECTING  PRESENT 

WORTH. 

Assume  a  life  tenant  or  annuitant  is  70  years  of  age.  The 
American  Experience  table  of  mortality,  Table  G,  shows  that 
of  100,000  persons  living  at  the  age  of  ten,  38,569  will  survive 
to  the  age  of  70 ;  that  2,391  will  die  during  the  following  year  ; 
and  that  36,178  will  be  living  at  the  age  of  71. 

The  chance  of  a  life  tenant  of  70  living  to  receive  his  annual 
income  at  the  end  of  the  year  when  he  will  be  71  is  therefore 
expressed  by  this  fraction. 

36178— living  at  71. 


38569— living  at  70. 

g.  KULE  FOR  CALCULATING  THE  PRESENT  VALUE  OF  LIFE 
ESTATES. 

As  we  have  seen  by  sub.  c,  the  present  worth  of  $100  pay- 
able at  the  end  of  one  year  is  $95.2381. 

But  to  a  life  tenant  of  70  this  present  worth  must  be  re- 
duced by  the  chance  of  death  within  the  year.  His  present 


PART  III  — THE  PARTIES  283 

worth    of   $95.2381    must   be    reduced    by    the    fraction    of 
36178 

—  which  represents  his  chance  of  living  to  get  the  money. 
38569 

So,  $95.2381  divided  by  38569=$0.00247,  and  this  multi- 
plied by  36178  gives  $89.36  as  the  present  worth  of  $100  pay- 
able to  an  annuitant  of  70  at  the  end  of  the  year. 

The  present  worth  of  the  installment  payable  to  the  an- 
nuitant of  70  at  the  end  of  two  years  is  worked  out  in  the 
same  way.  The  number  living  at  the  end  of  two  years  of 
persons  aged  70  is  33730  out  of  the  38569  and  the  chance 
that  the  annuitant  of  70  will  live  to  get  his  second  yearly 

33730 

payment  of  $100  is  expressed  by  the  fraction 

38569 

The  present  worth  of  the  installment  payable  to  the  an- 
nuitant of  70  at  the  end  of  two  years  is  worked  out  in  the 
same  way  to  be  added  to  the  present  worth  of  one  year's 
income ;  and  so  on  to  the  end  of  the  table. 

It  is  needless  to  proceed  further.  The  principle  being  under- 
stood, we  may  now  employ  the  tables  in  which  the  whole 
problem  is  worked  out  by  the  actuaries. 

By  referring  to  the  American  Experience  table,  Table  D, 
of  the  present  value  of  one  dollar  at  various  ages  calculated 
as  above,  we  find  that  the  present  value  of  an  income  of  one 
dollar  a  year  at  5%  to  an  annuitant  of  70  years  of  age  is 
$5.9802  and  of  an  income  of  $100  the  value  would  be  $598.02. 

2.  Tables  for  Computing  the  Present  Worth  of  Annuities. 

The  first  table  of  mortality  still  in  use  was  published  by 
Dr.  Price  in  1771  as  the  ''experience  of  life  in  Northampton." 
It  is  not  employed  in  making  inheritance  tax  calculations, 
however. 

In  1789  Dr.  Edward  Wigglesworth  of  Harvard  University 
prepared  a  mortality  table  which  is  now  used  for  inherit- 
ance tax  purposes  only  in  the  State  of  Kentucky. 

In  1815  Dr.  Joshua  Milne  prepared  and  published  the 
Carlisle  tables  of  mortality. 


284  INHERITANCE  TAXATION 

In  1838  a  committee  of  English  actuaries  prepared  a  table 
of  mortality  based  on  the  combined  experience  of  seventeen 
insurance  companies. 

In  1868  Sheppard  Homans  prepared  the  American  Experi- 
ence table  based  upon  the  experience  of  the  Mutual  Life  Insur- 
ance Company. 

The  last  three  tables,  as  we  have  seen,  are  still  in  general 
use  in  the  different  States. 

THE  TABLES 

The  present  worth  of  an  annuity  of  one  dollar  at  any  given 
age  at  4%,  5%,  and  6%  is  shown  by  the  following  tables,  to 
which  reference  is  made  by  the  table  showing  what  standard 
is  adopted  in  the  several  States: 

Table  A.  Actuaries'  combined  table  at  4%. 

Table  B.  Actuaries'  combined  table  at  5%. 

Table  C.  American  experience  table  at  4%. 

Table  D.  American  experience  table  at  5%. 

Table  E.  Carlisle  table  at  5%. 

Table  F.  Carlisle  table  at  6%. 

Table  G.  American  experience  table  of  mortality  and 
expectation  of  life. 


PAKT  III  — THE  PAETIES 


285 


TABLE  A 

ACTU ABIES*  COMBINED  EXPERIENCE  TABLE  ON  BASIS  OF  4  PER 

CENT  INTEREST 


Annuity, 

Reversion, 

Annuity, 

Reversion, 

or  present 

or  present 

or  present 

or  present 

value  of  one 

value  of  one 

value  of  one 

value  of  one 

dollar  due 

dollar  due 

dollar  due 

dollar  due 

Age 

at  the  end  of 

at  the  end  of 

Age 

at  the  end  ol 

at  the  end  of 

each  year 

the  year 

each  year 

the  year 

during  the 

of  death 

during  the 

of  death 

life  of  a 

of  a  person 

life  of  a 

of  a  person 

person  of 
specified  age 

of  specified 
age 

person  of 
specified  age 

of  specified 
age 

0... 

$14.72829 

$0.39507 

50... 

$12.47032 

$0.48191 

1... 

17.30771 

0.29586 

51... 

12.17919 

0.49311 

2... 

18.69578 

0.24247 

52... 

11.88408 

0.50446 

3... 

19.15901 

0.22465 

53... 

11.58531 

0.51595 

4... 

19.41226 

0.21491 

54... 

11.28325 

0.52757 

5... 

19.55301 

0.20950 

55... 

10.99789 

0.53931 

8... 

19.61731 

0.20703 

56... 

10.66982 

0.55116 

7... 

19.62502 

0.20673 

57... 

10.35931 

0.56310 

8... 

19.61097 

0.20727 

58... 

10.04630 

0.57514 

9... 

19.53413 

0.21022 

59... 

9.73131 

0.58726 

10... 

19.45359 

0.21332 

60... 

9'.  41474 

0.59943 

11... 

19.36943 

0.21656 

61... 

9.09765 

0.61163 

12... 

19.28184 

0.21993 

62... 

8  .  78052 

0.62382 

13... 

19.19065 

0.22344 

63... 

8.46412 

0.63600 

14... 

19.09590 

0.22708 

64... 

8.14888 

0.64812 

15... 

18.99764 

0.23086 

65... 

7.83552 

0.66017 

16... 

18.89569 

0.23478 

66... 

7.52476 

0.67212 

17... 

18.79010 

0.23884 

67... 

7.21699 

0.68396 

18... 

18.68070 

0.24305 

68... 

6.91298 

0.69565 

19... 

18.56751 

0.24740 

69... 

6.61301 

0.70719 

20... 

18.45038 

0.25191 

70... 

6.31716 

0.71857 

21... 

18.32932 

0.25656 

71... 

6.02612 

0.72976 

22... 

18.20416 

0.26138 

72... 

5.74003 

0.74077 

23... 

18.07471 

0.26636 

73... 

5.45928 

0.75157 

24... 

17.94097 

0.27150 

74... 

5.18402 

0.76215 

25... 

17.80274 

0.27682 

75... 

4.91463 

0.77251 

26... 

17.65984 

0.28231 

76... 

4.65125 

0.78264 

27... 

17.51224 

0.28799 

77... 

4.39383 

0.79254 

28... 

17.35968 

0.29386 

78... 

4.14286 

0.80220 

29... 

17.20225 

0.29991 

79... 

3.89858 

0.81150 

30... 

17.03961 

0.30617 

80... 

3.66071 

0.82074 

31... 

16.87176 

0.31262 

81... 

3.42900 

0.82965 

32... 

16.69846 

0.31929 

82... 

3.20258 

0.83836 

33... 

16.51964 

0.32617 

83... 

2.98024 

0.84691 

34... 

16.33503 

0.33327 

84... 

2.76106 

0.85534 

35... 

16.14437 

0.34060 

85... 

2.54366 

0.86371 

36... 

15.94755 

0.34817 

86... 

2.32795 

0.87200 

37... 

15.74427 

0.35599 

87... 

2.11384 

0.88024 

38... 

15.53421 

0.36407 

88... 

1.90115 

0.88842 

39... 

15.31722 

0.37241 

89... 

1.69107 

0.89650 

40... 

15.09295 

0.38104 

90... 

1.48540 

0.90441 

41... 

14.86102 

0.38996 

91... 

1.28432 

0.91214 

42... 

14.62122 

0.39918 

92... 

1.09024 

0.91961 

43... 

14.37356 

0.40871 

93... 

0.90647 

0.92667 

44... 

14.11860 

0.41852 

94... 

0.73687 

0.93320 

45... 

13.85713 

0.42857 

95... 

0.58435 

0.93906 

46... 

13.58958 

0.43886 

96... 

0.46182 

0.94378 

47... 

13.31698 

0.44935 

97... 

0.36698 

0.94742 

48... 

1 

13.03942 

0.46002 

98... 

0.24038 

0.95229 

49... 

12.75716 

0.47088 

99... 

0.00000 

0.96154 

286 


INHERITANCE  TAXATION 


TABLE  B 

ACTUARIES'  COMBINED  EXPERIENCE  TABLE  WITH  INTEREST 
AT  5  PER  CENT  PER  ANNUM, 


AGE 

$1  annuity 
value 

Present 
worth  of 
remainder 

AGE 

$1  annuity 
value 

Present 
worth  of 
remainder 

10      

16.5559 

.164006 

55.  . 

10.0775 

472499 

11  

16.5020 

.  166572 

66  

9.8157 

484966 

12 

16.4455 

.  169264 

57  

9  5505 

497596 

13  .      

16  .  3862 

.  172087 

58  

9.2818 

510393 

14.. 

16.3241 

.175042 

59  

9.0100 

.  523335 

15 

16.2593 

.  178127 

60   

8.7355 

536407 

16.  . 

16.1917 

.  181349 

61   

8.4592 

549563 

17.. 

16.1212 

.  184707 

62  

8.1816 

.562782 

18 

16.0476 

.188209 

63       

7.9033 

576032 

19.  . 

15.9711 

.191854 

64  

7.6249 

589292 

20.. 

15.8913 

.  195651 

65  

7.3469 

.  602530 

21  

15.8085 

.  199598 

66     

7.0700 

615716 

22.  . 

15.7222 

.203703 

67   

6.7946 

628829 

23.. 

15.6325 

.207977 

68  

6.5215 

.641834 

24  

15.5392 

.212418 

!  69     

6.2509 

654718 

26.  . 

15.4422 

.217037 

70  

5.9831 

667473 

26.  . 

15.3414 

.221842 

71  

5.7185 

680077 

27.  . 

15.2364 

.226837 

,72        

5.4574 

692504 

28... 

15.1274 

.232030 

73   

5.2003 

704748 

29  

15.0141 

.237425 

74  

4.9473 

.  716795 

30  

14  .  8963 

.243033 

75 

4.6988 

728627 

31.  . 

14.7740 

.248856 

76  

4.4550 

740235 

32... 

14.6469 

.254907 

77  

4.2160 

751619 

33.  ...       ... 

14  5150 

.261191 

78 

3  9821 

762756 

34.  . 

14.3779 

.267719 

79 

3.7538 

773626 

35. 

14  2354 

.274506 

80 

3  5308 

784247 

36  

14  0873 

.281559 

81 

3  3129 

794621 

37.  . 

13.9333 

.288892 

82        

3  0993 

804793 

38.  . 

13.7730 

.296522 

83       

2.8890 

814812 

39  ... 

13  6064 

.304458 

84 

2  6809 

824714 

40.  .  . 

13.4329 

.312718 

85          

2  4739 

834575 

41  

13.2523 

.321321 

86  

2.2678 

844389 

42  

13  0641 

.330280 

87 

2  0626 

854163 

43  

12  8684 

.339900 

88 

1  8580 

863905 

44  

12.6656 

.349258 

89          ... 

1  6553 

873557 

45  

12.4562 

.359226 

90         

1.4562 

.883040 

46  

12  2408 

.369487 

91 

1  2609 

892335 

47  

12.0200 

.380002 

92 

1  0718 

901339 

48  

11  7939 

.390767 

93 

8923 

909888 

49  

11.5627 

.401775 

94 

7282 

917797 

50  

11.3265 

.413024 

95 

5765 

924929 

51... 

11  0855 

424502 

96 

4560 

930667 

52  

10.8398 

836200 

97 

3628 

935102 

53.  .  . 

10  5898 

445105 

98 

2381 

941019 

64  

10  3357 

460204 

PART  III  — THE  PARTIES 


287 


TABLE  C. 

As  ISSUED  BY  TAX  COMMISSIONER  OF  MASSACHUSETTS. 

AMERICAN     EXPERIENCE     TABLES. —  DISCOUNTED     AT     4     PER 
CENT  COMPOUND  INTEREST. 

[Explanation:  To  find  the  present  worth  of  the  life  estate  of  a  person,  multiply  the  principal  of 
the  fund  by  the  figure  in  column  1  opposite  the  age  of  the  person  at  the  nearest  birthday.  Example: 
A,  who  is  26  yeprs,  4  months  old  at  the  death  of  B,  is  given  by  B's  will  a  life  estate  in  property 
valued  at  $20,000.  Solution:  Opposite  age  26  in  column  1  is  .7143;  multiply  .7143  X  $20,000  = 
$14,286. 

To  find  the  present  worth  of  an  annuity  of  a  given  amount  for  life,  multiply  the  annuity  by  the 
figure  in  column  2  opposite  the  age  at  the  nearest  birthday  of  the  person  receiving  the  annuity. 


Example:    A,  who  is  25  years,  7  months  old  at  death  of  B,  is  given  by  B's  will  an  annuity  of  $800 
for  life.    Solution:    Opposite  age  26  in  column  2  is  17.857;  multiply  17.857  X  $800  =  $14,285.60.] 

Column  1, 

Column  2, 

Column  1, 

Column  2, 

Column  1, 

Column  2, 

Age 

life 

an- 

Age 

life 

an- 

Age 

life 

an- 

estates 

nuities 

estates 

nuities 

estates 

nuities 

10... 

.7766 

19.414 

40.. 

.6177 

15.443 

70.. 

.2523 

6.307 

11... 

.7737 

19.343 

41.. 

.6088 

15.220 

71.. 

.2397 

5.993 

12... 

.7708 

19.269 

42.. 

.5995 

14.988 

72.. 

.2274 

5.685 

13... 

.7677 

19.192 

43.. 

.5900 

14.749 

73.. 

.2153 

5.383 

14... 

.7645 

19.112 

44.. 

.5801 

14.502 

74.. 

.2034 

5.086 

15... 

.7611 

19.028 

45.. 

.5699 

14.248 

75.. 

.1918 

4.794 

16... 

.7577 

18.942 

46.. 

.5594 

13.985 

76.. 

.1802 

4.505 

17... 

.7540 

18.851 

47.. 

.5486 

13.714 

77.. 

.1688 

4.219 

18... 

.7503 

18.757 

48.. 

.5374 

13.436 

78.. 

.1574 

3.936 

19... 

.7464 

18.660 

49.. 

.5260 

13.151 

79.. 

.1462 

3.656 

20... 

.7423 

18.558 

50.. 

.5143 

12.858 

80.. 

.1352 

3.380 

21... 

.7388 

18.452 

51.. 

.5002 

12.559 

81.. 

.1243 

3.108 

22... 

.7337 

18.342 

52.. 

.4902 

12.255 

82.. 

.1137 

2.842 

23... 

.7291 

18.228 

53.. 

.4776 

11.944 

83.. 

.1032 

2.580 

24... 

.7244 

18.109 

54.. 

.4651 

11.628 

84.. 

.0927 

2.318 

25... 

.7194 

17.985 

55.. 

.4523 

11.307 

85.. 

.0823 

2.057 

26... 

.7143 

17.857 

56.. 

.4393 

10.982 

86.. 

.0720 

1.799 

27... 

.7089 

17.723 

57.. 

.4261 

10.653 

87.. 

.0619 

1.548 

28... 

.7034 

17.585 

58.. 

.4128 

10.321 

88.. 

.0524 

1.310 

29... 

.6976 

17.440 

59.. 

.3994 

9.985 

89.. 

.0434 

1.085 

30... 

.6916 

17.291 

60.. 

.3859 

9.648 

90.. 

.0347 

0.867 

31... 

.6854 

17.135 

61.. 

.3724 

9.309 

91.. 

.0262 

0.654 

32... 

.6789 

16.973 

62.. 

.3588 

8.969 

92.. 

.0181 

0.454 

33... 

.6722 

16.806 

63.. 

.3452 

8.630 

93.. 

.0116 

0.291 

34... 

.6653 

16.632 

64.. 

.3316 

8.290 

94.. 

.0055 

0.137 

35..  . 

6580 

16  451 

65 

3181 

7  952 

95 

36... 

.6505 

16.263 

66.. 

.3046 

7.616 

37... 

.6428 

16.069 

67.. 

.2913 

7.282 

38... 

.6347 

15.868 

68.. 

.2781 

6.952 

39... 

.6264 

15.659 

69.. 

.2651 

6.627 

If  an  annuity  is  payable  semiannually,  add  .250  to  the  annuity  value  in  column  2. 
If  an  annuity  is  payable  quarterly,  add  .375  to  the  annuity  value  in  column  2. 
If  an  annuity  is  payable  monthly,  add  .458  to  the  annuity  value  in  column  2. 


288 


INHERITANCE  TAXATION 


TABLE  D. 

AMERICAN     EXPERIENCE     TABLE. —  DISCOUNTED     AT 
CENT    COMPOUND  INTEREST. 


5     PER 


Age 

Expectation 
of  life  in 
years 

Present 
value  of  $1 
per  annum 

Age 

Expectation 
of  life  in 
years 

Present 
value  of  $1 
per  annum 

o 

41  45 

$12  818 

48 

22  35 

$12  133 

1 

47  94 

14  922 

49  

21  63 

11  901 

2             

50.16 

15.731 

50  

20.91 

11  662 

3 

50  91 

16  125 

51      

20  20 

11  416 

4 

51  23 

16  346 

52   

19  49 

11  164 

5 

51  13 

16  472 

53 

18  79 

10  905 

6 

50  83 

16  535 

54 

18  00 

10  640 

7 

50  41 

16.561 

55     

17  40 

10  370 

8 

49  90 

16  560 

56 

16  72 

10  095 

9 

49  33 

16  540 

57 

16  05 

9  8145 

10 

48  72 

16.505 

58   

15  39 

9  5299 

11       

48  09 

16.461 

59  

14.74 

9  2413 

12 

47  45 

16  415 

60       

14  10 

8  9493 

13          ... 

46  80 

16  366 

61    

13  47 

8  6545 

14  

46  16 

16.316 

62  

12  86 

8  3574 

15 

45  51 

16  263 

63 

12  26 

8  0588 

16 

44  85 

16  207 

64         .      .  .      

11  67 

7  7590 

17      

44  19 

16.149 

65  

11  10 

7  4588 

18  

43.53 

16.088 

66  

10.54 

7  .  1592 

19        

42  87 

16  024 

67 

10  00 

6  8607 

20      

42  20 

15  957 

68     

9  47 

6  5642 

21  

41.53 

15.886 

69  

8  97 

6  2705 

22         .              .    .  . 

40  85 

15  813 

70                   ... 

8  48 

5  9801 

23     

40.17 

15  736 

71      

8  00 

5  6942 

24  

39.49 

15.655 

72   

7.55 

5  4129 

25       

38  81 

15  570 

73 

7  11 

5  1359 

2«       

38.12 

15.482 

74              

6  68 

4  8628 

27  

37.43 

15.389 

75   

6  27 

4  5926 

28  

36.73 

15.292 

76.  .  . 

5.88 

4.3248 

29       

36.03 

15.191 

77         

5  49 

4  0586 

30  

35.33 

15.084 

78  

5  11 

3  7939 

31       .            

34  63 

14  973 

79 

4  75 

3  5311 

32  

33.92 

14.857 

80 

4  39 

3  2702 

33  

33.21 

14.735 

81  

4  05 

3  0135 

34       

32.50 

14  608 

82 

3  71 

2  7606 

35  

31.78 

14  475 

83                   

3  39 

2  5105 

36  

31.07 

14.336 

84     

3  08 

2  2607 

37  

30.35 

14.191 

85 

2  77 

2  0098 

38  

29.63 

14.039 

86 

2  47 

1  7606 

39  

28.90 

13.881 

87   

2  18 

1.5175 

40  

28.18 

13  716 

88 

1  91 

1  2861 

41  

27.45 

13.544 

89                   

1  66 

1  0670 

42  

26.72 

13.365 

90       

1.42 

0  85453 

43  

25.99 

13  179 

91 

1  19 

0  64497 

44  

25.27 

12.985 

92 

98 

0  44851 

45  

24.54 

12  783 

93 

80 

0  28761 

46... 

23.81 

12.574 

94 

64 

0  13605 

47  

23.08 

12.357 

95  

.50 

PAET  III  — THE  PARTIES 


289 


TABLE  E. 

CARLISLE  TABLE  or  MORTALITY,  WITH  INTEREST  AT  5  PER 
CENT  PER  ANNUM. 


AGE 

SI  annuity 
value 

Present 
worth  of 
remainder 

AGE 

$1  annuity 
value 

Present 
worth  of 
remainder 

0 

12  083 

37700 

52 

11  154 

42124 

1   

13  995 

.  28595 

53  

10.892 

.43371 

2  

14.983 

.23891 

54.  . 

10.624 

.44648 

3     .     

15  824 

19886 

55  

10.347 

.45967 

4  

16.271 

.  17757 

56  

10.063 

.47319 

5  

16.590 

.  16238 

57  

9.771 

.48710 

6  

16.735 

.15548 

58  

9.478 

.50105 

7.  . 

16.790 

.  15286 

59  

9.199 

.K1433 

8 

16  786 

15305 

60. 

8  940 

52667 

9  

16.742 

.  15514 

61.  .. 

8.712 

.  53752 

10  

16.669 

.  15862 

62  

8.487 

.54824 

11  

16  581 

16281 

63.  . 

8  258 

55914 

12.  . 

16.494 

.  16695 

64  

8.016 

.57067 

13  ... 

16  406 

17114 

65 

7  765 

58262 

14  

16.316 

.17543 

66 

7  503 

.59510 

15  

16.227 

.  17967 

67  

7.227 

.60824 

16  

16  144 

18362 

68 

6  941 

62186 

17  

16.066 

.  18733 

69. 

6  643 

.63605 

18  

15.987 

.19110 

70  

6.336 

.65067 

19  

15  904 

19505 

71 

6  015 

66595 

20  

15.817 

.  19919 

72 

5  711 

.  68043 

21  

15.726 

.  20352 

73.  .. 

5.435 

.69357 

22.. 

15  628 

20819 

74 

5  190 

.  70524 

23... 

15  525 

.21310 

75 

4  989 

•  .71481 

24  

15.417 

.21824 

76.  .. 

4  792 

'  .72419 

25.  .  . 

15  303 

22367 

77 

4  609 

73291 

26  

15.187 

.22919 

78 

4  422 

.74181 

27.. 

15  065 

23500 

79 

4  210 

75191 

28.. 

14  942 

24086 

80 

4  015 

.76119 

29  

14.827 

.24633 

81 

3  799 

.77148 

30.  . 

14  723 

25129 

82 

3  606 

78067 

31  

14.617 

25633 

83 

3  406 

.79019 

32  

14.506 

.26162 

84 

3  211 

79948 

33.  . 

14  387 

26729 

85 

3  009 

80910 

34  

14.260 

27333 

86 

2  830 

81762 

35.  . 

14  127 

27967 

87 

2  685 

82452 

36  

13  987 

28633 

88 

2  597 

82870 

37  

13.843 

.29319 

89 

2  495 

83357 

38  

13  695 

30024 

90 

2  339 

84103 

39  

13.542 

30752 

91 

2  321 

84186 

40  

13.390 

.31477 

92 

2  412 

.83752 

41  

13  245 

32167 

93 

2  518 

83248 

42  

13.101 

32852 

94 

2  569 

83005 

43  

12  957 

33538 

95 

2  596 

82876 

44  

12  806 

34257 

96 

2  555 

83071 

45  

12.648 

35010 

97 

2  428 

83676 

46  

12  480 

35810 

98 

2  278 

84391 

47  

12  301 

36662 

99 

2  045 

85500 

48  

12.107 

37586 

100 

1  624 

87505 

49  

11  892 

38610 

101 

1  192 

89562 

50  

11  660 

39714 

102 

0  753 

91653 

51  

11  410 

40905 

103 

0  317 

93728 

19 


290 


INHEEITANCE  TAXATION 


TABLE  F. 

CARLISLE  TABLE  OF  MORTALITY,  WITH  INTEREST  AT  6  PER 

CENT  PER  ANNUM. 


AGE 

SI  Annuity 
value 

i.  Present    j 
worth  of 
remainder 

AGE 

$1  Annuity 
value 

Present 
worth  of 
remainder 

0. 

10.439 

.35251 

52.  . 

10.208 

36558 

1 

12  078 

25974 

53    .. 

9  988 

37804 

2 

12.925 

.21179 

54  

9  761 

39089 

3  

13.652 

.  17065 

55  

9  524 

40431 

4 

14.042 

14857 

56.  . 

9  280 

41812 

5.  . 

14.325 

.  13255 

57  

9  027 

43243 

6.  . 

14.460 

.  12491 

58.  .. 

8.772 

44687 

7 

14.518 

.  12163 

59  ... 

8  529 

46062 

8.  .  . 

14.526 

.12117 

60  

8.304 

47336 

9 

14.500 

12264 

61 

8  108 

48445 

10 

14.448 

12558 

62.  .. 

7  913 

49549 

11.  . 

14.384 

.  12921 

63  

7.714 

50676 

12 

14.321 

13227 

64 

7  502 

51875 

13.    . 

14.257 

.13640 

65  

7  281 

53126 

14.  . 

14.191 

.  14013 

66.  . 

7.049 

54440 

15 

14.126 

14381 

67. 

6  803 

55832 

16. 

14.067 

.  14715 

68.  ..      . 

6  546 

57287 

17.  . 

14.012 

.15026 

69.  . 

6  277 

58809 

18.  . 

13.956 

.  15343 

70  

5.998 

60389 

19   . 

13.897 

.15677 

71  

5  704 

62053 

20.  . 

13.835 

.  16028 

72.  . 

5  424 

63638 

21.  . 

13.769 

.16402 

73  

5.170 

65075 

22.  . 

13.697 

.16809 

74  

4  944 

66355 

23.  . 

13.621 

.  17240 

75.  . 

4.760 

67396 

24 

13.541 

.  17692 

76. 

4  579 

68421 

25.  . 

13.456 

.  18174 

77  

4  410 

"^    69377 

26.  . 

13.368 

.  18672 

78.  . 

4.238 

70351 

27    . 

13.275 

.19198 

79. 

4  040 

71472 

28.  . 

13.182 

.  19725 

80  

3  858 

72502 

29.  . 

13.096 

.20211 

81.  . 

3.656 

73645 

30.    . 

13.020 

.20642 

82.    .. 

3  474 

74675 

31.  . 

12.942 

.21083 

83  

3  288 

75740 

32  

12.860 

.21547 

84.  ... 

3.102 

76781 

33  ...      . 

12.771 

.22051 

85.  . 

2  909 

77874 

34.  . 

12.675 

.  22594 

86.  . 

2  739 

78836 

35  

12.573 

.23172 

87.  . 

2.599 

79628 

36.  . 

12.465 

.23783 

88 

2  515 

80101 

37.  . 

12.354 

.24411 

89  

2.417 

80658 

38.  . 

12.239 

.25062 

90. 

2  266 

81513 

39.  . 

12  .  120 

.25736 

91  

2  248 

81615 

40  

12.002 

.26404 

92  

2  337 

81111 

41.  . 

11.890 

27038 

93 

2  440 

80528 

42.  . 

11.779 

.  27666 

94. 

2  492 

80234 

43  

11.668 

28294 

95 

2  522 

80064 

44.  . 

11.551 

.  28957 

96 

2  486 

80268 

45  

11.428 

.29653 

97  

2  368 

80936 

46.  . 

11.296 

30400 

98 

2  227 

81734 

47.. 

11.154 

31204 

99 

2  004 

82996 

48  

10.998 

.32087 

100  

1.596 

86306 

49.  . 

10.823 

33077 

101 

1  175 

87689 

60.  . 

10.631 

34164 

102      . 

0  744 

90128 

51  

10  422 

35347 

103 

0  314 

92562 

PART  III  — THE  PARTIES 


291 


TABLE  G. 

AMERICAN   EXPERIENCE   TABLE   OF  MORTALITY. 


AGE 

Number 
living 

Number 
dying 
during 
year 

Expecta- 
tion 

AGE 

Number 

Wring 

Number 
dying 
during 
year 

Expecta- 
tion 

10               

100,000 

749 

48.72 

53... 

66,797 

1,091 

18  79 

H 

99  251 

746 

48  09 

54  

65,706 

1  143 

18  09 

12 

98  ,  505 

743 

47.45 

55  

64,563 

1,199 

17  40 

13 

97  762 

740 

46  80 

56... 

63,364 

1  260 

16  72 

14 

97  ,  022 

•    737 

46.16 

57  

62,104 

1,325 

16  05 

15  

96,285 

735 

45.51 

58  

60,779 

1  ,  394 

15  39 

16 

95,550 

732 

44  85 

59... 

59,385 

1  468 

14  74 

17 

94,818 

729 

44.19 

60  

57,917 

1,546 

14  10 

18 

94  089 

727 

43  53 

61  

56,371 

1  628 

13  47 

19 

93  ,  362 

725 

42  87 

62  

54,743 

1  713 

12  86 

20  

92  ,  637 

723 

42.20 

63  

53,030 

1,800 

12  26- 

21 

91,914 

722 

41  53 

64  

51,230 

1  889 

11  67 

22               ... 

91,192 

721 

40.85 

65  

49,341 

1,980 

11   10 

23 

90  471 

720 

40  17 

66  

47,361 

2  070 

10  54 

24 

89,751 

719 

39.49 

67... 

45,291 

2  158 

10  00 

25  

89,032 

718 

38.81 

68.  ... 

43,133 

2,243 

9  47 

20 

88,314 

718 

38  12 

69... 

40,890 

2  321 

8  97 

27  

87  ,  596 

718 

37.43 

70.  ... 

38,569 

2  391 

8  48 

28 

86  878 

718 

36  73 

71.. 

36  178 

2  448 

8  00 

29..  . 

86,160 

719 

36.03 

72  

33,730 

2,487 

7  55 

30  

85,441 

720 

35.33 

73.... 

31,243 

2,505 

7  11 

31 

84,721 

721 

34  63 

74  

28  738 

2  501 

6  68 

32 

84,000 

723 

33.92 

75... 

26,237 

2  476 

6  27 

33 

83  277 

726 

33  21 

76.. 

23  761 

2  431 

5  88 

34 

82  ,  551 

729 

32  50 

77... 

21,330 

2  369 

5  49 

35  

81,822 

732 

31  .78 

78... 

18.961 

2,291 

5  11 

36 

81,090 

737 

31  07 

79  

16,670 

2  196 

4  75 

37  

80,353 

742 

30.35 

80... 

14,474 

2  091 

4  39 

38 

79,611 

749 

29  63 

81.. 

12  383 

1  964 

4  05 

39 

78,862 

756 

28  90 

82  

10,419 

1  816 

3  71 

40  

78,106 

765 

28.18 

83  

8,603 

1  648 

3  39 

41 

77,341 

774 

27  45 

84  

6  955 

1  470 

3  08 

42  

76,567 

785 

26  72 

85  

5  ,  485 

1  292 

2  77 

43  

75,782 

797 

25.99 

86  

4,193 

1,114 

2  47 

44 

74,985 

812 

25  27 

87.. 

3  079 

933 

2  18 

46  

74,173 

828 

24.54 

88  

2,146 

744 

1  91 

46..  . 

73,345 

848 

23.81 

89  

1,402 

555 

1  66 

47. 

72,497 

870 

23  08 

90.. 

847 

385 

1  42 

48  

71,627 

896 

22.35 

91  

462 

246 

1  19 

49. 

70  ,  731 

927 

21  63 

92 

216 

137 

98 

50  

69,804 

962 

20  91 

93.. 

79 

58 

80 

51  . 

68  842 

1  001 

20  20 

94 

21 

18 

64 

52  

67,841 

1,044 

19  49 

95.. 

3 

3 

50 

292  INHERITANCE  TAXATION 

3.  How  to  Use  the  Tables. 

a.  THE  NECESSARY  FACTORS. 

First  ascertain  the  rate  of  interest  to  be  employed  and  the 
mortality  table  to  be  used. 

The  tables  give  the  present  value  of  an  income  of  $100  per 
annum  at  the  various  ages,  based  on  their  expectation  of  life 
from  year  to  year. 

To  find  the  present  value  of  the  annual  income  from  a 
specified  principal  sum  during  the  lifetime  of  a  person,  find 
the  annual  income  on  the  basis  of  the  given  rate  of  interest 
and  then  multiply  this  annual  income  by  the  value  of  one 
dollar  at  the  given  age  as  shown  in  the  table. 

To  find  the  value  of  dower  make  the  same  calculation  and 
divide  it  by  three. 

To  find  the  remainder  deduct  the  life  estate  value  from  the 
principal  sum. 

b.  ASCERTAINING  THE  VALUE. 

A  New  York  testator  dying  in  January,  1917,  leaves  a  net 
estate  of  $300,000  to  his  widow,  aged  30,  for  life ;  on  her  death 
remainder  to  their  only  child,  then  a  minor. 

By  reference  to  the  table  of  States  we  find  that  New  York 
uses  the  American  experience  table  on  the  basis  of  5%,  and 
by  reference  to  that  table — Table  D — we  find  that  the  present 
worth  of  an  annuity  of  $1.00  at  5%  to  a  life  tenant  30  years 
of  age  is  $15.08425. 

The  annual  income  of  $300,000  at  5%  is  $15,000,  which, 
multiplied  by  the  present  worth  of  the  annuity  of  $1.00,  gives 
$226,263.75  as  the  value  of  the  life  estate  and  subtracting 
from  the  principal  sum  $300,000,  the  value  of  the  remainder 
is  $73,736.25. 

4.  Application  to  the  Problems  of  Inheritance  Taxation. 

Taking  the  above  example  of  a  life  estate  and  a  remainder 
created  by  the  will  of  a  New  York  decedent  in  favor  of  his 
widow  of  30  and  his  minor  child  in  $300,000  net  estate,  the 
date  of  death  being  January,  1917: 

Assume : 

a.  That  $100,000  is  personal  property  located  in  Arizona. 

b.  That  $100,000  is  personal  property  invested  in  Idaho. 


PART  III  —  THE  PARTIES  293 

c.  That  $100,000  is  personal  property  located  in  Ten- 

nessee.   What  inheritance  taxes  must  be  paid  in  those 
States! 

d.  What  tax  must  be  paid  in  the  State  of  New  York? 

e.  What  tax  must  be  paid  the  United  States  Government 

and  in  what  proportions  1 

f.  What  is  the  total  tax  due  by  life  tenant  and  remainder- 

man less  any  possible  discounts  for  prompt  payment  ? 

a.  THE  VALUE  AND  TAX  IN  AKIZONA. 

As  to  the  $100,000  invested  in  Arizona,  we  find  by  reference 
to  the  table  of  States  that  Arizona  uses  the  Combined  Ac- 
tuaries' table  on  the  basis  of  4%  (Table  A).  The  annual  in- 
come on  $100,000  at  ±%  is  $4,000.  By  reference  to  Table  A 
we  find  that  the  annuity  value  of  $1.00  at  the  age  of  30  is 
$17.03961.  This  multiplied  by  $4,000  gives  $68,158.40  as  the 
value  of  the  life  estate  and  subtraction  gives  the  value  of  the 
remainder  as  $31,841.60. 

By  reference  to  the  table  of  rates  and  exemptions  given  in 
the  abstract  of  the  Arizona  statute  (see  Appendix),  we  find 
that  the  life  tenant  pays  \%  over  an  exemption  of  $5,000, 
giving  the  tax  on  the  life  estate  $631.58.  The  remainder  pays 
the  same  rate  less  the  same  exemption,  or  $268.41. 

b.  THE  VALUE  AND  TAX  IN  IDAHO. 

As  to  the  $100,000  invested  in  Idaho  we  find  that  State  uses 
the  Actuaries'  combined  table  on  the  basis  of  5% — Table  B. 
And  by  reference  to  that  table  we  find  the  annuity  value  of 
$1.00  at  the  age  of  30  to  be  $14.8963.  The  income  at  the  rate 
of  5%  is  $5,000,  which,  multiplied  by  the  annuity  value  of  $1.00 
at  30  years,  gives  $74,481.50  as  the  value  of  the  life  estate  and 
the  subtraction  shows  $25,518.50  as  the  value  of  the  remainder. 

By  the  reference  to  the  table  of  rates  and  exemptions  in 
the  abstract  of  the  statute  of  Idaho  (see  Appendix),  we  find 
that  the  widow  and  minor  child  each  have  an  exemption  of 
$10,000.  As  to  the  life  estate,  the  tax  on  the  first  $25,000  of 
the  excess  is  1%  or  $250,  leaving  $25,000  to  be  taxed  at  iy2% 
or  $375,  and  $14,481.50  to  be  taxed  at  2%  or  $289.63,  a  total 
tax  to  the  life  tenant  of  $914.63. 


294  INHERITANCE  TAXATION 

As  to  the  remainder  of  $25,518.50,  the  exemption  of  $10,000 
leaves  $15,518.50  taxable  at  \%  or  $155.19  as  the  tax  against 
the  remainder. 

c.  THE  VALUE  AND  TAX  IN  TENNESSEE. 

As  to  the  $100,000  invested  in  Tennessee  we  find  that  this 
State  uses  the  Carlisle  table  on  the  basis  of  6% — Table  F. 
Referring  to  Table  F,  we  find  that  an  annuity  of  $1.00  is 
valued  at  $13.020;  at  6%  the  annual  income  is  $6,000,  which, 
multiplied  by  the  present  worth  of  an  annual  income  of  $1.00, 
gives  $78,120  as  the  value  of  the  life  estate  and  by  subtraction 
the  remainder  value  is  $21,880. 

By  reference  to  the  table  of  rates  and  exemptions  in  the 
abstract  of  the  Tennessee  statute  (see  Appendix),  we  find  that 
the  exemption  to  each  is  $5,000.  The  life  tenant's  interest 
less  $5,000  is  $73,120,  of  which  $20,000  pays  a  tax  at  1%  or 
$200  and  the  balance  $53,120  pays  a  tax  of  iy±%  or  $664.00,  a 
total  of  $864  as  against  the  life  tenant.  The  remainder,  less 
the  $5,000  exemption,  pays  a  tax  of  \%  on  $16,880  or  $168.80. 
This  computation  is  on  the  tax  as  it  stood  prior  to  the  recent 
Tennessee  amendments. 

d.  THE  TAX  DUE  THE  STATE  OF  NEW  YORK. 

The  value  of  the  life  estate  in  New  York  as  we  have  seen 
by  the  first  illustration  is  $226,263.75  and  of  the  remainder 
$73,736.25. 

As  death  occurred  in  January,  1917,  the  rates  and  exemp- 
tions prescribed  by  the  statute  of  1916  are  in  force. 

This  gives  the  widow  and  child  each  an  exemption  of  $5,000. 
The  life  estate  subject  to  tax  is  valued  at  $221,263.75  and  it 
pays  these  rates: 

On  the  first  $25,000.00  1%  or  $250.00 

On  the  next  75,000.00  2%  or  1,500.00 

On  the  next  100,000.00  3%  or  3,000.00 

On  the  balance  21,263.75  4=%  or  850.55 


$5,600.55 

The  remainder  less  the  exemption  is  $68,736.25,  on  which 
the  tax  is  $1,124.73. 


PART  III  — THE  PARTIES  295 

e.  THE  FEDERAL  TAX  AND  VALUATION. 

The  inheritance  tax  levied  by  the  United  States  Govern- 
ment took  effect  September  8,  1916,  and  the  amendment  of 
March  3,  1917,  increased  the  rates  by  50%.  The  assumed 
testator  died  in  January,  1917,  and  his  estate  is  therefore  tax- 
able under  the  1916  statute  and  not  under  the  1917  amendment. 
The  entire  net  estate  is  $300,000  and  an  exemption  of  $50,- 
000  is  allowed,  making  the  taxable  estate  $250,000.  The  State 
taxes  are  not  deducted  by  the  ruling  of  the  treasury  depart- 
ment of  September,  1917 — reversing  its  former  rule.  The  net 
estate  is  therefore  $250,000,  taxed  as  follows: 

On  the  first  $50,000  1%  or  $500 

On  the  next  100,000  2%  or  2,000 

On  the  balance      100,000  3%  or  3,000 


Total $5,500 

The  Federal  Government,  under  the  present  statute,  does 
not  concern  itself  with  the  apportionment  of  the  burden 
among  the  beneficiaries.  The  entire  tax  must  be  paid  out  of 
the  residuary  estate.  In  the  present  case  it  makes  no  differ- 
ence, but  if  these  were  specific  legatees  in  the  supposed  case 
they  would  escape  payment  of  the  tax  altogether. 

f.  THE  TOTAL  TAX  AND  THE  DISCOUNTS. 

We  now  have  the  problem  of  the  total  tax  and  the  dis- 
counts. The  previous  work  shows  the  taxes  as  follows : 

Remainder-  Life 

man.  Tenant. 

Arizona $268.41  $631.58 

Idaho 155.19  914.63 

Tennessee 168.80  864.00 

New  York 1,124.73  5,600.55 


Total $1,717.13       $8,010.76 

1,717.13 


Total  State  Taxes $9,727.89 

Federal  Tax 5,500.00 


Grand  Total $15,227.89 


296  INHERITANCE  TAXATION 

This  total,  however,  may  be  somewhat  reduced  by  the  dis- 
counts allowed  by  the  several  statutes  for  the  prompt  payment 
of  the  tax. 

By  referring  to  the  table  of  interest  and  discount  of  taxes 
or  to  the  statutes  in  the  Appendix,  it  will  appear  that  Ten- 
nessee allows  5%  discount  if  paid  within  three  months;  the 
other  three  States  5%  discount  if  paid  within  six  months, 
and  the  United  States  5%  per  annum  for  the  time  payment 
anticipates  one  year.  If  these  taxes  are  all  paid  immediately 
there  will  be  a  discount  of  5%  on  all  and  a  total  saving  of 
$761.39.  The  U.  S.  Statute  of  1919  changes  the  matter  of 
discount. 

The  total  tax  due  the  four  States  and  the  Federal  Govern- 
ment, less  the  possible  discount  for  prompt  payment,  is  there- 
fore $14,466.50. 

These  figures  will  be  slightly  reduced  by  a  further  con- 
sideration. The  Federal  statute  allows  amounts  paid  for  State 
taxes  as  a  deduction.  New  York  does  not  allow  the  Federal 
tax  as  a  deduction ;  but  in  many  other  States  wrhere  the  ques- 
tion has  arisen  the  deduction  of  the  Federal  tax  is  permitted. 
But  the  Federal  tax  is  calculated  upon  the  net  estate,  which 
assumes  the  deduction  of  the  State  taxes,  and  no  account  has 
been  taken  of  this  feature  in  the  illustrative  case  supposed. 

It  should  also  be  noted  that  under  the  new  Federal  act, 
as  to  persons  dying  after  February  24,  1919,  no  discount  is 
allowed. 

The  foregoing  examples  should  enable  the  average  attorney 
to  work  out  the  more  simple  problems  involved  in  the  taxation 
of  life  estates  and  remainders. 

As  to  successive  life  estates  and  estates  for  joint  lives  the 
calculations  require  the  use  of  other  tables  and  higher  mathe- 
matics, and  should  be  referred  to  an  actuary  or  expert  mathe- 
matician. 


PART  IV— THE  PROPERTY  297 


PART  IV-THE  PROPERTY 


PAGE 

What  is  included 299 

A.  As  to  Situs 300 

1.  Real  Estate 300 

a.  Taxable  only  Where  Located 300 

b.  No  Equitable  Conversion. 301 

e.  Land  Contracts   303 

d.  Leases 304 

2.  Tangibles 305 

3.  Mortgages,  Bonds  and  Commercial  Paper 306 

a.  Situs  at  Domicile  of  Owner 306 

b.  Where  the  Land  Lies 307 

c.  Where  Physically  Present 308 

d.  "Transient"  or  "Habitual"  Presence 310 

e.  Where  Held  by  an  Agent 311 

4.  Corporate  Stock 312 

a.  Of  Domestic  Corporations 312 

b.  Foreign  Corporations  Owning  Property  Within  the  State 314 

c.  Foreign  Corporations  Not  Owning  Property  Within  the  State. . . .  315 

d.  Apportionment  of  Corporate  Property 316 

e.  Pledged  Securities 316 

5.  Other  Choses  in  Action 321 

a.  Bank  Deposits  321 

b.  Debts 1 322 

c.  Life  Insurance  323 

d.  Seat  in  the  Stock  Exchange 324 

e.  Interest  of  Non-Resident  in  Estate  of  Deceased  Non-Resident . . .  324 

f .  Partnership  Interest  324 

B.  As  to  Value 327 

1.  Where  the  Value  at  Death  Cannot  be  Ascertained 327 

2.  Real  Estate 330 

3.  Tangibles 333 

a.  Pictures 333 

b.  Furniture 333 

c.  Jewelry 334 

4.  Notes,  Mortgages  and  other  Obligations 335 

5.  Stocks 337 

a.  Active  Securities   337 

b.  Inactive  Securities  339 

c.  Closely  Held  Stocks 339 

6.  Bonds 345 

7.  Pledged  Securities 345 

a.  As  to  the  Non-Resident  Pledgor 345 

b.  As  to  the  Pledgee 347 


298  INHERITANCE   TAXATION 

B.  As  to  Value — Continued.  PAGE 

8.  Partnerships 347 

9.  Good  Will  351 

a.  A  Taxable  Asset 351 

b.  Rules  for  Computation 353 

c.  Number  of  Years '  Purchase 354 

d.  When  the  Profits  are  Speculative 361 

e.  When  no  Profits  are  Shown 362 

C.  Deductions 366 

1.  Mortgages 367 

2.  Debts 368 

a.  Liability  on  Mortgage  Bond 368 

b.  Repairs  to  Real  Estate 368 

c.  Debts  Paid  by  Will 369 

d.  Doubtful  Claims    370 

3.  Funeral  and  Burial  Expenses 371 

4.  Administration  Expenses  and  Counsel  Fees 372 

5.  Discount  on  Legacy 373 

6.  Expenses  of  Litigation 374 

a.  Where  to  Conserve  the  Estate 374 

b.  Disputes  Among  the  Beneficiaries 374 

7.  Taxes 375 

a.  Other  Inheritance  Taxes 375 

b.  General  Taxes  and  Assessments 377 

c.  Income  Taxes  378 

8.  Commissions 379 

a.  To  Executors   379 

b.  To  Trustees    381 

c.  On  Sale  of  Real  Estate 383 

9.  Family  Allowance   383 

10.  Proportional  Taxation  of  Non-Resident  Estates 384 

11.  Pro  Rating  Debts 385 

a.  When  the  Local  Debts  Exceed  the  Local  Assets. . 386 

b.  When  there  are  Local  Assets  and  no  Legal  Debts 387 

c.  When  Local  Debts  are  Paid  with  Foreign  Assets 387 

d.  When  there  are  both  Local  and  Foreign  Debts  and  Assets 388 

e.  As  to  Partnerships 389 

12.  Marshaling  Assets  to  Reduce  Tax 391 

a.  When  the  Executor  can  do  so 391 

b.  When  he  cannot   .  .  392 


PART  IV  —  THE  PROPERTY  299 


PART  IV  —  THE  PROPERTY 


WHAT  Is  INCLUDED. 

This  is  not  limited  to  such  property  as  is  defined  as  taxable 
under  the  general  tax  laws  of  the  State,  but  extends  to  all  the 
assets  of  the  decedent  of  whatsoever  name  or  nature. 

Matter  of  Knoedler,  140  N.  Y.  377;   35  N.  E.  601. 
Hinds  v.  Wilcox,  22  Mont.  4;  55  Pac.  355. 

The  court  said  in  the  Knoedler  case:  "The  argument  is 
made  that  it  is  only  property  which  is  liable  to  taxation  under 
the  General  Tax  Law  of  the  State  which  can  be  taxed  under 
the  act  relating  to  taxable  transfers.  *  *  *  The  Taxable 
Transfer  Law  has  no  reference  or  relation  to  the  general  law. 
The  two  acts  are  not  in  pari  materia.  While  the  object  of 
both  is  to  raise  revenue  for  the  support  of  the  government, 
they  have  nothing  else  in  common.  Nearly  sixty  years  inter- 
vened between  the  passage  of  the  earlier  and  the  later  statute, 
and  the  latter  was  enacted  under  different  conditions  from 
the  former.  It  taxes  the  right  of  succession  to  property,  and 
measures  the  tax  in  the  method  specifically  prescribed.  All 
property  having  an  appraisable  value  must  be  considered, 
whether  it  is  such  as  might  be  taxed  under  the  general  law  or 
not.  Many  kinds  of  property  might  be  enumerated  which  are 
not  assessable  under  the  general  law,  but  which  are  apprais- 
able under  the  Collateral  Inheritance  Act." 

"The  word  'property'  is  broad  enough  to  include  every- 
thing which  one  person  can  own  and  transfer  to  another." 

Hamilton  v.  Rathbone,  175  U.  S.  414. 

By  a  curious  paradox  the  bequest  of  freedom  to  a  slave  was 
held  a  taxable  transfer  in  Maryland. 

Spencer  v.  Negro  Dennis,  8  Gill   (Md.),  314. 


300  INHERITANCE  TAXATION 

Inheritance  taxes  embrace  every  kind  of  interest  in  the 
estate  of  a  decedent. 

Attorney  General  v.  Pierce,  59  N.  C.  240. 
Commonwealth  v.  Smith,  20  Pa.  St.  100. 

And  all  property  subject  to  the  jurisdiction  of  the  courts 
of  the  State  is  also  subject  to  the  transfer  tax. 

Hinds  v.  Wilcox,  22  Mont.  4;  55  Pac.  355. 

A.— AS  TO  SITUS. 

As  we  have  seen,  the  law  of  Inheritance  Taxation  has  been 
complicated  by  the  conflicting  theories  as  to  the  situs  of  per- 
sonal property,  the  same  State  persisting  in  taxing  the  in- 
tangibles of  resident  decedents  wherever  located  and,  at  the 
same  time,  the  intangible  property  of  nonresidents  when 
physically  present  within  the  State.  Of  course,  the  very  fact 
that  it  is  " physically  present"  anywhere  conflicts  with  the 
notion  that  any  property  is  "intangible." 

At  all  events,  the  actual  and  theoretical  situs  of  property 
subject  to  inheritance  taxation  presents  some  of  the  most 
perplexing  questions  in  the  entire  scope  of  the  subject.  It 
is  further  complicated  by  the  frequent  amendment  of  the 
statutes  so  that  one  decision  which  apparently  conflicts  with 
another  in  fact  construes  a  statute  that  has  since  been 
amended  by  the  Legislature. 

From  1911  to  1920  many  important  States  taxed  only  the 
real  estate  and  tangibles  of  nonresidents  but  under  recent 
amendments  the  situs  of  intangibles  is  once  more  a  vexed 
question. 

1.  Real  Estate. 

a.  TAXABLE  ONLY  WHERE  LOCATED. 

The  authorities  are  all  agreed  that  the  real  estate  of  a  resi- 
dent decedent  located  in  a  foreign  jurisdiction  is  not  taxable 
and  a  fortiori  as  to  a  nonresident. 

Matter  of  Swift,  137  N.  Y.  77;  32  N.  E.  1096. 
Marr's  Estate,  240  Pa.  St.  38;  87  A.  621. 
Succession  of  Westfeld,  122  La.  836;  48  So.  281. 
People  v.  Kellogg,  268  111.  489;  109  N.  E.  304. 
Gallup 's  Appeal,  76  Conn.  617;  57  A.  699. 
Lorillard  v.  People,  6  Dem.  268. 


PAET  IV  — THE  PROPERTY  301 

b.  No  EQUITABLE  CONVERSION. 

The  cases  are  also  substantially  unanimous  in  holding  that 
even  though  the  testator  directs  the  sale  of  foreign  real  estate 
and  the  payment  of  money  legacies  out  of  the  proceeds  the 
doctrine  of  equitable  conversion  is  not  applicable  in  the  law 
of  inheritance  taxation. 

So  a  fund  devised  to  executors  to  be  invested  in  real  estate 
is  none  the  less  taxable  as  personal  property. 

Kenlis  v.  Hodgson,  2  Ch.  458 ;  64  L.  J.  Ch.  585 ;  72  L.  T.  Rep.  N.  S.  866. 
.  Re  Delancey  L.  R.,  5  Exch.  102  ;  39  L.  J.  Exch.  76 ;  22  L.  T.  Rep.  N.  S.  239. 
Connell  v.  Crosby,  210  111.  380;  71  N.  E.  350. 
McCurdy  v.  McCurdy,  197  Mass.  248;  83  N.  E.  881. 
Matter  of  Swift,  137  N.  Y.  77;  32'  N.  E.  1096. 
Matter  of  Offerman,  25  App.  Div.  94;  48  Supp.  993. 
Matter  of  Hallock,  42  Misc.  473;  37  Supp.  255. 

Matter  of  Sutton,  3  App.  Div.  208;  38  Supp.  277;   aff.  149  N.  Y.  618; 
44  N.  E.  1128. 

In  the  Swift  case,  supra,  the  court  said : 

"Nor  is  the  argument  available  that,  by  the  power  of  sale 
conferred  upon  the  executors,  there  was  an  equitable  con- 
version worked  of  the  lands  in  New  Jersey,  as  of  the  time  of 
the  testator's  death,  and,  hence,  that  the  property  sought  to 
be  reached  by  the  tax,  in  the  eye  of  the  law,  existed  as  cash  in 
this  State  in  the  executor's  hands,  at  the  moment  of  the 
testator's  death." 

Where  a  testator  directs  his  executors  to  sell  certain  real 
property  and  divide  the  proceeds,  it  has  been  held  in  North 
Carolina  that  such  conversion  is  for  the  purpose  of  distribu- 
tion only  and  does  not  change  the  character  of  the  property 
in  respect  to  its  liability  for  debts  or  legacies. 

Baptist  Female  University  v.  Borden,  132  N.  C.  476;  44  S.  E.  47. 

The  courts  of  Pennsylvania  take  a  contrary  view.  In  that 
State,  where  there  is  a  direction  to  sell  in  the  will,  it  is  held 
(that  there  is  a  conversion  and  therefore  foreign  real  estate  is 
subject  to  the  tax. 

Rambo's  Estate,  266  Pa.  St.  520;   109  A.  671. 

Handley's  Estate,  181  Pa.  St.  339;  37  A.  587. 

In  re  Dalrymple,  215  Pa.  St.  367;  64  A.  554.  '    ', 

In  re  Williamson,  153  Pa.  St.  508;  26  A.  246. 

Miller  v.  Commonwealth,  111  Pa.  St.  508 ;  26  A.  246. 

In  re  Vanuxem,  212  Pa.  St.  315;  6  A.  876. 


302  INHERITANCE  TAXATION 

But  where  the  will  of  a  nonresident  testator  merely  gave  a 
discretionary  power  of  sale  to  the  executor  and  there  was  no 
proof  that  the  situation  of  the  estate  called  upon  him  to  exer- 
cise that  power,  it  was  held  in  a  recent  case  that  this  did  not 
create  an  equitable  conversion  of  real  estate  in  Pennsylvania 
which  was  therefore  held  liable  to  the  transfer  tax  of  that 
State. 

Re  Chamberlain,  257  Pa.  St.  113;   101  A.  314. 

Since  the  second  edition  of  this  work  the  courts  of  Iowa 

• 

seem  to  have  adopted  the  Pennsylvania  rule  under  the  follow- 
ing circumstances:  Where  an  Iowa  testatrix  owned  large 
amounts  of  land  in  both  Iowa  and  Nebraska  and  devised 
legacies  far  in  excess  of  her  personal  estate  so  that  it  was 
necessary  to  sell  land  in  both  States  to  pay  them ;  held  a  con- 
version and  the  collateral  inheritance  tax  payable  on  amounts 
so  converted. 

Sanford's  Estate,  188  la.  833,  175  N.  W.  506. 

In  McCurdy  v.  McCurdy,  197  Mass.  248;  83  N.  E.  881,  the 
court  stated  the  doctrine  thus : 

"The  Attorney-General,  in  behalf  of  the  Treasurer  and 
Keceiver-General  of  the  Commonwealth,  contends  that  the 
doctrine  of  equitable  conversion  and  exoneration  should  be 
applied  to  relieve  the  land  from  the  encumbrance  of  the  mort- 
gage, and  that  the  executors  should  bring  the  proceeds  of 
personal  estate  from  the  place  of  domiciliary  administration 
in  New  Jersey  and  apply  it  to  the  payment  of  the  debt  here, 
so  as  to  leave  the  land  free  from  the  encumbrance  within  the 
jurisdiction  of  the  Commonwealth.  The  answer  to  this  con- 
tention is,  first,  that  the  rights  and  obligations  of  all  parties 
in  regard  to  the  payment  of  a  tax  of  this  kind  are  to  be  deter- 
mined as  of  the  time  of  the  death  of  the  decedent.  This  has 
been  settled  by  our  decisions.  (Hooper  v.  Bradford,  178 
Mass.  95;  59  N.  E.  678;  Howe  v.  Howe,  179  Mass.  546;  61 
N.  E.  225;Kingsbury  v.  Chapin,  196  Mass.  533;  82  N.  E.  700.) 
Secondly,  the  law  of  equitable  conversion  ought  not  to  be 
invoked  merely  to  subject  property  to  taxation  especially  when 
the  question  is  one  of  jurisdiction  between  different  States. 
In  Custance  v.  Eradshaw,  4  Hare,  315,  325,  it  was  said  that 


PAET  IV  — THE  PROPERTY  303 

'equity  would  not  alter  the  nature  of  the  property  for  the 
purpose  only  of  subjecting  it  to  fiscal  claims  to  which  at  law 
it  was  not  liable  in  its  existing  State. '  In  Matter  of  Offerman, 
25  App.  Div.  (N.  Y.)  94;  48  Supp.  993,  the  court  says  that 
equitable  conversion  should  not  be  invoked  merely  for  the 
purpose  of  subjecting  the  property  to  taxation.  To  the  same 
effect  is  Matter  of  Button,  3  App.  Div.  (N.  Y.)  208;  38  Supp. 
277;  affirmed  in  149  N.  Y.  618.  In  Pennsylvania  a  different 
rule  is  established.  (Handler's  Estate,  181  Penn.  St.  339;  37 
A.  587.)" 

c.  LAND  CONTRACTS. 

The  interest  of  a  vendor  in  an  executory  contract  of  sale  is 
taxable  as  personalty. 

State  v.  Probate  Court,  Ramsay  County,  145  Minn.  155,  176  N.  W.  493. 

Money  due  on  land  contracts  to  pay  a  resident  decedent's 
estate  the  purchase  price  of  land  in  a  foreign  jurisdiction  is 
not  taxable. 

Matter  of  Wolcott,  94  Misc.  73;  157  Supp.  268. 

A  nonresident  owner  of  land  in  this  state  had  made  an 
executory  installment  contract  of  sale.  Held  personalty  and 
not  taxable  as  an  intangible  asset  although  the  purchaser  was 
in  default. 

Matter  of  Bosehert,  107  Misc.  697;  177  Supp.  567. 

And,  conversely,  land  contracts  to  sell  lands  in  Michigan 
owned  by  a  nonresident  decedent  are  taxable  in  Michigan. 

Re  Stanton's  Estate,  142  Mich.  491;  105  N.  W.  1122. 

So,  where  there  was  a  contract  to  sell  real  estate  and  the 
deed  was  executed  by  the  decedent,  but  not  delivered  until  the 
day  after  death,  and  the  property  was  located  out  of  the  State, 
it  was  held  that  there  was  no  conversion  and  the  proceeds  of 
the  sale  were  not  taxable  at  domicile. 

Matter  of  Baker,  67  Misc.  630;  124  Supp.  827. 

On  the  other  hand,  it  has  been  held  in  Nebraska  and 
Wisconsin  that  money  due  on  a  land  contract  is  a  debt  with 
its  situs  at  the  domicile  of  the  owner. 

Dodge  County  v.  Burns,  131  N.  W.  922. 
Stephenson's  Estate,  171  Wis.  462;  177  N.  W.  579. 


304  INHERITANCE  TAXATION 

Of  a  nature  similar  to  land  contracts  are  shares  in  an  unin- 
corporated real  estate  trust  where  real  estate  is  in  Massachu- 
setts ;  held,  taxable  against  a  nonresident  holder  as  property 
within  the  State. 

The  court  said:  "It  is  not  necessary  to  analyze  with 
greater  nicety  the  precise  character  of  the  property  interest 
of  a  shareholder  under  each  of  the  trusts.  It  is  true  of  all 
of  them  that  their  rights  are  equitable  interests  in  tangible 
property  within  this  Commonwealth.  While  the  legal  title  is 
in  the  trustees,  their  ownership  is  fiduciary,  and  the  certificate 
holders  are  the  ultimate  proprietors  of  the  property,  which 
is  held  and  managed  for  their  benefit,  and  which  must  be 
divided  among  them  at  the  termination  of  the  trust.  Their 
rights  constitute  not  choses  in  action,  but  a  substantial  prop- 
erty right.  In  this  respect  the  case  is  indistinguishable  in 
principle  from  shareholders  in  a  domestic  corporation. 
(Greves  v.  Shaw,  173  Mass.  205 ;  53  N.  E.  372.)  The  fact  that 
the  certificates  themselves  were  not  within  the  Commonwealth 
is  an  immaterial  circumstance. " 

Peabody  v.  Treasurer,  215  Mass.  129 ;  102  N.  E.  435. 

This  rule  was  followed  in  Minnesota. 

Thome's  Estate,  145  Minn.  412;  177  N.  W.  638. 

d.  LEASES. 

Obviously  a  lease  may  be  an  asset  or  a  liability,  a  debt  or 
property.  If  it  is  a  perpetual  lease,  reserving  rent,  it  is  held 
to  be  real  property. 

Matter  of  Vivanti,  138  App.  Div.  281;  122  Supp.  954;  146  App.  Div.  942; 
131  Supp.  1148;  aff.  206  N.  Y.  656. 

The  leasehold  interest  was  in  Japan,  and  the  court  said,  in 
holding  it  not  taxable  as  against  a  resident  decedent  in  New 
York: 

"It  would  seem  clear,  upon  all  the  testimony,  that  the 
premises  in  question  were  held  by  decedent  under  a  perpetual 
lease,  reserving  rent,  and  that  under  the  law  of  Japan,  as  well 
as  under  our  own,  the  interest  of  the  decedent  therein  was 
real  property  and  not  personal,"  and  the  transfer  thereof 
not  taxable. 


PART  IV  — THE  PEOPEETY  305 

• 

A  lease  for  twenty-one  years  from  Columbia  College  of 
property  in  New  York  was  held  personal  property. 

Matter  of  Althause,  63  App.  Div.  252;  71  Supp.  445;  aff.  168  N.  Y.  670; 
61  N.  E.  1127. 

And  so,  generally,  as  to  leasehold  interests. 

Attorney-General  v.  Hubbuck,  13  Q.  B.  D.  275;  53  L.  J.  Q.  B.  146;  50 
L.  T.  Eep.  N.  S.  374. 

The  fact  that  the  lease  is  physically  out  of  the  State  does  not 
change  its  situs. 

"The  fact  that  the  instrument  of  lease  was  located  in  New 
Jersey  is  immaterial,  as  it  was  merely  evidence  of  the  dece- 
dent's interest  in  the  premises  situate  in  this  country.  A 
lease  is  not  an  indebtedness  existing  in  favor  of  either  of  the 
parties  thereto,  but  evidence  of  a  contract  or  agreement  by 
which  each  of  the  parties  became  entitled  to  certain  rights. 
Like  a  certificate  of  stock  in  a  corporation,  it  has  no  legal 
situs  apart  from  the  property  to  which  it  refers.  The  dece- 
dent's interest  in  the  leasehold  premises  therefore  constituted 
property  in  this  State.  (Matter  of  Whiting,  150  N.  Y.  27; 
44  N.  E.  715;  Matter  of  Clinch,  180  N.  Y.  300;  73  N.  E.  35.) " 

Matter  of  Rosenbaum,  N.  Y.  L.  J.,  August  7,  1913. 

Mineral  lease  and  unaccrued  royalties  held  real  property. 

Bust's  Estate,  213  Mich.  138;   182  N.  W.  82. 

A  mining  lease  on  land  in  another  State  is  realty  and  not 
taxable  in  Pennsylvania. 

De  Witt's  Estate,  266  Pa.  St.  548;  109  A.  699. 

2.  Tangibles. 

Cattle  in  another  State  are  held  not  taxable  as  against  a 
resident  decedent  in  Iowa  since  they  do  not  follow  the  domicile 
of  the  owner,  even  though  they  have  been  sold  and  the  proceeds 
brought  into  the  State  for  distribution.  This  is  not  the  general 
doctrine. 

Weaver  v.  State,  110  la.  328;  81  N.  W.  603. 

The  home  port  of  a  vessel  engaged  in  interstate  commerce 
is  its  situs  for  purposes  of  taxation. 

Ayer  &  Lord  Co.  v.  Kentucky,  202  U.  S.  409;  26  S.  Ct.  Rep.  679. 
20 


306  INHERITANCE  TAXATION 

And  a  vessel  so  located  is  "tangible." 

People  v.  State  Tax  Commission,  174  App.  Div.  320;  160  Supp.  854. 

So,  a  yacht  of  a  nonresident,  if  its  home  port  is  within  the 
State,  is  tangible. 

Matter  of  Curry,  N.  Y.  L.  J.,  May  27,  1914. 

Jewelry  and  bullion  of  a  nonresident  are  held  taxable  in 
Pennsylvania  under  act  of  1887. 

Antique  furniture  of  a  nonresident  is  taxable  when  in  New 
York. 

Matter  of  Canfield,  96  Misc.  119;  159  Supp.  735. 

The  New  York  statute  prior  to  1911  and  after  May  26, 1919, 
taxes  the  tangible  property  of  residents  in  a  foreign  jurisdic- 
tion, so  when  machinery  in  a  factory  in  New  Jersey  was  not 
so  attached  to  the  building  that  it  could  not  be  removed  without 
injury  to  the  property,  it  was  held  personal  property  and 
taxable  as  part  of  the  estate  of  a  New  York  decedent. 

Matter  of  Gumbinner,  92  Misc.  104 ;  155  Supp.  188. 

3.  Mortgages,  Bonds  and  Commercial  Paper. 

As  to  the  situs  of  mortgages  for  purposes  of  inheritance 
taxation  there  are  three  different  theories.  The  mortgage 
may  be  held  to  have  its  situs  at  the  domicile  of  the  owner,  or 
where  the  land  is  situated,  or  where  the  bond  and  mortgage 
documents  happen  to  be  found.  It  is  possible,  under  these 
conditions,  that  a  mortgage  held  by  a  decedent's  estate  might 
pay  taxes  in  three  States. 

a.  SITUS  AT  DOMICILE  OF  OWNER. 

The  court  said  in  Matter  of  Fearing,  200  N.  Y.  340;  93 
N.  E.  956 :  "  Whether  the  bonds  are  secured,  as  in  the  Bronson 
case,  by  mortgages  of  corporate  property,  or,  as  in  the  present 
case,  by  mortgages  of  the  property  of  individuals,  they  repre- 
sent, equally,  debts  of  their  makers,  which,  as  choses  in  action, 
under  the  general  rule  of  law  are  inseparable  from  the  per- 
sonalty of  the  owner.  Under  that  rule,  as  it  was  said  in  the 
Foreign  Held  Bonds  case,  15  Wall.  300-320,  of  the  bonds  there, 
they  '  can  have  no  locality  separate  from  the  parties  to  whom 


PART  IV  — THE  PROPERTY  307 

they  are  due,'  and  the  legal  situs  of  the  indebtedness,  which 
they  represent,  is  fixed  by  the  domicile  of  the  creditor.  The 
legal  title  of  these  bonds  in  question  was  transferred  by  force 
of  the  laws  of  Ehode  Island.  As  their  legal  and  actual  situs 
was  in  a  foreign  State,  upon  no  theory  were  they  within  the 
operation  of  our  Transfer  Tax  Law." 

This  doctrine  is  emphasized  in  several  of  the  other  earlier 
New  York  cases. 

Matter  of  Bronson,  150  N.  Y.  1;  44  N.  E.  707. 

Matter  of  Gibbes,  84  App.  Div.  510;  83  Supp.  53;  aff.  176  N.  Y.  565;  68 
N.  E.  1117. 

This  is  the  rule  adopted  by  the  courts  in  several  other 
States. 

Orcutt's  Appeal,  97  Pa.  St.  179. 
Gilbertson  v.  Oliver,  129  la.  568 ;  105  N.  W.  1002. 
Estate  of  Fair,  128  Cal.  607;  61  Pae.  184. 
Estate  of  McCahill,  171  Cal.  482;  153  Pac.  930. 

And  was  recently  followed  in  Colorado,  where  it  was  held 
that  the  situs  of  unregistered  corporate  bonds  issued  by  a 
corporation  of  the  State  is  the  domicile  of  a  nonresident 
owner,  unless  physically  present  in  the  State  of  issue.  Two 
justices  dissented  on  the  authority  of  Matter  of  Bronson,  150 
N.  Y.  1;  44  N.  E.  707,  and  Matter  of  Houdayer,  150  N.  Y.  37; 
44  N.  E.  718. 

Walker  v.  People,  64  Colo.  143,  171  Pac.  747. 

But  where  the  bonds  of  a  nonresident  owner  were  kept 
within  the  State  they  were  held  taxable  in  New  York  prior  to 
1911. 

Matter  of  Tiffany,  143  App.  Div.  327 ;  128  Supp.  106 ;  aff.  202  N.  Y.  550 ; 
sustained  sub  nom.  Wheeler  v.  Sohmer,  233  U.  S.  434. 

b.  WHERE  THE  LAND  LIES. 

In  other  States  the  situs  of  the  mortgage  debt  is  regarded 
as  that  of  the  land  which  secures  it.  The  reasoning  upon 
which  this  doctrine  is  founded  is  set  forth  by  the  Massachu- 
setts court  in  Kinney  v.  Stevens,  207  Mass.  368 ;  93  N.  E.  586, 
as  follows : 

"While,  for  general  purposes,  the  interest  of  the  mortgagee 
is  treated  as  personal  property,  it  has  a  local  situs,  and 


308  INHERITANCE  TAXATION 

carries  with  it  an  ownership  of  the  land  until  it  is  redeemed 
by  the  payment  of  the  debt  in  performance  of  the  condition. 
The  debt,  which  is  the  obligation  of  the  debtor  to  pay,  and 
the  land,  which  is  the  security  for  the  payment  of  the  debt, 
are  individual  parts  of  a  single  valuable  property  in  the  mort- 
gagee, which  may  be  made  available  in  different  ways.  The 
debt  belongs  with  the  mortgage,  and  it  must  coexist  to  give 
the  mortgage  validity.  For  that  purpose  it  has  a  situs  within 
the  jurisdiction  of  the  State  where  the  land  lies.  It  was  held 
in  McCurdy  v.  McCurdy,  197  Mass.  248;  83  N.  E.  881,  that  the 
tax  upon  the  succession  to  real  estate  in  this  Commonwealth, 
which  belonged  to  a  decedent  in  another  State  and  was  subject 
to  a  mortgage,  was  to  be  assessed  only  upon  the  value  of  the 
property  above  the  mortgage.  This  was  upon  the  ground 
that  what  passed  upon  the  death  of  the  mortgagor  was  only 
the  value  of  his  interest,  which  was  the  value  of  the  real  estate 
less  the  amount  of  the  debt  that  was  a  charge  upon  it.  This 
was  equivalent  to  holding  that,  upon  the  death  of  the  mort- 
gagee, his  interest  in  the  real  estate,  to  the  amount  of  his 
debt,  would  pass  in  succession  to  his  representatives." 

This  rule  has  been  adopted  by  the  courts  of  Michigan  and 
Maryland. 

Re  Rogers'  Estate,  149  Mieh.  305;  112  N.  W.  931. 
Re  Merriam's  Estate,  147  Mich.  630 ;  111  N.  W.  196. 
Helser  v.  State,  128  Md.  288 ;  97  A.  539. 

On  a  similar  theory  bonds  of  the  State  of  Massachusetts 
kept  by  a  nonresident  at  his  domicile  are  held  taxable. 

Bliss  v.  Bliss,  221  Mass.  201 ;  109  N.  E.  148. 

c.  WHERE  PHYSICALLY  PRESENT. 

"Bonds  and  commercial  paper  are  something  more  than 
mere  evidences  of  indebtedness  and  may  be  taxed  when  they 
are  physically  present  as  well  as  at  the  domicile  of  the 
owner." 

State  ex  rel.  Graff  v.  Probate  Court,  128  Minn.  371 ;  150  N.  W.  1004. 

And  so  in  New  York,  under  the  former  statute,  when  the 
bonds  themselves  were  physically  present  within  the  State  it 
was  held  that  they  were  taxable  against  a  nonresident. 

Matter  of  Morgan,  150  N.  Y.  35;  44  N.  E.  1126. 


PART  IV  — THE  PROPERTY  309 

The  distinction  is  pointed  out  in  Matter  of  Bronson,  150 
N.  Y.  1 ;  44  N.  E.  707,  as  follows : 

"Whatever  may  be  argued  in  support  of  the  right  to  subject 
the  bonds  of  domestic  corporations  to  appraisement  for  taxa- 
tion purposes  under  this  act,  when  physically  within  the  State, 
upon  some  theory  that  they  are  something  more  than  the 
evidences  of  a  debt  and  constitute  a  peculiar  and  appreciable 
species  of  property,  within  the  recognition  of  the  law  as  well 
as  of  the  business  community,  such  argument  is  certainly 
unavailing  in  this  case,  where  the  bonds  themselves  were  at 
their  owner's  foreign  domicile." 

See  also 

Matter  of  Houdayer,  150  N.  Y.  37;  44  N.  E.  718. 

In  Matter  of  Tiffany,  143  App.  Div.  327;  128  Supp.  106;  aff. 
202  N.  Y.  550;  sustained  sub  nom.  Wheeler  v.  Sohmer,  233 
U.  S.  434,  where  notes  of  a  nonresident  decedent  were  secured 
by  mortgages  on  nonresident's  land,  and  were  in  the  safe 
deposit  box  of  decedent  in  New  York,  they  were  held  taxable. 

In  the  course  of  its  discussion  the  United  States  Supreme 
Court  says : 

"For  the  purposes  of  argument  we  may  assume  that  there 
are  limits  to  this  kind  of  power;  that  the  presence  of  a  deed 
would  not  warrant  a  tax  measured  by  the  value  of  the  real 
estate  it  conveyed,  or  even  that  a  memorandum  of  a  contract 
required  by  the  statute  of  frauds  would  not  support  a  tax  on 
the  value  of  the  contract  because  it  happened  to  be  found  in 
the  testator's  New  York  strong  box.  But  it  is  plain  that  bills 
and  notes,  whatever  they  may  be  called,  come  very  near  to 
identification  with  the  contract  that  they  embody.  An  endorse- 
ment of  the  paper  carries  the  contract  to  the  endorsee.  An 
endorsement  in  blank  passes  the  debt  from  hand  to  hand,  so 
that  whoever  has  the  paper  has  the  debt." 

To  the  same  effect : 

Matter  of  Wall,  105  App.  Div.  643;  94  Supp.  1166. 

So,  mortgage  bonds  kept  by  a  nonresident  at  her  home  in 
New  Jersey  were  held  not  taxable  although  secured  by  New 
York  real  estate. 

Matter  of  Preston,  75  App.  Div.  250;   78  Supp.  31. 


310  INHERITANCE  TAXATION 

A  mortgage  owned  by  a  resident  secured  by  foreign  real 
estate  was  held  taxable  although  in  the  hands  of  a  nonresident 
agent  of  the  deceased. 

Matter  of  Corning,  3  Misc.  160;  23  Supp.  285. 

Where  bonds  of  a  foreign  corporation  were  to  be  issued  in 
New  York  and  the  testator  died  before  they  were  issued,  held, 
that  the  title  was  in  the  foreign  corporation,  and  that  they 
were  not  within  the  State  for  taxation  purposes. 

Matter  of  Hillman,  116  App.  Div.  186. 

d.  ' '  TRANSIENT  ' '  AND  '  *  HABITUAL  ' '  PRESENCE. 

The  courts  have  drawn  a  distinction  between  the  "tran- 
sient" presence  of  securities  within  the  State  and  their 
"habitual"  deposit  there. 

Matter  of  Leopold,  35  Misc.  369;   71  Supp.  1032. 

The  distinction  is  well  stated  in  Matter  of  Romaine,  127 
N.  Y.  80,  where  the  court  says : 

"We  should  hesitate  before  applying  the  statute  to  any 
property  casually  brought  into  the  State  for  a  temporary  pur- 
pose, or  by  a  visitor  or  traveler,  but  the  record  before  us  does 
not  present  such  a  case.  It  might  well  be  held  that  such  prop- 
erty, although  literally  'within  the  State,'  was  not  here  in 
the  sense  meant  by  the  statute  on  account  of  the  transitory  and 
accidental  character  of  its  presence  and  the  immediate  custody 
of  the  owner." 

When  paper  evidences  of  debt  are  in  the  possession  and 
control  of  an  agent  of  the  owner  in  some  State  other  than 
that  of  his  domicile,  and  are  held  there  by  such  agent  for 
management  in  connection  with  business  there  carried  on, 
they  are  regarded  as  property  within  the  State  for  inheritance 
tax  purposes. 

Estate  of  Fair,  128  Cal.  607;  61  Pac.  184. 
Matter  of  Morgan,  150  N.  Y.  35;  44  N.  E.  1126. 

When  a  resident  of  Minnesota  came  to  California  for  his 
health  and  brought  with  him  for  safekeeping  Minnesota  securi- 
ties, they  were  held  "transiently"  within  the  State  and  not 
taxable  in  California. 

Estate  of  McCahill,  171  Cal.  482;  153  Pac.  930. 


PART  IV  — THE  PROPERTY  3H 

In  discussing  this  distinction  the  Illinois  court  says  in 
People  v.  Griffith,  245  111.  532;  92  N.  E.  313  (supra) : 

"  There  was  no  evidence  in  the  record  showing  that  the 
money  that  was  used  in  purchasing  the  stocks  and  bonds 
found  in  the  safety  deposit  box  of  decedent  was  kept  here  for 
investment,  but  only  for  safekeeping.  Under  the  New  York 
decisions  construing  the  statute  previous  to  the  adoption  here, 
as  well  as  from  the  wording  of  the  statute,  there  is  a  basis 
for  contending  that  the  bonds  of  foreign  corporations  habitu- 
ally in  this  State,  even  though  here  only  for  safekeeping, 
should  be  taxed.  In  reaching  a  conclusion  on  this  question, 
however,  it  is  necessary  to  keep  in  mind  the  familiar  rule 
applicable  to  all  forms  of  taxation,  and  particularly  special 
taxes,  that  the  sovereign  is  bound  to  express  its  intention  to 
tax  in  clear  and  ambiguous  language.  If  there  be  doubt 
whether  under  the  language  it  was  intended  to  tax  certain 
property,  the  language  should  not  be  extended  beyond  the 
clear  import  of  the  words  used. ' ' 

e.  WHERE  HELD  BY  AN  AGENT. 

An  instructive  case  on  this  question  arose  in  Iowa.  Hannah 
H.  Adams  left  a  will  disposing  of  her  entire  estate  to  collateral 
heirs  and  was  at  the  time  of  her  death,  and  for  many  years 
prior  thereto  a  resident  of  the  State  of  Florida.  Prior  to 
removing  to  Florida  she  resided  in  Waukon  in  the  State  of 
Iowa,  and  one  Hendrick  acted  as  her  agent  at  Waukon  in 
negotiating  and  caring  for  many  loans  which  had  been  made 
for  her  in  that  place.  The  notes  and  the  mortgages  were 
either  in  the  possession  of  her  agent,  Hendrick,  or  were  in 
the  possession  of  an  officer  of  The  Waukon  State  Bank. 
Furthermore  one  of  the  officers  of  the  bank  had  a  power  of 
attorney  from  Mrs.  Adams,  authorizing  him  to  cancel  and 
release  any  mortgages  of  record  appearing  in  the  name  of 
Mrs.  Adams.  On  the  3rd  day  of  August,  1904,  Hendrick 
received  instructions  to  secure  all  of  the  notes  and  mortgages 
and  to  take  them  to  Chicago  where  Mrs.  Adams  was,  she 
having  gone  to  Chicago  for  the  purpose  of  receiving  medical 
attention.  On  the  4th  day  of  August,  1904,  Mrs.  Adams 
redelivered  the  notes  and  mortgages  to  Hendrick  who  returned 


312  INHERITANCE  TAXATION 

home,  stopping  on  his  way  at  Prairie  du  Chien,  Wisconsin, 
and  depositing  the  notes  and  mortgages  in  a  bank  at  that 
place  for  safe  keeping.  Prairie  du  Chien  is  just  across  the 
Mississippi  Kiver  from  Waukon,  and  is  the  nearest  point  by 
rail  from  the  latter  place.  On  the  6th  day  of  August,  1904, 
Mrs.  Adams  died  in  Chicago.  Her  estate  was  administered 
upon  in  the  State  of  Florida.  The  State  of  Iowa  contended 
that  the  notes  and  mortgages  which  had  been  removed  from 
Waukon  were  subject  to  the  collateral  inheritance  tax  of  that 
State. 

It  was  held  that,  as  a  general  rule,  personal  property  follows 
the  person,  and  for  the  purpose  of  taxation  is  assessable  at  the 
domicile  of  the  owner,  but  if  the  creditor  establishes  an  agency 
in  another  state  than  that  of  his  domicile  such  securities  as 
are  in  the  possession  of  the  agent  are  "within  the  jurisdic- 
tion" of  the  foreign  State  for  the  purpose  of  taxation,  this  is 
the  rule,  although  the  securities  may  be  temporarily  with- 
drawn from  the  situs  of  the  agency.  The  court  said  "there 
can  be  no  doubt  in  our  minds  that  this  transaction  was  had  to 
avoid  our  collateral  inheritance  tax  laws,  and  that  Hendrick 
still  retained  control  over  the  securities  and  either  received 
payments  thereon  or  was  authorized  to  do  so  until  the  revoca- 
tion of  his  authority  by  the  death  of  Mrs.  Adams." 

Estate  of  Adams,  167  la.  382;  149  N.  W.  531. 

4.  Corporate  Stock. 

a.  OF  DOMESTIC  CORPORATIONS. 

The  authorities  agree  that  a  State  may  tax  the  transfer  of 
stock  owned  by  nonresidents  in  domestic  corporations,  even 
though  the  certificates  are  physically  kept  without  the  State. 

Hawley  v.  Maiden,  232  17.  S.  1;  34  S.  Ct.  Eep.  201. 
Ewald's  Exr.  v.  City  of  Louisville  (Ky.),  189  S.  W.  438. 
Matter  of  Clarkson,  125  Ark.  381 ;  188  S.  W.  834. 
Dixon  v.  Russell,  78  N.  J.  L.  296;  73  A.  51. 

This  was  the  rule  in  New  York  prior  to  the  repeal  of  the  tax 
on  intangibles  of  nonresidents  in  1911. 

"The  attitude  of  a  holder  of  shares  of  capital  stock  is  quite 
other  than  that  of  a  holder  of  bonds  towards  the  corporation 
which  issued  them.  While  the  bondholders  are  simply  cred- 


PART  IV  — THE  PEOPEETY 

itors,  whose  concern  with  the  corporation  is  limited  to  the 
fulfillment  of  its  particular  obligation,  the  shareholders  are 
persons  who  are  interested  in  the  operation  of  the  corporate 
property  and  franchises,  and  their  shares  actually  represent 
undivided  interests  in  the  corporate  enterprise." 

Matter  of  Bronson,  150  N.  Y.  1;  44  N.  E.  707. 

To  the  same  effect  is : 

Matter  of  Whiting,  150  N.  Y.  27;  44  N.  E.  715. 

"The  situs  of  stock  in  a  corporation  is  the  State  of  incor- 
poration, for  the  purposes  at  least  of  the  inheritance  tax  law." 

McDougald  v.  Low,  164  Cal.  107;   127  Pac.  1027. 

So  it  was  held  in  Nebraska  that  stock  in  a  Nebraska  cor- 
poration, held  in  a  foreign  State  by  a  foreign  trustee  under 
the  deed  of  a  resident  decedent,  was  taxable. 

Douglas  County  v.  Kountze,  84  Neb.  506;  121  N.  W.  593. 

When  stock  of  domestic  corporations  is  found  in  the  safe 
deposit  box  of  a  nonresident  decedent  in  Illinois,  held  taxable. 

People  v.  Griffith,  245  111.  532;  92. N.  E.  313. 

It  is  taxable  even  though  the  certificates  are  without  the 
State. 

Greves  v.  Shaw,  173  Mass.  205;  53  N.  E.  372. 

And  though  the  stock  is  held  in  another's  name. 

Matter  of  Newcomb,  71  App.  Div.  606;  76  Supp.  222;  aff.  172  N.  Y.  608; 
64  N.  E.  1123. 

The  tax  is  imposed  though  the  certificates  are  given  for 
life  to  mother  of  the  donor  with  remainder  to  a  niece. 

Matter  of  Bushnell,  73  App.  Div.  325 ;  77  Supp.  4 ;  aff.  172  N.  Y.  649 ;  65 
N.  E.  1115. 

When  the  remainderman  dies  before  the  life  tenant  they 
are  still  taxable  when  passing  under  the  former's  will. 

Matter  of  Wright,  214  N.  Y.  714;  108  N.  E.  1112. 

For  the  purposes  of  inheritance  taxation  a  national  bank 
located  within  the  State  is  a  domestic  corporation. 

Matter  of  Gushing,  40  Misc.  505;  82  Supp.  795. 


314  INHERITANCE  TAXATION 

"A  share  of  stock  in  a  corporation  may  be  denned  as  a  right 
which  its  owner  has  in  the  management,  profits  and  ultimate 
assets  of  the  corporation.  The  shares  of  stock  represent 
interests  in  the  earnings  or  the  property  of  the  corporation 
and  a  certificate  is  not  stock  itself,  but  only  a  convenient 
representation  of  it,  though  one  may  be  a  stockholder  without 
having  a  certificate  issued  to  him."  The  Iowa  court  finds 
that  the  decedent  owned  an  " interest"  in  the  property  of  the 
bank  within  the  meaning  of  the  inheritance  statute  and  that 
such  interest  is  property  within  the  jurisdiction  of  the  State. 

In  re  Culver,  145  la.  1 ;  123  N.  W.  743. 

b.  FOREIGN    CORPORATIONS    OWNING    PROPERTY    WITHIN    THE 
STATE. 

On  the  theory  that  a  certificate  of  stock  is  a  mere  muniment 
of  title,  like  a  title  deed,  not  the  stock  itself,  but  mere  evidence 
of  its  ownership  (Cook  on  Corporations,  Sec.  13),  many  states 
tax  transfers  of  stock  in  foreign  corporations  wThen  such  cor- 
porations own  property  within  the  State  to  the  proportion 
that  such  value  bears  to  the  entire  assets  of  the  company. 

These  statutes  are  in  practice  very  difficult  of  enforcement. 
Where  the  testator  and  the  beneficiaries  are  both  nonresidents 
the  courts  of  Illinois  hold  that  no  tax  can  be  imposed  upon 
the  transfer  of  stock  in  a  foreign  corporation  merely  because 
that  corporation  owns  tangible  assets  in  Illinois. 

Oakman  v.  Small,  282  HI.  360;  118  N.  E.  775. 

Other  recent  cases  in  that  State  have  followed  this  doctrine. 

People  v.  Cuyler,  276  111.  72;  114  N.  E.  494. 
People  v.  Dennett,  276  111.  43;  114  N.  E.  493. 
People  v.  Blair,  276  111.  623 ;  115  N.  E.  218. 

Another  difficulty  in  the  practical  application  of  the  tax 
under  such  circumstances  arose  in  Idaho. 

The  decedent,  E.  H.  Harriman,  a  resident  of  New  York, 
owned  shares  of  stock  in  the  Union  Pacific,  which  corpora- 
tion owned  all  the  stock  of  the  Oregon  Short  Line  Railroad 
Company,  which  latter  corporation  owned  large  and  valuable 
property  in  Idaho.  Held,  that  as  the  shares  of  stock  of  the 
Union  Pacific  owned  by  the  deceased  were  not  physically 
within  Idaho  at  the  time  of  his  death  and  the  deceased  owned 


PART  IV  — THE  PROPERTY 

no  stock  in  the  Oregon  Short  Line,  his  interest  therein  because 
of  his  ownership  of  Union  Pacific  stock  was  not  subject  to 
tax  under  the  Idaho  statute. 

State  v.  Dunlap,  28  Ida.  784;  156  Pae.  1141. 

c.  FOREIGN  CORPORATIONS  NOT  OWNING  PROPERTY  WITHIN  THE 

STATE. 

As  a  general  rule  the  transfer  of  stock  in  such  corporation 
is  not  taxed  as  against  a  nonresident  decedent  merely  because 
the  certificates  are  physically  within  the  State. 

Matter  of  James,  144  N.  Y.  6;  38  N.  E.  961. 
Matter  of  Bishop,  82  App.  Div.  112;   81  Supp.  474. 

People  v.  Griffith,  245  111.  532;  92  N.  E.  313;   followed   (1917)    276  111. 
44  and  73. 

But  the  reasoning  of  modern  authorities  would  support 
such  a  tax  when  the  certificate  is  within  the  jurisdiction  of  the 
taxing  power.  For  example,  in  New  York,  though  the  inherit- 
ance tax  was  held  not  to  cover  the  certificates  of  foreign 
corporations  kept  in  New  York  by  nonresident  decedents,  it 
was  held  that  such  certificates  are  taxable  property. 

In  People  ex  rel.  Hatch  v.  Reardon,  185  N.  Y.  531,  the 
court  said:  ''But  even  assuming  that  a  tax  on  the  sale  of 
property  is,  in  effect,  a  tax  upon  the  property  itself,  what  are 
certificates  of  stock  and  how  may  they  be  treated  by  the  State 
for  purposes  of  taxation!  They  may  be  treated  as  property 
from  the  function  they  perform  and  the  use  that  is  made  of 
them.  They  may  well  be  regarded  as  a  distinct  species  of 
property,  for  they  now  represent  the  bulk  of  the  property  in 
the  State  and  are  the  universal  medium  of  transfer.  As  we 
said  in  a  recent  case:  'The  main  use  of  certificates  is  for 
convenience  of  transfer,  and  they  are  treated  by  business  men 
as  property  for  all  practical  purposes.  They  are  sold  in  the 
market,  transferred  as  collateral  security  to  loans  and  are 
used  in  various  ways  as  property.  They  pass  by  delivery 
from  hand  to  hand,  are  the  subject  of  larceny,  and  are  taxable 
generally  in  this  State.' 

In  Simpson  v.  Jersey  City  Contracting  Company,  165  N.  Y. 
193,  the  plaintiffs  were  suing  a  foreign  corporation  and  pro- 
cured a  warrant  of  attachment  and  a  levy  was  made  on  certain 


316  INHERITANCE  TAXATION 

certificates  of  stock  in  another  foreign  corporation,  which 
certificates  were  physically  in  the  possession  of  the  Produce 
Exchange  of  the  city  of  New  York,  and  the  question  was, 
whether  an  attachment  could  be  had  of  the  physical  pieces  of 
paper.  The  court  said,  at  page  197 :  ''Jurisdiction  is  founded 
on  the  presence  of  the  thing  in  respect  to  which  it  is  exercised. 
The  action  is  in  rem  and  seeks  the  place  rei  sitae.  Did  it  not 
therefore  clearly  have  rights  or  interests  within  this  State 
which  could  be  impounded  by  our  courts  to  abide  the  result  of 
the  litigation  over  the  plaintiff's  claim?  I  think  so." 

d.  APPORTIONMENT  OF  CORPORATE  PROPERTY. 

When  a  corporation  is  incorporated  in  several  States  and 
the  tax  is  against  the  estate  of  a  nonresident  stockholder,  it 
is  based  not  on  the  market  value  of  the  stock  but  upon  the 
proportionate  value  of  the  property  of  the  corporation  within 
the  State. 

Matter  of  Ripka,  118  Misc.  351. 
Matter  of  Cooley,  186  N.  Y.  220;  78  N.  E.  939. 
Matter  of  Thayer,  193  N.  Y.  490;  86  N.  E.  462. 
Kingsbury  v.  Chapin,  196  Mass.  533;  82  N.  E.  700. 
Gardiner  v.  Carter,  74  N.  H.  507;  69  A.  939. 

The  same  is  true  as  to  joint  stock  associations  organized  in 
several  States. 

Matter  of  Willmer,  75  Misc.  62 ;  134  Supp.  686 ;  aff.  153  App.  Div.  804 ;  138 
Supp.  649. 

But  when  the  corporation  is  incorporated  in  one  State  only 
the  value  of  a  nonresident's  interest  in  a  domestic  corporation 
is  fixed  by  the  market  price  and  not  by  the  proportion  of  the 
corporate  assets  within  the  State. 

Matter  of  Palmer,  183  N.  Y.  238;  76  N.  E.  16. 

e.  PLEDGED  SECURITIES. 

Securities  pledged  by  a  nonresident  decedent  within  the 
State  to  secure  a  debt  were  formerly  held  in  New  York  not  to 
be  his  property  for  the  purposes  of  taxation. 

Matter  of  Pullman,  46  App.  Div.  574;  62  Supp.  495. 
Matter  of  Ames,  141  Supp.  793. 


PART  IV  — THE  PROPERTY  317 

The  New  York  Court  of  Appeals  has  recently  overruled 
these  older  authorities  and  followed  the  doctrine  of  the  New 
Jersey  case  cited  below.  Where  a  nonresident  pledged  stock 
in  New  York  as  collateral  his  equity  was  held  to  be  an  asset  in 
his  estate  subject  to  the  tax  and  the  debt  a  liability  of  the 
estate.  It  was  the  duty  of  the  ancillary  executor  to  pay  the 
debt  and  take  back  the  stock. 

Matter  of  Hallenbeck,  231  N.  Y.  409;  132  N.  E.  131. 

The  older  New  York  rule  has  not  been  followed  in  other 
States,  and  a  recent  case  in  New  Jersey  takes  the  contrary 
view  upon  the  authority  of  other  New  York  cases. 

Security  Trust  Co.  v.  Edwards,  90  N.  J.  L.  558;  101  A.  384. 

In  this  case  stock  in  a  New  Jersey  corporation  was  pledged 
by  a  Connecticut  decedent  in  Connecticut,  but  the  New  Jersey 
Comptroller  refused  to  allow  its  transfer  unless  the  tax  was 
paid.  The  court  said : 

"The  New  York  courts  recognize  that  the  pledger  has  a 
residuary  interest.  In  Warner  v.  Fourth  National  Bank,  115 
N.  Y.  251,  the  interest  of  a  nonresident  pledger  of  notes 
held  in  pledge  by  a  resident,  was  held  to  be  subject  to  attach- 
ment in  New  York  State.  Judge  Gray  says:  'The  title  to 
property  may  remain  in  the  pledgor,  but  the  pledgee  has  a 
lien,  or  special  property,  in  the  pledge,  which  entitled  him 
to  its  possession  against  the  world.'  And  further:  'The 
pledger's  residuary  interest  in  the  pledge  constitutes  a  claim 
or  demand  upon  the  pledgee,  which  is  property,  and  hence 
may  become  the  subject  of  attachment.'  And  again:  'We 
think  the  attachment  in  question  here  operated  to  secure  to 
the  (attaching  creditor)  the  lien  upon  the  pledged  property, 
to  the  extent  of  the  interest  of  the  (pledgor),  and  that  inter- 
est was  the  right  to  the  pledged  property,  or  so  much  of  it 
or  of  its  proceeds  from  any  collection  as  remained  after  the 
satisfaction  of  the  pledgee's  claim  for  advances.' 

' '  See  also  opinion  of  the  same  judge  in  Simpson  v.  Jersey 
City  Contracting  Co.,  165  N.  Y.  193,  where  it  is  said:  'The 
pledgee  obtains  a  special  property  in  the  thing  pledged,  while 
the  pledgor  remains  general  owner.' 

"The  most  distinguished  New  York  judge  of  all  times, 
Chancellor  Kent,  expressly  held  in  Cortelyou  v.  Lansing,  2 


318  INHERITANCE  TAXATION 

Caines  Cases,  200;  2  N.  Y.  Common  Law  Reports,  802  (1805), 
that  the  legal  property  in  a  pledge  does  not  pass  as  in  the 
case  of  a  mortgage  with  defeasance ;  that  the  general  owner- 
ship remained  with  the  pledgor  and  only  a  special  property 
passed  to  the  pledgee,  and  further  that  the  pledger's  interest 
passed  to  his  administrators. 

"If  the  stock  had  a  situs  here,  where  else  can  be  the  situs 
of  the  residuum! 

"If  the  interest  of  the  pledgee  is  less  than  absolute  and 
unqualified  ownership,  how  can  the  residuary  interest  of  the 
pledgor  have  a  situs  other  than  that  of  the  subject  of  the 
pledge?" 

The  opinion  thus  supports  its  ruling  from  other  authorities 
after  an  extended  review  of  the  English  cases : 

"In  Meisel  v.  Merchants  National  Bank,  85  N.  J.  L.  253; 
88  A.  1067  (Court  of  Errors,  1913),  it  was  said  in  effect  that 
the  pledgor  has  the  right  to  bring  a  possessory  action  against 
the  pledgee  to  recover  the  stock  itself,  providing  only  he 
makes  and  keeps  good  a  tender  of  the  debt. 

"In  McCrea  v.  Tale,  68  N.  J.  L.  465;  53  A.  210,  the 
Supreme  Court  in  1902,  in  a  case  of  an  assignment  of  a  chose 
in  action  as  collateral  security,  said  (p.  467) : 

"A  pledgee  of  personal  property,  assigned  as  collateral 
security,  has  the  right  to  collect  the  interest,  dividends  and 
income  accruing  on  the  collateral  assigned,  accounting  to 
the  pledgor  upon  the  redemption  of  the  pledge.  In  making 
such  collections  the  pledgee  is  a  trustee  of  the  pledgor  to 
see  to  the  proper  applications  of  the  funds  collected  or  to 
refund  the  same  to  the  pledgor  if  the  debt  be  otherwise 
paid.'  In  Mechanics'  B.  &  L.  v.  Conover,  14  N.  J.  Eq.  219 
(reversed  on  the  other  grounds,  Herbert  v.  Mechanics'  B.  & 
L.  Assn.,  17  N.  J.  Eq.  497),  the  court  said  that  when  shares 
of  stock  are  pledged  they  'remain  the  property  of  the  share- 
holder for  every  purpose  excepting  that  of  defeating  the 
lien'  of  the  pledgee. 

"In  the  United  States  Supreme  Court,  drawing  the  familiar 
distinction  between  a  chattel  mortgage  and  a  pledge,  Mr. 
Justice  Pitney  says,  in  Dale  v.  Partisan,  234  U.  S.  399,  405; 
34  Sup.  Ct.  Rep.  785: 


PART  IV  — THE  PROPERTY  319 

"  'On  the  other  hand,  where  title  to  the  property  is  not 
presently  transferred,  but  possession  only  is  given,  with 
power  to  sell  upon  default  in  the  performance  of  a  condition, 
the  transaction  is  a  pledge,  and  not  a  mortgage.' 

The  law  of  Connecticut  appears  to  be  to  the  same  effect. 
In  Robertson  v.  Wilcox,  36  Conn.  426  (1870),  the  highest 
court  of  that  State,  at  page  430,  said : 

"A  pledge  of  property  does  not  carry  with  it  the  title  to 
the  thing  pledged.  The  title  remains  as  before.  All  that 
passes  to  the  pledgee  is  the  right  of  possession,  coupled  with 
a  special  interest  in  the  property,  in  order  to  protect  the 
right.'' 

The  method  of  computing  the  tax  in  the  above  case  is 
instructive.  The  court  thus  states  the  process : 

11  Morse  left  no  real  estate  whatever,  either  within  or  with- 
out New  Jersey.  His  gross  estate  amounted  to  $64,523.85, 
and  by  the  will  went  entirely  to  collaterals  or  those  unrelated 
to  the  testator.  The  estate  consisted  largely  of  certain 
securities,  viz.,  corporate  stock  and  four  bonds  appraised  in 
the  aggregate  at  $63,285.50.  All  of  these  securities  had  been 
pledged  by  Morse  in  his  lifetime,  accompanied  by  a  power  of 
attorney  in  blank,  to  the  Phoenix  National  Bank  of  Hartford, 
Connecticut,  to  secure  his  promissory  note  of  $37,500,  upon 
which  there  was  due  $5.21  of  interest,  together  with  all  of 
the  principal  amount,  at  the  time  of  his  death.  It  does  not 
appear  that  this  note  had  been  called  prior  to  the  death  of 
Morse  or  that  the  pledgee  had  caused  any  of  the  securities 
to  be  transferred  to  it  or  that  any  demand  had  been  made 
upon  him  prior  to  death  for  the  payment  of  the  note. 

"Among  the  securities  so  pledged  were  New  Jersey  stocks 
appraised  in  aggregate  at  $28,249. 

"The  Comptroller  appraised  the  New  Jersey  stocks  at 
the  figures  above  mentioned,  and  the  decedent's  interest  in 
the  New  Jersey  stocks  at  the  sum  of  $11,507.  This  amount 
was  obtained  by  pro-rating  the  amount  of  the  loan,  together 
with  such  portion  of  the  general  deductions  as  the  other  assets 
were  insufficient  to  meet,  over  all  of  the  stocks  pledged.  The 
value  of  the  equity  in  the  New  Jersey  stocks  was  arrived  at 
by  applying  to  the  equity  in  all  of  the  stocks  the  fraction 


320  INHERITANCE  TAXATION 

represented  by  the  value  of  the  New  Jersey  stocks  over  the 
value  of  all  the  securities  pledged. 

"Treating  the  gross  estate  for  the  purpose  of  taxation 
as  the  value  of  the  equity  in  all  of  the  stocks,  plus  the  value 
of  the  other  assets,  the  Comptroller  arrived  at  the  propor- 
tion demanded  by  the  method  of  computation  prescribed  for 
nonresident  estates  in  section  12  of  the  act  (namely,  the  ratio 
of  the  New  Jersey  property  to  the  total  property  wherever 
situate),  which  proportion  was  found  to  be  42.6 %.  The  tax 
was  then  calculated  in  the  manner  prescribed  in  that  section 
and  found  to  be  $527.55. 

"The  Comptroller  refused  to  consent  to  the  transfer  of 
the  New  Jersey  stocks  to  executor  of  the  decedent,  unless 
such  tax  upon  the  decedent's  equity  therein  was  paid,  and 
accordingly  it  was  paid. 

"The  amount  of  the  tax,  i.  e.,  the  method  of  computation, 
is  not  challenged,  and  with  that  we  are  not  concerned. ' ' 

It  is  believed  that  the  New  Jersey  court  states  a  sounder 
doctrine  than  that  of  the  Pullman  and  Ames  cases  and  it  is 
now  sustained  in  New  York. 

See  Matter  of  Hallenbeck,  231  N.  Y.  409;  132  N.  E.  131. 

But  in  any  event,  when  redeemed  by  the  executor  the  title 
relates  back  to  the  date  of  death. 

Matter  of  Hurcomb,  36  Misc.   755;   74  Supp.  475. 

Where  the  court  said: 

"While  the  debt  secured  by  the  pledge  of  collateral  is 
unliquidated,  and  the  extent  of  the  equity  is  unascertain- 
able,  as  was  the  case  in  the  Matter  of  Pullman,  it  may  well 
be  that  the  taxation  of  any  equity  therein  would  be  postponed 
until  the  transaction  had  been  completed  and  the  value  of 
the  decedent's  interest  therein  determined.  But  after  the 
transaction  had  been  closed,  and  the  interest  of  the  estate 
therein  fixed  by  redemption  of  the  collateral  —  to  paraphrase 
the  language  of  Justice  Patterson  —  those  securities  are  no 
longer  liable  to  be  resorted  to  by  creditors ;  the  title  to  them 
has  reverted  to  the  estate  of  the  pledger,  and  they  are  in  a 
situation  to  be  taxed  as  property  of  the  estate.  They  can 
no  longer  be  required  to  pay  the  debts  to  which  they  were 


PART  IV  — THE  PROPERTY  321 

pledged  as  collateral,  and  there  is  no  longer  a  necessity  for 
protecting  the  creditor's  security,  his  relation  to  the  matter 
having  terminated." 

The  pledged  property  cannot  be  redeemed  with  the  pro- 
ceeds of  tangible  assets  which  are  taxable  within  the  State 
and  thus  free  exempt  property  from  the  lien,  but  the  debt 
must  be  deemed  to  be  paid  with  the  pledged  property  for 
purposes  of  taxation. 

Matter  of  Burden,  47  Misc.  329;  95  Supp.  972. 

And  the  surplus  value  of  the  pledged  assets  is  property 
within  the  State  for  purposes  of  taxation. 

Matter  of  Bennett,  N.  Y.  L,.  J.,  October  24,  1906;  aff.  120  App.  Div.  904; 
105  Supp.  1107. 

5.  Other  Choses  in  Action, 
a.  BANK  DEPOSITS. 
Money  deposited  in  banks  is  taxable  at  the  place  of  deposit. 

Succession  of  Page  (La.),  89  So.  876. 

Matter  of  Burr  (prior  to  1911),  16  Misc.  89;  30  Supp.  811. 

Re  Rogers'  Estate,  149  Mich.  305;  112  N.  W.  931. 

Re  Speers,  4  Ohio  N.  P.  238. 

And  also  at  domicile  of  decedent,  even  though  it  involves 
double  taxation. 

Mann  v.  Carter,  74  N.  H.  345;  68  A.  130. 

So  it  was  recently  held  in  Iowa  that  a  savings  bank  deposit 
owned  by  a  nonresident  decedent  and  represented  by  a  pass- 
book in  her  possession  was  subject  to  the  inheritance  tax 
of  Iowa. 

Hoyt  v.  Keegan  (la.),  167  N.  W.  521. 

In  discussing  the  theory  of  such  taxation  (prior  to  1911) 
the  New  York  Court  of  Appeals  said : 

"If  he  had  deposited  in  specie,  to  be  returned  in  specie, 
there  can  be  no  doubt  that  the  money  would  be  property 
in  this  State  subject  to  taxation.  But,  instead,  he  did  as 
business  men  generally  do,  deposited  his  money  in  the  usual 
way,  knowing  that,  not  the  same,  but  the  equivalent,  would 
be  returned  to  him  upon  demand.  While  the  relation  of 
21 


322  INHERITANCE  TAXATION 

debtor  and  creditor  technically  existed,  practically  he  had 
his  money  in  the  bank  and  could  come  and  get  it  when  he 
wanted  it.  It  was  an  investment  in  this  State  subject  to 
attachment  by  creditors.  If  not  voluntarily  repaid,  he 
could  compel  payment  through  the  courts  of  this  State.  The 
depositary  was  a  resident  corporation,  and  the  receiving  and 
retaining  of  the  money  were  corporate  acts  in  this  State. 
Its  repayment  would  be  a  corporate  act  in  this  State.  Every 
right  springing  from  the  deposit  was  created  by  the  laws  of 
this  State.  Every  act  out  of  which  those  rights  arose  was 
done  in  this  State.  In  order  to  enforce  those  rights,  it  was 
necessary  for  him  to  come  into  this  State.  Conceding  that 
the  deposit  was  a  debt ;  conceding  that  it  was  intangible,  still 
it  was  property  in  this  State  for  all  practical  purposes,  and 
in  every  reasonable  sense  within  the  meansing  of  the  Transfer 
Tax  Act." 

Matter  of  Houdayer,  150  N.  Y.  37;  44  N.  E.  718. 

The  rule  is  applied  even  though  depositor  holds  a  certificate 
of  deposit  at  his  nonresident  domicile. 

Matter  of  Hewitt,  90  Supp.  1100;  aff.  181  N.  Y.  547. 

b.  DEBTS. 

When  a  debt  is  due  from  a  resident  to  a  nonresident  dece- 
dent it  is  the  property  of  such  nonresident,  and  has  been 
held  property  within  the  State  for  purposes  of  inheritance 
taxation. 

People  ex  rel.  Graff  v.  Probate  Court,  128  Minn.  371 ;  150  N.  W.  1094. 
Blackstone  v.  Miller,  188  U.  S.  189. 
Matter  of  Page,  N.  Y.  L.  J.,  April  13,  1912. 

Matter  of  Daly,  100  App.  Div.  373;  91  Supp.  858;  aff.  182  N.  Y.  524; 
74  N.  E.  1116  (prior  to  1911). 

A  contrary  rule  has  recently  been  applied  in  Illinois. 

People  v.  Blair,  276  111.  623;  115  N.  E.  218. 

In  the  Daly  case  the  court  said : 

"The  continuous  tendency  of  the  courts  of  this  State  has 
been  to  embrace  within  the  Transfer  Tax  Law,  directly  or 
indirectly,  all  property  of  every  species  found  herein  upon 
the  death  of  the  decedent.  That  policy  and  rule  has  never 


PART  IV  — THE  PROPERTY  323 

been  departed  from  or  infringed  upon,  save  by  the  appli- 
cation of  what  the  court  regarded  as  an  inexorable  rule  of 
law,  which  upon  thorough  examination  turns  out  to  be  a 
fiction.  When  that  fact  appeared,  and  the  statute  is  the 
subject  of  construction  wherein  it  is  made  to  appear,  it 
becomes  controlling  not  only  as  an  adjudication  of  the  highest 
court  of  the  land,  but  also  as  an  adjudication  of  the  construc- 
tion adopted  by  the  courts  of  this  State.  It  is  not  so  much 
a  difference  of  construction  as  it  is  of  reason  producing  it,, 
and  when  the  reason  for  a  given  construction  is  shown  to 
fail,  and  the  policy  of  the  statute  is  clear,  the  adjudication  of 
the  United  States  court  becomes  supreme  and  is  made  the 
law  of  the  land  with  respect  to  the  particular  questions 
involved. 

"Under  these  circumstances,  we  think  its  rule  must  obtain, 
and  so  obtaining  it  necessarily  follows  that  debts  due  within 
this  State  from  solvent  debtors,  which  are  converted  into 
money  herein,  and  must  of  necessity  be  enforced  in  this 
jurisdiction,  or  not  at  all,  become  property  within  the 
meaning  of  the  Transfer  Tax  Law,  and  as  such  are  taxable.'* 

On  the  other  hand,  it  has  been  held  that  the  situs  of  a  debt 
is  the  domicile  of  the  creditor. 

Citizens  Bank  v.  Sharp,  53  Md.  521. 
Kintzing  v.  Hutchinson,  Fed.  Gas.  No.  7,384. 
Chambers  v.  Mumford   (Gal.),  201  Pae.  588. 

As  a  matter  of  fact  it  is  both  for  purposes  of  inheritance 
taxation. 

c.  LIFE  INSURANCE. 

A  policy  of  life  insurance  held  by  a  nonresident  in  a  local 
company  is  not  property  within  the  State  subject  to  the 
inheritance  tax. 

Matter  of  Parsons,  117  App.  Div.  321 ;  102  Supp.  168. 
Matter  of  Elting,  78  Misc.  692;   140  Supp.  238. 

d.  SEAT  IN  THE  STOCK  EXCHANGE. 

This  is  universally  held  to  be  property. 

Nashua  Bank  v.  Abbott,  181  Mass.  531 ;  63  N.  E.  1085. 

Powell  v.  Waldron,  89  N.  Y.  328. 

People  v.  Feitner,  167  N.  Y.  1;  60  N.  E.  265. 

Page  v.  Edmunds,  187  IT.  S.  596;  23  S.  Ct.  Rep.  200. 


324  INHERITANCE  TAXATION 

It  is  taxable  as  such  in  New  York  against  a  resident. 

Matter  of  Glendinning,  68  App.  Div.  125;   74  Supp.  190;  aff.  171  N.  Y. 

684. 
Matter  of  Curtis,  31  Misc.  83 ;  64  Supp.  574. 

And  also  when  owned  by  a  nonresident  prior  to  1911. 

Matter  of  Hellman,  174  N.  Y.  254;  66  N.  E.  809. 


e.  INTEREST  OF  NONRESIDENT  IN  ESTATE  OF  DECEASED  NON- 

RESIDENT. 

Where  a  nonresident  died  leaving  a  legacy  to  another  non- 
resident who  died  the  next  day,  the  interest  of  the  deceased 
devisee  in  the  estate  of  the  testator  had  not  been  determined 
and  therefore  was  not  property  within  the  State. 

Matter  of  Zefita,  167  N.  Y.  280;  60  N.  E.  508. 
Matter  of  Thomas,  3  Misc.  388;  240  Supp.  713. 

But  where  a  nonresident  bequeathed  the  residuary  to  his 
son,  also  a  nonresident,  and  the  son  died  after  the  amount 
of  the  residuary  estate  had  been  ascertained,  though  still 
in  the  hands  of  the  executors,  it  was  held  that  the  interest 
of  the  son  was  property  within  the  State  transferred  at  his 
death  and  taxable. 

Matter  of  Clinch,  180  N.  Y.  300;  73  N.  E.  35. 

So,  in  Pennsylvania,  when  a  brother  of  the  decedent,  who 
was  a  resident  of  New  York,  died  two  weeks  before  his  sister, 
who  was  a  resident  of  Pennsylvania,  it  was  held  that  the 
sister  inherited  at  the  moment  of  the  brother's  death,  and 
that  it  was  wholly  immaterial  that  the  net  amount  of  his 
estate  had  not  been  ascertained. 

Milliken's  Estate,  206  Pa.  St.  149;  55  A.  853. 

f .  PARTNERSHIP  INTEREST. 

The  interest  of  copartners  is  in  the  surplus  after  payment 
of  debts,  and  is  therefore  intangible,  even  if  the  copartnership 
owns  real  estate. 

Darrow  v.  Calkins,  154  N.  Y.  503;  49  N.  E.  61. 

Russell  v.  McCall,  141  N.  Y.  437. 

Preston  v.  Fitch,  137  N.  Y.  41. 

Menagh  v.  Whitehall,  52  N.  Y.  146. 

Secor  v.  Tradesmen's  National  Bank,  92  App.  Div.  294. 


PART  IV  —  THE  PROPERTY  325 

It  was  long  held  by  the  Comptroller  of  New  York  that 
under  this  doctrine,  real  estate  owned  by  a  partnership, 
though  situated  outside  the  State,  is  to  be  included  in  the 
valuation  of  the  assets  of  the  firm  in  which  a  decedent  had 
an  interest. 

Matter  of  Dusenberry,  2  N.  Y.  State  Dept.  Rep.  501. 

But  a  recent  case  in  that  State  has  ruled  to  the  contrary. 

Matter  of  McKinlay,  166  Supp.  1081. 

i 

The  interest  of  a  nonresident  in  a  New  York  partnership 
is  taxable  under  the  present  New  York  statute,  chapter  664, 
L.  1915. 

Matter  of  Du  Bois,  N.  Y.  L.  J.,  February  9,  1917;  163  Supp.  668. 

The  same  rule  prevails  in  Pennsylvania  by  judicial  con- 
struction. 

In  re  Small,  151  Pa.  St.  1;  25  A.  23. 

A  pamphlet  on  the  Iowa  inheritance  tax  statute,  issued  by 
the  State  and  edited  by  B.  J.  Powers  of  Des  Moines,  la., 
makes  the  following  interesting  analysis  of  the  theory  of 
"equitable  conversion"  of  partnership  real  estate: 

"Equitable  Conversion  —  Partnership  Property  as  Per- 
sonalty.—  The  theory  of  equitable  conversion  has  long  been 
considered  in  connection  with  partnership  property.  That 
real  estate  belonging  to  a  partnership  is  to  be  treated  as  per- 
sonal property  has  been  recognized  in  Iowa  for  many  years. 
In  the  early  case  of  Hewitt  v.  Rankin  (1875),  41  Iowa,  39, 
the  Supreme  Court  stated:  'We  think  the  weight  of  author- 
ities is  to  this  effect :  Real  estate  held  by  a  partnership  is  to 
be  regarded  as  the  property  of  the  firm,  as  to  creditors  and 
all  other  persons  dealing  with  it,  where  necessary  to  protect 
their  rights.  The  partner  is  to  be  regarded  in  such  cases 
as  holding  only  an  interest  in  the  stock  or  capital  of  the  part- 
nership, which  is  personal  property.  If  the  business  of  the 
firm  be  in  operation  or  there  be  liabilities  outstanding  against 
it,  the  partners  have  not  an  interest  in  its  lands,  or  other 
assets  that  may  be  regarded  as  property;  their  interest  is  in 
the  stock  of  the  firm,  whatever  upon  final  settlement  may  be 
due  them.' 


326  INHERITANCE  TAXATION 

"Continuing,  the  court  says :  'The  conversion  of  real  prop- 
erty into  personalty  under  the  rule  first  above  stated,  is  a 
device  of  equity  in  order  to  effectuate  the  settlement  of  part- 
nerships, and  to  devote  all  their  property  to  the  payment  of 
the  firm  debts,  a  result  highly  equitable,  which  the  courts  will 
never  fail  to  attain.  The  reason  of  the  rule  ceasing  in  the 
absence  of  creditors  of  the  firm  or  others  having  like  equities, 
the  rule  itself  should  no  longer  be  applied.'  This  case  has 
.been  repeatedly  affirmed,  Vol.  4  of  Iowa  Notes,  page  470. 

"In  a  more  recent  case,  the  Supreme  Court  said:  'It  is  the 
general  rule,  which  has  been  frequently  approved  by  this 
court,  that  in  equity  real  property  owned  by  a  partnership 
will  be  treated  as  personalty,  subject  to  the  rules  which  gov- 
ern that  species  of  property/  See  the  case  of  Western 
Securities  Co.  v.  Atlee  (1915),  168  Iowa,  650,  page  665;  151 
N.  W.  56. 

'  *  That  partnership  property  lying  within  this  State,  whether 
real  or  personal,  is  subject  to  the  tax  cannot  be  questioned. 
But  the  Supreme  Court  of  this  State  has  never  had  occasion 
to  consider  the  question  of  whether  real  property  lying  with- 
out the  State,  and  owned  by  a  partnership,  should  be  treated 
as  personal  property  or  real  property  for  the  purpose  of 
collateral  inheritance  taxation. 

"As  to  the  application  of  the  theory  of  equitable  conver- 
sion to  partnership  property  in  general,  see  the  annotations 
to  Robinson  Bank  v.  Miller,  27  L.  R.  A.  449 ;  and  Johnson  v. 
Hogan,  37  L.  R.  A.  (ns)  889. 

"  'Although  the  question  has  not  been  litigated,  the  New 
York  State  Comptroller  has  given  an  opinion  that,  under 
this  doctrine,  real  estate  owned  by  a  partnership  though 
situated  outside  the  State  is  to  be  included  in  the  valuation 
of  the  assets  of  the  firm  in  which  a  decedent  had  an  interest. ' 
Gleason  and  Otis  on  'Inheritance  Taxation,'  page  261,  Matter 
of  Dusenberry,  2  N.  Y.  State  Dept.  Rep.  501.  It  is  therefore 
clear  that  New  York  regards  partnership  real  property,  even 
though  lying  without  the  State,  as  personalty  and  subject  to 
the  tax. ' ' 

A  recent  case  in  Massachusetts  presented  a  rather  complex 
problem.  Shares  in  a  foreign  partnership  trust  were  held 
taxable  in  Massachusetts  because  the  declaration  of  trust 


PART  IV  — THE  PROPERTY  327 

provided  for  the  ultimate  conversion  of  the  realty  into  per- 
sonalty, after  constituting  the  realty  and  personalty  as  one 
fund.  The  conversion  was  held  to  date  from  the  beginning 
of  the  trust.  When  the  partnership  interest  was  in  the 
nature  of  a  lien  upon  the  real  estate  it  was  held  taxable  as 
personalty  against  a  resident  decedent.  On  the  other  hand, 
where  the  copartnership  interest  is  merely  an  undivided  right 
in  or  title  to  the  land  itself,  it  is  not  personalty,  and  therefore 
is  not  taxable  against  the  resident  decedent. 

Dana  v.  Treasurer,  227  Mass.  562;  116  N.  E.  941. 

Where  copartners  take  title  to  real  estate  in  their  indi- 
vidual names,  as  tenants  in  common,  it  does  not  become 
partnership  property  in  the  absence  of  evidence  of  intent. 

Matter  of  Lowenfeld,  N.  Y.  L.  J.,  June  27,  1916. 

But  where  real  estate  is  purchased  with  partnership  funds 
and  the  title  is  taken  in  the  name  of  one  of  the  partners 
a  resulting  trust  arises  in  favor  of  the  other  partners  in 
proportion  to  their  interest  in  the  partnership. 

People  v.  Sholem,  244  111.  502 ;  91  N.  E.  704. 

Local  assets  of  a  partnership  with  its  main  office  in  Boston 
and  branch  office  in  New  York  are  taxable  in  New  York. 

Matter  of  Clark,  N.  Y.  L.  J.,  February  9,  1912. 

B.— AS  TO  VALUE. 

Though  the  tax  is  on  the  transfer  and  not  upon  the  prop- 
erty the  value  of  the  property  transferred  is  used  as  a  yard- 
stick whereby  to  measure  the  value  of  the  transferred  inter- 
est. The  value  must,  unless  the  statute  specifies  otherwise, 
be  at  the  date  of  death  and  no  subsequent  change  can  affect  it. 

Hanberg  v.  Morgan,  263  111.  616 ;  105  N.  E.  720. 
Matter  of  Penfold,  216  N.  Y.  163;  110  N.  E.  497. 

1.  Where  the  Value  at  Death  Cannot  be  Ascertained. 

It  is  often  impossible  to  ascertain  the  value  at  the  date  of 
death.  A  claim  of  the  estate  may  be  involved  in  litigation, 
in  which  case  taxation  must  be  suspended. 

Matter  of  Westurn,  152  N.  Y.  93,  103 ;  46  N.  E.  315. 
Matter  of  Skinner,  106  App.  Div.  217;  94  Supp.  144. 


328  INHERITANCE  TAXATION 

Or  the  claim  may  be  an  interest  in  the  estate  of  another 
decedent  which  has  not  yet  been  settled. 

An  interesting  question  recently  arose  under  such  suspen- 
sion of  taxation  in  the  estate  of  Mary  D.  Daly,  which  con- 
sisted chiefly  of  her  interest  in  the  estate  of  her  deceased 
husband,  Augustin  Daly,  the  playwright. 

The  Surrogate's  opinion,  reported  in  the  New  York  Law 
Journal  of  July  28,  1916,  is  in  part  as  follows : 

"An  order  was  entered  on  a  transfer  tax  appraiser's 
report  on  December  30,  1908,  which,  among  other  things, 
suspended  from  appraisal  and  taxation  decedent's  interest 
in  the  estate  of  Augustin  Daly,  her  deceased  husband. 
The  grounds  of  such  suspension  were  stated  to  be  that  the 
value  of  this  interest  was  not  then  ascertainable.  A  sup- 
plemental report  was  subsequently  filed  from  which  it 
appears  that  said  interest  wTas  valued  at  $82,530.48,  and  that 
the  date  of  accrual  was  therein  fixed  as  of  June  30,  1914. 
From  this  report  and  the  order  entered  thereon  fixing  tax 
the  executor  appeals.  The  principal  question  involved  in 
the  appeal  is  whether  the  value  of  the  interest  above  referred 
to  should  be  considered  as  of  the  date  of  decedent's  death 
or  at  the  time  the  last  payment  was  made  under  the  terms 
of  which  the  said  two  estates  settled  their  differences  and 
which  was  the  date  designated  by  the  appraiser  to  be  the 
date  of  accrual.  In  view  of  the  fact  that  at  an  earlier  date 
it  was  impossible  to  fix  the  value  of  the  decedent's  interest 
in  her  husband's  estate,  we  must  then  inquire,  What  was  the 
date  at  which  the  value  of  this  interest  could  be  ascertained! 
Apparently  the  date  when  the  parties  by  the  agreement  men- 
tioned made  the  last  payment.  This  payment  represents 
the  value  of  decedent's  interest  in  her  husband's  estate  at 
the  time  of  her  death,  although  at  that  time  not  ascertainable. ' ' 

But  where  there  is  no  means  whereby  the  value  can  be 
more  certainly  ascertained  in  the  future  taxation  will  not  be 
suspended.  In  illustration  of  this  principle  the  New  York 
County  Surrogate  said: 

"There  is  also  the  further  element  of  uncertainty  caused 
by  the  right  of  the  surviving  partner  of  the  firm  to  retain 
all  the  firm  assets  for  three  years  after  the  date  of  decedent's 


PART  IV  — THE  PROPERTY  329 

death,  and  to  use  the  interest  of  the  deceased  partner  as  if 
it  belonged  absolutely  to  the  survivor.  If  the  surviving 
partner  were  unfortunate  in  his  investments  during  those 
three  years,  he  might  materially  reduce  the  value  of  the 
interest  of  the  decedent  in  the  firm;  if  he  were  fortunate,  he 
might  considerably  augment  the  value  of  that  interest.  But 
it  is  not  upon  the  value  of  the  interest  that  is  finally  paid  over 
to  the  legatees  that  the  tax  is  imposed,  but  upon  the  value 
of  the  interest  transferred  at  the  date  of  decedent's  death. 
(Matter  of  Davis,  149  N.  Y.  539;  44  N.  E.  185;  Matter  of 
Penfold,  216  N.  Y.  163;  110  N.  E.  497;  Ann.  Gas.  1916  A,  783.) 

"If  the  contention  of  the  State  Comptroller  were  upheld 
and  taxation  of  the  interest  of  the  decedent  in  the  firm  of 
Thomas  H.  Hubbard  &  Co.  suspended  until  three  years  after 
his  death,  the  tax  imposed  would  not  be  upon  the  value  of 
the  property  transferred  by  the  will  of  the  decedent,  but 
upon  the  value  of  that  property  as  augmented  or  diminished 
by  the  operations  of  the  surviving  partner  for  the  period  of 
three  years.  In  other  words,  some  further  speculation  may 
yet  lend  value  (although  this  is  doubtful)  to  this  unsuccess- 
ful railway  scheme.  But  that  fact  ought  not  to  be  allowed 
to  affect  the  proved  valuation  of  General  Hubbard 's  estate 
at  the  time  of  his  demise. 

"Upon  this  appeal  evidence  was  submitted  that  the  securi- 
ties deposited  by  the  firm  as  collateral  for  the  6%  trust  notes 
were  returned  to  the  firm  upon  the  maturity  of  the  notes, 
but  there  is  no  proof  of  the  new  liability  incurred  by  the 
firm  at  that  time,  or  the  new  arrangement  made  by  the  firm 
for  the  payment  of  the  notes  and  the  release  of  the  securities. 

"I  am  inclined  to  think  that  the  cases  cited  by  the  attor- 
ney for  the  State  Comptroller  in  support  of  his  contention 
that  the  appraisal  should  be  suspended  are  distinguishable 
from  the  matter  under  consideration.  In  the  Matter  of 
Westurn,  152  N.  Y.  93 ;  46  N.  E.  315,  it  was  alleged  by  the 
executor  that  a  note  was  due  the  decedent,  but  the  maker 
of  the  note  denied  the  obligation.  It  was  held  that  taxation 
on  the  amount  of  the  note  should  be  suspended  until  it  was 
determined  that  it  was  really  a  debt  due  the  estate.  In  the 
Matter  of  Skinner,  106  App.  Div.  217;  94  N.  Y.  Supp.  144, 


330  INHERITANCE  TAXATION 

it  was  held  that  the  value  of  a  claim  then  in  litigation  should 
be  suspended  until  the  termination  of  the  litigation.  In  the 
Matter  of  Zefita,  167  N.  Y.  280;  60  N.  E.  598,  it  was  held  that 
a  tax  cannot  be  imposed  upon  a  legacy  of  a  residuary  estate 
until  the  amount  of  the  estate  or  interest  is  ascertained. 

"In  the  matter  under  consideration  there  was  no  claim  in 
litigation  at  the  date  of  decedent's  death;  there  was  no 
uncertainty  as  to  whether  a  claim  was  valid  or  invalid,  and 
there  was  no  means  by  which  the  value  of  the  decedent's 
interest  could  in  the  future  be  more  definitely  determined 
than  at  the  date  of  his  death. ' ' 

Matter  of  Hubbard,  103  Misc.  125 ;  169  Supp.  325. 

2.  Real  Estate. 

The  assessed  value  for  ordinary  taxation  is  not  controlling 
on  the  market  value  which  is  the  test  for  inheritance  taxation. 

Sevier's  Exrs.  v.  Commonwealth,  181  Ky.  49;  203  S.  W.  1070. 
Warner  v.  Corbin,  91  Conn.  532 ;  100  A.  354. 
McGhee  v.  State,  105  la.  9 ;  74  N.  W.  695. 

But  in  practice  a  wide  discrepancy  between  the  value  fixed 
by  an  expert  appraiser  and  the  assessed  valuation,  equalized 
to  100%  bsais  would  require  explanation. 

When  obtainable  an  actual  ~bona  fide  sale  of  property  in 
the  vicinity  prior  to  death  is  the  best  evidence. 

Matter  of  Arnold,  114  App.  Div.  244;  99  Supp.  704. 
See  New  York  Decedents'  Estate  Law,  §  122. 

The  appraisal  is  of  the  market  value  at  the  date  of  death ; 
though  evidence  of  the  sale  of  property  in  the  vicinity  shortly 
after  death  is  competent,  but  the  price  realized  on  a  forced 
sale  is  not  a  fair  test  of  market  value. 

Matter  of  Paterno,  182  App.  Div.  478;  169  Supp.  765. 

It  is  the  equity  of  redemption  only  that  is  taxed  and  mort- 
gages should  be  deducted  from  the  value  of  the  real  estate. 

Matter  of  Sutton,  3  App.  Div.  208;   38  Supp.  277;   aff.  149  N.  Y.  618; 
44  N.  E.  1128. 

Deduction  of  incumbrances  on  real  estate  must  be  made 
from  that  estate  and  not  from  the  personalty.  The  interest 
of  decedent  is  in  the  equity. 

State  v.  Probate  Court  Ramsay  County,  145  Minn.  155 ;  176  N.  W.  493. 


PART  IV  — THE  PROPERTY  331 

And  this  is  so  even  when  the  will  directs  that  the  mortgage 
be  paid  out  of  personalty. 

Matter  of  Offerman,  25  App.  Diy.  94;  48  Supp.  993. 

Matter  of  Murphy,  32  App.  Div.  627 ;  53  Supp.  1110 ;  affirming  on  opinion 
in  Matter  of  Offerman ;  aff.  157  N.  Y.  679 ;  51  N.  E.  1092. 

When  testator's  will  directs  that  a  mortgage  on  foreign 
real  estate  be  paid  out  of  local  personal  assets  it  was  allowed 
as  a  debt  of  the  estate  by  the  Surrogate's  Court  of  New  York 
County. 

Matter  of  Hunt,  97  Misc.  233 ;  160  Supp.  1115. 

This  case  is  of  doubtful  authority,  for  it  has  long  been  held 
that  even  taxes  due  on  foreign  real  estate  are  not  a  deduction 
from  the  personal  assets. 

McElroy  on  the  Transfer  Tax  Law,  p.  488. 

And  it  has  since  apparently  been  overruled  in  Matter  of 
George  W.  Vanderbilt,  104  Misc.  511,  where  a  mortgage  on 
foreign  real  estate  was  held  not  to  be  a  deduction  from  the 
personal  property  of  the  testator  within  the  State. 

The  theory  is  that  for  the  purpose  of  the  transfer  tax  the 
parties  interested  in  the  estate  take  their  interest  in  the 
property  in  the  form  it  had  at  the  death  of  the  decedent,  and 
no  direction  in  the  will  as  to  the  application  of  the  personalty 
for  the  benefit  of  the  realty  can  defeat  or  qualify  the  rights 
of  the  State  in  the  imposition  and  collection  of  the  tax. 

Matter  of  Livingston,  1  App.  Div.  568;  37  Supp.  463. 
Matter  of  Baudouine,  5  App.  Div.  622;  39  Supp.  1121. 
Matter  of  Kemp,  7  App.  Div.  609;  40  Supp.  1144;   aff.  151  N.  Y.  619; 
45  N.  E.  1132. 

While  sales  of  property  in  the  neighborhood  shortly  prior 
to  the  testator's  death  are  the  best  evidence  of  value,  the 
price  for  which  the  property  itself  sells  after  death  is  of 
doubtful  value  if  remote  and  the  fact  that  it  sells  for  less  than 
the  amount  of  the  appraisal  is  not  ground  for  modifying  the 
taxing  order  after  the  time  to  appeal  has  expired. 

Matter  of  Meyer,  209  N.  Y.  386 ;  103  N.  E.  713. 
Matter  of  Barnum,  127  App.  Div.  418;  114  Supp.  33. 

The  uncontradicted  affidavit  of  an  expert  is  sufficient  proof 
of  value,  if  received  without  objection. 

Matter  of  Gale,  83  Misc.  686;  145  Supp.  301. 


332  INHERITANCE  TAXATION 

The  interest  of  the  decedent  and  its  nature  must  be 
established  before  the  appraiser  by  competent  evidence. 

Matter  of  Willets,  119  App.  Div.  119;   100  Supp.  850;   104  Supp.  1150; 
aff.  190  N.  Y.  527;  83  N.  E.  1134. 

Where  the  decedent  owned  an  undividual  interest  in  real 
estate,  subject  to  certain  mortgages,  a  discount  of  15%  was 
allowed  by  the  appraiser  on  the  value  of  the  interest  because 
a  judicial  sale  would  be  necessary  to  realize  on  it.  It  was 
claimed  on  appeal  to  the  Surrogate  that  the  deduction  should 
be  made  of  the  15%  from  the  equity  of  redemption  after  the 
amount  of  the  mortgage  had  been  deducted;  but  it  was  held 
that  it  was  the  entire  property  that  must  be  sold  and  not  the 
equity  and  therefore  that  the  deduction  from  the  entire  value 
was  correct. 

Matter  of  Gibert,  176  App.  Div.  850. 

Where  there  was  a  devise  of  a  one-seventh  interest  in 
undivided  lands  it  was  held  proper  to  appraise  it  at  one- 
seventh  of  the  value  of  the  entire  property. 

Wingert  v.  State,  129  Md.  28;  98  A.  224. 

An  instructive  case  in  the  valuation  of  fractional  interests 
in  real  estate  arose  before  the  New  York  County  Surrogate 
in  Matter  of  Meyer  Loeb,  N.  Y.  Law  Journal,  January  13, 
1914:  "This  is  an  appeal  from  an  order  fixing  tax  upon  the 
ground  that  the  appraiser  erred  in  his  valuation  of  decedent's 
real  estate.  An  expert  employed  by  the  State  Comptroller 
submitted  an  affidavit  giving  his  estimate  of  the  value  of  cer- 
tain real  estate  of  which  the  decedent  was  entitled  to  a  one- 
half  interest,  but  he  did  not  give  the  value  of  the  one-half 
interest.  On  behalf  of  the  estate  an  affidavit  was  submitted 
giving  the  opinion  of  another  expert  as  to  the  value  of  the 
one-half  interest.  It  appeared  from  the  evidence  of  this 
expert  that  the  value  of  the  one-half  interest  is  less  than 
one-half  the  value  of  the  entire  plot.  The  appraiser  disre- 
garded this  evidence  and  ascertained  the  value  of  decedent's 
one-half  interest  to  be  one-half  the  value  of  the  entire  plot  as 
appraised  by  the  State  Comptroller's  expert.  This  was 
incorrect,  as  the  only  evidence  before  him  was  to  the  effect 
that  the  one-half  interest  is  worth  less  than  one-half  the 


PART  IV  —  THE  PROPERTY  333 

value  of  the  entire  plot.  The  order  fixing  tax  will  be  reversed 
and  the  appraiser's  report  remitted  to  him  for  the  purpose  of 
ascertaining  the  value  of  decedent's  one-half  interest  in  the 
real  estate  of  which  he  died  seized." 

3.  Tangibles. 

a.  PICTURES. 

The  valuation  by  an  expert  as  of  the  date  of  death  was 
held  the  best  evidence  and  the  price  for  which  the  pictures 
actually  sold  ten  months  afterwards  was  held  not  competent 
to  contradict  it. 

Matter  of  Anderson,  N.  Y.  L.  J.,  December  20,  1916. 

b.  FURNITURE. 

An  instructive  decision  was  recently  made  by  the  New  York 
County  Surrogate's  Court  on  the  valuation  of  the  collection 
of  antique  furniture  owned  by  the  late  Richard  Canfield, 
formerly  of  Saratoga,  New  York,  but  at  the  time  of  his  death 
a  nonresident. 

The  Surrogate's  opinion  (96  Misc.  119;  159  Supp.  735) 
is  as  follows : 

"At  the  time  of  his  death  he  had  his  domicile  in  Rhode 
Island.  He  owned  a  collection  of  antique  furniture  which 
was  located  in  this  State  and  a  competent  appraiser  made 
an  affidavit  in  which  he  alleged  that  the  market  value  of  such 
furniture  at  the  date  of  decedent's  death  was  $65,175.  Testi- 
mony disclosed  that  this  furniture  was  sold  in  August,  1915, 
for  $159,999,  and  the  appraiser  accepted  these  figures  as  the 
value  of  the  furniture  for  the  purposes  of  the  transfer  tax. 
The  affidavit  submitted  by  the  expert  employed  by  the  estate 
was  the  only  evidence  as  to  the  value  of  the  furniture  at  the 
date  of  decedent's  death.  The  State  Comptroller  did  not 
produce  testimony  to  show  that  the  appraisal  by  the  expert 
was  incorrect  but  relied  upon  the  testimony  as  to  the  price 
for  which  the  furniture  sold  in  August,  1915.  *  *  *  As 
the  only  competent  testimony  submitted  to  the  appraiser  in 
regard  to  the  value  of  the  furniture  showed  that  its  market 
value  at  the  date  of  decedent's  death  was  $65,175,  he  should 
have  accepted  that  valuation  and  not  the  price  at  which  it  was 


334  INHERITANCE  TAXATION 

sold  nine  months  later.  The  decedent  also  owned  certain 
porcelains  which  were  appraised  by  the  expert  employed  on 
behalf  of  the  estate  at  $12,915.  The  appraisal  represented 
their  value  at  the  date  of  decedent's  death.  The  executor 
submitted  an  affidavit  showing  that  the  porcelains  were  sold 
for  much  less  than  their  appraised  value  but  the  transfer  tax 
appraiser  accepted  the  value  of  $12,915.  This  was  correct. ' ' 

c.  JEWELRY. 

In  Matter  of  Moore,  97  Misc.  238;  162  Supp.  213,  the 
question  of  the  value  of  the  stock  of  Tiffany  &  Co.  was  in 
question.  On  this  subject  the  Surrogate  said: 

"The  par  value  of  this  stock  is  $1,000  a  share  and  the 
appraiser  reported  that  its  market  value  at  the  date  of 
decedent's  death  was  $7,683.45  per  share.  The  stock  is  not 
customarily  bought  and  sold  in  the  open  market.  The  sale 
of  three  shares  in  1914  at  an  average  price  of  $5,570  a  share 
cannot  be  accepted  as  the  market  value  of  the  stock  on  the 
30th  of  March,  1914,  the  date  of  decedent's  death,  as  the 
record  does  not  show  the  circumstances  under  which  the  sale 
was  made.  The  appraiser  was  therefore  obliged  to  rely 
upon  the  statement  of  assets  and  liabilities  of  the  company 
in  ascertaining  the  value  of  the  stock.  In  this  statement  the 
company  claims  that  the  sum  of  $2,300,000  should  be  deducted 
from  the  assets  as  a  reserve  fund.  The  appraiser  allowed  a 
deduction  of  $2,102,463.48  as  a  reserve  against  depreciation 
and  refused  to  allow  the  other  reduction.  The  value  of  the 
assets  represented  the  cost  price  of  the  goods  purchased  by 
the  company,  plus  the  expenditures  made  for  labor  in  pre- 
paring them  for  sale.  The  reserve  for  depreciation  repre- 
sented the  amount  which  the  company  considered  reasonable 
as  a  reserve  fund  in  view  of  the  fact  that  the  goods  sold  by 
the  company  consist  almost  exclusively  of  luxuries.  Noth- 
ing is  more  fickle  than  fashion  and  the  taste  in  luxuries.  The 
design  or  style  of  many  of  the  most  costly  articles  may  sud- 
denly become  obsolete  and  necessitate  the  employment  of 
considerable  labor  and  expense  in  making  such  articles 
conform  to  the  fashion  or  popular  taste  for  the  time  being. 

"This  reserve  for  depreciation  is  therefore  a  reasonable 


PART  IV  — THE  PROPERTY  335 

deduction  from  the  assets  of  the  company;  but  for  the  pur- 
pose of  ascertaining  the  value  of  the  stock,  the  reserve  main- 
tained against  possible  loss  by  theft,  smoke,  etc.,  should  not 
be  deducted,  as  this  is  a  reserve  for  contingencies  that  may 
never  happen,  and  no  evidence  was  submitted  to  the  appraiser 
to  show  that  the  company  had  ever  lost  any  of  the  amount 
reserved  for  contingencies.  The  appraiser  therefore  was 
correct  in  refusing  to  deduct  this  special  reserve  of  $2,300,000 
from  the  assets  of  the  company." 

4.  Notes,  Mortgages  and  Other  Obligations. 

The  rules  which  should  govern  an  appraiser  in  the  valua- 
tion of  mortgages  wTere  clearly  stated  by  the  New  York  County 
Surrogate  in  Matter  of  Kingsland,  118  Misc.  525;  193  Supp. 
638: 

"The  decedent  left  a  gross  estate  of  over  $9,000,000,  includ- 
ing mortgages  on  real,  estate  in  this  city  of  the  face  value  of 
$4,014,300.  About  75%  of  the  mortgages  were  overdue.  The 
rate  of  interest  in  all  but  one  was  less  than  6%.  The  transfer 
tax  appraiser  depreciated  to  the  value  of  the  real  estate  the 
mortgages  which  were  for  sums  in  excess  of  that  valuation, 
and  were  therefore  considered  by  him  to  be  inadequately 
secured.  He  appraised  the  other  mortgages  at  their  face 
value.  He  then  deducted  10%  from  the  value  thus  found  of 
all  the  mortgages,  and  the  balance,  with  interest  on  the  mort- 
gages to  the  date  of  decedent's  death,  is  his  appraisal.  The 
total  sum  by  which  the  mortgages  are  depreciated  is  $444,405. 
The  appraiser  did  not  accept  the  valuation  submitted  by  the 
executors,  who  claimed  that  the  mortgages  were  worth  $602,- 
580  less  than  their  face  value,  but  his  plan  of  applying  a  per- 
centage of  reduction  to  all  the  mortgages  was  that  employed 
by  the  expert  for  the  estate. 

"This  method  of  appraisal  is  erroneous.  No  reason  is 
given  by  the  appraiser  for  adopting  it.  The  true  value  of 
the  mortgages  could  no  more  be  ascertained  in  this  way  than 
could  the  value  of  an  aggregation  of  bonds  differing  one  from 
the  other  in  amount,  interest  rate,  date  of  maturity  and  suffi- 
ciency of  security.  The  fact  that  the  number  of  mortgages 
left  by  decedent  is  large  cannot  be  considered  as  an  element 


336  INHERITANCE  TAXATION 

of  depreciation  (Matter  of  Gould's  Estate,  19  App.  Div.  362; 
46  N.  Y.  Supp.  506).  It  is  possible  in  this  proceeding, 
because  of  the  completeness  of  the  data  furnished  to  the 
appraiser  by  the  estate,  to  fix  the  value  of  all  the  mortgages 
with  reasonable  accuracy. 

"The  evidence  justifies  the  assumption  that  a  mortgage 
bearing  interest  at  6%,  secured  by  real  estate  of  greater 
value  than  the  mortgage,  is  worth  its  face  value. 

"Overdue  mortgages  similarly  secured  are,  like  past-due 
bonds,  also  worth  their  face  value,  irrespective  of  the  interest 
rate.  Mortgages  which  are  secured  by  real  estate  at  lesser 
value  are  ordinarily  worth  no  more  than  the  security. 

"The  record  contains  a  list  of  payments  of  mortgages  in 
whole  or  in  part  from  the  date  of  decedent's  death,  August 
10,  1919,  to  January,  1921.  The  best  proof  of  the  value  of 
mortgages  paid  up  or  assigned  is  the  amount  received  for 
their  satisfaction  or  sale.  They  should  be  appraised  at  such 
sums,  less  a  discount  of  the  difference  between  the  rate  of 
interest  of  the  mortgage  and  6%,  for  the  period  from  the  date 
of  death  to  the  date  of  payment.  Mortgages  not  paid  up  or 
assigned,  but  which  are  overdue,  should  be  appraised  at  their 
face  value,  except  where  they  exceed  the  value  of  the  real 
estate,  in  which  cases  they  should  be  appraised  at  the  real 
estate  value. 

"Mortgages  not  due  at  decedent's  death,  and  not  paid  up 
or  assigned,  should  be  appraised  at  their  face  value,  dis- 
counted by  the  difference  in  percentage  between  the  interest 
rate  in  the  mortgage  and  6%  for  the  period  from  the  date  of 
decedent's  death  to  the  date  of  maturity.  If  in  excess  of  the 
value  of  the  security,  the  mortgages  referred  to  in  the  fore- 
going paragraph  should  be  depreciated  to  its  value. ' ' 

Notes  must  be  appraised  at  market  value  according  to 
the  evidence  adduced.  In  reversing  an  appraisal  as  against 
the  weight  of  evidence  the  court  said:  "This  is  not  a  case, 
as  assumed  by  the  appellant,  within  Matter  of  Gibert,  176 
App.  Div.  850;  163  N.  Y.  Supp.  974,  where  the  appraiser  has 
arbitrarily  disregarded  all  the  evidence,  and  there  was  noth- 
ing before  him,  or  before  the  surrogate,  on  which  to  base  a 
different  conclusion;  for  here  were  the  book  entries,  which 


PART  IV  — THE  PROPERTY  337 

afforded  some  guide,  taken  in  connection  with  the  opinions 
of  the  appellants'  experts.  But  the  determination  that  this 
note  was  worth  its  face  value,  and  that  the  stock  of  this  cor- 
poration had  any  value,  was  contrary  to  the  weight  of  the 
evidence,  and  the  decree  should  be  reversed,  and  the  ap- 
praiser's report  remitted  to  him,  for  the  purpose  of  correct- 
ing the  value  of  the  17  shares  of  stock  held  by  the  decedent  in 
the  Contracting  Company  and  correcting  the  value  of  the  note 
in  question. ' ' 

Matter  of  Paterno,  182  App.  Div.  178;  169  Supp.  765. 

Unless  it  is  shown  affirmatively  that  notes  are  worth  less 
than  their  face  value,  they  should  be  valued  at  their  face  value 
and  it  will  be  error  if  valued  at  a  lower  figure  without  affirma- 
tive evidence  to  support  it. 

People  v.  Penniston,  262  111.  191. 

5.  Stocks. 

Unless  the  statute  specifically  so  provides  rights  to  sub- 
scribe for  stock  held  by  a  decedent  are  not  included  in  a  tax 
on  transfers  of  stock  in  domestic  corporations.  The  New 
York  statute  was  amended  in  this  regard  April  1,  1922. 
(Ch.  430.) 

Matter  of  Phelps,  118  Misc.  405 ;  193  Supp.  399. 

a.  ACTIVE  SECURITIES. 

When  the  securities  are  actively  dealt  in  on  the  market  the 
average  price  for  a  reasonable  period  before  and  after  death 
is  the  best  measure  of  value. 

Matter  of  Crary,  31  Mise.  72;  64  Supp.  566. 
Matter  of  Proctor,  41  Misc.  79. 
Matter  of  Chambers,  155  Supp.  153. 

In  New  York  the  statute  requires  this  basis  of  appraisal. 

See  Decedents '  Estate  Law,  §  122. 

And  this  is  so  even  though  the  estate  holds  large  blocks  of 
stock  which  might  depress  the  price  if  sold  all  at  once. 

In  discussing  this  question  the  Illinois  court  says  in  Walker 
v.  People,  192  111.  106,  at  page  110;  61  N.  E.  489: 

"Fair  market  value  has  never  been  construed  to  mean  the 
22 


338  INHERITANCE  TAXATION 

selling  price  of  property  at  a  forced  or  involuntary  sale.  The 
very  fact  that  the  market  would  be  depressed  by  forcing  such 
large  blocks  of  stock  to  sale  indicates  that  such  a  sale  is  not 
a  proper  test  of  the  fair  cash  value  of  the  stock  *  *.  The 
quotations  of  the  stock  exchange  may  be  temporarily  uncer- 
tain and  untrustworthy,  if  the  sales  thereon  are  suddenly 
affected  for  speculative  purposes  or  by  the  forcing  upon  the 
market  and  to  sale  of  large  blocks  of  stocks  in  an  extraor- 
dinary manner  with  no  explanation  of  such  action  and  when 
the  purpose  of  it  is  left  to  the  conjecture  of  those  dealing  in 
the  stocks ;  but  such  quotations  may  be  a  fair  and  safe  guide 
wThen  they  are  taken  for  a  reasonable  period  of  sales  made  in 
the  usual  and  ordinary  course  of  business." 

Walker  v.  People,  192  111.  106 ;  61  N.  E.  489. 

The  same  rule  prevails  in  New  York.  The  court  said  in 
Matter  of  Gould,  19  App.  Div.  352;  aff.  as  to  this  point,  156 
N.  Y.  423;  51  N.  E.  287: 

"It  is  claimed,  however,  that  the  rule  should  be  construed 
that  when  the  value  of  large  blocks  of  stock  is  involved  only 
the  purchase  and  sale  in  markets  of  correspondingly  large 
blocks  of  stock  should  be  considered,  upon  the  theory  that 
such  large  blocks  would  necessarily  sell  at  lower  rates  than 
small  quantities  of  stock  sold  separately,  and  that  throwing 
large  blocks  of  stock  upon  the  market  all  at  once  would  have 
a  tendency  to  produce  a  break  in  the  market  and  perhaps  an 
inability  to  get  more  than  a  mere  nominal  price  offered  for 
that  stock.  Under  the  construction  contended  for  the  securi- 
ties involved  in  this  proceeding  might  have  been  shown  to  be 
of  little  or  no  value. ' ' 

To  the  same  effect  is  People  v.  Coleman,  107  N.  Y.  541 ;  14 
N.  E.  431,  where  the  court  said : 

"The  market  value  of  shares  of  capital  stock  may  some- 
times be  above  and  sometimes  below  the  actual  value.  Such 
value  may  be  greatly  advanced  or  depressed  for  speculative 
purposes  without  any  change  in  the  actual  value;  but  the 
market  value  of  any  stock  which  is  listed  at  the  Stock  Ex- 
change in  New  York  and  largely  dealt  in  from  day  to  day  for 
a  series  of  months  will  usually  furnish  the  best  "measure  of 
value  for  all  purposes.  The  competition  of  sellers  and  buyers, 


PART  IV  — THE  PROPERTY  .  339 

most  of  them  careful  and  diligent  to  take  account  of  everything 
affecting  the  value  of  the  stock  in  which  they  deal,  and  each 
mindful  of  his  own  interests  and  seeking  for  personal  gain  or 
advantage,  will,  almost  universally,  if  time  sufficient  be  taken, 
furnish  the  true  measure  of  the  actual  value  of  the  stock." 
See  also 

Matter  of  Chambers,  155  Supp.  153. 
Matter  of  Kennedy,  155  Supp.  192. 

Rule  here  laid  down  followed  in  Louisiana. 

Succession  of  Coleman,  85  So.  43. 

b.  INACTIVE  SECURITIES. 

A  problem  is  often  presented  where  the  corporation  has 
a  large  number  of  stockholders  and  extensive  properties  and 
yet  its  shares  are  seldom  dealt  in  on  the  market.  For  example 
many  railroads  which  are  branch  or  connecting  lines  seldom 
appear  in  the  quotations,  yet  it  would  be  absurd  for  an  ap- 
praiser to  undertake  a  valuation  of  their  properties  for  the 
valuation  of  a  few  shares  unless  the  circumstance  of  incor- 
poration in  several  States  required  it  under  the  rule  estab- 
lished in  New  York,  Massachusetts  and  New  Hampshire  as 
to  the  Boston  and  Albany  and  Fitchburg  roads.  Stock  in 
National  banks  is  of  a  similar  nature,  held  by  many  stock- 
holders yet  not  an  active  or  speculative  security.  Such  cor- 
porations are  not  to  be  confused  with  the  incorporated  co- 
partnerships or  "family  corporations"  whose  securities  are 
classed  as  "closely  held  stock."  Their  values  have  been 
established  by  time  and  publicity.  Published  financial  state- 
ments, dividends,  private  sales  and  opinion  evidence  afford 
sufficient  means  for  ascertaining  their  worth. 

c.  CLOSELY  HELD  STOCK. 

Obviously  the  market  price  cannot  determine  its  value— 
for  often  there  is  no  market  price.  An  entirely  different 
method  must  be  employed  in  ascertaining  its  value  and  in 
such  case  the  fact  that  the  estate  holds  large  blocks  of  the 
stock  and  whether  it  could  be  sold  are  elements  to  be  con- 
sidered. 

Matter  of  Chappell,  151  App.  Div.  774;  136  Supp.  271. 


340  INHERITANCE  TAXATION 

It  was  recently  held  in  California  that  the  fact  that  minority 
stock  was  converted  into  majority  stock  by  its  transfer  from 
the  deceased  to  the  beneficiary,  who  was  also  a  large  stock- 
holder did  not  affect  the  appraised  value.  This  must  be  deter- 
mined, as  in  other  cases  of  closely  held  stock  by  the  value  of 
the  property  of  the  corporation  which  the  shares  of  stock 
transferred  represented. 

Felton's  Estate,  176  Cal.  663;  169  Pac.  392. 

The  selling  price  of  a  few  shares  of  such  stock  is  of  little 
value  in  determining  the  actual  worth. 

Matter  of  Curtice,  111  App.  Div.  230;  97  Supp.  444;  aff.  185  N.  Y.  543; 
77  N.  E.  1184. 

Where  there  had  been  but  two  sales  in  six  months  held 
error  to  take  the  average  price. 

Matter  of  Malcolmson,  N.  Y.  L.  J.,  June  20,  1912. 

But  where  there  were  four  sales  though  not  on  the  ex- 
change of  100  share  lots  shortly  prior  to  death  the  evidence 
was  held  to  establish  a  market  price  and  in  such  a  case  it  was 
error  to  take  evidence  of  book  value. 

Matter  of  Eugene  Pitou,  N.  Y.  L.  J.,  February  14,  1914. 

It  was  error  to  value  the  stock  at  the  price  bid  on  the  date 
of  death;  the  average  price  fixes  the  market  value. 

Matter  of  J.  S.  Kennedy,  N.  Y.  L.  J.,  March  8,  1911. 

And  of  course  it  must  be  the  price  bid  and  not  the  price 
asked  in  the  absence  of  actual  sales. 

Matter  of  Clark,  163  Supp.  972. 

Evidence  of  sales  two  years  prior  to  death  is  too  remote. 

Matter  of  Valentine,  147  Supp.  231. 

In  the  absence  of  sufficient  evidence  of  market  price  the 
intrinsic  value  from  the  assets  and  debts  must  be  ascertained. 

Matter  of  Achelis,  N.  Y.  L.  J.,  March  9,  1912. 

The  entire  subject  of  the  valuation  of  such  stock  and  the 
kind  of  evidence  by  which  it  may  be  determined  was  recently 
illustrated  in  the  valuation  of  stock  in  the  Pabst  Brewery 
which  was  owned  almost  exclusively  by  its  founder  and  his 


PART  IV  — THE  PROPERTY  341 

family.    In  State  v.  Pdbst,  139  Wis.  561,  the  court  says,  at 
page  593 : 

"The  court's  finding  as  to  the  value  of  the  stock  in  the 
brewing  company  is  excepted  to  as  erroneous.  The  court 
found  the  value  of  the  brewing  company's  stock  on  June  1, 
1904,  the  date  of  the  decedent's  death,  to  be  $1,150  per  share. 
The  appraisers  appointed  by  the  County  Court  reported  the 
same  value  in  January,  1905.  The  County  Court,  upon  the 
trial,  valued  it  at  $1,408.45  per  share.  The  face  value  is 
$1,000  per  share.  The  law  requires  that  the  tax  shall  be 
assessed  upon  the  clear  market  value  of  the  property.  It 
appears  that  there  had  been  no  general  sales  of  this  stock  in 
the  market.  On  various  occasions,  when  he  secured  stock 
for  the  corporation  or  when  there  were  dealings  between 
members  of  the  family,  the  decedent  had  dealt  with  this  stock 
on  the  basis  of  its  book  value.  The  transfers  shown  were 
apparently  made  in  reliance  on  the  book  value.  The  evidence 
adduced  showed  the  dividends  declared  and  paid  for  the  years 
1896-1904  inclusive,  and  the  value  of  the  corporation's  assets 
from  1896  to  1904  inclusive,  exclusive  of  the  good  will  of  the 
business.  In  the  deed  of  gift  decedent  declared  the  book  value 
of  2,840  shares  of  stock  to  be  $4,000,000.  These  items  of  evi- 
dence were  offered  as  the  best  proof  attainable  to  show  the 
value  of  the  stock.  They  were  evidences  of  value  though  they 
were  not  direct  and  general  tests  of  market  value.  Many  and 
various  reasons  are  assigned  why  the  evidence  adduced  on 
stock  value  fails  to  sustain  the  court's  findings  as  to  the  value 
of  the  stock.  These  contentions  are  based  on  the  claims  that 
dividends  have  been  small,  that  the  brewing  plant  has  no  con- 
venient shipping  facilities,  that  the  stock  transfers  and  value 
of  the  corporation's  assets  as  shown  on  the  books  are  not 
reliable  criteria  because  they  represent  no  more  than  the 
decedent's  estimate  of  his  business  and  because  there  are  no 
proper  and  necessary  deductions  for  depreciation,  losses, 
decrease  in  business  and  other  causes  incident  to  the  conduct 
and  operation  of  so  large  and  extensive  an  enterprise  and  its 
holdings.  Special  probative  force  is  claimed  for  the  opinion 
evidence  of  values  adduced  by  appellants  as  tending  to  show 
that  the  stock  is  worth  less  than  its  face  value.  After  giving 


342  INHERITANCE  TAXATION 

full  effect  to  these  considerations,  we  cannot  say  that  the 
court  erred  by  over-estimating  the  actual  value  of  the  stock. 
The  facts  and  circumstances  regarding  the  business  of  the 
corporation  and  its  properties,  the  progress,  growth,  and 
general  financial  results,  furnish  a  basis  for  valuation.  These 
evidences  of  the  value  of  the  stock  are  sufficient  to  sustain  the 
conclusion  of  the  trial  court,  and  the  findings  of  fact  on  this 
branch  of  the  case  must  stand." 

State  v.  Pabst,  139  Wis.  561,  593 ;  121  N.  W.  351. 

The  cases  in  New  York  when  similar  questions  have  arisen 
follow  similar  lines. 

The  price  at  which  such  stock  was  appraised  in  another 
State  or  even  in  another  proceeding  it  is  not  competent 
evidence. 

Matter  of  Willmer,  75  Misc.  62;  134  Supp.  686;  aff.  153  App.  Div.  804; 
138  Supp.  649. 

Dividends  actually  paid  are  to  be  considered  but  are  not 
controlling. 

Matter  of  Smith,  71  App.  Div.  602 ;  76  Supp.  185. 

Earning  power  is  a  factor. 

Matter  of  Brandreth,  28  Misc.  468;  aff.  169  N.  Y.  437;  62  N.  E.  563. 

The  rule  to  determine  the  value  of  closely  held  stock  is  the 
same  as  with  co-partnerships. 

Matter  of  McMullen,  92  Misc.  637;  157  Supp.  655. 

Proof  of  profits  or  losses  after  death  not  competent,  except 
for  purposes  of  comparison. 

Matter  of  Demarest,  157  Supp.  653. 

When  the  business  must  be  sold  executor's  commissions 
should  be  deducted  in  determining  the  value. 

Matter  of  Weatherbee,  157  Supp.  652. 

The  market  value  of  merchandise  on  hand  and  bills  receiv- 
able should  be  considered. 

Matter  of  Hyman,  N.  Y.  L.  J.,  May  22,  1914. 

Book  value  may  be  a  basis  for  the  valuation.  Appraiser 
sustained  and  Surrogate  reversed  where  it  was  followed  by 
appraiser. 

Matter  of  Valentine,  163  App.  Div.  843 ;  147  Supp.  1146. 


PART  IV  — THE  PROPERTY  343 

See  also : 

Matter  of   Laidlaw,   176   Supp.    885. 

But  book  value  may  be  a  very  uncertain  criterion  espe- 
cially if  the  concern  has  over-valued  its  assets  for  purpose  of 
securing  credit  or  "insurance  purposes,"  as  some  business 
men  naively  put  it. 

The  learned  Surrogate  who  was  reversed  in  the  Valentine 
case  soon  had  an  opportunity  to  point  this  out.  In  Matter  of 
Pancost,  89  Misc.  110 ;  152  Supp.  724,  he  says : 

"This  appeal  by  the  executor  of  decedent's  estate  brings 
up  for  review  the  finding  of  the  appraiser  as  to  the  value  of 
the  shares  of  stock  in  the  Jersey  City  Galvanizing  Company 
held  by  the  decedent  at  the  time  of  his  death.  It  is  conceded 
by  the  executor  that  the  statement  of  assets  and  liabilities  of 
the  company  which  is  attached  to  the  appraiser's  report  is 
a  correct  transcript  from  the  books  of  the  company.  If  the 
valuations  contained  in  this  statement  were  correct,  the  book 
value  of  the  stock  would  be  about  $186  a  share.  The  presi- 
dent of  the  company  testified,  however,  that  the  value  of  the 
assets  as  entered  on  the  books  of  the  company  was  not  correct, 
that  the  values  were  25  to  50%  higher  than  the  actual  values, 
and  that  they  were  retained  on  the  books  for  the  purpose  of 
assisting  the  company  in  obtaining  credit. 

"When  the  corporation  wishes  to  obtain  credit,  it  refers 
to  its  books,  which  show  net  assets  of  $149,022,  or  a  value  of 
$186  a  share.  When  the  State  attempts  to  assess  a  tax  upon 
the  interest  of  a  stockholder  in  the  company,  the  president  of 
the  company  testifies  that  the  actual  value  of  the  assets  is 
about  50%  of  the  book  value,  and  that  the  value  of  the  stock 
is  only  about  $50  a  share.  I  regret  to  say  that  in  law  little 
credence  can  be  given  to  the  evidence  of  persons  who  make 
such  admissions  of  deliberate  misrepresentation.  There  may 
be  extenuating  facts  not  presented  of  record.  It  is  difficult  for 
the  Surrogate  to  reconcile  the  conflicting  statements  of  value, 
and  therefore  it  is  practically  impossible  to  arrive  at  a  valua- 
tion that  is  more  than  approximately  correct.  The  testimony 
in  regard  to  alleged  sales  of  stock  is  not  conclusive,  as  such 
sales  were  not  made  in  the  open  market,  and  the  price  at 
which  the  sales  were  made  five  years  after  the  date  of  dece- 


344  INHERITANCE   TAXATION 

dent's  death  cannot  be  taken  into  consideration  in  a  proceeding 
to  ascertain  their  value  at  the  date  of  his  death.  I  cannot, 
therefore,  find  from  the  evidence  in  this  matter  that  the  ap- 
praiser's valuation  of  $125  a  share  is  excessive.  The  order 
fixing  tax  will  be  affirmed. ' ' 

The  uncertainties  incident  to  appraisal  on  the  basis  of  book 
value  were  again  illustrated  before  the  same  Surrogate  in 
Matter  of  Bach,  147  Supp.  229,  where  the  appraiser  had  de- 
ducted 50  points  from  the  book  value  in  fixing  the  market 
value  of  the  stock.  The  Surrogate  remitted  the  report  with 
directions  to  reduce  the  book  value  by  20  points  instead  of  50. 

On  another  occasion  he  thus  states  the  difficulties  of  the 
situation:  "I  do  not  feel  that  there  is  any  legal  principle 
which  would  enable  me  to  decide  that  the  appraiser's  valua- 
tion of  the  stock  held  by  the  decedent,  although  it  varies  con- 
siderably from  the  book  value,  is  incorrect." 

Matter  of  Frost,  N.  Y.  L.  J.,  May  1,  1914. 

In  Matter  of  Roos,  90  Misc.  521 ;  154  Supp.  939,  the  Surro- 
gate said: 

*  *  The  corporation  was  a  close  one.  The  stock  was  not  listed 
and  no  sales  of  it  had  ever  occurred  prior  to  the  death  of  the 
decedent  other  than  those  when  the  corporation  was  originally 
formed.  Where  such  a  condition  obtains  it  is  difficult  to  fix 
the  value  of  the  stock,  and  it  is  often  possible  to  get  at  it  only 
by  ascertaining  the  value  of  the  property  which  it  represents 
(Matter  of  Jones,  172  N.  Y.  575;  65  N.  E.  570),  and  even  then 
it  can  be  ascertained  only  with  reasonable  certainty  (Matter 
of  Rees,  208  N.  Y.  590,  affirming  order  of  Surrogate  without 
opinion)." 

The  corporate  books  should  be  put  in  evidence. 

Matter  of  Crawford,  85  Misc.  283 ;  147  Supp.  234. 

Prices  quoted  on  a  local  exchange  are  competent  evidence 
though  the  stock  is  not  listed  or  dealt  in  elsewhere. 

Matter  of  Cook,  50  Misc.  487;  100  Supp.  628;  aff.  187  N.  Y.  253,  262; 
79  N.  E.  991. 

Evidence  of  actual  sales  about  the  time  of  death  may  out- 
weigh the  report  of  a  financial  investigator. 

Matter  of  Newman,  91  Misc.  200;  154  Supp.  1107. 


PART  IV  — THE  PROPERTY  345 

The  fact  that  the  decedent  was  a  minority  stockholder  will 
not  justify  a  valuation  of  shares  of  minority  stock  at  less  than 
the  value  of  the  shares  of  stock  in  the  hands  of  a  majority 
owner. 

Matter  of  Delafield,  N.  Y.  L.  J.,  January  24,  1916. 

Value  of  shares  in  Boston  &  Albany  Railroad,  which  is  incor- 
porated both  in  the  States  of  New  York  and  Massachusetts 
should  be  apportioned,  the  tax  not  being  due  on  the  entire 
value  of  the  shares.  (Following  Matter  of  Cooley,  186  N.  Y. 
220.) 

Matter  of  Greene  (C.  S.),  183  Supp.  138. 

6.  Bonds. 

Such  securities  are  subject  to  the  same  classification  as 
stock.  Though  less  frequently  dealt  in  their  rate  of  interest 
and  the  value  of  the  security  give  them  easily  ascertainable 
value  when  issued  by  public  corporations  or  railroads.  On 
the  other  hand,  when  they  are  issued  by  a  corporation  sub- 
stantially as  preferred  stock  some  examination  of  the  cor- 
porate assets  may  be  advisable.  These  questions  present  so 
few  practical  difficulties  that  the  valuation  of  bonds  has  pro- 
duced little  or  no  litigation. 

7.  Pledged  Securities. 

a.  As  TO  THE  NONRESIDENT  PLEDGOR. 

The  title  to  the  pledged  securities  or  assets  is  in  the  pledger 
and  not  in  the  pledgee.  A  recent  decision  of  the  New  York 
Court  of  Appeals  has  clarified  the  law  on  this  subject. 

Matter  of  Hallenbeck,   231   N.   Y.  409;    132   N.   E.   131;    reversing   195 
App.  Div.  381. 

A  nonresident  had  pledged  shares  in  a  New  York  realty 
corporation  with  another  corporation  in  New  York.  The 
question  was  whether  the  will  transferred  an  interest  in  the 
shares  of  stock  which  was  taxable  or  merely  a  right  to  redeem 
the  shares  by  paying  the  debt.  The  Appellate  Division  held 
(195  App.  Div.  381)  the  latter  view,  but  the  Court  of  Appeals 
said:  "Great  injustice,  inequality,  and  loss  to  the  State 


346  INHERITANCE  TAXATION 

would  result  from  holding  that  a  nonresident  decedent  had 
no  taxable  interest  in  stocks  within  the  State  pledged  by  him 
to  secure  an  indebtedness  and  that  no  liability  to  taxation  in 
this  State  could  attach  thereto,  although  the  debt  should  be 
paid  by  the  executor  out  of  assets  nontaxable  in  New  York. 
We  are  not  disposed  to  modify  a  rule  of  the  Common  Law  as 
old  as  the  leading  case  of  Coggs  v.  Bernard  (1702,  2  Ld.  Raym. 
909),  that  'a  pawn  never  conveys  the  general  property  to  the 
pawnee'  to  permit  such  a  result." 

This  is  the  rule  in  New  Jersey.  Where  securities  of  many 
States  were  pledged  to  secure  debts  the  New  Jersey  Comp- 
troller valued  the  total  securities  pledged,  deducted  the  amount 
of  the  debt  and  apportioned  the  value  of  the  equity  to  the 
value  of  the  New  Jersey  securities  pledged  with  the  others  to 
arrive  at  the  taxable  value  of  the  pledged  stock.  Held  proper. 

Macmillar  v.  Bugbee  (N.  J.),  115  A.  341. 

In  the  Matter  of  Pullman,  46  App.  Div.  574;  62  Supp.  395, 
the  court  said :  ' '  These  securities  are  liable  to  be  resorted  to 
by  the  creditors.  In  pledge  the  title  to  them  is  in  the  pledgee 
and  they  are  not  in  a  situation  to  be  taxed  now  as  property  of 
the  estate  of  Mr.  Pullman.  All  of  their  amount  may  be  re- 
quired to  pay  the  debts  to  which  these  bonds  and  stocks  are 
collateral  and  the  creditors'  security  should  not  be  dimin- 
ished at  this  time."  The  contrary  would  seem  to  be  the 
doctrine  as  to  the  title. 

In  Matter  of  Havemeyer,  32  Misc.  416;  66  Supp.  722,  the 
Surrogate  took  a  similar  view: 

"The  stock  deposited  by  the  decedent  with  his  brokers  as 
extra  collateral  for  the  loan  of  $600,000  was  not  the  property 
of  the  decedent,  but  formed  a  portion  of  an  estate  created  by 
the  decedent  under  a  valid  trust  instrument,  the  terms  of 
which  were  not  revocable  at  his  election,  except  with  the  con- 
sent of  the  beneficiaries  of  the  trust. ' ' 

To  the  same  effect  is : 

Matter  of  Parsons,  51  Misc.  370;  101  Supp.  430;  aff.  117  App.  Div.  321; 
102  Supp.  168. 

But  when  the  executor  has  redeemed  the  securities  prior  to 
the  institution  of  the  tax  proceedings  they  are  taxable. 

Matter  of  Hurcomb,  36  Misc.  755;  74  Supp.  475. 


PART  TV  — THE  PROPERTY  347 

b.  As  TO  THE  PLEDGEE. 

In  Matter  of  Guggenheim,  New  York  Law  Journal,  July 
29,  1916,  a  note  belonging  to  decedent  was  secured  by  col- 
lateral. The  note  was  for  $261,119.60;  and,  at  the  date  of 
death,  the  collateral  was  worth  $158,200.  The  note  was  not 
due  until  a  year  after  the  death  of  the  testator.  At  its  ma- 
turity the  value  of  the  collateral  had  diminished  and  it  was 
then  worth  only  $62,000.  This  was  all  that  was  realized  on 
the  note,  the  maker  being  irresponsible.  On  the  theory  of  the 
Pullman  case  the  appraiser  held  that  the  value  of  the  note 
was  measured  by  the  value  of  the  collateral  at  the  date  of 
death  and  appraised  it  at  $158,200.  On  appeal  to  the  Surro- 
gate it  was  held  that  the  title  to  the  collateral  was  not  in  the 
decedent  and  did  not  pass  to  his  estate;  that  the  loss  in  the 
value  of  the  collateral  was  not  a  loss  of  the  estate ;  and  that 
the  value  of  the  note,  at  the  death  of  the  testator,  was  its  value 
as  finally  determined  by  the  amount  received  on  the  sale  of 
the  collateral,  at  the  maturity  of  the  note.  The  value  as  fixed 
by  the  appraiser  was  therefore  reduced  from  $158,200  to 
$62,000. 

8.  Partnerships. 

Generally  the  valuation  of  copartnership  property  involves 
the  same  problems  as  to  book  value,  earning  power,  deprecia- 
tion of  assets  and  value  of  good  will  that  are  involved  in 
appraising  closely  held  stocks. 

The  title  vests  in  the  surviving  partner  and  all  that  the 
executor  can  claim  is  the  equitable  interest  in  the  surplus  after 
the  payment  of  all  debts. 

Williams  v.  Whedon,  109  N.  Y.  333 ;  16  N.  E.  365. 

Where,  under  partnership  articles  the  surviving  partner 
has  three  years  in  which  to  liquidate  the  interest  of  the  de- 
ceased cannot  be  determined  until  such  liquidation  and  gen- 
erally the  value  of  that  interest  at  death  is  determined  by  the 
ultimate  liquidation. 

Matter  of  Hubbard,  199  App.  Div.  356. 

A  special  partner  is,  in  a  sense,  a  creditor. 

Matter  of  Clark,  N.  Y.  L.  J.,  February  9,  1912. 


348  INHERITANCE  TAXATION 

An  agreement  between  partners  as  to  the  value  of  the  co- 
partnership interest  and  what  a  retiring  partner  shall  have, 
whether  the  retirement  be  by  death  or  otherwise,  often  has  a 
material  bearing  upon  the  valuation. 

Matter  of  Borden,  95  Misc.  443;  159  Supp.  346. 
Matter  of  Vivanti,  138  App.  Div.  281 ;  122  Supp.  954. 
Matter  of  Hellman,  172  Supp.  671;  aff.  226  N.  Y.  mem. 

But  an  agreement  that  the  surviving  partner  shall  take  all 
or  a  material  portion  of  the  assets,  or  may  buy  the  decedent's 
share  for  a  materially  lower  valuation  than  it  is  worth  is  an 
agreement  to  take  effect  at  death  and  would  seem  to  be 
taxable. 

Matter  of  Cory,  177  App.  Div.  871 ;  164  Supp.  56 ;  aff.  221  N.  Y.  612. 
Matter  of  Orvis,   179  App.   Div.   1;    166   Supp.    126;    aff.   223   N.   Y.    1; 
119  N.  E.  88. 

Where  the  testator  bequeathed  to  his  partners  his  interest 
in  the  partnership  assets  on  condition  that  they  pay  90% 
of  its  appraised  value  to  his  executors  in  15  equal  annual 
instalments,  the  probate  court  made  a  finding  that  the  in- 
heritance tax  should  be  fixed  from  time  to  time  as  the  money 
or  property  of  the  estate  should  come  into  the  hands  of  the 
executors  and  not  at  the  present  value  of  future  payments 
to  be  made  by  the  partners. 

Port  Huron  v.  Wright,  150  Mich.  279 ;  114  N.  W.  76. 

Where  a  partner  had  sold  out  his  interest  the  continuing 
partner  held  the  assets  of  the  firm  as  trustee.  Upon  his  death 
his  executors  were  substituted  as  trustees.  It  was  properly 
held  that  the  trust  fund  was  no  part  of  his  estate. 

Matter  of  Hamilton,  100  Misc.  61. 

A  recent  case  before  the  New  York  County  Surrogate's 
Court  illustrates  some  of  the  difficulties  in  the  valuation  of 
copartnership  assets  from  the  examination  of  the  firm  books 
by  an  accountant.  The  court  thus  criticises  the  methods 
adopted : 

"The  decedent  was  a  member  of  the  firm  of  Milmine,  Bod- 
man  &  Company,  which  has  been  established  in  this  city  for 
more  than  thirty  years.  For  the  purpose  of  enabling  the 


PART  IV  — THE  PROPERTY 

appraiser  to  ascertain  the  value  of  decedent's  interest  in  the 
firm  an  affidavit  was  submitted  by  an  accountant  in  which  he 
states  that  the  figures  given  by  him  in  relation  to  the  assets 
and  liabilities  of  the  firm  are  'accurate  statements  from  the 
books  of  the  copartnership.'  He  subsequently  states  that 
deduction  ranging  from  5%  to  10%  had  been  made  by  him  as 
depreciation  from  the  value  of  the  assets.  If  the  figures  given 
by  him  are  'accurate  statements  from  the  books  of  the  co- 
partnership,' then  his  conclusion  as  to  the  value  of  decedent's 
interest  is  incorrect,  because  he  fails  to  make  any  deductions 
from  the  figures  supposed  to  have  been  taken  from  the  books 
of  the  firm.  If  he  has  made  the  deductions,  then  the  figures 
given  by  him  cannot  be  'accurate  statements  from  the  books 
of  the  copartnership.'  In  ascertaining  the  value  of  the  mer- 
chandise on  hand  the  accountant  has  taken  the  cost  price  of 
wheat,  barley,  oats  and  grain.  This  is  incorrect,  as  it  is  the 
market  price  of  the  merchandise  at  the  date  of  decedent's 
death  which  should  be  taken  in  ascertaining  the  value  of  de- 
cedent's interest  in  the  firm.  The  accountant  states  that 
there  is  no  good  will,  because  the  firm  does  not  do  business 
with  the  public.  This  statement  seems  to  be  inconsistent  with 
accounts  receivable  of  $297,320  and  accounts  payable  of  $191,- 
247.93.  There  should  be  some  explanation  of  these  items.  In 
ascertaining  the  value  of  the  stock  of  the  Kochester  Cold 
Storage  and  Ice  Company  the  accountant  has  deducted  5% 
from  the  cost  price  of  the  real  estate  owned  by  the  company. 
This  is  incorrect,  as  the  real  estate  should  be  appraised  at 
its  market  value  upon  the  date  of  decedent's  death.  The 
value  of  the  merchandise  owned  by  the  Bodman-McConaughy 
Company  is  given  at  $295,909.29,  but  it  is  not  stated  whether 
that  amount  represented  the  market  value  of  the  merchandise 
at  the  date  of  decedent's  death.  To  justify  the  appraiser  in 
appraising  at  $68,151.58  the  value  of  the  note  given  by  the 
Elk  Creek  Banch  Company  to  the  decedent  for  $81,594.71 
there  should  be  a  verified  statement  of  the  assets  and  liabili- 
ties of  the  company  as  of  the  date  of  decedent's  death.  The 
appraiser's  report  will  be  remitted  to  him  for  further  testi- 
mony in  regard  to  the  matters  above  referred  to. ' ' 

Matter  of  Bodman,  100  Misc.  390. 


350  INHERITANCE  TAXATION 

As  to  partnership  real  estate  the  rule  seems  well  estab- 
lished that  tKe  interest  of  the  deceased  copartner,  being  in 
the  surplus  after  the  payment  of  debts,  is  personalty. 

McFarlane  v.  McFarlane,  82  Hun,  238;  31  Supp.  272. 
Fairchild  v.  Fairehild,  64  N.  Y.  471. 
Van  Brocklen  v.  Smeallie,  140  N.  Y.  70. 
Matter  of  Straus,  N.  Y.  L.  J.,  October  9,  1911. 

On  the  other  hand,  it  has  been  held  that,  unless  the  part- 
nership agreement  expressly  or  impliedly  refers  to  it,  the 
copartnership  real  estate  retains  its  character  as  realty  with 
all  the  incidents  of  that  species  of  property  between  partners 
themselves  and  also  between  a  surviving  partner  and  the  real 
and  personal  representatives  of  a  deceased  partner,  except 
that  each  share  is  impressed  with  the  payment  of  debts  and 
obligations  of  the  partnership. 

Huber  v.  Case,  93  App.  Div.  479;  87  Supp.  663. 
Barney  v.  Pike,  94  App.  Div.  199 ;  87  Supp.  1038. 

Partnership  ownership  is  not  a  legal  joint  tenancy. 

Matter  of  Wormser,  51  App.  Div.  441 ;  64  Supp.  897. 

Money  loaned  to  a  firm  by  one  of  the  copartners  is  capital 
invested  and  not  a  mere  copartnership  interest,  subject  to 
accounting.  It  is  to  be  valued  like  any  other  asset  on  the 
death  of  the  creditor. 

Matter  of  Probst,  40  Misc.  431 ;  78  Supp.  983. 

Where  a  partner  in  a  firm  invested  the  profits  with  the 
firm  and  transferred  this  account  to  his  wife  to  protect  him- 
self from  his  creditors,  on  the  death  of  the  wife  a  transfer 
tax  should  be  assessed  against  the  fund  as  her  property. 

Matter  of  Anthony,  40  Misc.  497;  82  Supp.  981. 

A  nonresident  decedent  sold  his  interest  in  a  New  York 
copartnership  shortly  before  his  death  and  took  as  part  pay- 
ment notes  of  the  firm  indorsed  by  the  continuing  partners. 
These  notes  matured  after  death  and  were  paid  by  the  firm 
to  the  widow  in  her  individual  capacity,  who  made  affidavit 
that  the  deceased  owned  no  property  within  the  State ;  held 
not  taxable,  as  there  was  no  proof  the  notes  belonged  to 
decedent  at  the  date  of  his  death. 

Matter  of  Wallace,  149  Supp.  354. 


PART  IV  — THE  PROPERTY  351 

Profits  due  but  not  withdrawn  held  a  part  of  the  partner- 
ship assets  and  to  be  taken  into  account  in  the  valuation  of 
the  interest  of  the  deceased. 

Matter  of  DuBois,  163  Supp.  668. 

Interest  on  capital  invested  by  retired  partners  should  not 
be  included  in  estimating  net  profits. 

Matter  of  Weatherbee,  N.  Y.  L.  J.,  November  5,  1913. 

A  partnership  agreement  which  provides  that  there  shall 
be  no  good  will,  or  that  good  will  shall  not  be  taken  into 
account  in  the  valuation  of  a  copartnership  interest,  though 
good  as  between  the  partners,  is  not  binding  upon  the  State 
Comptroller,  and  the  good  will  remains  a  taxable  asset  despite 
the  agreement. 

Matter  of  Halle,  103  Misc.  661;  170  Supp.  898. 
Matter  of  Hellman,  172  Supp.  671 ;  aff.  226  N.  Y.  702. 

But  the  nature  of  the  copartnership  interest  may  be  such 
that  no  good  will  is  transferred.  For  example,  where  the 
partnership  agreement  provided  that  a  partner  might  be  re- 
tired by  a  vote  of  three-fourths  of  the  copartnership  interest, 
or  voluntarily,  or  by  death  and  in  any  one  of  these  events  the 
good  will  should  remain  with  the  firm  and  no  part  thereof  go 
to  the  retiring  partner,  it  was  held  by  the  N.  Y.  County 
Surrogate  that  no  interest  in  the  good  will  passed  to  the 
decedent's  estate  or  to  the  surviving  partner  on  his  death. 

Matter  of  Dickey,  N.  Y.  L.  J.,  June  1,  1922. 

An  allowance  for  bad  debts  should  be  made  in  appraising 
a  firm's  assets. 

Matter  of  Sandahl,  171  Supp.  959. 

9.  Good  Will. 

a.  A  TAXABLE  ASSET. 

When  Dr.  Johnson  was  selling  the  Thrale  brewery  he  made 
the  famous  statement  that  it  was  not  the  material  assets  that 
he  was  putting  up  at  auction  but ' '  the  potentiality  of  growing 
rich  beyond  the  dreams  of  avarice,"  and  though  the  Thrale 
brewery  no  longer  has  any  good  will,  it  was  obviously  a 
valuable  commodity  a  hundred  years  ago. 


352  INHERITANCE  TAXATION 

But  there  can  be  no  such  thing  as  good  will  of  a  business 
which  depends  upon  the  personal  qualities  of  the  individual 
who  conducts  it.  There  is  a  clear  distinction  between  the 
property  value  attaching  to  the  firm  name  of  a  manufactur- 
ing or  mercantile  partnership  and  a  business  which  depends 
solely  for  its  success  on  the  personal  equation  of  those  who 
conduct  it. 

For  example  there  is  no  saleable  or  taxable  good  will  of  a 
firm  of  stock  brokers. 

Wilson  v.  Williams,  29  L.  R.  Ir.  176. 

Or  of  a  firm  of  attorneys. 

Masters  v.  Brooks,  132  App.  Div.  975. 

Or  of  a  physician. 

Matter  of  Caldwell,  107  Misc.  316;  176  Supp.  425. 

It  is  not  capital  invested  in  business  within  the  meaning  of 
the  New  York  statute  taxing  the  transfer  of  such  capital 
within  the  State  by  nonresident  decedents. 

Matter  of  Tyson,  113  Misc.  306;  184  Supp.  398. 

On  the  other  hand  good  will  has  been  held  to  exist  in  the 
case  of  a  proprietary  medicine.  Each  case  must  be  deter- 
mined on  its  own  peculiar  circumstances. 

Matter  of  Ulrici,  111  Misc.  55 ;  182  Supp.  516. 

"Good  will"  is  not  to  be  considered  in  appraising  the  value 
of  a  company,  such  as  a  gas  plant  where  it  is  the  only  concern 
of  its  kind  in  the  vicinity  and  hence  has  a  monopoly  on  the 
business. 

Des  Moines  Gas  Co.  v.  Des  Moines,  199  Fed.  204. 

Cedar  Rapids  Gaslight  Co.  v.  City  of  Cedar  Rapids,  144  la.  426 ;  120  N.  W. 

966. 
Willcox  v.  Consolidated  Ga*  Co.,  212  U.  S.  19;  53  L.  Ed.  382;  29  Sup.  Ct. 

Rep.  192. 

Good  will  consists  of  various  elements : 

1.  The  probability  that  old  customers  will  resort  to  the  old 
place. 

2.  Or  if  they  do  not  "resort"  that  they  will  continue  to  be 
customers. 


PAET  IV  — THE  PROPERTY  353 

3.  The  advantage  of  continuing  an  established  business  at 
the  "old  stand." 

4.  The  advantage  of  continuing  a  familiar  name  or  style. 

5.  Reputation  and  prior  advertising. 

6.  Pattern,  styles,  trademarks. 

Austen  v.  Boys,  27  L.  J.  Ch.  714. 

People  v.  Roberts,  159  N.  Y.  70;  53  N.  E.  685. 

Kramer  v.  Old,  119  N.  C.  1 ;  25  S.  E.  813. 

Matter  of  Silkman,  121  App.  Div.  202;  105  Supp.  872. 

Where  a  business  was  carried  on  by  an  administratrix  in 
the  name  of  the  decedent  the  good  will  was  held  to  be  an  asset 
in  her  hands. 

Matter  of  Mullon,  74  Hun,  358 ;  26  Supp.  683. 

The  succession  to  the  good  will  of  a  decedent's  business  in 
which  he  had  an  interest  is  therefore  a  taxable  transfer. 

Matter  of  Jones,  28  Misc.  356;  59  Supp.  983;  69  App.  Div.  237;  74  Supp. 

702;  172  N.  Y.  575,  586;  65  N.  E.  570. 
Matter  of  Vivanti,  138  App.  Div.  281;   122  Supp.  954;   same  case,  146 

App.  Div.  942 ;  131  Supp.  1148 ;  aff.  206  N.  Y.  656. 
Matter  of  Keahon,  60  Misc.  508 ;  113  Supp.  926. 

b.  RULES  FOE  COMPUTATION. 

Good  will  is  elusive  and  in  the  nature  of  things  cannot  long 
endure  as  a  thing  apart  from  the  enterprise  and  effort  of  the 
successors.  While  no  hard  and  fast  rules  could  be  applied 
to  the  valuation  of  anything  so  ephemeral,  several  elements 
necessarily  are  to  be  considered. 

The  accepted  method  for  computation  is  to  take  gross  profits 
of  the  business  for  a  number  of  years  prior  to  death,  usually 
at  least  three,  and  obtain  an  average,  after  deducting  the 
reasonable  value  of  the  services  of  the  deceased  and  6%  in- 
terest on  the  capital  invested,  and  then  multiply  by  the  num- 
ber of  years '  purchase. 

Matter  of  Ball,  161  App.  Div.  79;  146  Supp.  499. 
Matter  of  Ottman,  166  Supp.  1078. 

The  valuation  of  the  services  of  the  deceased  is  often  a 

vexatious  problem,  as  the  only  testimony  obtainable  is  from 

those  interested  in  the  estate  who  are  apt  to  exaggerate  their 

importance.    Much  depends  upon  the  nature  of  the  business 

23 


354  INHERITANCE  TAXATION 

and  how  well  it  is  established.  The  better  established  the 
business  the  less  any  one  man's  services  are  worth  to  it  and 
proportionately  the  greater  the  value  of  the  good  will.  The 
principle  is  justly  founded  but  its  application  is  often  difficult. 
In  a  recent  case  the  New  York  Surrogate  fixed  the  value 
of  the  services  of  the  decedent  at  one-half  the  net  annual 
profits  or  $11,500,  although  he  drew  out  only  $5,000  a  year 
as  salary. 

Matter  of  Crerand,  N.  Y.  L.  J.,  June  30,  1914. 

The  valuation  of  the  capital  and  the  profits  must  be  ascer- 
tained from  the  balance  sheets  of  the  years  prior  to  death; 
but  the  subsequent  balance  sheets  may  be  competent  for  pur- 
poses of  comparison. 

Matter  of  Hirsehberg,  N.  Y.  L.  J.,  November  20,  1914. 

An  unusually  good  year  for  the  firm  is  fairly  taken  into 
account  when  it  was  the  year  in  which  the  partner  died  and 
the  good  times  are  likely  to  continue. 

Matter  of  Cohen,  170  Supp.  156. 

Years  when  profits  are  above  or  below  normal  on  account 
of  unusual  conditions  are  to  be  excluded  in  computing  the 
value  of  the  good  will. 

Matter  of  Lincoln,  114  Misc.  45;  185  Supp.  574. 

Good  will  is  taxable  where  value  is  proved  even  though  the 
partnership  agreement  provides  that  it  shall  be  of  no  value 
in  accounting  between  the  partners. 

Matter  of  Hellman,  172  Supp.  671;  aff.  226  N.  Y.  702. 
Matter  of  Halle,  170  Supp.  898. 

c.  NUMBER  OF  YEARS'  PURCHASE. 

The  annual  value  of  the  good  will  thus  obtained  must  be 
multiplied  by  the  number  of  years  the  evidence  shows  it  may 
be  expected  to  continue.  In  the  absence  of  evidence  to  the 
contrary  three  years'  purchase  is  customarily  allowed. 

Page  v.  Ratcliffe,  75  L.  T.  Rep.  371. 

Matter  of  Silkman,  121  App.  Div.  202 ;  105  Supp.  872. 

Where  partnership  agreement  was  to  expire  some  years 
after  death,  value  of  good  will  to  be  reckoned  from  date  of 


PART  IV  — THE  PROPERTY  355 

death  and  not  from  date  of  expiration  of  agreement.  In  view 
of  the  nature  of  the  business  (James  A.  Hearn  &  Son,  dry 
goods),  five  years'  purchase  held  not  unreasonable. 

Matter  of  Hearn,  182  Supp.  363. 

Where  there  was  a  bona  fide  sale  of  the  business,  including 
the  good  will  and  the  appraiser  accepted  it  as  a  measure  of 
value  the  rules  as  to  the  valuation  of  the  good  will  do  not 
apply.  While  the  selling  price  is  not  conclusive  it  was  held 
in  this  case  to  be  the  best  evidence  of  value  to  be  had.  f 

Matter  of  Herrmann,  110  Misc.  475 ;  180  Supp.  509. 

But  six  and  even  ten  years'  purchase  have  been  held  not 
excessive  when  the  evidence  warrants  it. 

*  *  Our  courts  have  not  adopted  the  rigid  rule,  established  by 
the  English  courts,  of  limiting  the  value  of  good  will  to  one 
year's  purchase  of  the  net  annual  profits  of  the  business 
calculated  on  an  average  of  three  years  (Mellersh  v.  Keen, 
28  Beav.  453)  or  that  three  years'  net  profits  of  a  business 
arbitrarily  represents  the  value  of  its  good  will  (Page  v. 
Ratcliffe,  75  L.  T.  Eep.  371),  but  on  the  contrary  incline  to 
the  more  equitable  rule  that  the  value  of  good  will  may  be 
fairly  arrived  at  by  multiplying  the  average  net  profits  by  a 
number  of  years,  such  number  being  suitable  and  proper, 
having  reference  to  the  nature  and  character  of  the  particular 
business  under  consideration,  and  the  determination  of  such 
proper  number  of  years  should  be  submitted  to  and  deter- 
mined by  the  jury  as  a  question  of  fact,  dependent  upon  the 
evidence  before  them  in  each  action." 

Von  Au  v.  Magenheimer,  115  App.  Div.  84-87;  100  Supp.  659. 

On  the  second  appeal  of  the  same  case  a  verdict  for  six 
years'  purchase  was  sustained  in  126  App.  Div.  257;  110 
Supp.  629. 

These  rules  were  applied  by  the  New  York  County  Surro- 
gate in  Matter  of  Flurscheim,  New  York  Law  Journal,  June 
6,  1919,  which  involved  the  valuation  of  the  good  will  of 
Franklin  Simon  Co.  The  appraiser  valued  the  decedent's 
half  of  the  firm's  good  will  at  $291,289.98;  but  under  the  rules 
laid  down  by  Surrogate  Fowler  the  valuation  of  the  decedent's 


356  INHERITANCE  TAXATION 

share  of  the  good  will  was  increased  to  $594,926.80.  The 
opinion  is  instructive  on  many  details  of  good  will  valuation 
and  is  in  full  as  follows : 

4 'This  appeal  is  taken  by  the  State  Comptroller  from  the 
report  of  the  transfer  tax  appraiser  and  the  order  assessing 
the  tax  on  the  ground  that  the  interest  of  decedent  as  a  co- 
partner in  the  firm  of  Franklin  Simon  &  Co.  has  been  under- 
valued and  that  the  amount  allowed  as  a  deduction  from  the 
gross  estate  as  counsel  fee  is  excessive.  The  decedent,  who 
died  August  18,  1914,  and  Franklin  Simon  were  equal  part- 
ners in  the  business,  which  was  established  in  the  year  1903 
with  a  combined  capital  of  $110,000.  At  the  date  of  death  of 
decedent  the  net  worth  of  the  copartnership  as  shown  by  the 
books  was  $1,477,519.31.  The  transfer  tax  appraiser  has 
valued  the  interest  of  decedent  in  the  firm  at  $904,241.09,  of 
which  $613,051.11  represents  the  decedent 's  capital  and  $291,- 
289.98  decedent's  one-half  interest  in  the  good  will.  The  ap- 
praiser has  adopted  as  his  estimate  the  valuation  fixed  by  a 
certified  public  accountant,  retained  by  the  estate,  which  re- 
port is  part  of  the  record.  The  date  fixed  by  the  firm  as  the 
termination  of  the  fiscal  year  was  the  first  day  of  February. 
The  books  of  the  partnership  as  of  August  1,  1914,  show  the 
assets  of  the  concern  to  be  of  the  value  of  $1,755,757.82  and 
the  decedent's  capital  account  to  be  the  sum  of  $664,819.45. 
The  accountant  has  not  accepted  the  statement  of  the  assets 
as  shown  by  the  books  of  the  concern,  but  has  applied  to  cer- 
tain items  depreciations  which  reduce  the  decedent's  interest 
in  the  capital  to  the  amount  found  by  the  appraiser  as  its 
value.  The  accounts  receivable  are  set  down  in  the  books  at 
the  sum  of  $657,817.27.  The  accountant  has  depreciated  this 
item  in  the  sum  of  $43,986.68,  which  includes  $5,000  for  bad 
or  doubtful  accounts,  $6,497.78  for  carrying  50%  of  the  ac- 
counts for  a  period  of  four  months,  and  $32,488.90,  which 
represents  10%  of  the  cost  of  collection  for  merchandise  which 
was  not  paid  for  on  delivery.  There  is  no  justification  in  the 
record  for  a  depreciation  in  the  accounts  receivable  to  such 
an  extent.  The  analysis  submitted  by  the  expert  accountant 
shows  that  of  the  amount  of  $649,778.02  outstanding  on 
August  1,  1914,  the  sum  of  $632,598.73,  or  all  but  $17,179.29T 


PART  IV— THE  PROPEETY  357 

was  collected  within  three  months  thereafter.  The  account- 
ant's report  does  not  show  how  much,  if  any,  of  the  accounts 
receivable  wrere  uncollected  four  months  after  the  death  of 
the  decedent.  A  depreciation  of  $10,000  from  the  book  value 
of  this  item  would  be  ample  to  cover  all  contingencies.  The 
inventory  value  of  the  merchandise  is  shown  by  the  books  to 
be  the  sum  of  $595,500.  This  is  arrived  at  by  deducting  25% 
from  the  sales  price.  Whatever  objections  there  may  be  to 
this  method  of  ascertaining  the  value,  it  is  stated  by  the  ac- 
countant to  be  the  plan  adopted  by  other  concerns  dealing, 
as  this  firm  does,  in  a  great  variety  of  articles,  and  perhaps 
it  is  as  fair  as  any.  The  accountant,  however,  has  reduced 
the  inventory  value  as  thus  determined  by  10%,  or  the  sum 
of  $59,550,  because  he  has  found  that  certain  articles  were 
sold  by  the  concern  at  less  than  what  is  called  the  usual  sell- 
ing price  on  which  the  calculation  of  the  inventory  value  is 
based.  The  book  value  of  the  merchandise  should  prevail. 
The  system  by  which  it  was  determined  is  founded  on  the  ex- 
perience of  the  firm  and  its  accuracy  is  not  brought  into  ques- 
tion by  the  instances  cited  by  the  accountant.  Three  elements 
must  be  considered  in  the  determination  of  good  will — net 
profits,  capital  and  the  number  of  years'  purchase.  In  the 
present  case  the  appraiser  has  subtracted  from  the  net  profits 
for  each  year  taken  the  difference  between  the  price  actually 
paid  by  the  copartnership  for  the  merchandise  and  its  cost  in 
case  the  firm  had  taken  30,  60  or  90  days  to  make  payment. 
The  adoption  of  this  method  leads  to  the  absurd  result  as 
shown  by  the  accountant's  own  report  that,  whereas  in  the 
fiscal  year  ending  February  1,  1914,  the  actual  net  profits  of 
the  concern  were  $338,299.51,  there  was  a  so-called  loss  by 
barter  and  trade  of  the  sum  of  $21,430.96,  because  the  saving 
gained  by  discount  of  $359,730.47  exceeded  the  net  profits  by 
that  sum.  It  is  obvious  that  the  net  profits  in  every  case  are 
shown  by  the  difference  between  the  actual  cost  of  the  mer- 
chandise and  the  selling  price  after  deducting  the  cost  of 
selling  and  other  proper  charges,  and  are  not  dependent  in 
any  way  upon  what  the  concern  might  have  paid  for  the  mer- 
chandise. The  report  of  the  appraiser  is  erroneous  in  this 
particular.  The  appraiser  has  deducted  from  the  net  profits 


358  INHERITANCE  TAXATION 

ascertained  lay  him  in  the  manner  above  shown,  6%  interest 
on  the  average  gross  capital  of  the  copartnership  for  the  six 
and  a  half  years  beginning  with  the  1st  of  February,  1909, 
and  terminating  the  1st  of  August,  1914.  For  the  purpose  of 
determining  the  good  will  interest  on  the  net  capital  only 
should  have  been  deducted.  The  transfer  tax  appraiser  has 
applied  a  multiple  of  three  years  to  the  sum  ascertained  by 
deducting  from  the  net  profits  as  found  by  him  6%  interest 
on  the  capital  and  $100,000  representing  the  value  of  the  ser- 
vices of  the  decedent  and  the  surviving  partner,  to  which  latter 
item  no  objection  is  made,  and  the  amount  appears  to  the 
court  reasonable  and  proper.  The  sole  reason  assigned  by  the 
accountant  and  adopted  by  the  transfer  tax  appraiser  for  not 
applying  a  larger  multiple  is  because  the  firm  was  in  existence 
at  the  death  of  the  decedent  only  twelve  and  a  half  years.  I 
do  not  think  that  this  is  a  controlling  factor.  The  record 
shows  that  the  sales  have  increased  steadily  since  the  estab- 
lishment of  the  copartnership.  The  sales  for  the  three  com- 
plete fiscal  years  preceding  decedent's  death  were  respectively 
$3,986,859,  $5,003,364  and  $5,919,925.  In  the  year  prior  to  the 
death  of  decedent  $219,858.82  was  the  sum  spent  for  adver- 
tising. The  firm  is  extremely  well  and  favorably  known.  It 
has  succeeded  in  establishing  a  reputation  in  the  community 
which  might  not  be  gained  by  other  concerns  in  business  many 
years  longer.  Under  all  the  circumstances  I  think  a  five  years ' 
purchase  should  be  applied  in  fixing  the  good  will.  The  value 
of  decedent's  interest  in  the  copartnership  should  be  deter- 
mined in  the  following  manner :  From  the  average  net  profits 
of  $400,990.70  for  the  three  complete  fiscal  years  preceding 
the  death  of  decedent  should  be  deducted  6%  on  the  average 
net  capital  of  $1,053,333  employed  for  the  same  period, 
amounting  to  $63,019.98,  and  $100,000  for  salaries  of  the  two 
partners.  The  difference,  or  $237,970.72,  multiplied  by  5,  is 
$1,189,853.60,  the  value  of  the  good  will.  One-half  of  this  sum, 
$594,926.80,  added  to  the  amount  of  decedent's  capital  ac- 
count of  $659,819.45  (book  value,  less  $5,000  deduction  from 
inventory)  is  $1,254,746.25,  the  value  of  decedent's  interest  in 
the  copartnership  at  the  date  of  his  death.  The  charge  of 
$75,000  counsel  fee  is,  in  my  opinion,  excessive.  The  estate 


PART  IV  — THE  PROPERTY  359 

was  not  difficult  of  administration,  and  no  more  than  $25,000 
should  be  allowed  as  a  deduction.  The  report  of  the  appraiser 
is  remitted  to  him  for  revision  and  correction,  in  accordance 
with  this  decision.  Settle  order  on  notice." 

In  Matter  of  Moore,  97  Misc.  238;  162  Supp.  213,  the  value 
of  the  good  will  of  Tiffany  &  Co.  was  involved,  and  the  Surro- 
gate held  that  ten  years'  purchase  was  a  fair  multiple.  He 
said: 

"The  appraiser  ascertained  the  value  of  the  good  will  by 
deducting  interest  at  the  rate  of  6%  per  annum  on  the  capital 
employed  by  the  company  in  its  business  from  the  average 
annual  net  profits,  and  multiplying  the  difference  by  10.  This 
gave  the  value  of  the  good  will  as  $1,507,922.40.  No  exception 
was  taken  to  the  amount  which  the  appraiser  adopted  as  the 
annual  average  net  profits ;  but  it  is  contended  that  the  value 
of  the  good  will  should  be  ascertained  by  multiplying  the  aver- 
age net  profit  by  3  or  5  instead  of  10.  The  cases  in  this  coun- 
try are  not  uniform  in  regard  to  the  number  of  years'  pur- 
chase by  which  the  average  annual  net  profits  may  be  multi- 
plied for  the  purpose  of  determining  the  value  of  the  good 
will.  Most  of  the  American  cases  adopt  a  period  ranging  from 
two  to  six  years,  the  number  being  dependent  upon  the  nature 
of  the  business,  the  length  of  time  during  which  it  has  been 
established  at  a  particular  place  and  the  extent  to  which  it  is 
known  to  the  public." 

The  court  then  held  that  as  Tiffany  &  Co.  had  been  estab- 
lished for  more  than  60  years,  and  had  an  excellent  and  wide 
reputation,  10  years '  purchase  used  by  the  appraiser  was  not 
excessive. 

In  the  Matter  of  Rosenberg,  114  Supp.  726,  it  was  held  that 
the  business  conducted  by  the  decedent  in  premises  rented  by 
the  month,  owed  much  of  its  value  to  the  confidence  inspired 
in  customers  by  the  presence  of  the  decedent,  and  fixed  the 
value  of  the  good  will  at  $800,  or  two  years'  purchase  of  the 
net  profits,  after  allowing  $2,000  per  year  for  the  decedent's 
services. 

The  firm  name  of  a  partnership  under  which  it  has  done 
business  for  many  years  does  not  belong  to  the  surviving 


360  INHERITANCE  TAXATION 

partner,  but  is  a  part  of  the  good  icill  of  the  firm,  and  subject 
to  sale  in  the  same  way  as  other  firm  property. 

Slater  v.  Slater,  175  N.  Y.  143 ;  67  N.  E.  224. 

General  public  patronage  is  an  element  of  the  good  will. 

Boon  v.  Moss,  70  N.  Y.  465. 

In  Matter  of  Joseph  Pulitzer,  N.  Y.  Law  Journal,  December 
10,  1912,  Surrogate  Cohalan  in  remitting  the  report  of  the 
appraiser  said:  "Among  the  items  of  personal  property  are 
the  following :  Four  thousand  nine  hundred  and  ninety  shares 
of  the  Press  Publishing  Company,  par  $100  per  share,  ap- 
praised at  $604.50  per  share,  $3,016,455;  9,164  shares  of  the 
Pulitzer  Publishing  Company,  par  $100  per  share,  appraised 
at  $121.75,  $1,115,717. 

"Among  the  affidavits  submitted  to  the  transfer  tax  ap- 
praiser in  regard  to  the  value  of  this  stock  appears  one  of 
Mr.  N.  H.  Hotsford,  auditor  of  the  Press  Publishing  Com- 
pany, publisher  of  the  New  York  World,  dated  January  29, 
1912,  in  which  he  states  that  the  net  profits  of  the  Press  Pub- 
lishing Company  for  the  year  1908  were  $333,673 ;  for  the  year 
1909  were  $662,391;  for  the  year  1910  were  $702,374;  for  the 
year  1911  were  $552,883 ;  total  $2,251,321.  From  this  net  total 
the  appraiser  deducted  $105,000  alleged  to  have  been  paid  as 
bonuses  to  employees  of  the  newspaper.  The  nature  of  these 
bonuses,  whether  gifts  or  contractual  obligations,  is  not  shown. 
Assuming  these  bonuses  to  have  been  voluntary  contributions 
to  the  employees  of  the  newspaper,  in  my  opinion  they  have 
been  erroneously  deducted,  and  the  net  profits  for  the  four 
years  should  be  placed  at  $2,251,321  instead  of  $2,146,321. 
This  would  make  the  average  net  profits  for  the  four  years 
preceding  decedent's  death  $562,830.25  instead  of  $536,580, 
as  shown  in  the  report  of  the  transfer  tax  appraiser." 

In  Matter  of  Ball,  161  App.  Div.  79;  146  Supp.  499,  the 
court  said : 

"This  good  will  is  property,  and  although  intangible,  the 
transfer  thereof  is  taxable  under  the  law  relating  to  taxable 
transfers.  (Tax  Law  [Consol.  Laws,  ch.  60;  Laws  of  1909, 
ch.  62],  §§  220,  243,  as  amended  by  Laws  of  1910,  ch.  706,  and 
Laws  of  1911,  ch.  732;  Godley  v.  Crandall  &  Godley  Co.,  153 
App.  Div.  697,  713;  139  Supp.  236;  Matter  of  Dun,  40  Misc. 


PAKT  IV  — THE  PROPERTY  361 

Kep.  509;  82  Supp.  802;  Matter  of  Hellman,  174  N.  Y.  254;  66 
N.  E.  809;  Matter  of  Vivanti,  138  App.  Div.  281;  122  Supp. 
954;  appeal  dismissed,  204  N.  Y.  413.)  The  determination  of 
the  value  of  this  intangible  property  is  always  difficult,  and 
any  rule  adopted  with  respect  to  the  same  must  of  necessity 
be  more  or  less  arbitrary.  In  Allan  on  the  Law  of  Goodwill 
(p.  85)  the  rule  is  thus  stated:  'The  usual  basis  of  valuation 
is  the  average  net  profits  made  during  the  few  years  preced- 
ing the  sale.'  In  Mellersh  v.  Keen,  28  Beav.  453,  Sir  John 
Komilly,  Master  of  the  Rolls,  determined  that  'the  average 
of  three  years'  annual  profits'  was  a  fair  basis  of  value.  In 
Page  v.  Ratdiffe,  75  L.  T.  Kep.  (N.  S.)  371,  Mr.  Justice 
Stirling,  of  the  High  Court  of  Justice,  said:  'It  is  assessed 
at  so  many  years'  purchase,'  and  in  fixing  the  value  of  the 
good  will  of  a  brewery,  he  added:  'It  seems  to  me  that  com- 
petition and  a  desire  to  exclude  rivals  in  trade  would  lead  a 
brewer  to  give  not  less  than  three  years '  profits. '  In  Von  Au 
v.  Magenheimer,  115  App.  Div.  84;  100  Supp.  659,  this  court 
said,  speaking  through  Mr.  Justice  Rich,  that  as  a  general 
rule  '  the  value  of  good  will  may  be  fairly  arrived  at  by  multi- 
plying the  average  net  profits  by  a  number  of  years,  such 
number  being  suitable  and  proper,  having  reference  to  the 
nature  and  character  of  the  particular  business  under  con- 
sideration, '  and  that  the  proper  number  of  years  is  not  a  ques- 
tion of  law,  but  one  of  fact.  In  the  same  case,  on  a  second 
appeal,  126  App.  Div.  257 ;  110  Supp.  629,  it  was  held  not  to 
be  error  to  refuse  to  charge  that  in  estimating  good  will  by 
the  net  profits  the  number  of  years  cannot  exceed  five.  In 
Matter  of  Keahon,  60  Misc.  Rep.  508;  113  Supp.  926,  the  value 
of  the  good  will  was  determined  by  multiplying  the  average 
net  profits  for  a  series  of  years  by  three.  In  Matter  of  Silk- 
man,  121  App.  Div.  202 ;  105  Supp.  872,  the  average  net  profits 
for  the  three  years  immediately  preceding  the  testator's  death 
was  ascertained,  and  this  sum,  multiplied  by  two,  was  held, 
under  the  circumstances  there  disclosed,  to  be  a  fair  basis  of 
computation." 

d.  WHEN  THE  PROFITS  ARE  SPECULATIVE. 

When  the  profits  for  the  three  years  prior  to  death  contain 
a  purely  speculative  element  the  speculative  profits  must  be 


362  INHERITANCE  TAXATION 

excluded.  This  was  illustrated  in  Matter  of  Brush,  N.  Y.  Law 
Journal,  Aug.  14,  1915,  when  the  Surrogate  said : 

"The  sum  of  $265  a  share  was  fixed  as  the  value  of  the  stock 
of  the  National  Exhibition  Company.  The  appellant  contends 
that  this  stock  should  be  valued  at  a  higher  figure.  The  prin- 
cipal items  upon  which  said  valuation  appears  to  have  been 
based  was  the  lease  of  the  playing  ground  used  by  said  com- 
pany and  the  earning  power  of  the  company.  The  appraiser, 
Mr.  Day,  has  sworn  that  the  lease  is  of  no  value  except  as  used 
for  its  present  purpose.  I  think  his  conclusion  is  correct. 
While  the  earning  power  of  the  company  for  the  years  1910, 
1911  and  1912  shows  a  large  return  upon  the  capital  invested, 
I  find  that  this  return  is  by  no  means  certain  by  reason  of  the 
fact  that  it  is  made  up  largely  of  money  paid  by  the  public  to 
see  the  post  season  games  called  the  'world's  championship 
series.'  The  New  York  Base  Ball  Club,  the  popular  name  for 
the  company,  cannot,  in  the  very  nature  of  things,  be  a  certain 
contender  in  this  series  every  year, — no  more  than  any  one  of 
the  other  seven  clubs  which,  with  it,  make  up  the  clubs  of  the 
national  league  circuit.  Hence  the  financial  returns  as  a  result 
of  being  a  participant  in  the  world's  championship  series  are 
so  completely  speculative  that  they  must  be  entirely  left  out 
of  consideration  in  analyzing  the  earning  power  of  said  com- 
pany." 

But  this  rule  does  not  apply  merely  because  of  the  ordinary 
uncertainties  and  hazards  of  commercial  enterprises.  As  the 
same  Surrogate  said  in  Matter  of  Daly,  N.  Y.  Law  Journal. 
July  28, 1916: 

'  *  The  uncertainties  of  the  theatrical  business  referred  to  in 
the  notice  of  appeal,  and  which  the  appraiser,  it  is  alleged, 
failed  to  take  into  account,  are,  in  my  opinion,  no  greater  than 
those  of  any  other  business,  and  the  appraiser  was  justified  in 
disregarding  them." 

e.  WHEN  No  PROFITS  ARE  SHOWN. 

An  important  case  on  this  question  went  to  the  Court  of 
Appeals  without  eliciting  an  opinion  all  along  the  line.  The 
question  involved  was  the  valuation  and  taxation  of  the  good 
will  of  the  copartnership  in  which  the  decedent,  Klauber,  had 
an  interest. 

On  the  26th  day  of  April,  1907,  Klauber,  Horn  &  Company 


PAET  IV  — THE  PROPERTY  363 

was  dissolved  by  the  retirement  of  Horn.  It  had  a  good  will 
concededly  valued  at  $300,000. 

On  the  following  day  the  firm  of  Klauber  Brothers  &  Com- 
pany was  organized.  The  decedent  had  substantially  a  half 
interest  in  both  firms.  The  new  firm  had  only  been  organized 
six  months  when  Klauber  died.  It  had  made  no  profits  simply 
because  in  its  trade  there  is  a  buying  season  when  it  is  all 
outgo  and  a  selling  season  when  it  is  all  income,  and  the  first 
six  months  were  in  the  buying  season.  The  firm  name  was 
not  retained ;  but  Klauber  Bros.  &  Co.  was  idem  sonans. 

The  new  firm  bought  and  the  old  firm  sold  to  it : 

"The  business;  The  embroidery  stock;  Goods  in  the  ware- 
house; Stock  in  the  lace  department;  Bills  receivable;  The 
furniture  and  fixtures ;  The  lease  of  the  premises  where  the 
business  was  done ;  All  contracts  with  the  traveling  salesmen 
whose  services  were  retained;  Books  of  the  old  firm;  The 
office  supplies;  All  samples;  The  designs  and  cartoons;  And 
the  agreement  further  provided, i  Only  the  said  David  Klauber 
and  Samuel  Glauber  shall  have  the  right  to  make  these  designs, 
and  no  direct  or  indirect  copy  of  such  design  shall  be  made  by 
the  said  Michael  Horn,  or  by  any  of  his  agents. ' 

There  was  no  specific  mention  of  "good  will"  eo  nomine. 

The  Surrogate  merely  made  a  memorandum  that  the  new 
firm  did  not  buy  the  good  will  of  the  old  firm  and  had  made 
no  profits  itself;  so  there  was  no  good  will.  On  appeal  the 
Comptroller's  counsel  protested  that  a  good  will  of  $300,000 
in  value  had  thus  been  made  to  disappear  over  night.  The 
appellate  courts  affirmed  without  opinion. 

Matter  of  Klauber,  N.  Y.  L.  J.,  May  17,  1913;  aff.   171  App.  Div.  9O8; 
218  N.  Y.  607. 

Austin  Nichols  &  Co.  was  incorporated  to  take  over  the 
business  of  a  partnership  of  the  same  name.  Preferred 
stock  was  issued  for  all  assets  but  good  will,  which  the 
common  stock  represented,  with  the  proviso  that  no  divi- 
dends should  be  paid  on  the  common  stock  unless  1%  was  paid 
on  the  preferred  and  a  sinking  fund  of  $150,000  set  aside  from 
surplus  profits.  In  the  year  and  a  half  after  incorporation 
these  conditions  had  not  been  complied  with  and  no  dividends 
were  paid  on  the  common  stock.  Held,  that  as  of  the  date  of 
death  of  testator  the  common  stock  had  no  value. 

Matter  of  Ormiston,  N.  Y.  L.  J.,  August  14,  1915. 


364  INHERITANCE  TAXATION 

From  all  of  which  it  might  appear  that  good  will  is  an 
ephemeral  commodity  and  that  partnership  agreements  may 
easily  be  so  drawn  as  to  avoid  its  taxation. 

In  the  Matter  of  George  A.  Hearn,  decided  by  Surrogate 
Cohalan  of  New  York  county  in  July,  1917,  the  good  will  of 
the  dry  goods  firm  of  James  A.  Hearn  &  Son  was  valued  at 
more  than  twice  its  tangible  assets  and  five  years'  purchase 
was  sustained.  The  valuation  of  the  interest  of  decedent  in 
the  good  will  after  death,  under  a  copartnership  agreement; 
was  involved,  and  is  interesting  and  important.  On  this  the 
opinion  speaks  for  itself  and  is  given  in  full  as  follows : 

"Estate  of  George  A.  Hearn. — The  deceased  died  on  the  1st 
of  December,  1913.  The  executors  of  his  estate  contend  that 
the  transfer  tax  appraiser  erred  in  appraising  at  $1,520,- 
014.67  the  good  will  of  the  business  conducted  by  the  decedent 
and  others  under  the  name  of  James  A.  Hearn  &  Son,  and 
they  have  appealed  from  the  order  entered  upon  the  ap- 
praiser's report.  The  firm  of  James  A.  Hearn  &  Son  has  con- 
ducted a  drygoods  business  on  West  Fourteenth  street  in  this 
city  since  1879.  In  1906  new  articles  of  copartnership  were 
entered  into  between  George  A.  Hearn,  the  decedent,  and  three 
others.  They  provided  that  the  partnership  should  continue 
until  March  1,  1916.  In  the  preamble  to  the  partnership 
agreement  it  is  stated  that  'the  good  will  and  assets  of  James 
A.  Hearn  &  Son  of  every  kind  and  description  belong  to  and 
are  vested  in  George  A.  Hearn  individually.'  The  articles  of 
copartnership  defined  the  interest  of  each  of  the  partners  in 
the  firm,  but  provided  that  the  death  of  either  of  the  partners 
would  not  cause  a  dissolution  of  the  firm.  The  articles  further 
provided  that  in  the  event  of  the  death  of  either  of  the  part- 
ners, except  George  A.  Hearn,  before  the  expiration  of  the 
partnership  by  time  limitation,  the  interest  of  the  one  so  dying 
would  be  the  amount  standing  opposite  his  name  on  the  books 
of  the  firm  at  the  last  preceding  trial  balance,  plus  interest  at 
the  rate  of  5%.  Upon  the  death  of  George  A.  Hearn  it  was 
provided  that  his  interest  or  share  in  the  business  should  con- 
tinue until  the  termination  of  the  partnership  by  time  limita- 
tion. Upon  such  termination  his  executors  were  authorized 
and  empowered  to  purchase  the  interests  of  the  other  members 


PART  IV  — THE  PROPERTY  365 

of  the  firm  at  the  amounts  standing  opposite  their  names  on 
the  books  of  the  firm,  as  ascertained  by  the  last  preceding  trial 
balance.  It  is  apparent  from  the  articles  of  copartnership  that 
George  A.  Hearn  never  parted  with  the  good  will  of  the  busi- 
ness of  James  A.  Hearn  &  Son,  and  that  the  other  partners 
never  acquired  any  right  to  such  good  will.  The  value  of  their 
respective  interests  in  the  business  was  determined  by  the 
partnership  agreement,  and  that  instrument  excluded  the 
value  of  the  good  will  when  providing  for  the  method  of  ascer- 
taining the  value  of  their  interests.  Therefore,  George  A. 
Hearn  was,  at  the  time  of  his  death,  the  sole  owner  of  the  good 
will  of  the  business  of  James  A.  Hearn  &  Son.  This  good  will 
was  transferred  and  disposed  of  by  his  will.  In  appraising 
the  value  of  the  good  will  the  appraiser  found  that  the  average 
annual  net  profits  for  the  three  years  immediately  preceding 
the  date  of  decedent's  death  wTas  $366,710.18,  and  he  multi- 
plied this  amount  by  2%  for  the  two  years  and  nine  months 
immediately  prior  to  the  date  of  decedent's  death,  the  result 
being  $1,008,452.98.  He  also  multiplied  the  average  annual 
net  profits  by  2*4  for  the  time  which  elapsed  between  the  death 
of  the  decedent  and  the  termination  of  the  partnership  by 
time  limitation,  and  took  62%  of  the  result,  making  $511,- 
561.69.  He  then  added  this  amount  to  the  $1,008,452.89  pre- 
viously ascertained,  and  the  sum  of  $1,520,014.67  he  found  to 
be  the  value  of  the  good  will.  The  appraiser  explains  that  he 
took  62%  of  the  net  earnings  after  the  date  of  decedent's 
death,  instead  of  the  whole  amount,  because  the  decedent's 
interest  in  the  assets  of  the  firm  was  62%.  The  value  of  the 
good  will  constituted  an  asset  of  the  decedent's  estate,  and  its 
value,  like  that  of  any  other  asset,  must  be  ascertained  as  of 
the  date  of  his  death.  The  decedent  at  the  date  of  his  death 
was  the  owner  of  the  entire  good  will,  and  not  62%  of  it ;  and 
it  was  the  value  of  the  entire  good  will  that  was  transferred 
by  his  will.  There  was  therefore  no  legal  justification  for  the 
appraiser  in  calculating  the  good  will  on  the  basis  of  62%  from 
the  date  of  decedent's  death.  The  profits  earned  or  losses 
sustained  after  the  date  of  decedent's  death  cannot  be  taken 
into  consideration  in  ascertaining  the  value  of  the  good  will 
(Matter  of  Silkman,  121  App.  Div.  203) ;  it  must  be  based 


366  INHERITANCE  TAXATION 

upon  the  net  profits  for  the  years  preceding  the  date  of  de- 
cedent's death.  The  appraiser  multiplied  the  average  annual 
net  profits  for  the  three  years  immediately  preceding  the  date 
of  decedent's  death  by  five.  In  view  of  the  length  of  time 
during  which  the  business  has  been  established,  its  reputation, 
its  extensive  advertising  and  its  prominence  in  the  drygoods 
trade,  I  think  five  years '  average  of  the  annual  net  profits  is  a 
reasonable  value  of  the  good  will  of  the  business  (Von  Au  v. 
Magenheimer,  126  App.  Div.  257) ;  but  in  order  to  ascertain 
the  average  net  annual  profits  which  is  to  be  multiplied  by 
five,  a  period  of  at  least  six  years  immediately  prior  to  the 
date  of  decedent's  death  should  be  taken  into  consideration. 
The  average  annual  profits  thus  ascertained,  multiplied  by 
five,  would  represent  the  value  of  the  good  will  of  the  busi- 
ness of  James  A.  Hearn  &  Son  at  the  date  of  the  decedent's 
death,  if  his  executors  could  sell  it  on  that  day.  The  articles 
of  copartnership,  however,  provided  that  decedent's  interest 
in  the  firm  could  not  be  sold  at  the  date  of  decedent's  death, 
but  should  continue  until  the  termination  of  the  partnership 
on  March  1,  1916.  Therefore  the  value  of  the  good  will  at 
the  date  of  decedent's  death  would  be  the  sum  which,  if  in- 
vested at  5%  on  that  day,  would  equal  on  March  1,  1916,  the 
amount  obtained  by  multiplying  the  average  annual  net  profits 
by  five.  The  appeal  of  the  executors  is  confined  to  the  value 
of  the  good  will,  no  question  being  raised  as  to  its  distribution 
under  the  terms  of  the  will  of  the  decedent.  It  is  therefore 
unnecessary  to  inquire  whether  the  persons  who  were  partners 
of  the  copartnership  which  expired  on  March  1, 1916,  and  who 
were  entitled  to  receive  a  certain  number  of  shares  of  stock  in 
the  corporation  directed  to  be  formed  by  the  will  of  the  dece- 
dent, are  beneficiaries  of  a  part  of  the  good  will  and  their 
interests  taxable  accordingly.  The  order  fixing  tax  will  be 
reversed  and  the  appraiser's  report  remitted  to  him  for  cor- 
rection as  indicated." 

C.— DEDUCTIONS. 

In  order  to  ascertain  the  value  of  the  interest  transferred 
which  is  subject  to  the  tax  we  must  not  only  consider  the  assets 
but  also  the  liabilities,  consisting  of  the  debts  of  the  estate  and 


PART  IV  — THE  PROPERT1  367 

the  expenditures,  which  must  be  deducted  in  order  to  ascer- 
tain the  net  value  of  the  estate  passing  to  the  heir,  devisee  or 
distributee. 

Jackson  v.  Myers,  257  Pa.  104;  101  A.  341. 

Dower,  family  allowance,  homestead,  community  interest, 
have  all  been  considered  elsewhere  (see  ante,  Part  II)  because 
they  are  not  deductions  from  the  estate  of  the  decedent  but 
never,  in  fact,  became  a  part  of  that  estate. 

1.  Mortgages. 

As  to  mortgages  we  have  seen  that  they  are  to  be  deducted 
from  the  value  on  the  theory  that  it  is  the  equity  of  redemp- 
tion and  not  the  gross  value  that  is  subject  to  the  tax. 

Matter  of  Sutton,  3  Appr.  Div.  208;  38  Supp.  277;  aff.  149  N.  Y.  618. 

Matter  of  Offerman,  25  App.  Div.  4;  48  Supp.  993. 

Matter  of  Murphy,  32  App.  Div.  627;  53  Supp.  1110;  aff.  157  N.  Y.  679. 

A  direction  by  testator  to  pay  certain  mortgages  out  of 
personalty  does  not  authorize  the  appraiser  to  deduct  the 
amount  from  the  value  of  the  personal  estate. 

Matter  of  Berry,  23  Misc.  230;  51  Supp.  1132. 
Matter  of  DeGraff,  24  Misc.  147;  53  Supp.  591. 
Matter  of  Livingston,  1  App.  Div.  368 ;.  37  Supp.  463. 
Matter  of  Maresi,  74  App.  Div.  76;  77  Supp.  76. 

Under  chapter  41,  New  York  Laws  1903  (now  section  122, 
Decedents'  Estate  Law),  mortgages  are  deducted  from 
appraised  value  of  the  real  estate. 

A  devisee  of  land  which  is  subject  to  a  mortgage  takes  it 
cum  onere,  and  the  equity  therein  is  only  liable  to  taxation. 

Matter  of  Kene,  8  Misc.  102;  29  Supp.  1078. 

In  the  case  of  a  blanket  mortgage  covering  several  pieces 
of  realty,  where  testator  has  made  an  apportionment  on  sale 
of  one  of  the  parcels,  it  is  binding  on  the  executor  and  hence 
on  the  appraiser. 

Matter  of  Tremberger,  N.  Y.  L.  J.,  October  31,  1913. 

Where  a  resident  testator  devised  foreign  real  estate  to  his 
wife,  a  mortgage  on  that  real  estate  was  held  not  a  deduction 
from  personal  property  within  the  State. 

Matter  of  George  W.  Vanderbilt,  104  Misc.  511;  175  Supp.  863. 


368  INHERITANCE  TAXATION 

2.  Debts. 

Debts  of  the  decedent  are,  of  course,  to  be  deducted  from 
his  assets  in  order  to  ascertain  the  net  value  of  his  estate, 
even  though  the  will  has  not  been  probated. 

Lambrecht's  Estate,  112  Wash.  645;  192  Pac.  1018. 

a.  LIABILITY  ON  MOBTGAGE  BOND. 

This  was  recently  illustrated  in  the  Matter  of  Prentiss, 
N.  Y.  Law  Journal,  Dec.  2, 1916.  Here  a  decedent  had  deeded 
the  real  estate  to  his  wife  subject  to  a  mortgage  which  she 
did  not  assume.  After  holding  his  liability  on  the  bond  a 
debt  of  the  testator's,  the  Surrogate  said:  "But  on  the  other 
hand  the  matter  of  its  payment  must  be  viewed  as  differing 
from  the  payment  of  an  ordinary  debt,  for  the  reason  that  in 
all  likelihood  it  will  fall  upon  the  real  estate  under  the  terms 
of  the  mortgage.  In  view  of  this,  I  think  that  the  proper 
disposition  of  the  appeal  is  to  suspend  giving  to  said  bond 
the  status  of  a  debt  until  its  value  is  irrevocably  fixed  by  the 
final  disposition  of  the  mortgage." 

Under  similar  circumstances  the  Surrogate  was  sustained 
when  he  refused  to  allow  the  obligation  on  the  bond  as  a 
deduction. 

Matter  of  Caiman,  100  App.  Div.  517;  91  Supp.  1095. 

See  also 

Matter  of  Skinner,  45   Misc.  559;    92   Supp.   972;    aff.   as  to  this  point, 
106  App.  Div.  217;  94  Supp.  144. 

b.  REPAIRS  TO  REAL  ESTATE. 

The  cost  of  repairs  to  real  estate  is  a  charge  on  the  land 
and  is  not  to  be  deducted  from  the  personal  assets  when  the 
repairs  were  contracted  for  during  the  lifetime  of  the  dece- 
dent though  not  completed  until  after  his  death. 

Matter  of  Baudouine,  5  App.  Div.  622;  39  Supp.  1121. 
Matter  of  Kemp,  7  App.  Div.  609;  40  Supp.  1144;   aff.  151  N.  Y.  619; 
45  N.  E.  1132. 

Surrogate  Fowler  of  New  York  county  took  an  opposite 
view  in  Matter  of  Amsinck,  New  York  Law  Journal,  Feb.  21, 
1913,  but  possibly  the  decision  of  the  Court  of  Appeals  in 
the  Kemp  case  was  not  called  to  his  attention.  If  unpaid 


PART  IV  — THE  PROPERTY  369 

bills  are  deducted  from  the  value  of  the  real  estate,  then  the 
property  should  be  appraised  at  its  value  plus  the  better- 
ments and  minus  the  sums  so  unpaid. 

c.  DEBTS  PAID  BY  WILL. 
When  a  debt  is  forgiven  by  will  the  transfer  is  taxable. 

Matter  of  Bartlett,  4  Misc.  380;  25  Supp.  990. 
Matter  of  Wood,  40  Misc.  155;  81  Supp.  511. 
Matter  of  Hirsch,  83  Misc.  681;  145  Supp.  305. 
Matter  of  Michaelis,  N.  Y.  L.  J.,  August  11,  1915. 
Matter  of  Tuigg,  15  Supp.  548. 

If  not  outlawed,  it  must  be  appraised  at  its  fair  market 
value  and  not  its  face  value. 

Morgan  v.  Warner,  45  App.  Div.  424;  60  Supp.  63;  aff.  162  N.  Y.  612; 
57  N.  E.  1118. 

If  the  debt  is  valueless,  that  is,  if  the  beneficiary  is  finan- 
cially irresponsible,  no  tax  is  imposed,  the  mental  relief  of  a 
bankrupt  in  having  one  score  out  of  many  canceled  not  being 
regarded  as  a  taxable  commodity. 

Morgan  v.  Warner,  45  App.  Div.  424;  60  Supp.  963;  aff.  162  N.  Y.  612; 
57  N.  E.  1118. 

"It  is  against  conscience  that  the  legatee  should  receive 
anything  out  of  the  fund  without  deducting  therefrom  the 
amount  of  that  fund  which  is  already  in  his  hands,  as  a  debtor 
to  the  estate." 

Smith  v.  Kearney,  2  Bart.  Ch.  533. 

Cited  and  followed  in 

Leask  v.  Hoagland,  64  N.  Y.  159. 

And  such  debts  will  not  be  construed  as  advancements 
rather  than  loans  on  the  testimony  of  interested  parties  as 
against  written  evidence  of  the  obligation. 

Matter  of  Dormitzer,  N.  Y.  L.  J.,  February  6,  1913. 
Matter  of  Bennington,  67  Misc.  363;  124  Supp.  829. 
Bruce  v.  Griscom,  9  Hun,  280 ;  aff.  70  N.  Y.  612. 
Erbeling  v.  Erbeling,  61  Misc.  537;  115  Supp.  894. 

A  more  serious  question  arises  when  services  have  been 
rendered  to  the  decedent  and  are  paid  for  by  will.    The  pay- 
ment of  the  debt  by  will  is  taxable.     Shall  the  legatee  who 
24 


370  INHERITANCE  TAXATION 

accepts  the  payment  still  be  permitted  to  prove  the  value  of 
the  services  and  have  them  allowed  as  a  deduction?  A  New 
York  Surrogate  has  so  held,  though  the  decision  is  of  doubtful 
authority. 

Matter  of  Enos,  61  Misc.  594;  115  Supp.  863. 

In  this  case,  where  a  niece  had  rendered  services  to  testa- 
trix, and  the  latter,  after  the  usual  clause  relative  to  the  pay- 
ment of  debts  and  funeral  expenses,  devised  all  her  property 
to  said  niece;  held,  that  the  value  of  niece's  services  was  a 
proper  deduction. 

The  contrary  was  held  in  Kansas. 

State  v.  Mollier,  96  Kan.  514;  152  Pac.  771. 

And  in  New  York,  where  a  testatrix  left  a  sum  of  money 
to  her  daughter-in-law  pursuant  to  an  agreement  thus  to  com- 
pensate her  for  supporting  her  husband  (the  son  of  the  testa- 
trix), and  where,  after  the  death  of  the  testatrix,  the  daughter- 
in-law  present  a  claim  against  her  estate  based  upon  the 
agreement,  and  the  claim,  after  having  been  rejected  by  the 
executor,  is  established  and  paid,  the  claimant  is  not  entitled 
also  to  the  legacy  under  decedent's  will  intended  by  her  to 
carry  out  her  agreement. 

Matter  of  Embury,  19  App.  Div.  214;  45  Supp.  881;  aff.  154  N.  Y.  746; 
49  N.  E.  1096. 

The  creditor  must  accept  the  legacy.  So  where  the  will 
directed  the  executors  to  pay  a  debt,  but  the  creditor  proves 
his  claim  as  a  debt  and  the  executor  pays  it  as  such,  it  is  a 
proper  deduction  from  the  decedent's  estate,  and  the  amount 
thereof  is  not  liable  to  a  transfer  tax  (citing  Matter  of  Gould, 
156  N.  Y.  423;  51  N.  E.  287),  and  the  direction  in  the  will  was 
a  sufficient  acknowledgment  to  remove  the  bar  of  the  statute 
of  limitation. 

Matter  of  Levy,  N.  Y.  L.  J.,  May  15,  1907;  aff.  122  App.  Div.  919;  107 
Supp.  1134. 

d.  DOUBTFUL  CLAIMS. 

A  debt  not  collectible  because  the  statute  of  limitations  has 
intervened ;  or  wThere  the  statute  of  frauds  may  be  interposed 
as  a  defense,  should  not  be  deducted;  and,  generally,  claims 


PART  IV  — THE  PROPERTY  371 

should  not  be  allowed  as  deductions  unless  they  can  be  proved 
against  the  estate  and  payment  enforced  if  resisted. 

Matter  of  Wormser,  36  Misc.  434;  73  Supp.  748. 

If  the  claim  against  the  estate  is  of  doubtful  validity  the 
question  of  deduction  should  be  postponed  until  the  doubt  is 
resolved. 

Matter  of  Dimon,  82  App.  Div.  107;  81  Supp.  428. 

Matter  of  Rice,  56  App.  Div.  253 ;  61  Supp.  911 ;  68  Supp.  1147. 

Amount  paid  in  good  faith  in  compromise  of  a  valid  claim 
against  the  estate  is  a  proper  deduction  to  be  made,  if  the 
claim  was  in  fact  valid,  and  the  burden  of  proving  it  invalid 
is  on  the  people. 

People  v.  Tatge,  267  111.  634. 

3.  Funeral  and  Burial  Expenses. 

These  are  allowed  as  deductions  provided  they  are  ' '  reason- 
able." 

Matter  of  Ludlow,  4  Misc.  594;  25  Supp.  989. 
Matter  of  Millward,  6  Misc.  425;  27  Supp.  286. 
Matter  of  Liss,  39  Misc.  123;  78  Supp.  969. 
Succession  of  Pizzati,  141  La.  Rep.  645. 

The  cost  of  a  monument  is  included. 

State  v.  Probate  Court,  138  Minn.  307;  164  N.  W.  365. 

Matter  of  Edgerton,  35  App.  Div.  125;  54  Supp.  700;  aff.  158  N.  Y.  671; 

52  N.  E.  1124. 
Matter  of  Black,  5  Supp.  452. 

Also  the  cost  of  a  cemetery  lot. 

Matter  of  Maverick,  135  App.  Div.  44;  119  Supp.  914;  aff.  198  N.  Y.  618; 

92  N.  E.  1084. 

Matter  of  Vinot,  7  Supp.  517. 
Re  Close  Estate,  260  Pa.  269,  103  A.  822. 

Reasonable  provision  for  the  care  of  a  cemtery  lot  is  a 
proper  deduction. 

Re  Fleck,  35  Pitts.  L.  J.  (Pa.)  67. 

As  to  what  may  be  regarded  as  "reasonable"  in  such  cases 
there  is  very  little  authority.  Probably  the  " station  of  life" 
rule  as  to  necessaries  is  applicable. 

When  the  expenditure  is  provided  for  in  the  will  the  rule 


372  INHERITANCE  TAXATION 

seems  to  be  that  the  testator  is  the  best  judge  of  what  he 
can  afford  to  spend  on  himself  when  he  dies. 

Out  of  an  estate  of  about  $6,000  testator  devised  $2,000  for 
a  tombstone  and  burial  expenses ;  held,  that  the  fact  that  the 
testator  designated  that  amount  is  a  presumption  of  its 
reasonableness;  and  that,  as  the  sum  did  not  pass  to  any 
collateral  heir,  it  was  not  taxable. 

Morrow  v.  Durant,  140  la.  437;  118  N.  W.  781. 

4.  Administration  Expenses  and  Counsel  Fees. 

These  are  generally  allowed  as  a  deduction  within  the  rule 
of  "reasonableness." 

Matter  of  Westurn,  152  N.  Y.  93-102;  46  N.  E.  315. 

Withers  v.  Jones  Exrs.,  126  Va.  500 ;  102  S.  E.  68 ;  citing  Gleason  &  Otis, 
2  Ed.  464. 

In  Wisconsin  an  allowance  of  $3,500  on  a  $250,000  estate 
although  "large"  sustained  in  the  absence  of  evidence  that 
it  was  excessive. 

Matthew's  Estate,  174  Wis.  220;  182  N.  W.  744. 

A  counsel  fee  of  $5,000  where  the  personal  estate  amounted 
to  only  $14,270  held  unreasonable  and  disallowed. 

Matter  of  Thomas  J.  Kennedy,  N.  Y.  L.  J.,  August  11,  1915. 

On  a  $1,200,000  estate  fee  of  $75,000  reduced  to  $25,000 
where  the  estate  was  not  difficult  of  administration. 

Matter  of  Flurscheim,  107  Misc.  470;  176  Supp.  694. 

Counsel  fees  and  expenses  may  be  estimated  in  advance  by 
the  appraiser. 

Matter  of  Gould,  19  App.  Div.  352. 

"The  expenses  of  administration  are  imposed  as  a  matter 
of  law  and  are  caused  by  the  use  of  the  legal  machinery 
provided  by  the  State  to  wind  up  the  affairs  of  deceased 
persons,  and  cannot  ordinarily  be  avoided;  hence  it  is  just 
that  they  should  be  deducted  from  the  valuation  of  the 
estate." 

State  v.  Probate  Court,  112  Minn.  279;  128  N.  W.  18. 

Deductions  include  the  fee  of  administratrix;  real  estate 
taxes  accrued  as  liens;  personal  taxes  where  tax  books  have 
been  delivered  to  collector. 

People  v.  Ballans,  294  111.  551 ;  128  N.  E.  542. 


PART  IV  — THE  PEOPEETY  373 

Administration  expenses  should  be  paid  out  of  the  personal 
property  of  a  nonresident  within  the  State  if  it  is  sufficient 
to  meet  them,  and  should  not  be  deducted  from  the  value  of  the 
real  estate.  This  is  important  in  the  States  that  tax  only  the 
tangibles  and  real  property  of  nonresidents. 

Matter  of  Steele,  98  Misc.  180;  162  Supp.  718. 

The  tax  itself  is  not  an  expense  of  administration. 

Chesney's  Estate,  1  Cal.  App.  30;  81  Pae.  679. 

5.  Discount  on  Legacy. 

Under  most  of  the  statutes  a  legacy  cannot  be  paid  until 
one  year  has  elapsed  —  or  longer  —  in  order  to  give  time 
for  advertising  for  debts  and  collecting  assets.  It  seems  to 
be  a  necessary  moratorium  for  the  settlement  and  adjustment 
of  the  affairs  of  the  decedent.  But,  as  the  legacy  is  presently 
taxable  at  its  value  at  testator's  death,  many  attorneys  have 
been  inclined  to  the  view  that  the  present  worth  of  the  legacy 
is  its  true  value ;  in  other  words,  that  its  taxable  value  should 
be  its  discount  value. 

The  answer  to  this  argument  is  that  the  statutes  work  out 
practical  justice  by  charging  no  interest  on  the  tax  during  the 
"moratorium;"  such  at  least  is  the  effect  of  the  only  decisions 
on  the  question  to  which  our  attention  has  been  called. 

Matter  of  Hutter,  N.  Y.  L.  J.,  December  3,  1914;  aff.  167  App.  Div.  930; 

152  Supp.  1119. 
Matter  of  Bird,  11  Supp.  891. 

But  the  courts  in  several  States  hold  that  the  postponement 
of  the  payment  of  the  legacy  operates  to  postpone  the  date 
when  the  tax  falls  due. 

Commonwealth  v.  Gaulbert,  134  Ky.  157;  119  S.  W.  779. 

But  under  this  theory  the  tax  must  at  all  events  be  paid  as 
soon  as  the  legacy. 

Attorney  General  v.  Allen,  59  N.  C.  144. 

These  authorities  overrule  the  earlier  cases  in  which  such 
a  discount  was  allowed. 

Matter  of  Peck,  2  Con.  201 ;  9  Supp.  465. 
Matter  of  Underbill,  2  Con.  262 ;  20  Supp.  134. 


374  INHERITANCE  TAXATION 

6.  Expenses  of  Litigation. 

a.  WHEN  TO  CONSERVE  THE  ESTATE. 

When  the  purpose  of  such  litigation  was  to  protect  and  con- 
serve the  estate  such  expenses  are  allowed  as  a  deduction. 

Matter  of  Gihon,  169  N.  Y.  443;  62  N.  E.  561. 

So  the  expense  of  preparing  for  trial  to  meet  objections  filed 
to  the  probate  of  the  will  may  be  deducted. 

Matter  of  Reed,  98  Mise.  102 ;  162  Supp.  412. 

"The  successful  defense  of  the  attack  upon  the  validity  of 
the  will  wras  in  the  interest  of  the  State,  as  the  recipient  of 
the  tax  on  the  bequest  to  the  college;  and  we  think  that  in 
ascertaining  the  amount  upon  which  the  tax  should  be  com- 
puted the  expenditures  in  defense  of  the  wall  should  have  been 
deducted,  so  that  the  tax  should  not  be  computed  upon  it. ' ' 

Connell  v.  Crosby,  210  111.  380,  391 ;  71  N.  E.  350. 

It  was  held  in  the  Succession  of  Weber,  49  La.  Ann.  1491, 
that  the  costs  of  settling  the  community  are  to  be  charged  to 
the  entire  community  and  not  to  decedent 's  half  thereof. 

b.  DISPUTES  AMONG  THE  BENEFICIARIES. 

On  the  other  hand,  litigation  caused  by  disputes  among  the 
heirs  or  distributees  as  to  the  value  of  their  interest  is  not  a 
proper  deduction. 

Matter  of  Thrall,  157  N.  Y.  46;  51  N.  E.  411. 
Matter  of  Sanf ord,  66  Misc.  395 ;  123  Supp.  284. 
Re  Lines '  Estate,  155  Pa.  St.  378 ;  26  A.  728. 

"The  fact  that  the  appellants  were  put  to  expense  in  assert- 
ing their  rights,  and  were  embroiled  in  expensive  litigation  to 
obtain  them,  was  their  misfortune.  It  did  not  diminish  the 
value  of  the  interests  which  devolved  upon  them  on  Westurn's 
death.  It  was  a  loss,  but  a  loss  to  their  general  estate.  It 
did  not  prevent  them  receiving  the  whole  interest  transmitted 
to  them.  The  fact  that  the  court  charged  certain  costs  and 
allowances  in  their  favor  upon  the  estate  did  not  change  the 
situation.  It  was  practically  a  charge  upon  their  own  prop- 
erty for  the  benefit  of  their  attorneys. ' ' 

Matter  of  Westurn,  152  N.  Y.  93 ;  46  N.  E.  315. 


PAET  IV  — THE  PROPERTY  375 

So,  money  paid  to  secure  the  withdrawal  of  a  will  contest 
is  not  allowed  as  a  deduction. 

Matter  of  Marks,  40  Misc.  507;  82  Supp.  803. 
Matter  of  Baldwin,  N.  Y.  L.  J.,  August  21,  1912. 

7.  Taxes. 

a.  OTHER  INHERITANCE  TAXES. 

The  Federal  Government  allowed  the  deduction  of  State 
inheritance  taxes  in  ascertaining  the  net  estate,  but  many  of 
the  States  did  not  return  the  compliment,  and  September  1, 
1917,  the  Treasury  Department  reversed  its  ruling.  Some  of. 
the  Federal  Courts  have  reversed  this  ruling  but  their  deci- 
sions apply  only  to  the  act  of  1916.  The  present  act  does  not 
allow  the  deduction.  See  page  612.  Under  the  Federal  in- 
heritance tax  of  1898  the  amount  due  the  Government  was  not 
allowed  as  a  deduction  in  New  York. 

Matter  of  Gihon,  169  N.  Y.  443 ;  62  N.  E.  561. 

Matter  of  Irish,  28  Misc.  647. 

Matter  of  Ely,  149  Supp.  90. 

Matter  of  Hoyt,  86  Misc.  696;  149  Supp.  91. 

In  New  York  it  is  held  that  the  present  Federal  tax  is  not  a 
deduction. 

Matter  of  Bierstadt,  178  App.  Div.  836;  166  Supp.  168. 
Matter  of  Sherman,  179  App.  Div.  497;  aff.  222  N.  Y.  540. 

And  the  rule  is  applied  to  a  nonresident  estate  although 
the  tax  is  held  to  be  a  deduction  in  the  state  of  domicile. 

Matter  of  Wittmann,  112  Misc.  168;  182  Supp.  535. 

In  the  case  of  N.  Y.  Trust  Co.  v.  Eisner,  256  U.  S.  345,  65 
Law  Ed.  620,  it  was  contended  before  the  U.  S.  Supreme  Court 
that  the  Federal  tax  would  be  unconstitutional  if  it  undertook 
to  diminish  the  amount  of  the  transfer  taxable  by  the  several 
States.  On  this  point  Mr.  Justice  Holmes  said  in  his  opinion 
sustaining  the  constitutionality  of  the  Federal  act:  "What 
amount  New  York  may  take  as  a  basis  of  taxation,  and  ques- 
tions of  priority  between  the  United  States  and  the  State  are 
not  open  in  this  case." 

The  amount  of  the  Federal  tax  is  still  considered  as  a  part 


376  INHERITANCE  TAXATION 

of  the  estate  as  a  basis  of  taxation  in  New  York  and  this  rule 
is  followed  by  these  other  States : 

Rhode  Island— Hazard  v.  Bliss  (R.  I.),  113  A.  569. 

Iowa— Sanford's  Estate  (la.),  175  N.  W.  406. 

Pennsylvania — (By    statute    since    a    contrary    decision).      See    Knight's 

Estate,  261  Pa.  537 ;  104  A.  765. 
Wisconsin— Estate  of  Week,  169  Wis.  316 ;  Estate  of  Ebeling,  169  Wis.  432. 

As  the  Federal  tax  on  large  estates  is  very  heavy  this  works 
a  palpable  injustice.  The  great  weight  of  authority  through 
the  Union  is  to  the  contrary  and  would  seem  to  be  supported 
by  reason  as  well  as  justice.  The  reasoning  is  that  the  Federal 
tax  is  upon  the  whole  estate  as  an  excise  on  the  right  to  trans- 
mit from  the  dead  hand  to  the  living ;  while  the  State  statutes 
are  imposed  upon  the  right  to  receive  by  the  living  from  the 
dead.  The  beneficiary  cannot  receive  what  he  does  not  get, 
save  by  legal  fiction. 

The  decisions  of  the  State  courts  holding  the  Federal  tax  a 
deduction  are  as  follows : 

California— People  v.  Bemis  (Cal.),  189  Pac.  32;  Miller's  Estate,  195  Pac. 

413. 
Connecticut — Corbin   v.    Baldwin,   92    Conn.    99;    101    A.    884;    Corbin    v. 

Townshend,  92  Conn.  501;  103  A.  647. 
Illinois— People  v.  Passfield,  289  111.  450;  20  N.  E.  286;  People  v.  Northern 

Trust  Co.,  289  111.  475;  124  N.  E.  662. 

Indiana — State  v.  Calumet  Trust  Co.  (Ind.),  125  N.  E.  200. 
Kansas — (Citing  Gleason  &  Otis)  ;  Central  Union  Trust  Co.  v.  State  (Kan.), 

202  Pac.  853,  859. 

Louisiana — Succession  of  Gheens  (La.),  88  So.  253. 

Massachusetts — Old  Colony  Trust  Co.  v.  Burrell   (Mass.),  131  N.  E.  321. 
Minnesota — Smith  v.  Hennepin  County,  139  Minn.  210;  166  N.  W.  125. 
New  Jersey — Bugbee  v.  Roebling,  44  N.  J.  L.  438 ;  111  A.  29. 
Oregon — (Citing  Gleason  &  Otis)  ;  Inman's  Estate  (Ore.),  199  Pac.  615. 

In  New  York  the  inheritance  tax  imposed  by  another  State 
is  not  allowed  as  a  deduction,  and  this  rule  was  impliedly 
affirmed  by  the  Supreme  Court  of  the  United  States,  which 
dismissed  the  appeal  of  the  executor. 

Matter  of  W.  H.  Penf old,  216  N.  Y.  171 ;  110  N.  E.  499. 

This  would  also  seem  to  be  the  rule  in  Illinois  and  California. 

People  v.  Ballans,  294  111.  551 ;  128  N.  E.  542. 
Miller's  Estate,  184  Cal.  674;  195  Pac.  413. 


PAET  IV  — THE  PEOPEETY  377 

Where  the  devisee  dies  and  the  interest  is  subject  to  two 
inheritance  taxes,  on  two  devolutions  of  the  property,  the  first 
tax  is  allowed  as  a  deduction. 

Estate  of  Williams,  23  Cal.  App.  285;  137  Pac.  1067. 

Other  States  do  not  accept  this  doctrine,  and  it  was  recently 
held  in  Pennsylvania  that  where  a  transfer  tax  had  been  paid 
in  New  Jersey  it  was  a  deduction  from  the  value  of  the  estate 
in  Pennsylvania. 

Van  Biel's  Estate,  257  Pa.  155;  101  A.  834. 

This  rule  was  also  recently  followed  in  Connecticut,  where 
it  was  held  that  taxes  paid  in  NewT  Jersey  for  the  transfer  of 
stock  in  New  Jersey  corporations  should  have  been  deducted 
in  arriving  at  the  taxable  value  of  the  estate  in  Connecticut. 

Corbin  v.  Baldwin,  92  Conn.  99;  101  A.  834. 

And  in  Massachusetts. 

Old  Colony  Trust  Co.  v.  Burrill  (Mass.),  131  N.  E.  321. 

Inheritance  taxes  of  foreign  states  are  properly  charged  by 
the  executors  to  legacies  paid  in  those  states. 

Matter  of  Lord,  112  Misc.  304;  183  Supp.  131. 

Taxes  paid  by  resident  heirs  to  foreign  States  on  property 
there  transferred  are  deductible  from  the  fund  paid  each 
beneficiary  and  not  as  expense  of  administration  from  the 
gross  estate,  as  in  case  of  the  Federal  tax. 

Matter  of  Guitera,  108  Misc.  487;  178  Supp.  559. 

b.  GENERAL  TAXES  AND  ASSESSMENTS. 

These  are  allowed  as  a  deduction,  if  they  were  a  debt  of  the 
decedent;  so,  when  they  are  so  far  complete  that  the  name  of 
the  person  assessed  as  the  owner  cannot  be  changed  or  altered 
by  the  assessment  officers,  they  are  to  be  deducted. 

Matter  of  Hoffman,  42  Misc.  90 ;  85  Supp.  1082. 
Matter  of  Babcock,  115  N.  Y.  450 ;  22  N.  E.  263. 

If  they  are  assessed  during  the  lifetime  of  the  testator  they 
have  the  status  of  debts. 

Matter  of  Liss,  39  Misc.  123 ;  78  Supp.  969. 


378  INHERITANCE  TAXATION 

Taxes  levied  subsequent  to  testator's  death,  but  assessed 
prior  to  his  death,  should  be  deducted  if  paid  by  the  executors. 

Matter  of  Brundage,  31  App.  Div.  348 ;  52  Supp.  362. 

Taxes  due  at  death  of  decedent  are  payable  out  of  his  per- 
sonal estate,  and  taxes  accruing  subsequently  are  chargeable 
to  the  land. 

Seabury  v.  Bowen,  3  Bradf .  207. 

Griswold  v.  Griswold,  4  Bradf.  216. 

Smith  v.  Cornell,  111  N.  Y.  554 ;  19  N.  E.  271. 

Under  the  Greater  New  York  charter  the  assessment  roll  is 
not  completed  until  the  amount  chargeable  against  each  parcel 
of  land  is  computed  and  set  down,  when  the  lien  attaches  and 
it  is  a  debt,  and  therefore  deductible. 

Burr  v.  Palmer,  53  App.  Div.  368 ;  65  Supp.  1056. 

Accordingly  held  in  the  Matter  of  Maresi,  74  App.  Div.  76 ; 
77  Supp.  76,  that  where  testator  died  January  30,  1901,  taxes 
for  the  year  1900  are  not  deductible  from  his  personal  estate, 
as  the  tax  was  not  a  lien  at  the  time  of  death. 

When  the  assessors  had  valued  the  property,  but  the  assess- 
ment roll  had  not  been  closed  or  the  amount  of  the  tax  deter- 
mined, it  was  held  that  the  tax  was  not  a  debt  of  the  decedent, 
and  so  no  deduction  was  allowed. 

Matter  of  Freund,  143  App.  Div.  335;  128  Supp.  48;  aff.  202  N.  Y.  556; 
95  N.  E.  1129. 

Taxes  levied  against  the  personal  property  of  a  nonresident 
must  be  paid  out  of  that  property,  and  are  not  a  deduction 
from  the  value  of  the  real  estate. 

Matter  of  Steele,  98  Misc.  180;  162  Supp.  718. 

c.  INCOME  TAXES. 

The  amount  of  income  tax  due  is  held  to  be  a  deduction  in 
New  York. 

Matter  of  Hazzard,  228  N.  Y.  26;  126  N.  E.  345. 

Conflicts  between  inheritance  and  income  taxes  have  arisen 
in  Wisconsin.  In  State  ex  rel.  Kempsmith  v.  Widule,  161  Wis. 
389,  it  was  held  that  an  annuity  for  life  to  a  widow  to  be  paid 
to  her  by  trustees  out  of  the  net  income  of  her  husband's 


PART  IV  — THE  PEOPEETY  379 

estate  is  not  subject  to  the  income  tax  because  "inheritances 
*  received  during  the  year  which  are  subject  to  and 
have  complied  with  the  inheritance  tax  laws  of  the  State,"  are 
exempt  from  the  income  tax.  Whether  such  income  was  assess- 
able to  the  trustees  as  part  of  their  assessable  income  under 
the  income  tax  law  was  expressly  left  undetermined.  The 
court  subsequently  held  such  income  taxable  under  the  income 
tax  law,  against  the  trustees,  who  collected  the  same  for  the 
benefit  of  the  widow.  See  State  ex  rel.  Wisconsin  Trust  Com- 
pany v.  Widule,  164  Wis.  56. 

In  State  ex  rel.  Hickox  v.  Widule,  163  N.  W.  648,  it  is  held 
that  the  payment  of  inheritance  tax  upon  the  present  value  of 
an  annuity,  such  annuity  being  payable  out  of  the  income  of 
the  estate,  does  not  relieve  the  income  in  the  hands  of  the 
executor  or  trustee  of  the  income  tax. 

Payments  by  beneficiaries  of  their  State  inheritance  taxes 
are  now  allowed  as  a  deduction  by  the  Federal  officials  who 
regard  Prentis  v.  Eisner,  260  Fed.  589,  as  overruled  by  the 
reasoning  of  the  opinion  in  N.  Y.  Trust  Co.  v.  Eisner,  256 
U.  S.  345. 

8.  Commissions. 

a.  To  EXECUTORS. 

Practically  all  the  statutes  provide  that  bequests  to  execu- 
tors in  lieu  of( commissions  are  taxable  when  in  excess  of  statu- 
tory compensation,  and  all  the  authorities  are  agreed  that  the 
reasonable  or  statutory  commissions  of  executors  are  to  be 
allowed  as  a  deduction. 

Where  each  of  three  executors  received  a  full  commission 
under  the  New  York  Code  (§  2730),  three  commissions  were 
deducted. 

Matter  of  Van  Pelt,  63  Misc.  616 ;  118  Supp.  65. 

Where  securities  of  decedent  pledged  at  the  time  of  his 
death  as  security  for  payment  of  his  indebtedness  are  sold 
by  order  of  executors,  and  the  proceeds  applied  to  the  pay- 
ment of  the  debt,  the  executors  are  entitled  to  commissions 
on  the  gross  proceeds. 

Matter  of  Williams,  N.  Y.  L.  J.,  October  2,  1914. 
Matter  of  Bolles,  67  Misc.  40 ;  164  Supp.  620. 


380  INHEEITANCE  TAXATION 

Where  securities  are  specifically  bequeathed  no  commissions 
are  allowed  on  their  value. 

Matter  of  Robinson,  37  Misc.  336;  75  Supp.  490. 

Matter  of  Kings  County  Trust  Co.,  69  Misc.  531 ;  127  Supp.  879. 

Legacies  to  the  executors  should  be  reduced  by  the  amount 
due  them  as  commissions  in  fixing  the  tax. 

Ee  Hooper,  4  Ohio  N.  P.  186. 
Matter  of  Weimann,  179  Supp.  190. 
Matter  of  O  'Donohue,  181  Supp.  911. 

Where  the  real  estate  was  not  sold  but  the  executor  ad- 
vanced money  out  of  his  own  pocket  to  pay  legacies  there  was 
no  equitable  conversion  and  therefore  no  commissions  on  the 
amount  thus  paid  out  could  be  allowed  as  a  deduction. 

Matter  of  Ehoades,  109  Misc.  406;  178  Supp.  782. 

But  if  securities,  although  not  specifically  bequeathed,  were 
accepted  by  the  legatees  in  satisfaction  of  their  legacies,  the 
executors  would  be  entitled  to  full  commissions. 

Matter  of  Curtiss,  9  App.  Div.  285 ;  37  Supp.  626 ;  41  Supp.  1111. 

Property  held  by  decedent  as  trustee  should  not  be  included 
in  the  assets  of  the  estate  and  carried  as  a  debt,  so  as  to 
increase  the  amount  of  the  deduction  for  executor's  commis- 
sions. 

Matter  of  Russell,  148  Supp.  272. 

If  the  executors  renounce  their  commissions  a  nice  ques- 
tion arises  as  to  whether  there  is  a  gift.  If  they  have  accrued 
the  executors  may  give  away  what  is  theirs;  if  not,  the  com- 
missions revert  to  the  estate,  and  are  taxable. 

Matter  of  Van  Rensselaer,  N.  Y.  L.  J.,  October  11,  1912. 

The  decedent  was  a  resident  of  New  Jersey.  The  Surro- 
gate said : 

"No  proof  of  the  law  of  New  Jersey  in  regard  to  the  par- 
ticular time  at  which  executors  become  entitled  to  commissions 
was  adduced  before  the  appraiser.  In  the  absence  of  such 
proof  it  will  be  presumed  that  the  law  of  New  Jersey  on  this 
question  is  the  same  as  our  law  (Hynes  v.  McDermot,  82 
N.  Y.  41;  Savage  v.  O'Neill,  44  N.  Y.  298).  Our  courts  hold 
that  an  executor  is  not  entitled  to  commissions  until  such  com- 


PAET  IV  — THE  PROPERTY  3gl 

missions  have  been  ascertained  by  the  court  and  a  decree 
entered  authorizing  their  payment  (Wheelwright  v.  Rhodes, 
28  Hun,  57;  Freedman  v.  Freedman,  4  Kedf.  211).  If,  there- 
fore, the  executor  of  the  decedent 's  estate  renounced  His  right 
to  commissions  before  a  decree  of  the  Orphans'  Court  of  New 
Jersey  was  made  determining  the  amount  of  such  commis- 
sions and  directing  their  payment,  he  renounced  something  to 
which  he  was  not  actually  entitled  and  to  which  he  never  be- 
came entitled.  The  estate  was  not  diminished  by  the  amount 
of  such  commissions,  because  they  were  never  deducted  from 
the  estate  and  had  never  become  the  lawful  property  of  any 
individual.  The  property  passed  without  any  deduction  for 
commissions  to  the  legatee  mentioned  in  decedent's  will,  and 
upon  the  privilege  of  succeeding  to  the  entire  amount  of  the 
property  so  transferred  a  tax  may  be  imposed. 

"If,  however,  the  renunciation  was  made  after  the  entry 
of  the  decree  in  the  Orphans'  Court  ascertaining  such  com- 
missions and  directing  their  payment,  then,  as  such  commis- 
sions would  be  the  property  of  the  executor,  his  renunciation 
of  them  would  constitute  a  gift  of  the  amount  of  such  commis- 
sions from  him  to  the  legatee,  and  they  would  not  form  a  part 
of  the  taxable  assets  of  the  estate." 

b.  As  TO  TRUSTEES. 

Where  the  executors  are  also  made  trustees  under  the  pro- 
visions of  the  will  there  is  a  difference  of  opinion. 

In  Minnesota  it  is  held  that  when  the  executors  also  be- 
come trustees  the  commissions  as  such  trustees  are  not  a 
proper  deduction.  The  court  reasons  thus: 

"Trusts,  however,  of  the  character  of  that  here  before  the 
court,  are  created  for  the  benefit  of  those  to  whom  the  prop- 
erty ultimately  passes,  are  of  voluntary  creation,  and  are  in- 
tended for  the  preservation  of  the  estate.  No  sound  reason  is 
given  to  support  the  contention  that  such  expenses  should  be 
taken  into  consideration  in  fixing  the  value  of  the  estate  for 
the  purposes  of  this  tax." 

State  v.  Probate  Court,  112  Minn.  279 ;  128  N.  W.  18. 

A  contrary  rule  prevails  in  New  Jersey. 

Re  Christie's  Estate  (N.  J.),  101  A.  64. 


382  INHERITANCE  TAXATION 

In  New  York,  when  the  duties  as  executors  are  distinct  and 
severable  from  the  duties  as  trustees,  two  commissions  are 
allowed ;  but  if  not  distinct  and  severable  only  one  commission. 

Matter  of  Collard,  161  Supp.  455. 

This  distinction  often  involves  nice  questions  in  the  con- 
struction of  wills. 

In  Matter  of  Ziegler,  168  App.  Div.  735,  743;  154  Supp. 
652;  aff.  218  N.  Y.  544,  the  court  said: 

4 'They  must  show  that  they  are  required  as  executors :  first, 
to  conserve  the  entire  estate  that  they  may  set  aside  the  per- 
sonal property  in  one  fund  for  the  purposes  of  an  express 
trust  established  by  the  will;  and  the  administration  of  that 
trust  must  be  separate  and  severable  in  both  act  and  time 
from  the  administration  of  the  estate  as  executors ;  and  finally 
they  must  show  that  they  are  directed  in  both  of  the  above 
particulars,  distinctly,  definitely  and  expressly,  or  by  fair 
intendment,  by  the  will  under  which  they  assume  to  act. ' ' 

But  the  commission  may  be  postponed  until  the  execution 
of  the  trust. 

"The  testator  here  established  a  trust  fund  in  the  adminis- 
tration of  which  no  executorial  duties  are  to  be  performed. 
The  executors  can  pay  this  fund  over  to  themselves  as  trustees 
and  be  discharged  from  any  liability  therefor  as  executors. 
They  will  therefore  be  entitled  to  receive  commissions  for 
receiving  and  paying  out  this  sum  as  executors  and  for  receiv- 
ing the  same  as  trustees.  The  trustees  will  not  be  entitled  to 
commissions  for  paying  out  this  money  until  the  termination 
of  the  life  estate.  This  commission  is  not  a  proper  charge  in 
diminution  of  the  value  of  the  life  estate." 

Matter  of  Vanneck,  175  App.  Div.  363 ;  161  Supp.  893. 
Matter  of  Cadwalader,  96  Misc.  404;  160  Supp.  523. 

When  the  amount  of  the  trust  estate  cannot  be  determined 
until  the  executorial  duties  have  been  performed  commissions 
are  allowed. 

Matter  of  Blun,  176  App.  Div.  189;  160  Supp.  731. 

In  Matter  of  James  P.  Tuttle,  N.  Y.  Law  Journal,  June  9, 
1914,  Surrogate  Cohalan  held:  "The  executors  appeal  from 
the  order  fixing  tax  and  allege  that  the  appraiser  erred  in 


PART  IV  — THE  PROPERTY  383 

refusing  to  deduct  trustees'  commissions  from  the  assets  of 
the  estate.  The  testator  directed  his  executors  to  pay  his 
debts,  to  deliver  the  specific  legacies  and  to  satisfy  the  general 
legacies.  He  then  directed  that  his  residuary  estate  be  held  in 
trust  during  the  life  of  his  wife.  It  is  obvious  that  the  duties 
of  the  executors  and  trustees  are  entirely  distinct.  The  trus- 
tees therefore  are  entitled  to  commissions  upon  the  residuary 
estate.  (Laytin  v.  Davidson,  95  N.  Y.  263 ;  Olcott  v.  Baldwin, 
190  N.  Y.  99;82N.  E.  748.)" 

c.  Oisr  SALE  OF  REAL  ESTATE. 

When  there  is  a  mere  power  of  sale  of  real  estate  given  by 
the  will,  and  no  direction  to  sell  or  necessity  for  sale,  no  com- 
missions on  the  real  estate  are  allowed  to  the  executor. 

Matter  of  Grain,  98  Misc.  496;  164  Supp.  751. 

When  the  will  gave  power  to  sell  real  estate,  but  the  power 
has  not  been  exercised  at  the  date  of  the  tax  proceedings, 
commissions  on  the  real  estate  are  not  allowed  as  a  deduction. 

Matter  of  Steele,  98  Misc.  180;  162  Supp.  718. 

Brokers'  commissions  are  also  allowed  as  a  deduction  when 
the  sale  of  the  real  estate  is  necessary  to  the  due  administra- 
tion of  the  estate. 

Matter  of  Saunders,  77  Misc.  54,  68;  137  Supp.  438;  aff.  156  App.  Div.  891. 

9.  Family  Allowance. 

Section  2670  of  the  New  York  Surrogates'  Act  (former 
§  2713)  reads  as  follows: 

"If  a  person  having  a  family  die,  leaving  a  widow  or  hus- 
band, or  minor  child  or  children,  the  following  articles  shall 
not  be  deemed  assets,  but  must  be  included  and  stated  in  the 
inventory  of  the  estate  as  property  set  off  to  such  widow,  hus- 
band or  minor  child  or  children : 

' '  1.  All  housekeeping  utensils,  musical  instruments,  sewing 
machine  and  household  furniture  used  in  and  about  the  house 
and  premises,  fuel  and  provisions,  and  the  clothing  of  the 
deceased,  in  all  not  exceeding  in  value  five  hundred  dollars. 

"2.  The  family  Bible,  family  pictures  and  school  books  used 


384  INHERITANCE  TAXATION 

by  or  in  such  family,  and  books  not  exceeding  in  value  fifty 
dollars,  which  were  kept  and  used  as  part  of  the  family  library. 

"3.  Domestic  animals  with  their  necessary  food  for  sixty 
days,  not  exceeding  in  value  one  hundred  and  fifty  dollars. 

"4.  Money  or  other  personal  property  not  exceeding  in 
value  one  hundred  and  fifty  dollars. 

1  'Such  property  so  set  apart  shall  be  the  property  of  the 
surviving  husband  or  wife,  or  of  the  minor  child  or  children 
if  there  be  no  surviving  husband  or  wife.  No  allowance  shall 
be  made  in  money  or  other  property  under  subdivisions  one, 
two  and  three  if  the  articles  mentioned  therein  do  not  exist." 

Former  §  2713  amended  and  renumbered,  L.  1914,  chap.  443. 

Most  of  the  States  have  similar  statutes. 
The  above  exemptions  are  allowed  as  deductions  in  transfer 
tax  proceedings. 

Matter  of  Libolt,  102  App.  Div.  29;  92  Supp.  175. 

But  the  allowance  is  in  kind  only;  the  money  value  cannot 
be  estimated  and  deducted. 

Matter  of  Baird,  126  App.  Div.  439;  110  Supp.  708. 
Matter  of  Stiles,  64  Misc.  658 ;  120  Supp.  714. 
Matter  of  Williams,  31  App.  Div.  617;  52  Supp.  710. 
Matter  of  Keough,  42  Miac.  387;  86  Supp.  807. 
Baucus  v.  Stover,  24  Hun,  109. 

10.  Proportional  Taxation  of  Nonresident  Estates. 

The  problems  discussed  under  this  subdivision  have  been 
materially  affected  in  Wisconsin,  New  Jersey  and  New  York 
by  the  statutes  providing  for  the  proportional  taxation  of  non- 
resident estates  whereby  the  debts  and  assets  in  all  jurisdic- 
tions are  proportioned  to  the  assets  within  the  State.  This 
plan  has  been  put  into  effect  in  New  York  pursuant  to  Chapter 
432,  L.  1922.  It  should  be  noted  that  the  decisions  cited  below 
are  prior  to  the  enactment  of  the  statute  in  that  State. 

This  plan  has  been  sustained  as  constitutional  by  the  United 
States  Supreme  Court  in  Maxwell  v.  Bug~bee,  250  U.  S.  525.  It 
was  attacked  as  an  attempt  to  tax  property  or  the  transfer  of 
property  not  within  the  jurisdiction  of  the  State.  The  court 
said:  "In  the  present  case  the  State  imposes  a  privilege  tax, 
clearly  within  its  authority,  and  it  has  adopted  as  a  measure 
of  that  tax  the  proportion  which  the  specific  local  property 


PART  IV  — THE  PROPERTY  385 

bears  to  the  entire  estate  of  the  decedent.  That  it  may  do  so 
within  limitations  which  do  not  really  make  the  tax  one  upon 
property  beyond  its  jurisdiction  the  decisions  to  which  we 
have  referred  clearly  establish."  There  were  three  dissents 
on  the  ground  that  the  New  Jersey  statute  exceeded  this  limit. 
The  Wisconsin  statute,  section  1087-11  (5),  Laws  of  1917, 
provided  in  substance  that  when  decedent  left  property  or 
estate  partly  within  and  partly  without  the  State  the  bene- 
ficiary should  be  entitled  to  only  a  proportionate  deduction  of 
debts,  expenses  and  exemptions,  equal  to  the  proportion  of 
the  property  located  within  the  State.  Certain  beneficiaries 
received  the  Wisconsin  property,  and  received  no  interest  in 
the  California  property;  and  the  lower  court  held  that  the 
debts,  expenses  and  exemptions  should  not  be  apportioned, 
but  should  be  allowed  in  full  as  deductions.  This  was  reversed 
on  appeal  and  the  deductions  apportioned. 

Carter's  Estate,  169  Wis.  89;  166  N.  W.  657. 

An  exception  to  the  rule  of  proportional  valuation  is  made 
in  New  Jersey  where  specific  property  within  the  State  is 
devised  or  bequeathed  to  an  individual.  This  is  taxed  under 
the  general  rule  as  to  transfers  without  apportionment. 

Kountze's  Estate  (N.  J.),  115  A.  93. 

Lawyers  Title  Co.  v.  Comptroller,  85  N.  J.  Eq.  481 ;  95  A.  1003. 

11.  Prorating  Debts. 

In  the  absence  of  proportional  taxation  of  the  whole  estate 
serious  problems  arise  in  taxing  the  transfer  of  the  property 
of  nonresidents  within  the  State.  The  estate  might  be  bank- 
rupt and  yet  there  might  be  no  local  creditors  and  all  the 
assets  might  be  within  the  State.  The  general  rule  is  to  appor- 
tion or  prorate  the  assets  and  total  debts;  as  well  as  the 
funeral  expenses,  commissions  and  other  deductions. 

Matter  of  Baylies,  148  Supp.  912. 

Larson  v.  MacMiller,  56  Utah,  84 ;  189  Pac.  579. 

Matter  of  Porter,  67  Misc.  19;  124  Supp.  676;  aff.  148  App.  Div.  896. 

The  commissions  of  a  foreign  executor  are  estimated  at  the 
rate  paid  in  New  York  unless  there  is  proof  of  a  different 
allowance  in  the  State  of  domicile. 

Matter  of  Kennedy,  20  Misc.  531 ;  46  Supp.  906. 
Matter  of  La  Farge,  149  Supp.  535. 

25 


386  INHERITANCE  TAXATION 

"Under  the  decision  in  the  Matter  of  Porter,  67  Misc.  19; 
124  Supp.  676;  aff.  148  App.  Div.  896,  the  appraiser  should 
have  deducted  from  the  New  York  assets  the  debts  due  to 
residents  of  this  State  and  then  deducted  the  foreign  debts 
and  administration  expenses  in  the  proportion  which  the  New 
York  assets  bore  to  the  entire  assets  of  the  estate." 

Matter  of  Yerkes,  N.  Y.  L.  J.,  December  5,  1912. 

Debts  should  be  prorated  as  against  tangible  property  with- 
out the  State  which  was  not  taxed  under  the  law  then  in  force. 

Matter  of  Mitchell,  180  Supp.  874. 

Matter  of  Eeiss,  110  Misc.  482 ;  180  Supp.  876. 

The  value  of  foreign  real  estate  must  be  taken  into  con- 
sideration in  prorating  debts  and  assets  in  order  to  fix  the 
tax  on  a  nonresident  estate. 

Matter  of  Keith,  114  Misc.  86;  185  Supp.  911. 

a.  WHEN  THE  LOCAL  DEBTS  EXCEED  THE  LOCAL  ASSETS. 

In  Matter  of  King,  71  App.  Div.  581;  76  Supp.  220;  aff.  172 
N.  Y.  616;  64  N.  E.  1122,  the  nonresident  decedent's  interest 
was  in  a  firm  which  manufactured  in  New  York  and  had  a 
branch  selling  office  in  Illinois,  hence  its  assets  were  mainly  in 
Illinois,  and  its  debts  in  New  York  and  the  New  York  debts 
exceeded  the  local  assets. 

The  court  said : 

1 1  However  desirous  we  may  be  to  give  a  liberal  construction 
in  order  to  uphold  a  levy  under  the  Transfer  Tax  Act  (Laws 
of  1896,  ch.  908,  art.  10,  as  amd.),  we  think  there  is  an  insuper- 
able objection  to  sustaining  the  tax  fixed  in  this  proceeding. 
Ordinarily  on  the  death  of  a  member  of  a  firm  the  legal  title 
to  the  assets  of  the  firm  vests  in  the  surviving  members,  and 
what  is  left  to  the  representatives  of  the  deceased  partner  is 
the  right  to  an  accounting.  (Williams  v.  Whedon,  109  N.  Y. 
333 ;  16  N.  E.  365.)  Assuming,  however,  but  not  deciding,  that 
the  decedent  had  a  property  interest  in  the  assets  of  the  firm 
in  this  State  which  is  subject  to  taxation,  we  find  it  impossible 
to  get  away  from  the  conclusion  that  as  against  such  property 
the  right  exists  to  deduct  the  debts  due  to  creditors  in  this 
State.  In  the  present  instance,  upon  the  conceded  facts,  this 
would  leave  no  balance  subject  to  taxation.  A  tax  on  personal 


PART  IV  —  THE  PROPERTY  387 

property  of  a  nonresident  is  one  which  the  State  imposes  based 
upon  its  dominion  over  the  property  situated  within  its  terri- 
tory, and  as  such  property  is  liable  to  be  appropriated  for  the 
payment  of  debts  therein,  we  fail  to  see  upon  what  principle 
the  latter  can  be  entirely  disregarded.  Here  it  is  conceded 
that  the  liabilities  of  the  firm  in  this  State  exhaust  its  assets, 
in  this  State." 

b.  WHEN  THERE  ARE  LOCAL  ASSETS  AND  No  LOCAL  DEBTS. 
When  the  assets  were  in  California  and  the  debts  in  New 

York,  the  California  court  said : 

"In  determining  the  value  fixing  the  amount  of  the  inherit- 
ance tax  payable  in  this  State  of  property  having  its  situs 
therein  which  passes  in  kind  to  the  residuary  legatees  under 
the  will  of  a  nonresident  testator,  who  left  no  creditors  in  this 
State  and  whose  estate  in  his  State  of  domicile  is  ample  to 
pay  all  debts  and  expenses  of  administration,  no  deduction 
should  be  made  from  the  actual  value  of  the  property  of  any 
portion  of  the  debts  proved  or  expenses  incurred  in  the  State 
of  the  testator's  domicile." 

McDougald  v.  Low,  164  Cal.  107;  127  Pac.  1027. 

c.  WHEN  LOCAL  DEBTS  ARE  PAID  WITH  FOREIGN  ASSETS. 

In  Tennessee  it  is  held  that  to  secure  a  deduction  of  debts 
of  a  nonresident  due  local  creditors  it  must  be  shown  that  they 
were  paid  from  local  assets.  So,  when  a  resident  of  Missis- 
sippi owned  property  in  Tennessee,  and  owed  debts  there,  and 
the  debts  were  paid  out  of  Mississippi  assets,  no  deduction 
was  allowed. 

Memphis  Trust  Co.  v.  Speed,  114  Term.  677,  691;  88  S.  W.  321. 

In  New  York,  however,  a  deduction  is  allowed,  notwithstand- 
ing the  fact  that  the  local  debts  were  paid  with  foreign  assets. 
The  court  reasons  thus : 

' '  The  principle  applicable  to  this  taxation  is  different  from 
that  applicable  to  the  taxation  of  personal  property  of  resi- 
dents of  this  State,  for  here  the  tax  is  not  against  the  indivi- 
dual or  against  the  particular  property,  but  is  a  tax  upon  the 
transfer  of  that  property,  and  it  is  only  by  reason  of  the 
transfer  of  the  specific  personal  property  in  this  State  from 


388 


INHERITANCE  TAXATION 


the  testator  to  his  legatees  that  the  State  undertakes  to  tax, 
and  when  nothing  actually  passes  by  virtue  of  that  transfer 
no  tax  is  imposed.  The  Code  having  made  this  property 
within  the  State  applicable  to  the  payment  of  the  debts  of  the 
decedent  to  resident  creditors,  the  fact  that  to  release  them 
the  executor  brought  money  of  the  decedent  from  out  of  the 
State  and  paid  the  debts,  so  that  the  securities  in  this  State 
could  be  transmitted  to  be  administered  at  the  residence  of  the 
decedent,  cannot  make  any  difference  as  to  what  actually  was 
transferred  upon  which  a  tax  was  imposed. 

"If  the  securities  had  been  sold  and  the  proceeds  used  to 
pay  the  debts  to  resident  creditors  there  could  be  no  question. 
The  executors  have  procured  the  money,  paid  the  debts,  and 
released  these  securities  from  the  liability  for  his  indebted- 
ness, in  substance  purchased  the  securities  for  the  estate.  This 
result  is  within  Matter  of  King,  71  App.  Div.  581;  76  Supp. 
220;  aff.  on  opinion  below,  172  N.  Y.  616;  64  N.  E.  1122;  and 
Matter  of  Westurn,  152  Id.  93 ;  46  N.  E.  315.  There  it  was  held 
that  what  was  transferred  and  what  was,  therefore,  taxable 
was  the  amount  of  the  property  of  the  testator  less  his  debts." 

Matter  of  Grosvenor,  124  App.  Div.  331;  108  Supp.  926;   126  App.  Div. 
953;  111  Supp.  1121;  aff.  193  N.  Y.  652;  86  N.  E.  1124. 

d.  WHEN  THERE  ARE  BOTH  LOCAL  AND  FOREIGN  DEBTS  AND 

ASSETS. 

"The  deduction  to  be  made  for  debts  owing  to  nonresident 
creditors,  mortuary  expenses,  commissions  on  property  with- 
out the  State,  and  other  administration  expenses  in  respect  to 
such  property,  should  be  in  the  proportion  which  the  net  New 
York  estate  (after  all  deductions  are  made  for  debts  owing  to 
resident  creditors,  New  York  commissions,  and  New  York 
administration  expenses)  bears  to  the  entire  gross  estate 
wherever  situated." 

Matter  of  Porter,  67  Misc.  19;  124  Supp.  676;  aff.  148  App.  Div.  896; 

132  Supp.  1143. 
Matter  of  Browne,  127  App.  Div.  941;  111  Supp.  1111;  aff.  195  N.  Y.  522; 

88  N.  E.  1115. 

So,  where  the  appraiser  merely  deducted  from  the  New  York 
assets  the  expenses  of  administration  and  commissions  allowed 
by  the  laws  of  New  York,  it  was  held  that  he  should  also  have 


PART  IV  —  THE  PROPERTY  389 

deducted  the  proportion  of  the  debts  due  to  nonresidents  and 
the  administration  expenses  incurred  in  the  State  of  decedent's 
domicile  which  the  net  New  York  assets  bear  to  the  entire 
assets  of  the  estate  wherever  situated. 

Matter  of  Kirtland,  94  Misc.  58;  157  Supp.  378. 

When  a  deceased  nonresident's  total  estate  was  $489,393.27, 
and  his  tangible  assets  in  New  York  were  valued  at  $50,040.30, 
and  he  owned  the  Vichy  Company,  a  French  corporation, 
$129,617.24  on  a  contract  payable  in  New  York,  the  executors 
contended  no  tax  was  due;  but  the  Surrogate  held  the  debts 
should  be  prorated  against  the  entire  assets.  That  is,  as  about 
1/11  of  the  assets  were  taxable  in  New  York  they  should  be 
charged  with  about  1/11  of  the  debt. 

Matter  of  Raimbouville,  N.  Y.  L.  J.,  July  27,  1916. 

e.  As  TO  PARTNERSHIPS. 

When  partnership  debts  are  paid  out  of  partnership  assets 
no  deduction  allowed  from  individual  estate. 

Memphis  Trust  Co.  v.  Speed,  114  Tenn.  677;  88  S.  W.  321. 

The  whole  subject  was  exhaustively  considered  by  the  New 
York  County  Surrogate  in  the  Matter  of  Clark,  N.  Y.  Law 
Journal,  Feb.  9, 1912.  The  decedent's  firm  had  its  main  office 
in  Boston,  with  branch  offices  in  New  York  and  Chicago.  The 
deceased  was  owner  of  7/10  of  the  firm  assets.  The  New  York 
assets  amounted  to  $94,306.88,  there  were  New  York  debts  of 
$26,174.65,  and  then  there  was  a  special  partner,  residing  in 
New  York,  who  had  $100,000  invested  in  the  firm.  In  dealing 
with  the  problem  thus  presented  the  court  said : 

"It  is  true  that  the  legal  title  to  the  partnership  property 
in  this  State  vested  upon  the  death  of  the  decedent  in  the  sur- 
viving partners  for  the  purpose  of  liquidation  and  that  the 
right  of  the  legal  representatives  of  the  deceased  partner  in 
the  assets  was  an  equitable  right  to  the  decedent's  share  of 
what  was  left  after  payment  of  the  partnership  debts.  (Rein- 
hardt  v.  Reinhardt,  134  App.  Div.  440 ;  119  Supp.  285 ;  Joseph 
v.  Herzog,  198  N.  Y.  456 ;  92  N.  E.  103) ;  but  it  is  alleged  in  the 
affidavit  submitted  by  the  executors  that  the  net  value  of  the 
partnership  assets  in  this  State  was  the  sum  of  $94,306.88,  and 


390 


INHERITANCE  TAXATION 


that  the  legal  representatives  of  the  decedent  were  entitled  to 
seven-tenths  of  this  amount,  subject  to  any  claims  of  partner- 
ship creditors  in  other  States  which  remained  unsatisfied  after 
the  application  of  the  partnership  property  in  those  States  to 
the  payment  of  the  partnership  indebtedness.  When  the  value 
of  this  interest  was  actually  ascertained  and  definitely  deter- 
mined its  transfer  became  taxable  in  the  same  manner  and  to 
the  same  extent  as  if  the  property  had  belonged  to  the  dece- 
dent individually  at  the  time  of  his  death.  (Matter  of  Clinch, 
180  N.  Y.  300;  73  N.  E.  35.)  For  the  purpose  of  ascertaining 
the  value  of  this  interest  debts  due  by  the  partnership  to  New 
York  creditors  must  first  be  deducted  from  the  firm  assets 
located  here.  (Matter  of  King,  71  App.  Div.  581 ;  76  Supp.  220 ; 
aff.  172  N.  Y.  616;  64  N.  E.  1122.)  There  does  not,  however, 
seem  to  be  any  authority  for  holding  that  the  general  indebted- 
ness of  a  partnership  to  creditors  in  different  States  should  all 
be  deducted  from  the  New  York  assets;  it  would  seem  to  be 
more  equitable  and  reasonable  to  deduct  from  the  net  assets 
in  New  York  that  proportion  of  the  general  indebtedness  of 
the  partnership  to  foreign  creditors  which  the  New  York  assets 
bear  to  the  entire  assets  of  the  partnership  (Matter  of  Porter, 
67  Misc.  19;  124  Supp.  676;  aff.  148  App.  Div.  896;  132  Supp. 
1143.) 

"The  executors  also  contend  that  the  contribution  of  the 
special  partner  constitutes  an  indebtedness  of  the  firm  to  a 
New  York  creditor,  and  that  the  amount  should  be  deducted 
in  full  from  the  New  York  assets.  A  special  partner  in  a 
limited  partnership  is  not  entitled  to  payment  of  his  contribu- 
tion until  the  claims  of  all  the  partnership  creditors  are  satis- 
fied (§  37,  Partnership  Law),  and  if  payment  is  made  to  him 
after  dissolution  of  the  firm,  but  before  all  the  creditors  are 
paid,  the  amount  so  paid  to  him  may  be  reached  by  a  creditor 
of  the  partnership  who  has  exhausted  his  remedies  against  the 
partnership  assets.  (Fuhrmann  v.  Von  Pustau,  126  App.  Div. 
629;  111  Supp.  34.)  The  interest  of  a  special  partner  is  not 
strictly  a  debt  at  all.  (Harris  v.  Murray,  28  N.  Y.  547 ;  Hayes 
v.  Meyer,  35  N.  Y.  226.)  Up  to  the  time  of  dissolution  a  special 
partner  is  not  a  creditor  of  the  firm  in  any  sense.  (Matter  of 
Price-McCormick  Co.,  69  App.  Div.  37;  74  Supp.  624.)  It 


PAET  IV  — THE  PROPERTY  391 

would  therefore  appear  that  the  special  partner  is  not  a  New 
York  creditor  within  the  meaning  of  the  decision  in  the  Matter 
of  King,  supra,  directing  that  debts  due  to  New  York  creditors 
should  be  deducted  in  full  from  New  York  assets  for  the  pur- 
pose of  ascertaining  the  value  of  decedent's  interest  in  the 
copartnership." 

12.  Marshaling  Assets  to  Reduce  Tax. 

a.  WHEN  THE  EXECUTORS  CAN  Do  So. 

It  was  for  a  long  time  held  in  New  York  that  a  foreign 
executor  might  so  marshal  the  assets  of  the  estate  that  lega- 
cies to  collaterals  and  strangers  would  be  paid  out  of  foreign 
assets  and  so  escape  the  higher  rate  of  tax,  leaving  the  New 
York  assets  to  pass  to  lineals  and  exempt  corporations. 

In  Matter  of  James,  144  N.  Y.  6;  38  N.  E.  961,  the  court 
said: 

"The  property,  which  the  testator  died  possessed  of  in 
Great  Britain,  is  largely  in  excess  of  the  amount  given  by  him 
in  legacies.  Some  portion  of  them  has  already  been  paid  from 
the  English  estate,  and  the  executor  has  declared  his  deter- 
mination of  appropriating  that  part  of  the  testator's  property 
to  their  payment ;  so  that  the  American  estate  shall  constitute 
the  residuary  estate,  disposed  of  by  the  will  in  favor  of  the 
testator's  brothers.  This  he  may  rightly  do  and  thus  save 
the  estate  from  the  payment  of  the  succession  tax  imposed  by 
our  laws." 

To  the  same  effect  is : 

Matter  of  McEwan,  51  Misc.  455;  101  Supp.  733. 

This  has  been  followed  in  recent  years  in  Tennessee  and 
Illinois. 

The  Tennessee  statute  exempts  a  widow.  The  widow  of 
a  nonresident  owning  personal  property  within  Tennessee 
elected  to  take  that  property  as  her  half,  and  the  court  held 
she  could  do  so,  citing  Matter  of  James,  144  N.  Y.  6;  38 
N.  E.  961. 

Memphis  Trust  Co.  v.  Speed,  114  Tenn.  677;  88  S.  W.  321. 

So,  it  is  held  in  Illinois  that  an  Illinois  executor  cannot  be 
compelled  from  the  residuary  estate,  or  from  his  personal 


392 


INHERITANCE  TAXATION 


funds,  to  pay  inheritance  taxes  assessed  by  the  County  Court 
on  bequests  made  to  nonresident  beneficiaries  whose  bequests 
have  been  paid  by  an  ancillary  executor  out  of  proceeds  of 
sales  made  by  him  under  the  will  and  approved  by  a  court  of 
a  foreign  State,  of  real  estate  in  such  State.  The  court  said : 
"It  was  the  proper  exercise  of  a  sound  discretion  by  those 
representing  the  benevolent,  charitable  and  other  similar  in- 
stitutions in  Ohio  to  elect  to  take  their  legacies  from  proceeds 
of  real  estate  in  that  State  and  so  give  the  institutions  they 
severally  represented  the  benefit  of  the  laws  of  that  State 
exempting  such  legacies  from  the  succession  tax  according 
to  the  laws  of  that  State.  It  would  be  inequitable  to  require 
payment  of  the  tax  by  the  executor  from  his  personal  funds 
or  from  the  residuary  estate  in  view  of  our  conclusion  that 
the  action  of  the  Ohio  beneficiaries  of  Barber's  will  was  law- 
fully taken  and  relieved  the  funds  bequeathed  to  them  from 
the  operation  of  the  inheritance  tax  of  the  laws  of  Illinois." 

People  v.  Kellogg,  268  111.  489,  501 ;  109  N.  E.  304. 

b.  WHEN  HE  CANNOT. 

• 

In  New  York  the  rule  no  longer  obtains.  It  was  first  modi- 
fied in  Matter  of  Ramsdill,  190  N.  Y.  492 ;  83  N.  E.  584,  where 
a  distinction  was  made  in  cases  of  intestacy.  The  court  said : 

"When  a  specific  foreign  legatee  of  a  foreign  testator  can 
obtain  satisfaction  of  his  legacy  in  a  foreign  jurisdiction,  the 
executor  cannot  be  compelled  to  pay  such  a  legacy  out  of  the 
assets  within  our  jurisdiction.  This  is  the  necessary  result 
of  the  practical  and  obvious  distinction  between  testacy  and 
intestacy  as  applied  to  this  subject  of  taxation.  If  a  specific 
legatee  needs  not  the  intervention  of  our  laws  or  courts  to 
obtain  what  comes  to  him  under  a  foreign  will  through  foreign 
assets,  in  a  foreign  jurisdiction,  our  laws  cannot  coerce  an 
executor  into  paying  his  legacy  out  of  funds  within  our  juris- 
diction for  the  sole  purpose  of  exacting  a  tax. 

"But  in  a  case  of  intestacy  the  rule  is  essentially  different, 
because  the  distributee  takes  an  undivided  interest  in  the 
whole  estate ;  and  if  part  of  it  happens  to  be  within  our  juris- 
diction, he  can  only  get  his  share  of  what  is  here  under  our 
laws  and  through  our  courts.  This  is  the  theory  upon  which 


PART  IV  — THE  PROPERTY  393 

the  nephews  and  nieces  of  the  intestate  in  the  case  at  bar  are 
clearly  taxable  under  our  statute. " 

By  chapter  310,  L.  1908  (subd.  3,  §  220,  of  the  present  act), 
it  was  provided  that  all  taxable  nonresident  property  within 
the  State  not  specifically  bequeathed  is  deemed  to  be  trans- 
ferred proportionately;  and  foreign  executors  are  no  longer 
permitted  to  marshal  the  assets  so  as  to  defeat  or  lessen  the 
tax. 

The  same  result  has  been  attained  in  Massachusetts  through 
judicial  construction.  The  court  thus  reasons: 

"The  remaining  question  is  whether  the  executors,  by  using 
the  stock  in  Massachusetts  corporations  for  the  payment  of 
debts  and  legacies,  to  the  exemption  of  the  property  in  New 
Hampshire,  could  relieve  it  from  liability  to  a  tax  upon  suc- 
cession imposed  by  our  law.  We  are  of  opinion  that  they 
could  not.  It  was  decided  in  Hooper  v.  Bradford,  178  Mass. 
95;  59  N.  E.  678,  that  taxes  under  this  statute  are  to  b6  as- 
sessed on  the  value  of  the  testator's  property  at  the  time  of 
his  death.  The  rights  of  all  parties,  including  the  rights  of  the 
Commonwealth  to  its  tax,  vest  at  the  death  of  the  testator. 
It  is  true  that  the  interest  of  a  legatee  is  subject  to  an  account- 
ing; but  it  is  an  interest  in  the  existing  fund,  and  it  is 
analogous  to  that  of  a  cestui  que  trust.  The  executors  cannot, 
by  independent  action  in  attempting  to  marshal  assets  accord- 
ing to  their  personal  wishes,  enlarge  or  diminish  the  rights 
of  legatees,  or  of  the  Commonwealth;  The  property  in  Mas- 
sachusetts is  subject  to  the  jurisdiction  of  our  courts,  and  the 
executors  must  use  and  appropriate  it  according  to  law. 
(Greves  v.  Shaw,  173  Mass.  205;  53  N.  E.  372,  309;  Callahan 
v.  Woodbridge,  171  Mass.  595;  51  N.  E.  176.)  The  debts,  the 
legacies  in  Massachusetts  exempt  from  taxation  and  the  ex- 
penses of  administration  are  chargeable  upon  the  general 
assets,  as  well  those  in  New  Hampshire  as  those  in  Massachu- 
setts, and  only  a  proportional  part  of  the  property  in  Mas- 
sachusetts should  be  used  in  paying  them.  The  balance  is 
subject  to  the  payment  of  a  tax  under  the  statute.  The  deci- 
sion of  the  probate  court  upon  this  part  of  the  case  was 
correct." 

Kingsbury  v.  Chapin,  196  Mass.  533;  82  N.  E.  700. 


394 


INHERITANCE   TAXATION 


PART  V- PROCEDURE 


PAGE 

A.  Preliminaries 396 

1.  Motions  to  Exempt 397 

2.  In  Case  of  Nonresidents 400 

a.  Affidavit  prior  to  April  1,  1922 401 

b.  Affidavit  under  Proportional   Tax 405 

c.  Commutation  of  Tax 409 

3.  The  Safe  Deposit  Box 409 

a.  Comptroller  May  Inspect 409 

b.  May  Not  Impose  Arbitrary  Conditions 410 

c.  Consent  for  Transfer  of  Funds 411 

d.  Property   Belonging   to   Another 412 

4.  Inventory 413 

a.  Must  be  Filed  by  Executor 413 

b.  Form  of  Affidavit 414 

c.  Preparation  of  Inventory 421 

d.  Form  of  Inventory  429 

B.  Proceedings  Before  Appraiser 435 

1.  Appraisers 436 

a.  Appointment  and  Removal ." 436 

b.  Powers  and  Duties 437 

2.  Notice 440 

a.  Notice  is  Jurisdictional 440 

b.  Notice  by  Mail  Sufficient 442 

c.  Where  Notice  is  Impossible 443 

d.  Presumption  of  Notice   444 

3.  Hearings 444 

a.  Informal  Upon  Affidavits  444 

b.  Burden  of  Proof  445 

e.  Witnesses 446 

d.  Personal  Transactions  with  Deceased 448 

e.  Corporate  Books 449 

f .  Objections , 449 

g.  Proof  of  Foreign  Law 451 

4.  Report 452 

a.  What  It  Should  Contain 452 

b.  What  It  Must  Show 453 

c.  Where  Taxation  is  Suspended 454 

d.  Form  of  Report 455 

C.  Proceedings  on  Appeal  460 

1.  Jurisdiction  of  Probate  Court 460 

a.  Effect  of  Probate  Decree .  460 


PART  V— PROCEDURE  395 

0.  Proceedings  on  Appeal — Continued.  PAGE 

b.  Decree  of  Distribution 463 

c.  Jurisdiction  of  the  Tax  Proceedings 464 

2.  Assessment  of  the  Tax 465 

a.  The  Judge  Acts  as  Taxing  Officer 465 

b.  The  Taxing  Order 467 

c.  Report  May  be  Remitted  to  Appraiser 468 

d.  Forms  of  Taxing  Order 469 

(1)  Where  There  are  no  Contingent  Remainders 469 

(2)  Present  Taxation  of  Contingent  Remainders 470 

e.  Effect  of  Decree  Assessing  Tax * 474 

3.  Appeal  to  the  Surrogate 475 

a.  Notice  of  Appeal 475 

b.  Form  of  Notice 477 

4.  Determination  by  Surrogate 481 

a.  Hearings  on  Appeal  481 

b.  On  Motions  to  Exempt 483 

c.  Order  Remitting  Report    483 

d.  Supplemental  Report  of  Appraiser 486 

e.  Second  Taxing  Order  487 

f .  Notice  of  Appeal  from  Second  Taxing  Order 488 

g.  Taxing  Order  Upon  Second  Appeal 490 

h.  Notice  of  Appeal  to  Appellate  Division 491 

5.  Before  the  Appellate  Courts 492 

a.  Who  May  Appeal  492 

b.  Order  Appealed  From 494 

c.  Service  of  Notice  of  Appeal 496 

d.  Papers  on  Appeal  496 

e.  Costs ., . .  497 

f.  Appeals  to  Court  of  Appeals 498 

g.  To  Supreme  Court  of  United  States 498 

D.  Subsequent  Proceedings 499 

1.  Motions  to  Modify  Decree 499 

a.  Where  There  Was  a  Mistake  of  Fact 500 

b.  Where  There  Was  Lack  of  Jurisdiction 501 

c.  May  Not  Correct  an  Error  of  Law 503 

d.  Laches 505 

e.  Bad  Faith  506 

f .  Statute  of  Limitations  507 

2.  Motions  to  Remit  Penalty 509 

3.  Mandamus 511 

a.  When  Writ  Allowed  511 

b.  When  Refused  513 

4.  Proceedings  to  Collect  Delinquent  Taxes 514 

5.  Personal  Liability  of  Executor  or  Administrator 515 

C.  Personal  Liability  of  Beneficiaries 517 

7.  Compromise  Agreements 518 

8.  Application  of  Tax  Money 519 

9.  Interest 519 

10.  Discount .   519 


396 


INHERITANCE  TAXATION 


PART  V  —  PROCEDURE 


The  details  of  procedure  must  necessarily  vary  in  all  the 
States  and  are  subject  to  constant  fluctuation ;  but  in  the  main 
the  preparation  of  the  inventory,  the  valuation  of  the  estate 
and  the  fixation  of  the  tax  are  the  same. 

The  present  work  takes  the  procedure  followed  in  New 
York  as  a  general  guide  and  cites  cases  from  other  States 
where  applicable.  The  procedure  under  the  Federal  act  is 
covered  by  the  Rules  and  Regulations  of  the  Estate  Tax 
department  published  in  full  elsewhere. 

A.— PRELIMINARIES. 

"It  is  not  enough  for  the  Legislature  to  declare  that  such 
interests  are  taxable.  If  no  mode  is  provided  for  assessing 
and  collecting  the  tax  the  law  is  imperfect  and  cannot,  as  to 
such  interests,  be  executed.  A  tax  cannot  be  legally  imposed 
unless  the  statute,  in  addition  to  creating  the  tax,  provided 
an  officer  or  tribunal  who  shall  appraise  and  assess  the  prop- 
erty on  notice  to  the  owner.  (Stuart  v.  Palmer,  74  N.  Y.  188; 
Remsen  v.  Wheeler,  105  N.  Y.  575.)  The  principle  decided 
in  the  cases  cited  applies  to  the  transfer  tax  as  well  as  to  the 
assessments  for  public  improvements.  (Matter  of  McPherson, 
104  N.  Y.  321.)" 

Matter  of  Stewart,  131  N.  Y.  274;  30  N.  E.  184. 

So,  when  a  nonresident  decedent  owned  both  real  and  per- 
sonal property,  the  Surrogate  had  jurisdiction  under  the  New 
York  Act  of  1887;  but  unless  he  owned  real  estate  no  ma- 
chinery was  provided  for  collecting  tax ;  and  hence  his  estate 
escaped  taxation.  This  was  remedied  by  amendment;  but 
even  such  a  distinction,  if  intentional,  was  held  constitu- 
tional. 

Beers  v.  Glynn,  211  U.  S.  477. 

Matter  of  Lord,  111  App.  Div.  152;  97  Supp.  553;  aff.  186  N.  Y.  459; 

79  N.  E.  1110. 
Matter  of  Embury,  19  App.  Div.  214;  45  Supp.  881;  aff.  154  N.  Y.  746; 

49  N.  E.  1096. 


PART  V  — PROCEDURE  397 

But  if  the  tax  is  imposed  and  no  machinery  is  provided  for 
its  collection  the  tax  remains  in  force  and  a  subsequent  statute 
or  an  amendment  of  the  original  act  may  provide  the  pro- 
cedure necessary  for  its  collection. 

Matter  of  Davis,  149  N.  T.  539 ;  44  N.  E.  185. 
Estate  of  Stamford,  126  Cal.  112 ;  54  Pac.  259. 
Trippet  v.  State,  149  Cal.  521 ;  86  Pac.  1084. 

This  situation  is  illustrated  by  gifts  in  contemplation  of 
death.  Theoretically  the  tax  accrues  when  the  gift  is  made, 
but  no  machinery  is  ordinarily  provided  for  its  collection  until 
death  occurs,  at  which  time  the  facts  regarding  such  gifts  are 
.usually  revealed.  Few,  if  any  of  the  statutes  provide  ma- 
chinery for  the  collection  of  a  tax  upon  such  a  gift  at  the  time 
it  is  made ;  but  the  obligation  to  pay  it  remains  and  is  enforced 
when  the  procedure  is  provided. 

Matter  of  Hodges,  86  Misc.  367;  aff.  215  N.  Y.  447;  109  N.  E.  559. 

1.  Motions  to  Exempt — Residents. 

When  the  estate  is  too  small  to  be  taxed  there  are  provisions 
in  nearly  all  the  statutes  for  a  motion,  upon  affidavit  setting 
forth  the  facts,  for  an  exemption ;  or,  if  the  tax  only  amounts 
to  a  few  dollars,  for  a  motion  to  fix  the  tax  without  the 
formality  of  inventory  or  appraisal.  The  county  treasurer  or 
local  comptroller's  representative  will  always  have  blank 
forms  for  such  applications.  Notice  of  such  an  application 
must  be  given  to  the  comptroller  or  tax  commission. 

Matter  of  Collins,  104  App.  Div.  184;  93  Supp.  342. 

A  motion  to  exempt  is  not  entertained  where  the  taxing 
order  has  already  been  entered ;  it  must  then  be  accomplished 
by  a  motion  to  modify  the  decree. 

Matter  of  Rothfeld,  N.  Y.  L.  J.,  January  4,  1914. 

Following  is  the  form  of  a  motion  used  before  the  Surro- 
gate of  New  York  county : 

SURROGATE'S  COURT — COUNTY  OF  NEW  YORK. 

In  the  Matter  of  the  Estate  of 

,  Deceased. 

PLEASE  TAKE  NOTICE,  that  on  the  petition  of 

,  dated  and  verified  the  day  of 


INHERITANCE  TAXATION 

,  and  the  affidavit  of 

,  verified  the day  of ,  and  on 

all  other  papers  and  proceedings  herein,  I  will  move  this  Court 
at  Chambers  thereof,  to  be  held  in  the  Hall  of  Kecords,  in  the 
Borough  of  Manhattan,  City  of  New  York,  County  of  New 

York,  on  the day  of at  10:30  o'clock, 

in  the  forenoon  of  that  day,  or  as  soon  thereafter  as  counsel 

can  be  heard,  for  an  order  exempting  the  estate  of 

f  deceased,  from  the  tax  imposed  by  the  article 

of  the  Tax  Law  relating  to  the  Taxable  Transfers  of  Prop- 
erty. 
Dated,  New  York, 

To , 

Attorney  for  the  State  Tax  Commission, 

233  Broadway,  Borough  of  Manhattan, 
City  of  New  York. 

SURROGATE'S  COURT — COUNTY  OF  NEW  YORK. 

In  the  Matter  of  the  Estate  of .> 

, ,  Deceased. 

To  THE  SURROGATE'S  COURT  OF  THE  COUNTY  OF  NEW  YORK. 

The  petition  of respectfully 

shows : 

FIRST. — That  he  is  one  of  the  Executors  of  the  last  will 

and  testament  of ,  deceased ; 

that  said  decedent  died  a  resident  of  the  State  of  New  York 

on  the day  of ,  leaving  a  last  will  and 

testament,  copy  of  which  is  hereby  annexed,  which  was  duly 
admitted  to  probate  by  the  Surrogates'  Court  of  the  County 

of  New  York,  on  the '. . . .  day  of ,  and  that 

Letters  Testamentary  were  duly  issued  by  the  said  Surro- 
gates' Court  of  the  County  of  New  York,  on  the  

day  of to  your  petitioner, 

whose  post  office  address  is ,  Borough  of 

Manhattan,  City  of  New  York,  and  to  , 

whose  post  office  address  is 

SECOND. — That  no  order  has  been  made  herein  appointing 
an  appraiser. 


PART  V  —  PROCEDURE  399 

THIRD. — That  as  such  Executor,  deponent  is  personally 
familiar  with  the  affairs  of  said  estate,  the  property  con- 
stituting the  assets  thereof  and  their  fair  market  value  and 
with  the  debts,  expenses  and  charges  properly  and  legally 
liable  as  deductions  therefrom;  that  decedent  at  the  time  of 
his  death  had  no  safe  deposit  box;  that  to  the  best  of  de- 
ponent's knowledge,  information  and  belief,  there  is  no  per- 
son better  informed  than  deponent  upon  the  'said  affairs  of 
this  estate. 

FOURTH. — That  Schedule  A,  hereunto  annexed,  sets  forth 
fully  and  in  detail  all  the  personal  property  wheresoever 
situated,  owned  by  the  decedent,  or  in  which  said  decedent 
had  any  right,  title  or  interest  at  the  time  of  his  death,  or 
which,  by  reason  thereof,  fell  into  or  became  part  of  the 
assets  of  this  estate  by  reversion,  remainder  or  otherwise. 
That  decedent  owned  no  real  estate  at  the  time  of  his  death, 
and  decedent  made  no  gift,  grant  or  conveyance  in  contem- 
plation of  death,  or  to  take  effect  at  or  after  death,  and  dece- 
dent had  no  power  of  appointment  vested  in  him  by  the  will 
or  deed  or  other  instrument  of  another. 

That  decedent  left  no  money  at  the  time  of  his  death,  either 
in  his  immediate  possession,  standing  to  his  credit,  or  in 
which  he  had  any  right,  title  or  interest,  in  bank  of  deposit, 
savings  banks,  trust  companies,  or  other  institutions,  except 
as  set  forth  in  said  Schedule  A.  That  decedent  left  no  wear- 
ing apparel,  jewelry,  silverware,  pictures,  books,  works  of 
art,  household  furniture,  horses,  carriages,  automobiles, 
boats,  or  any  other  personal  chattels  of  any  kind  or  nature, 
no  bonds  or  mortgages  or  claims  due  and  owing  decedent  at 
the  time  of  his  death,  and  no  promissory  notes  or  other  in- 
struments in  writing  for  the  payment  of  money,  except  as 
stated  in  said  Schedule  A. 

That  decedent  was  in  the  employ  of 

and  was  not  interested  in  any  copartnership  or  business. 
That  decedent  carried  no  life  insurance  policy  or  policies 
payable  to  himself  or  his  estate,  but  was  insured  in  the 

for  the  sum  of 

,  and  also  insured  in  the 

for  the  sum  of and  that  both  policies  were  pay- 


400 


INHERITANCE  TAXATION 

to ,  your  petitioner,  as  beneficiary. 

That  decedent  owned  no  corporate  stocks  or  bonds,  or  other 
investment  securities,  and  no  property  of  any  kind  or 
description  except  as  set  forth  in  said  Schedule  A. 

FIFTH. — That  Schedule  B  hereto  annexed  sets  forth  the 
funeral  expenses,  administration  expenses  and  counsel  fees 
paid  or  incurred  in  connection  with  the  estate.  That  decedent 
left  no  debts  or  claims  against  the  decedent.  The  Executors 
also  claim  to  be  allowed  as  a  deduction  herein  their  lawful 
commissions  as  Executors. 

SIXTH. — That  the  only  person  beneficially  interested  in  this 

her 

estate  at  the  time  of  decedent's  death  and  ,.  relation  to  dece- 
dent was  and  is  your  petitioner,  a 

of  decedent,  who  resides  at 

Q  V|  /} 

and  that  ,       is  of  full  age  and  sound  mind. 

SEVENTH. — That  decedent  left  no  property  held  by  the  dece- 
dent in  trust  for  or  jointly  with  another  or  others. 

EIGHTH. — That  petitioner  has  made  due  and  diligent  search 
for  property  of  every  kind  and  description  left  by  the  dece- 
dent, and  has  been  able  to  discover  only  that  set  forth  in 
Schedule  A,  and  that  no  information  of  other  property  of  the 

her  she 

decedent  has  come  to  ,        knowledge,  and  that    ,       verily 

believes  that  the  decedent  left  no  property  except  as  therein 
set  forth. 

That  all  the  sums  claimed  as  deductions  in  Schedule  B  are 
lawful,  just  and  fair. 

WHEREFORE,  your  petitioner  prays  that  an  order  be  made 

exempting  the  estate  of  

from  the  tax  imposed  by  the  article  of  the  Tax  Law  relating 
to  Taxable  Transfers  of  Property. 
Dated, 


Petitioner. 

2.  In  Case  of  Nonresidents. 

If  there  are  assets  situated  in  another  State,  or  the  de- 
ceased owned  stock  in  a  corporation  incorporated  in  another 


PAET  V  — PROCEDURE  401 

State,  the  attorney  for  the  executor  or  administrator  should 
write  to  the  proper  official  in  that  State  for  blank  forms  and 
information. 

a.  AFFIDAVIT  PKIOR  TO  APRIL  1,  1922. 

Where  a  waiver  is  desired  from  the  State  Tax  Commission 
for  the  transfer  of  assets  of  a  nonresident  within  the  State  of 
New  York  the  following  form  of  affidavit  is  used  in  New 
York  County.  No  case  of  nonresidents  whose  death  occurred 
subsequent  to  June  21,  1911,  and  prior  to  April  1,  1922. 

This  form  to  be  used  only  in  cases  where  death  occurred  on 
or  subsequent  to  July  21,  1911,  and  prior  to  April  1,  1922. 

SURROGATE'S  COURT — NEW  YORK  COUNTY. 


IN  THE  MATTER  OF 

The  Transfer  Tax  Upon  the  Estate  of  I  .     , 

v  Appraisal 

Nonresident. 
Deceased. 


STATE  OF ) 

>  ss  * 
County  of \  "" 

,  being  duly  sworn,  deposes  and 

says: 

I.  That  he  resides  at 

II.  That  said  decedent  died  on  the day  of , 

19 . . ,  a  resident  of ,  State  of , 

testate,         ,  ,  -, 

.    .  and  letters  of  were  issued  on 

intestate, 

the day  of ,  19 . . ,  by  the  

Court  of  the  County  of ,  State  of 

Administrator    » 

III.  That  deponent  was  appointed  the        ^         , 

this  estate. 

IV.  That  the  decedent  died  seized  and  possessed  of  NO 
EEAL  ESTATE  IN  THE  STATE  OF  NEW  YOEK,  and 
NO  GOODS,  WAKES  OE  MEECHANDISE  PHYSICALLY 
IN  THE  STATE  OF  NEW  YOEK,   except  as  stated  in 
Schedule  A,  hereto  attached. 

26 


402  INHERITANCE  TAXATION 

V  That  decedent  died  possessed  of  no  STOCK  OF  COR- 
PORATIONS ORGANIZED  UNDER  THE  LAWS  OF  THE 
STATE  OF  NEW  YORK,  or  STOCK  OF  NATIONAL 
BANKING  ASSOCIATIONS  LOCATED  IN  THE  STATE 
OF  NEW  YORK,  except  as  stated  in  Schedule  A. 

VI.  That  decedent  died  possessed  of  no  shares  of  stock  in 
foreign  corporations,  joint  stock  companies  and  associations, 
and  the  bonds,  notes,  mortgages  or  other  evidences  of  in- 
terest in  any  corporation,  joint  stock  company  or  association 
wherever  incorporated  or  organized,  if  such  stock,  bonds, 
notes,  etc.,  are  presented  by  real  estate  in  New  York  State, 
except  as  stated  in  Schedule  A.     (Shares  of  stock,  bonds, 
etc.,  of  such  corporation,  joint  stock  company  or  associations 
being  in  the  nature  of  a  moneyed  corporation,  a  railroad  or 
transportation  corporation,   or   a  public   service   or  manu- 
facturing corporation,  as  denned  and  classified  by  the  laws 
of  the  State  of  New  York,  need  not  be  listed.) 

VII.  That  decedent  died  possessed  of  no  interest  in  any 
partnership  business  conducted  wholly,  or  partly,  within  the 
State  of  New  York,  and  was  not  possessed  of  any  money  or 
capital  invested  in  business  in  the  State  of  New  York,  either 
as  principal  or  partner,  except  as  stated  in  Schedule  A. 

VIII.  That  decedent  made  no  transfer  by  deed,  grant,  bar- 
gain, sale  or  gift  in  contemplation  of  death  or  intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  death  of  real 
property,  or  of  goods,  wares  and  merchandise  within  the  State 
of  New  York ;  or  of  shares  of  stock  of  New  York  Corporations 
or  of  National  Banking  Associations  located  in  the  State  of 
New  York,  or  of  property  evidenced  by  or  consisting  of  shares 
of  stock  referred  to  above  in  paragraph  VI  hereof ;  or  of  any 
interest  in  a  partnership  business  conducted  wholly  or  partly 
within  the  State  of  New  York,  except  as  stated  in  Schedule  A. 

IX.  That  at  the  time  of  decedent's  death  there  was  no  prop- 
erty held  in  the  joint  names  of  said  decedent  and  any  other 
person,  or  by  decedent  and  another  as  tenants  by  the  entirety, 
or  in  the  joint  names  of  decedent  and  another  payable  to 
either  or  the  survivor,  or  held  by  the  decedent  in  trust  for  any 
other  person,  except  as  stated  in  Schedule  A. 


PART  V  —  PROCEDURE  403 

X.  That  decedent  had  no  power  of  appointment  under  any 
will,  deed,  or  other  instrument,  except  as  stated  in  Schedule  A. 

XI.  That  the  following  are  the  names,  relationship  and 
amount  of  interest  of  the  persons  among  whom  this  estate  is 
distributable : 

Age  of  Life      Amount  of 
Name  and  Relationship  Address*  Tenant  Interest 


XII.  That  the  fair  market  value  of  decedent's  entire  estate 

at  the  time  of  death  wherever  situated  is  $ of 

which  $ represents  the  value  of  decedent's  per- 
sonalty, wherever  situated. 

XIII.  That  the  estimated  amount  of  debts  due  New  York 
creditors   and   for   New   York  Administration    expenses   is 
$ ;  and  the  amount  of  other  debts  and  adminis- 
tration expenses  is  $ 

XIV.  That  Schedule  B  hereto  attached,  contains  a  list  of 
the  deductions  claimed,  the  nature  of  each  deduction  being 
briefly  stated. 

XV.  The  facts  showing  the  decedent  to  be  a  nonresident  of 
the  State  of  New  York  at  the  time  of  his  or  her  death  are  as 
follows: 


XVI.  THAT  THE  DECEDENT  DID  NOT  DWELL  OR 
LODGE  IN  THE  STATE  OF  NEW  YORK  DURING  AND 
FOR  THE  GREATER  PART  OF  ANY  PERIOD  OF 
TWELVE  CONSECUTIVE  MONTHS  IN  THE  TWENTY- 
FOUR  NEXT  PRECEDING  HIS  OR  HER  DEATH 
EXCEPT  AS  ABOVE  STATED. 

XVII.  That  this  affidavit  is  made  for  the  purpose  of  in- 


INHERITANCE  TAXATION 

ducing  the  TAX  COMMISSION  OF  THE  STATE  OF  NEW 
YORK  to  issue  waivers  for  the  transfer  of  the  following 
property : 


Sworn  to  before  me  this  

day  of ,192.. 


Notary  Public, 
County. 

NOTE. — Attach  copy  of  decedent's  Will,  if  any. 

SCHEDULE  "A" 
Containing : 

(1)  A  list  of  all  EEAL  PEOPEETY  in  the  State  of  New 
York,  with  the  ASSESSED  VALUE  of  each  parcel  for  tax 
purposes,  for  the  year  of  decedent's  death;  also,  the  esti- 
mated   MAEKET    VALUE    thereof,    and    an    affidavit    of 
appraisal  thereof  by  a  competent  real  estate  appraiser. 

(2)  A   statement   of   decedent's   goods,   wares   and   mer- 
chandise physically  in  the  State  of  New  York. 

(3)  A  statement  of  stock  of  New  York  corporations,  giving 
par  value,  and  amount  of  stock  issued,  and  of  national  bank- 
ing associations  located  in  New  York. 

(4)  A  statement  of  shares  of  stock,  bonds,  etc.,  mentioned 
in  Paragraph  VI  of  attached  affidavit. 

(5)  A  detailed  and  accurate  book  statement  of  decedent's 
business  interest,  copartnership  interest,  or  capital  invested 
in  business  in  the  State  of  New  York. 

(6)  A  statement  of  property  transferred  in  contemplation 
of  death,  or  to  take  effect  at  or  after  death  as  mentioned  in 
Paragraph  VIII  of  attached  affidavit. 

(7)  A  statement  of  property  of  decedent  held  jointly  with 
or  in  trust  for  another  as  mentioned  in  Paragraph  IX  of 
attached  affidavit. 


PART  V  —  PROCEDURE  4Q5 

SCHEDULE  "B" 

Containing  a  list  of  the  deductions  claimed,  the  nature  of 
each  deduction  being  briefly  stated. 

b.  AFFIDAVIT  UNDER  PROPORTIONAL  TAX. 

If  the  deceased  died  subsequent  to  April  1,  1922,  the  tax  is 
proportioned  to  the  debts  and  assets  within  and  without  the 
State  of  New  York  under  the  rule  prescribed  by  Chapter  432, 
Laws  of  1922.  In  that  case  the  following  form  should  be 
used: 

To  be  used  only  where  death  occurred  on  or  after  April  1 
1922. 


SURROGATE'S  COURT — NEW  YORK  COUNTY. 

IN  THE  MATTER  OF 
The  Transfer  Tax  Upon  the  Estate  of 


Deceased. 


Affidavit  for 

Appraisal 

herewith 

Nonresident. 


Supply  original  and  2  copies  of  this  affidavit,  and  3  copies  of 
will. 

STATE  OF ~\ 

County  of \  SS': 

,  of ,  being  duly 

sworn,  says: 

I.  That  said  decedent  died  on  the day  of , 

D  ,1     ~.  intestate,      , 

19 . . ,  a  resident  of  the  State  of and 

testate, 

„  administration  .  ,         « 

letters  of  were  issued  on  the day  or 

testamentary 

."...,  19 ..,  by  the Court  of  the  County 

of ,  State  of to ; 

,  ,,  ,  .         ,.  ,    administrator 

and  that  deponent  is   acting  as  such 

executor 

II.  The  facts  showing  decedent  to  be  a  resident  of  such 
State  and  the  time  spent  by  the  decedent  within  the  State  of 
New  York  in  the  last  two  years  preceding  the  death  are  as 
follows : 


406 


INHERITANCE  TAXATION 


III.  The  following  are  the  names,  relationship,  ages,  ad- 
dresses and  amount  of  interest  of  the  persons  among  whom 
the  estate  is  distributed. 

Amount  of 
Name  and  Relationship  Age  Address  Interest 


IV.  Schedule  "A"  hereto  annexed  contains  an  itemized 
statement  of  all  the  property,  real  and  personal,  of  which  the 
decedent  died  seized  or  possessed  within  the  State  of  New 
York  or  within  the  classes  named  in  said  schedule,  and  states 
the  fair  market  value  of  each  item. 

Schedule  "B"  contains  a  list  of  bank  deposits,  stocks  in 
foreign  corporations  and  all  other  items  for  which  waivers 
are  requested  in  addition  to  waivers  regarding  the  items 
named  in  Schedule  A. 

Schedule  "C"  contains  a  list  of  all  the  property  of  the  dece- 
dent wherever  situated  and  states  the  fair  market  values  of 
the  items. 

Schedule  "D"  contains  a  list  of  all  the  deductions  claimed. 
The  aggregate  value  of  all  the  property  of  the  decedent 

wherever  situated  is  $ of  which  the  value  of  all 

the  personalty  is  $ the  amount  of  the  deductions 

is  $ 

SAvorn  to  before  me  this  

day  of ,19.. 


Notary  Public, 
County. 


(Attach  county  clerk's  certificate). 


PAET  V  —  PROCEDURE  4Q7 

SCHEDULE  "A" 

All  property  of  which  the  transfer  is  taxable  under  the  Tax 
Law  of  the  State  of  New  York.  [Where  any  question  is 
answered  yes,  include  the  items  in  the  annexed  list.] 

A-l.  Keal  estate  in  New  York  as  hereinafter  set  forth  (with 
assessed  value  of  each  parcel  for  the  year  of  decedent's  death 
and  estimated  market  value  and  affidavit  of  appraisal  of  a 
competent  real  estate  appraiser). 

Did  the  decedent  own  any  such  property? 

A-2.  Goods,  wares  and  merchandise  of  the  fair  market 

value  of  $ as  appraised  in  the  accompanying 

appraisal  by  items  made  by  a  competent  appraiser. 

Did  the  decedent  own  any  such  property? 

A-3.  Shares  of  stocks  or  certificates  of  interest  of  corpora- 
tions, joint  stock  companies,  or  associations  organized  under 
the  laws  of  the  State  of  New  York  or  of  national  banks 
located  in  the  State  of  New  York  and  including  all  dividends 
and  rights  to  subscribe  to  the  stock  of  such  corporation,  joint 
stock  companies  or  associations  or  banks  as  hereinafter 
stated  in  detail. 

Did  the  decedent  own  any  such  property? 

Also,  the  stock,  bonds,  notes,  mortgages  and  other  evidence 
of  interest  in  any  corporation  wherever  organized,  in  the 
nature  of  a  real  estate  corporation  owning  real  estate  within 
the  State  of  New  York. 

Did  the  decedent  own  any  such  property? 

A-4.  Interest  in  a  partnership  business  conducted  wholly 
or  partly  within  the  State  of  New  York  and  in  the  good  will 
of  such  business  within  the  State  of  New  York,  and  capital 
invested  in  business  in  New  York  State  by  decedent  doing 
business  either  as  principal  or  partner.  (A  detailed  and 
accurate  book  statement  is  required.) 

Did  the  decedent  own  any  such  property? 

A-5.  A  statement  of  property  of  decedent  included  within 
any  of  the  foregoing  classes  and  held  jointly  with  or  in  trust 
for  another  or  as  tenant  by  the  entirety  or  in  the  name  of 
decedent  and  another  payable  to  either  or  to  the  survivor. 

Did  the  decedent  own  any  such  property? 


408 


INHERITANCE  TAXATION 


A-6.  A  statement  of  the  interest  of  the  decedent  in  any 
estate  or  trust  holding  property  within  any  one  or  more  of 
the  foregoing  classes. 

Did  the  decedent  own  any  such  property! 

A-7.  Did  the  decedent  exercise  any  power  of  appointment 
regarding  any  property  included  in  any  of  the  foregoing 
classes?  (If  so,  the  exact  facts  must  be  hereinafter  set  forth.) 

Answer 

A-8.  Did  the  decedent  make  any  transfer  by  deed,  grant, 
bargain,  sale  or  gift  in  contemplation  of  death  or  intended  to 
take  effect  in  possession  or  enjoyment  at  or  after  his  death 
of  any  property  of  the  kind  above  described!  (If  so,  the 
exact  facts  must  be  hereinafter  set  forth.) 

Answer 

LIST  OF  ITEMS  TAXABLE  IN  NEW  YOKK 

The  following  is  a  detailed  list  of  all  the  property  within 
the  State  of  New  York,  or  subject  to  the  jurisdiction  of  the 
State  of  New  York  and  included  under  the  above-named 
classes. 

A-l.  (Signed). 

SCHEDULE  "B" 

1.  List  of  Bank  Deposits  in  the  name  of  the  decedent  within 
the  State  of  New  York. 

2.  Stocks  of  foreign  corporations  having  transfer  offices 
within  the  State  of  New  York. 

3.  Other  items  for  which  waivers  are  also  desired. 
1. 

(Signed). 

SCHEDULE  "C" 

List  of  all  the  property  of  the  decedent  wherever  situated 
and  the  fair  market  value  of  each  item. 

SCHEDULE  "D" 
DEDUCTIONS 


PART  V  — PROCEDURE  409 

c.  COMMUTATION  OF  NONRESIDENT  TAX. 

Under  Chapter  433,  Laws  of  1922,  a  nonresident  may  com- 
mute the  tax  by  payment  of  not  less  than  2%  of  the  taxable 
property  within  the  state  without  deduction.  The  provision 
of  the  act  under  which  this  may  be  done  is  as  follows : 

§  221-d.  Optional  commutation  of  the  tax  in  nonresident 
estates.  Provided  that  it  is  proved  to  the  satisfaction  of  the 
surrogate  that  the  amount  of  the  tax  will  not  be  decreased  by 
the  following  method,  the  transfer  tax  in  the  estate  of  a  non- 
resident decedent  may  be  commuted  and  finally  settled  as 
between  the  State  and  all  parties  in  interest  by  the  payment 
to  the  State  Tax  Commission  of  a  sum  to  be  determined  by 
the  commission  which  sum  shall  be  not  less  than  two  per 
centum  upon  the  clear  market  value  of  all  the  property  within 
the  State  taxable  under  this  article  and  without  deduction  or 
exemption  of  any  kind. 

For  the  forms  by  which  this  expeditous  course  may  be 
taken  see  post  under  Forms. 

3.  The  Safe  Deposit  Box. 

a.  'COMPTROLLER  MAY  INSPECT. 

The  statutes  of  all  the  States  where  there  are  large  cities 
require  notice  to  the  Comptroller  or  Tax  Commission  by  the 
executor  or  administrator  before  the  securities  of  a  decedent 
deposited  with]  a  safe  deposit  company  can  be  delivered  or  a 
bank  account  transferred. 

Safe  deposit  companies  were  inclined  to  contest  the  right 
of  the  State  to  step  in  between  them  and  their  customers  and 
the  test  case  in  New  York  resulted  in  their  favor. 

People  v.  Mercantile  Safe  Deposit  Co.,  159  App.  Div.  98;  143  Supp.  849. 

In  this  case  it  was  held  that  a  safe  deposit  company,  in 
renting  boxes  to  its  customers,  is  a  landlord  having  no  custody 
or  control  of  the  contents  or  physical  possession  thereof; 
and  it,  therefore,  was  not  liable  for  a  penalty  in  failing  to 
disclose  the  contents  of  such  a  box  belonging  to  a  deceased 
customer  to  an  agent  of  the  Comptroller. 

This  case  was  not  taken  to  the  Court  of  Appeals  because  a 
case  in  Illinois,  where  the  same  question  was  tested,  went  to 


410 


INHERITANCE  TAXATION 


the  Supreme  Court  of  the  United  States,  where  an  opposite 
result  to  the  ruling  in  the  New  York  case  was  reached. 

National   Safe  Deposit  Co.   v.   Stead,   250  111.   584;    95   N.   E.   973;    aff. 
232  U.  S.  58. 

The  United  States  Supreme  Court  reasoned  thus : 

'  *  The  contention  that  the  company  could  not  be  arbitrarily 
charged  with  the  duty  of  supervising  the  delivery  and  deter- 
mining to  whom  the  securities  belonged  is  answered  by  the 
fact  that  in  law  and  by  contract  it  had  such  control  as  to  make 
it  liable  for  allowing  unauthorized  persons  to  take  possession. 
Both  by  nature  of  its  business  and  the  terms  of  its  contract 
it  had  assumed  the  obligation  cast  upon  those  having  posses- 
sion of  property  claimed  by  different  persons. 

"Nor  was  there  any  deprivation  of  property  nor  arbitrary 
imposition  of  a  liability  in  requiring  the  company  to  retain 
assets  sufficient  to  pay  the  tax  that  might  be  due  to  the  State. 
There  are  many  instances  in  which,  by  statute,  the  amount 
of  the  tax  due  by  one  is  to  be  reported  and  paid  by  another,- 
as  in  tha  case  of  banks  required  to  pay  the  tax  on  the  shares 
of  a  stockholder.  The  boxes  were  leased  with  the 

knowledge  that  the  State  had  so  legislated  as  not  only  to 
protect  the  interests  of  one  dying  after  the  rental,  but  also 
to  secure  the  payment  of  the  State  tax  out  of  whatever  might 
be  found  in  the  box  belonging  to  the  deceased. ' ' 

Since  this  decision  safe  deposit  companies  throughout  the 
Union  have  acquiesced  with  the  demands  of  the  State  for  a 
right  to  inspect  the  contents  of  the  safe  deposit  boxes  of 
decedents. 

In  a  recent  case  in  New  York,  where  a  surviving  joint 
tenant  demanded  access  and  the  State  Comptroller  ordered 
the  box  sealed  and  the  personal  representative  of  the  deceased 
joint  tenant  were  also  opposed,  the  surviving  joint  tenant 
procured  a  mandatory  injunction,  but  it  was  reversed  leaving 
the  applicant  to  his  remedy  at  law. 

Holier  v.  Lincoln  S.  D.  Co.,  174  App.  Div.  458. 

b.  MAY  NOT  IMPOSE  ARBITRARY  CONDITIONS. 

But  the  State  Comptroller  cannot  impose  arbitrary  condi- 
tions or  burden  the  estate  with  any  expense. 


PART  V  — PROCEDURE  41 1 

"Upon  receiving  notice,  it  is  the  duty  of  the  Comptroller 
to  have  his  representative  attend  and  make  a  memo  of  the 
assets;  and  if  the  Comptroller  so  desires  he  may  have  an 
appraisement,  at  his  own  expense,  provided  he  does  not  delay 
the  administrator  in  the  performance  of  his  statutory  duties 
in  acquiring  control  of  the  property  and  assets.  He  may  not 
burden  the  estate  with  the  expense  of  an  appraisal  and  with-' 
hold  his  consent  to  delivery  until  this  command  has  been 
complied  with.  The  consent  is  not  a  matter  of  favor  but  a 
right  which  the  administrator  is  entitled  to,  and  it  may  not 
be  arbitrarily  refused.  An  executor  upon  application  to  the 
Surrogate  is  entitled  to  relief  from  such  refusal." 

Matter  of  Rook,  98  Misc.  544. 

In  the  matter  of  nonresident  assets  the  transfer  agent  in 
New  York  of  a  New  Jersey  corporation  refused  to  make  the 
transfer  without  the  Comptroller's  consent.  That  consent 
was  refused,  although  the  particular  assets  were  not  taxable. 
The  delay  caused  a  loss  in  the  securities  of  $14,000  and  the 
executors  sued  the  transfer  agent.  It  was  held  that  the  trans- 
fer agent  was  not  the  agent  of  the  executor  and  owed  him  no 
duty,  and  was  not  liable. 

Dunham  v.  City  Trust  Co.,  115  App.  Div.  584;  101  Supp.  87;   aff.   193 
N.  Y.  642;  86  N.  E.  1123. 

c.  CONSENT  FOR  TRANSFER  OF  FUNDS. 

In  New  York:  "It  is  the  practice  in  reference  to  the  estates 
of  resident  decedents  for  the  Comptroller  to  give  a  written 
consent  for  the  transfer  of  funds  in  bank,  and  stocks,  bonds, 
or  other  securities  as  soon  as  the  executor  or  administrator 
has  qualified  and  application  is  made  therefor  by  such  repre- 
sentative or  by  the  depositories  named,  and  in  case  it  is  desired 
to  transfer  the  contents  of  a  safe  deposit  box,  the  Comptroller 
will  have  a  representative  present  to  examine  the  contents  of 
such  box  and  will  consent  in  writing  to  the  transfer  thereof 
to  the  proper  representative.  In  case  of  nonresident  dece- 
dents, where  ancillary  letters  have  not  been  issued  by  a  Surro- 
gate of  this  State,  the  consent  of  the  Comptroller  for  the 
delivery  or  transfer  of  the  securities,  etc.,  is  withheld  until 
the  question  of  the  taxability  of  the  property  within  the  State 


412 


INHERITANCE  TAXATION 


is  determined,  and  if  taxable,  the  tax  paid,  after  which  the 
written  consent  to  transfer  each  security  or  deposit  will  be 
given. 

"In  several  of  the  largest  counties  it  has  been  the  practice 
for  the  Comptroller  to  give  the  resident  attorney  a  power  of 
attorney  to  issue  waivers  and  consents  for  the  transfer  of 
funds  of  a  resident  decedent  in  the  banks  and  trust  com- 
panies of  such  county  respectively,  and  also  to  attend  and 
represent  the  Comptroller  at  the  opening  of  safe  deposit 
boxes,  which  avoids  the  necessary  delay  in  making  requests 
and  obtaining  waivers  and  consents  through  the  mails." 

McElroy  on  Transfer  Tax  Law. 

A  similar  practice  obtains  in  all  the  States  where  there  are 
large  cities.  The  details  can  be  learned  by  addressing  the 
official  or  department  in  the  list  foregoing. 

d.  PROPERTY  BELONGING  TO  ANOTHER. 

Property  belonging  to  another  found  in  safe  deposit  box  of 
decedent  renders  it  necessary  for  the  representatives  of  the 
estate  of  the  decedent  to  explain  its  presence  there. 

Matter  of  Francis,  N.  Y.  L.  J.,  August  12,  1913;  aff.  163  App.  Div.  957. 

As,  for  example,  when  bonds  were  found  in  an  envelope 
endorsed  by  the  deceased  with  the  name  of  his  adopted 
daughter,  the  Surrogate  said : 

"The  endorsement  on  the  paper  containing  the  bonds  con- 
stituted a  declaration  by  the  decedent  that  the  bonds  were  the 
property  of  Florence  Elizabeth  Crusius.  This  declaration 
raises  a  presumption  that  the  bonds  were  her  property.  The 
presumption,  however,  was  rebutted  by  the  testimony  of  the 
executor.  He  testified  that '  she  did  not  know  that  such  bonds 
were  in  existence,  or  that  the  papers  in  reference  to  it  gave 
her  the  bonds.  There  is  no  proof  of  a  gift;  on  the  contrary, 
the  evidence  shows  that  the  bonds  were  never  delivered  by 
the  decedent  to  Florence  Elizabeth  Crusius.  It  must  therefore 
be  held,  for  the  purpose  of  this  proceeding,  that  the  decedent 
did  not  make  a  valid  gift  inter  vivos  of  the  bonds  to  Florence 
Elizabeth  Crusius." 

Matter  of  Crusius,  N.  Y.  L.  J.,  February  26,  1914. 


PAKT  V  — PROCEDURE  413 

4.  Inventory. 

a.  MUST  BE  FILED  BY  EXECUTOR. 

The  statutes  generally  require  the  executor  or  administra- 
tor to  file  an  inventory,  and,  in  case  of  large  estates,  he  may 
be  required  to  file  half  a  dozen, — one  in  the  State  of  domicile, 
one  with  the  Collector  of  Internal  Revenue  for  the  Federal 
tax,  and  an  inventory  of  the  personal  or  real  property  of  the 
decedent  situated  in  a  foreign  State. 

The  will  cannot  dispense  with  an  inventory. 

Matter  of  Morris,  138  N.  C.  259 ;  50  S.  E.  682. 

And  it  must  include  personal  property  without  the  State 
even  though  it  can  never  come  into  the  executor's  possession. 

Appeal  of  Hopkins,  77  Conn.  644,  645;  60  A.  657. 
State  v.  Bullen,  143  Wis.  512 ;  128  N.  W.  109. 

But  the  executor's  valuations  are  not  conclusive. 

Succession  of  Dean,  33  La.  Ann.  867. 

It  has  been  held  that  the  State  must  show  that  the  estate  is 
taxable  before  it  can  compel  the  executor  to  file  an  inventory. 

In  re  Estate  of  Stone,  132  la.  136;  109  N.  W.  455. 

And  that  he  cannot  be  compelled  to  answer  questions  con- 
cerning the  property  of  decedent  unless  the  State  has  jurisdic- 
tion to  impose  a  tax. 

Matter  of  Bishop,  82  App.  Div.  112;  81  Supp.  474. 

But  if  such  jurisdiction  exists  he  may  be  punished  for  con- 
tempt on  failure  to  answer  property  questions. 

Matter  of  David  Kennedy,  113  App.  Div.  4-8;  99  Supp.  72. 

But  an  executor  of  a  resident  decedent  must  file  an  inven- 
tory— he  has  no  discretion. 

Hooper  v.  Bradford,  178  Mass.  95 ;  59  N.  E.  678. 

And  a  decree  fixing  tax,  rendered  in  the  absence  of  an  inven- 
tory, must  be  reversed,  although  it  is  claimed  that  all  neces- 
sary information  was  before  the  court. 

People  v.  Sholem,  244  111.  502 ;  91  N.  E.  704. 


414 


INHERITANCE  TAXATION 


The  court  said  in  the  Sholem  case : 

"The  people  have  the  right  to  compel  the  filing  in  the 
County  Court  of  the  inventories  required  to  be  filed  by  the 
executor  and  by  surviving  partners  to  aid  in  determining  the 
extent  and  value  of  the  estate  for  inheritance  tax  purposes^ 
and,  while  such  inventory  is  not  conclusive,  the  people  have 
the  right  to  have  the  benefit  thereof  without  having  the  burden 
of  proving  the  value  of  the  estate  by  examining  witnesses. 

b.  FORMS  OF  AFFIDAVIT. 

The  following  forms  of  executor's  or  administrator's  affi- 
davit used  in  New  York  county  may  be  of  assistance : 

NOTE. — This  affidavit,  and  schedules,  with  will,  etc.,  must  be  filed  in  triplicate — 
one  original  and  two  copies — with  one  certified  copy  of  petition  and  order  ap- 
pointing Appraiser. 

SURROGATES'  COURT, 

COUNTY  OF  NEW  YORK. 


In  the  Matter  of  the  Transfer  Tax 
upon  the  Estate  of 

Deceased. 


STATE  OF  NEW  YORK,^ 

COUNTY  OF ,       fss.: 

CITY  OF  NEW  YORK.      J 

administrator  executor  of  tne  estate 

of  the  above-named  decedent  being  duly  sworn  in  this  pro- 
ceeding for  the  determination  of  the  tax,  if  any,  to  be  paid 
upon  the  assets  of  the  said  estate  under  the  Law  in  Relation 
to  Taxable  Transfers  of  Property,  deposes  and  says : 

I.— That  the  said  decedent  died  a  resident  of  the  County  of 

New  York,  State  of  New  York,  on  the  day  of 

,  19 . . . . ,  Intestate,  leaving  a  Last  Will  and 

Testament,  a  copy  of  which  is  herewith  submitted,  which  was 
duly  admitted  to  probate  ly  the  Surrogates'  Court  of  New 

York  County,  on  the  . . . day  of ,19 , 

and  that  Letters  of  Administration  testamentary  were  duly 


PART  V  —  PROCEDURE  415 

issued  by  the  said  Surrogates'  Court  of  New  York  County  on 

the day  of ,  19 . . . . ,  to  this  deponent, 

whose  post  office  address  is 

whose  post  office 

address  is  and  whose  post  office 

address  is 

II. — That  as  such  administrator  executor  deponent  is  per- 
sonally familiar  with  the  affairs  of  said  estate,  the  property 
constituting  the  assets  and  their  fair  market  value,  and  with 
the  debts,  expenses  and  charges  properly  and  legally  allow- 
able as  deductions  therefrom.  That  the1  decedent  at  the  time 
of  h  death  had  no  safe  deposit  box  except 

III. — Schedule  Al  sets  forth  each  and  every  parcel  of  real 
estate  in  the  State  of  New  York  of  which  decedent  died  seized 
and  possessed,  or  in  which  he  had  any  right,  title  or  interest, 
and  the  liber  and  page  of  the  record  of  the  conveyance  thereof ; 
together  with  a  statement  of  the  mortgages  and  other  encum- 
brances thereon  at  the  date  of  death,  giving  the  amount  of 
such  encumbrances  and  date,  place,  liber  and  page  of  record 
thereof.  It  also  sets  forth  in  the  first  marginal  column  the 
assessed  valuation  of  said  parcels  and  in  second  marginal 
column  the  estimated  market  value  thereof  (as  appraised  by 
a  competent  expert  in  real  estate  values,  whose  supplemental 
affidavit  is  herewith  submitted). 

Schedule  A2  sets  forth  all  of  the  moneys  left  by  the  decedent 
at  the  time  of  h  death,  whether  in  h  immediate  possession, 
standing  to  h  credit  or  in  which  he  had  any  right,  title  or 
interest,  in  banks  of  deposits,  savings  banks,  trust  companies, 
or  other  institutions,  whether  individually  or  in  trust  for  or 
jointly  with  any  other  person,  giving  also  separately  the 
accrued  interest  thereon,  if  any,  down  to  the  last  interest  day 
prior  to  decedent's  death  in  the  case  of  saving  accounts,  and 
down  to  the  date  of  decedent's  death  in  all  other  cases. 

Schedule  A3  sets  forth  all  wearing  apparel,  jewelry,  silver- 
ware, pictures,  books,  works  of  art,  household  furniture, 
horses,  carriages,  automobiles,  boats,  and  any  and  all  other 
personal  chattels  of  whatsoever  kind  or  nature,  and  whereso- 
ever situated,  left  by  the  decedent,  together  with  the  fairly 


416 


INHERITANCE  TAXATION 


estimated  market  value  thereof  (as  appraised  by  a  competent 
expert,  whose  supplementary  affidavit  is  herewith  submitted). 
It  also  contains  a  statement  of  all  bonds  and  mortgages  held 
by  decedent  and  of  all  claims  due  and  owing  decedent  at  the 
time  of  h  death,  and  of  all  the  promissory  notes  or  other 
instruments  in  writing  for  the  payment  of  money  of  which 

he  died  possessed,  of  whatsoever  nature,  with  interest 
thereon,  if  any  (except  such  as  are  included  in  the  statement 
of  the  decedent's  interest  in  a  co-partnership  or  business  set 
forth  in  Schedule  A5)  giving  face  values  and  estimated  fair 
market  values  thereof  and  if  such  estimated  fair  market  values 
be  less  than  the  face  value,  setting  forth  in  brief  the  reason 
for  such  depreciation  as  to  each  item.  Said  Schedule  A3  also 
contains  a  statement  of  any  and  all  moneys  payable  to  the 
estate  from  life  insurance  policies  carried  by  decedent. 

Schedule  A4  sets  forth  all  the  corporate  stocks,  bonds  and 
accrued  interest  thereon  to  the  date  of  decedent's  death,  or 
other  investment  securities,  owned  by  the  decedent  at  the  time 
of  h  death,  with  the  market  value  thereof  at  such  time,  and 
in  the  case  of  unlisted  corporate  securities  giving  the  State 
of  incorporation  of  the  corporation  issuing  the  same,  its 
capitalization,  the  value  and  nature  of  its  assets,  its  liabilities, 
its  surplus,  the  book  value  of  its  stock,  the  dividends  paid, 
and  any  other  facts  which  may  be  pertinent  affecting  the  value 
of  said  securities,  also  the  amount  of  any  dividends  declared 
on  such  stocks  but  unpaid  at  date  of  death. 

Schedule  A5  sets  forth  the  interest  of  decedent  at  the  time 
of  h  death  in  any  co-partnership  or  business,  a  balance 
sheet  of  such  business,  and  shows  the  nature  and  location 
thereof,  the  total  capital  employed,  the  gross  profits,  expenses 
and  net  profits  of  the  business  for  at  least  three  years  prior 
to  decedent's  death,  and  any  other  facts  pertaining  to  such 
business  as  may  be  pertinent  to  a  fair  and  just  appraisal  of 
decedent's  interest  in  said  business  and  the  good  will  thereof. 
(Submitted  to  the  Appraiser  herewith  is  a  certificate  and  two 
copies  thereof  showing  the  amount  of  the  decedent's  interest 
in  such  business  and  good  will  thereof,  made  by  a  competent 
accountant.) 


PART  V  —  PROCEDURE  417 

Schedule  A6  sets  forth  in  itemized  form  together  with  the 
fair  market  value  thereof,  any  other  property  owned  or  left 
by  decedent  at  the  time  of  h  death  and  not  included  in  the 
preceding  schedules. 

IV. — Schedule  Bl  sets  forth  the  funeral  expenses.  Schedule 
B2  sets  forth  the  expense  of  administration  and  counsel  fees 
paid  or  estimated.  Schedule  B3  sets  forth  the  valid  debts  due 
and  owing  by  decedent  at  the  time  of  h  death  and  allowed 
as  just  and  fair  by  the  administrator  executor,  together  with 
a  separate  list  of  such  claims  as  have  been  contested  or 
rejected  by  h  (except  liens  and  incumbrances  upon  real 
estate  and  except  such  as  enter  into  the  computation  of  dece- 
dent's interest  in  any  co-partnership  .or  business  as  set  forth 
in  Schedule  A5).  Schedule  B3  also  sets  forth  all  items  claimed 
by  the  administrator  executor  as  proper  deductions  herein, 
and  not  included  in  the  prior  schedules. 

V. — Schedule  C  sets  forth  all  the  property,  real  and  per- 
sonal, which  passed  at  decedent's  death  by  virtue  of  the  exer- 
cise by  h  of  any  power  of  appointment  vested  in  h  by 
the  will,  deed  or  other  instrument  of  another,  together  with 
the  fair  market  value  of  each  item  thereof  and  a  statement  in 
brief  of  the  source  and  derivation  of  such  power,  copies  of 
which  will,  deed  or  other  instrument  are  submitted  herewith. 
Said  Schedule  C  also  sets  forth  the  interest  of  decedent  in  any 
estate  of  another ;  and  any  property  wheresoever  situated  of 
which  decedent  made  any  grant,  bargain,  sale  or  gift  in  con- 
templation of  death  or  intended  to  take  effect  in  possession  or 
enjoyment  at  or  after  the  death  of  decedent,  also  all  transfers 
made  by  decedent  within  two  years  prior  to  h  death, 
without  a  valid  and  adequate  consideration. 

VI. — Schedule  D  contains  a  statement  of  the  names  of  all 
persons  beneficially  interested  in  this  estate  at  the  time  of 
decedent's  death,  the  nature  of  their  respective  interests,  their 
relationship,  if  any  to  the  decedent  together  with  the  ages  at 
the  time  of  decedent's  death  of  all  minors,  annuitants  and 
beneficiaries  for  life  under  decedent's  will,  if  any.  It  also 
contains  a  statement  showing  which  of  the  beneficiaries  named 
27 


418 


INHERITANCE  TAXATION 


in  decedent's  will,  if  any,  died  prior  to  decedent,  the  dates  of 
their  deaths,  their  survivors,  and  the  relationship  of  such 
survivor  to  decedent. 

VII. — That  deponent  has  made  due  and  diligent  search  for 
property  of  every  kind,  nature  and  description  left  by  the 
decedent,  and  has  been  able  to  discover  only  that  set  forth 
in  Schedules  A  and  C,  and  that  no  information  of  any  other 
property  of  the  decedent  has  come  to  h  knowledge,  and  that 

he  verily  believes  that  decedent  left  no  property  except  as 
therein  set  forth.  That  all  the  sums  claimed  as  deductions  in 
Schedule  B  are  lawful,  just  and  fair,  that  to  the  best  of 
deponent's  knowledge,  information  and  belief  the  decedent 
made  no  gift,  grant  or  conveyance  of  any  property,  real  or 
personal,  in  contemplation  of  death,  or  to  take  effect  at  or 
after  death,  except  as  may  be  so  specifically  set  forth  in  the 
appropriate  schedule. 

Deponent  further  says  that  wherever  in  any  of  said 
schedules  the  word  "none"  has  been  written  or  wherever 
such  schedule  has  been  left  blank,  such  word  or  omission  is  to 
be  taken  as  equivalent  to  an  affirmative  allegation  by  deponent 
that  the  decedent  left  no  property  of  the  kind  to  which  schedule 
relates. 

Sworn  to  before  me  this 

day  of ,  192.. 


SCHEDULE 
Al.     Real  Property 


Assessed  value 
For  year  of  decedent's 
death 

Estimated   Market 
value 

Value  as  appraised  in 
this  proceeding 
EQUITY 

For  the  Appraisers 
figures  only. 

NOTE. — Kindly  annex  appraisal  made  by  Expert  Real  Estate  Appraiser,  and  if 
Mortgages  exist,  give  liber  and  page  of  record,  name  of  mortgagee,  date  of 
mortgage,  amount  of  mortgage,  rate  of  interest,  date  when  payable,  and  amount 
of  accrued  interest  to  date  of  decedent's  death. 


PAET  V  —  PROCEDURE 


419 


SCHEDULE 
A2.     Cash  on  hand  and  on  deposit 

Amount 


Value  as  appraised  in 
this  proceeding 


For  the  Appraisers 
figures  only. 

NOTE. — Kindly  add  interest  on  above  to  last  interest  day  preceding  date  of 
death.  Where  joint  accounts,  state  what  amount  in  account  was  deposited  prior 
to  May  20th,  1915. 


SCHEDULE 

A3.     Personal  chattels — bonds  and  mortgages,  promissory  notes,  claims, 

insurances,  etc. 


Estimated  Market 
value 

Value  as  appraised  in 
this  proceeding 

For  the  Appraisers 
figures  only. 

NOTE. — Kindly  add  interest  accrued  to  date  on  all  above.     Tangible  personal 
property  wherever  situated  must  be  set  forth. 


SCHEDULE 

A4.  Corporate  Bonds  and  Stocks  (Including  Interest  on  bonds  to  date  of 
death  and  stock  dividends  declared  but  unpaid) 


Estimated  Market 
value 


Value  as  appraised  in 
this  proceeding 


For  the  Appraisers 
figures  only. 

NOTE. — Kindly  add  interest  on  all  bonds  to  date  of  death  and  stock  dividends 
declared  but  unpaid,  and  give  prices  of  listed  securities,  and  in  case  of  close 
corporations  and  unlisted  securities  statement  of  assets  and  liabilities  and  net 
earnings  for  3  years  prior  to  decedent's  death,  where  no  sales  have  been  made. 


420 


INHERITANCE  TAXATION 


SCHEDULE 

A5.    Interest  of  decedent  in  any  co-partnership  or  business,  together  with 
balance  sheet  and  profit  and  loss  statement 


Estimated  Market 
value 


Value  as  appraised  in 
this  proceeding 


For  the  Appraisers 
figures  only. 

NOTE. — Give  statement  of  assets  and  liabilities  as  of  date  of  death  and  in 
addition,  net  profits  for  at  least  3  years  preceding  date  of  death,  and  trial 
balances  for  same  period. 

SCHEDULE 


A6. 


Property  left  by  decedent  of  whatever  kind  or  nature  not  included 
in  the  foregoing  sub-schedules 


Estimated  Market 
value 

Value  as  appraised  in 
this  proceeding 

For  the  Appraisers 
figures  only. 

NOTE. — State  here  claims  by  estate  in  litigation  or  property  of  a  similar  nature, 
etc. 

SCHEDULE 

Bl.     Funeral   Expenses 

Allowed  in  this 
Claimed  proceeding 


For  the  Appraisers 
figures  only. 

NOTE. — If  claim  is  made   for   monument,   this   schedule   must   state   whether 
contracted  for  or  not. 

SCHEDULE 
B2.    Administration  Expenses 


Claimed 

Allowed  in  this 
proceeding 

For  the  Appraisers 
figures  only. 

NOTB. — Commissions  of  Ex'r  or  Adm'r  must  be  stated  separately  from  counsel 
fees,  etc.,  and  will  be  figured  by  Appraiser. 


PART  V  —  PROCEDURE 


421 


B3. 


SCHEDULE 

Debts  of  decedent.     Also  deductions  claimed  and  not  included  in 
the  preceding  sub-schedules 

Allowed  in  this 
Claimed  proceeding 


NOTE. — State  what  debts  are  paid  or  will  be  paid, 
state  so.    Nature  of  each  claim  must  be  set  forth. 


For  the  Appraisers 
figures  only. 

If  any  claims  contested, 


SCHEDULE   C. 

Property  passing  by  decedent's  exercise  of  any  power  of  appointment;  Interest 

of  decedent  in  any  other  estate;  Property  transferred  by  decedent 

in  contemplation  of  death  or  to  take  effect  at  death 

Value  as  appraised  in 
Estimated  Value  this  proceeding 


For  the  Appraisers 
figures  only. 

NOTE. — State  any  transfers  by  way  of  gifts  made  prior  to  death  under  Trust 
Deeds  or  any  other  instrument. 

SCHEDULE   D. 
Beneficiaries  and  their  interests,  relationship  to  deceased,  etc. 


NOTE. — Where  will  creates  estates,  annuities  or  estates  for  term  of  years, 
give  age  of  beneficiaries  at  date  of  decedent's  death.  State  whether  beneficiaries 
are  living  at 'date  of  appraisal. 

Address  of  each  beneficiary  must  be  stated. 

c.  PREPARATION  OF  INVENTORY. 

Schedule  Al— Should  set  forth,  by  the  description  in  the 
deed,  each  parcel  of  real  estate,  within  the  State,  of  which  the 
deceased  died  seized;  or  in  which  he  had  any  right,  title  or 
interest. 


422 


INHERITANCE  TAXATION 


If  it  is  not  within  the  State  it  should  not  be  included, 
because  not  taxable. 

Matter  of  Swift,  137  N.  Y.  77;  32  N.  E.  1096. 

Unless  there  is  to  be  an  apportionment  of  debts  and  assets 
and,  of  course,  all  personal  property  outside  the  State  must 
be  included. 

Matter  of  Bridgeport  Land  Co.,  77  Conn.  657;  60  A.  662. 

Keal  estate  in  another  county  must  be  inventoried  and 
appraised. 

Stringer  v.  Commonwealth,  26  Pa.  St.  429. 

The  improvements  or  buildings  on  the  property  should  be 
described;  if  the  property  is  unimproved  it  should  be  so 
stated.  Accrued  rents  prior  to  testator's  death  should  be 
included. 

Matter  of  Keefe,  164  N.  T.  352. 

The  last  assessed  valuation,  prior  to  death,  on  each  parcel, 
should  be  given.  It  is  the  practice  in  most  jurisdictions  to 
add  the  supplementary  affidavit  of  an  expert  giving  his  valua- 
tion of  the  premises.  If  there  have  been  sales  in  the  vicinity 
before  or  shortly  after  death  the  affidavit  should  include  a 
statement  of  them,  as  this  is  the  best  evidence  of  value. 

Matter  of  Arnold,  114  App.  Div.  244;  99  Supp.  740. 

As  mortgages  are  deducted  from  the  value  of  the  real  estate 
they  should  be  set  forth,  if  there  are  any  on  the  property. 

Matter  of  Sutton,  3  App.  Div.  308;  38  Supp.  277;  aff.  149  N.  Y.  618; 
44  N.  E.  1128. 

Taxes  which  become  a  lien  prior  to  death  should  also  be 
set  forth  here. 

Matter  of  Babcock,  115  N.  Y.  450;  22  N.  E.  263. 

Matter  of  Freund,  143  App.  Div.  335;  28  Supp.  48;  aff.  202  N.  Y.  556; 
95  N.  E.  1129. 

Bent  accrued  prior  to  death  is  an  asset  and  should  be  set 
forth  as  personal  property  under  the  appropriate  subdivision. 

Jay  v.  Kirkpatrick,  26  Misc.  550. 


PART  V  — PROCEDUBE  423 

If  dower  is  claimed  as  a  deduction  the  claim  should  be  set 
forth  here  and  the  date  of  the  birth  of  the  widow  should  be 
given  in  order  that  the  value  of  her  dower  interest  may  be 
calculated  under  the  mortality  tables. 

Devolution  of  title  should  be  shown  where  the  interest  is 
other  than  fee  simple  in  order  to  indicate  how  the  interest 
was  created. 

Schedule  A2 — Cash  on  hand  and  on  deposit. 

All  moneys  left  by  the  decedent  at  the  time  of  his  death, 
in  banks  of  deposit,  savings  banks,  trust  companies,  or  other 
institutions,  should  be  itemized  and  set  forth  in  this  schedule. 
This  means  money,  wherever  situated,  and  deposits  no  matter 
whether  in  New  York  or  foreign  banks. 

Joint  and  trust  accounts  should  be  set  forth  in  this  schedule. 

See  ante,  Part  II,  F.  p.  193. 

Interest  accrued  and  unpaid,  distinct  from  the  principal, 
should  be  set  forth  separately.  In  the  case  of  savings  banks, 
interest  should  be  given  down  to  the  last  interest  day  prior 
to  decedent's  death;  in  all  other  cases  down  to  the  date  of 
death.  Accrued  interest  to  date  of  death  is  subject  to  the  tax. 

Matter  of  Vassar,  127  N.  Y.  1-8. 
Matter  of  Hewitt,  181  N.  Y.  547. 

Schedule  A3 — Mortgages,  promissory  notes,  claims  due 
decedent,  life  insurance. 

Mortgages  held  by  decedent  should  be  included  in  this 
schedule.  The  names  of  the  parties,  the  date  of  the  mortgage, 
a  brief  description  of  the  premises  mortgaged,  the  amount 
of  the  principal,  the  interest  rate  and  the  interest  dates,  the 
place,  date,  liber  and  page  of  recording  mortgage,  should  be 
given.  If  any  amount  has  been  paid  on  account  of  the  prin- 
cipal of  the  mortgage,  so  state. 

Accrued  interest  on  mortgages  to  date  of  decedent's  death 
should  be  separately  stated. 

All  claims  in  favor  of  the  estate  should  be  included  whether 
valuable  or  worthless,  and  if  in  the  form  of  notes  or  other 
written  instruments  for  the  payment  of  money  they  should  be 


424 


INHERITANCE  TAXATION 


set  forth,  giving  date,  name  of  maker,  date  when  due,  rate  of 
interest,  amount  of  interest  accrued  to  date  of  death. 

A  debt  forgiven  by  the  will  should  be  set  forth  in  this 
schedule  as  an  asset  of  the  estate. 

Matter  of  Bartlett,  4  Misc.  380;  25  Supp.  990. 

Pictures,  books,  jewelry,  silverware,  works  of  art,  etc.,  as 
well  as  furniture,  carriages,  horses,  motor  cars,  wearing 
apparel  and  other  personal  chattels,  must  be  set  forth  in  this 
schedule. 

They  must  be  itemized. 

Matter  of  Leggett,  N.  Y.  L.  J.,  January  13,  1911. 

Where  the  pictures  are  of  value  the  name  of  the  painting 
and  of  the  artist  should  be  given. 

Matter  of  Kahn,  N.  Y.  L.  J.,  March  16,  1912. 

Schedule  A4 — Corporate  stocks  and  bonds. 

In  this  schedule  should  be  set  forth  all  corporate  securities, 
including  any  shares  in  joint  stock  associations. 

Interest  accrued  to  date  of  death  on  bonds  and  dividends 
declared  on  stock,  even  though  paid  after  death,  are  part  of 
the  estate  and  should  be  separately  stated. 

Matter  of  Kernochan,  104  N.  Y.  618 ;  11  N.  E.  149. 

The  denomination  of  the  bond  should  be  given,  and  if  the 
corporation  has  issued  more  than  one  kind  of  bond  that  owned 
by  the  decedent  should  be  identified. 

In  listing  the  stock,  state  the  name  of  the  corporation,  and 
if  the  corporation  issues  different  kinds  of  stock  indicate 
which.  State  the  par  value  and  the  market  value. 

The  stock  is  taxable  though  carried  in  the  name  of  the 
brokers. 

Matter  of  Newcomb,  71  App.  Div.  606;  76  Supp.  222;  aff.  172  N.  Y.  608; 
64  N.  E.  1123. 

Securities  pledged  as  collateral  should  be  placed  in  this 
schedule,  calling  attention  to  the  fact  that  the  securities  were 
pledged  at  the  date  of  decedent's  death,  and  that  the  amount 
for  which  they  are  pledged  is  set  forth  under  Schedule  B3. 


PAET  V  —  PROCEDURE  425 

A  statement  should  be  added  that  the  securities  so  given  are 
the  same  securities  for  which  the  debt  is  set  forth  under  B3. 

Schedule  A5 — Interest  of  decedent  in  any  copartnership  or 
business. 

In  this  schedule  should  be  set  forth  the  interest  of  dece- 
dent at  the  time  of  his  death  in  any  copartnership  or  business, 
stating  the  nature  and  location  thereof,  the  total  capital 
employed,  the  gross  profits,  expenses  and  net  profits  of  the 
business  for  at  least  three  years  prior  to  decedent's  death. 

If  the  decedent  was  not  interested  in  any  copartnership  or 
business,  say  so,  and  state  his  occupation  or  profession. 

Schedule  A6 — Property  not  included  in  other  schedules. 

In  this  schedule  should  be  set  forth  any  property  left  by 
decedent  of  whatever  kind  and  nature  not  included  in  the  fore- 
going schedules  except  property  passing  by  power  of  appoint- 
ment, which  should  be  set  forth  in  Schedule  C. 

When  there  is  an  interest  in  the  estate  of  another  decedent 
it  should  be  set  forth  in  this  schedule ;  also  a  remainder  interest 
where  there  is  a  surviving  life  tenant.  In  the  latter  case  the 
age  of  the  life  tenant  should  be  given  so  the  value  of  his 
interest  may  be  calculated. 

There  should  be  set  out  an  itemized  statement  of  the  assets 
of  the  estate  in  which  decedent  had  the  remainder  interest. 
These  assets  must  be  given  with  the  same  detail  as  though 
they  were  the  assets  of  the  estate  of  the  decedent. 

Schedule  Bl — Funeral  expenses. 

The  undertaker's  bill,  cost  of  advertising  death  notice,  and 
expense  of  funeral  service  should  all  be  separately  stated. 
The  cost  of  a  tombstone  is  allowed  as  a  deduction. 

Matter  of  Edgerton,  35  App.  Div.  125 ;  54  Supp.  700 ;  aff.  158  N.  Y.  671 ; 
52  N.  E.  1124. 

And  of  a  cemetery  lot. 

Matter  of  Maverick,  135  App.  Div.  44;  119  Supp.  914;  aff.  198  N.  Y.  618; 
92  N.  E.  1084. 

Schedule  B2 — Administration  expenses. 

Under  this  head  should  be  set  forth  the  expenses  of  admin- 


426 


INHERITANCE  TAXATION 


istration,  which  include  the  counsel  fees  and  disbursements 
necessary  in  the  administration  of  the  estate. 

Matter  of  Westurn,  152  N.  Y.  93-102;  46  N.  E.  315. 
Matter  of  Purdy,  24  Mise.  301;  53  Supp.  735. 

Counsel  fees  must  be  reasonable. 

Matter  of  Thomas,  39  Misc.  223 ;  79  Supp.  571. 

Expenses  of  litigation  are  allowed  when  incurred  to  con- 
serve the  estate. 

Matter  of  Gihon,  169  N.  Y.  443;  62  N.  E.  561. 

But  disallowed  when  arising  from  disputes  among  the  bene- 
ficiaries. 

Matter  of  Westurn,  152  N.  Y.  93 ;  46  N.  E.  315. 

Commissions  of  the  executor  or  administrator  are  allowed ; 
but  not  where  the  will  provides  that  they  shall  act  without 
compensation. 

Matter  of  Vanderbilt,  68  App.  Div.  27,  30;  74  Supp.  450. 

But  not  on  specific  bequests. 

Matter  of  Kings  County  Trust  Co.,  69  Misc.  531;  127  Supp.  879. 

Or  on  real  estate  unless  the  will  provides  for  its  sale. 

Matter  of  Saunders,  77  Misc.  54,  67;  137  Supp.  438;  aff.  156  App.  Div. 
891. 

In  which  case  broker's  commissions  are  allowed  also. 

Matter  of  Rothschild,  63  Misc.  615;  118  Supp.  654. 
Matter  of  Shields,  68  Mise.  264;  124  Supp.  1003. 

Temporary  administrators'  commissions  are  allowed. 

Matter  of  Hurst,  111  App.  Div.  460;  97  Supp.  697. 

Trustees'  commissions  are  a  proper  deduction. 

Matter  of  Silliman,  79  App.  Div.  98;  80  Supp.  336;  aff.  175  N.  Y.  513; 
67  N.  E.  1090. 

As  to  double  commissions  where  executors  are  also  trus- 
tees, vide  ante,  Pt.  IV,  under  "Deductions." 

Schedule  B3— Debts  of  decedent 

This  schedule  should  set  forth  all  the  debts  of  and  claims 
against  the  decedent. 


PAET  V  —  PKOCEDURE  427 

Recite  which  have  been  paid  or  allowed.  If  any  claims 
have  been  rejected,  state  which  they  are,  and  give  the  status 
of  each  rejected  claim. 

Mortgage  debts  belong  in  Schedule  A,  not  in  this  schedule. 

Doubtful  claims  should  not  be  allowed  as  a  deduction,  but 
should  be  recited  in  the  appraiser's  report,  and  also  in  the 
order  fixing  tax,  that  the  question  of  the  deduction  is  post- 
poned until  the  determination  of  the  claim. 

Matter  of  Dimon,  82  App.  Div.  107;  81  Supp.  428. 

Where  the  estate  has  indemnity  for  a  claim  against  it  the 
indemnity  must  be  set  off  against  the  debt. 

Matter  of  Skinner,  106  App.  Div.  217;  94  Supp.  144. 

Claims  barred  by  the  statute  of  limitations  should  not  be 
deducted. 
See  generally: 

Hamlin  v.  Smith,  72  App.  Div.  601;  76  Supp.  258. 
HoDey  v.  Gibbons,  176  N.  Y.  520;  68  N.  E.  889. 
Schutz  v.  Morette,  146  N.  Y.  137;  40  N.  E.  780. 
Butler  v.  Johnson,  111  N.  Y.  204;  18  N.  E.  643. 

And  generally,  if  there  is  a  defense  to  any  claim  against 
the  estate  and  the  executor  or  administrator  intends  to  reject 
it — as  a  claim  barred  by  the  statute  of  frauds — the  defense 
should  be  stated  and  the  tax  as  to  the  amount  of  the  claim 
should  be  suspended — or  the  deduction  disallowed. 

Schedule  B4 — Deductions  claimed  and  not  included  in  the 
preceding  sub-schedules. 

In  this  schedule  should  be  set  forth  every  deduction  claimed 
that  is  not  classified  as  a  funeral  expense,  an  expense  of 
administration  or  a  debt  of  the  decedent.  They  must  be 
separately  stated  and  itemized. 

Matter  of  Friedlander,  N.  Y.  L.  J.,  March  8,  1911. 

Exemptions  are  not  included  under  this  head.  They  are 
not  deductions  from  the  gross  estate  and  have  nothing  to  do 
with  the  inventory,  but  are  allowed  when  the  tax  is  fixed  by 
the  Surrogate. 

Schedule  C — Property  passing  by  decedent's  exercise  of 
any  power  of  appointment. 


428 


INHERITANCE  TAXATION 


If  there  was  a  power  of  appointment  which  was  not  exer- 
cised the  fact  should  be  stated. 

All  the  assets  must  be  set  forth  with  the  same  detail  and 
particularity  as  in  the  main  schedules. 

If  a  power  of  appointment  has  been  created  by  the  will  that 
fact  should  be  set  forth  and  the  assets  covered  by  the  power 
separately  stated,  as  taxation  as  to  them  must  be  suspended 
until  it  is  determined  whether  they  pass  under  the  will  of  the 
donor,  in  case  of  failure  to  exercise  the  power.  As  to  this 
subject,  vide  ant&,  "Powers  of  Appointment." 

Schedule  D — Beneficiaries  and  their  interest. 

The  statement  should  include,  as  accurately  as  possible,  the 
names  and  addresses  of  the  beneficiaries,  the  nature  of  their 
respective  interests,  their  relationship,  if  any,  to  the  decedent, 
together  with  the  ages  at  the  time  of  decedent's  death  of  all 
minors,  annuitants  and  beneficiaries  for  life  under  decedent's 
will,  if  any. 

It  should  also  state  if  any  of  the  beneficiaries  named  in 
decedent 's  will  died  prior  to  decedent. 

Morgan  v.  Cowie,  49  App.  Div.  612-615 ;  63  Supp.  608. 

If  the  devise  or  bequest  to  beneficiaries  who  predecease 
testator  does  not  fall  into  the  residuary  estate  then  the  facts 
should  be  given  showing  to  whom  the  interest  goes. 

In  case  of  an  adopted  child  the  facts  should  be  set  forth 
showing  the  adoption. 

Matter  of  Butler,  58  Hun,  400 ;  12  Supp.  201 ;  aff.  136  N.  Y.  649 ;  32  N.  E. 
1016. 

And  if  "mutually  acknowledged,"  the  facts  bringing  the 
beneficiary  within  the  statute  must  be  clearly  established  by 
affidavit  or  testimony  if  the  latter  is  required. 

Matter  of  Birdsall,  22  Misc.  180-187;  49  Supp.  450;  aff.  43  App.  Div. 

624;  60  Supp.  1133. 

Matter  of  McMurray,  96  App.  Div.  128 ;  89  Supp.  71. 
Matter  of  Davis,  98  App.  Div.  546-549;   90  Supp.  244;   revd.  on  other 

points,  184  N.  Y.  299 ;  77  N.  E.  259. 

The  beneficiary  is  competent  witness  to  give  evidence  upon 
the  question  of  the  relation  and  the  acknowledgment  thereof. 

Matter  of  Brundage,  31  App.  Div.  348-352. 


PABT  V  — PBOCEDUBE       .-•    .'.'.""''  429 

d.  FORM  or  INVENTORY. 

Following  is  the  inventory  filed  in  a  litigated  case  arising  in 
New  York  county: 


AFFIDAVIT  AND  SCHEDULES 

SCHEDULE  A. 
Al. — Real  property. 

Assessed  value  Value  as  ap- 

f  or  year  of  praised  in 

decedent's  Estimated    thisproeeed- 

death.  market  value,     ing  equity. 

Undivided  one-fourth  in- 
terest in  Lot  No.  1  on  Map 
of  Prospect  Hill,  Pelham 
Manor,  Town  of  Pelham, 
Westchester  County,  New 
York.  Total  lot  assessed 
at  $2,000.  Decedent's  one- 
fourth  interest  only $500  00  $937  50  $937  50 

Undivided  one-half  interest 
in  Lot  350  on  Map  of  Pel- 
hamville,  Town  of  Pelham, 
Westchester  County,  New 
York.  Total  lot  assessed 
at  $800.  Decedent's  one- 
half  interest  only 400  00  850  00  850  00 

Undivided  one-half  interest 
in  Lot  No.  371  on  Map  of 
Pelhamville,  Town  of  Pel- 
ham,  Westchester  County, 
New  York.  Total  lot  as- 
sessed at  $400.  Decedent's 
one-half  interest  only 200  00  500  00  500  00 


$2,287  50  $2,287  50 


430 


INHERITANCE  TAXATION 

SCHEDULE  A. 
A2. — Cash  in  hand  and  on  deposit. 


Amount. 

Balance  standing  to  credit  of  dece- 
dent in  his  account  at  National 

Park  Bank $8,456  44 

At  Equitable  Trust  Company 23  93 

Four  certificates  of  deposit  in 
United  States  Trust  Co.  as  fol- 
lows: 

Certificate  No.  B-5109 1,000  00 

Accrued  interest  374  85 

Certificate  No.  B-18966 2,500  00 

Accrued  interest  647  15 

Certificate  No.  B-34517 3,000  00 

Accrued  interest  380  59 

Certificate  No.  38657 18,000  00 

Accrued  interest 392  25 

Savings  bank  accounts  as  follows, 

with  accrued  interest  to  July  1st, 

1914: 

East  River  Savings  Bank  No.  90735 
Emigrant  Industrial  Savings  Bank 

No.  327283 114  76 

Bank  for  Savings  No.  687659 1,048  68 

Bank  for  Savings  No.  687965 974  73 

Seamen's   Bank   for   Savings   No. 

330709 1,453  07 

Seamen's   Bank   for   Savings    No. 

332812 1,052  06 

Greenwich     Savings     Bank     No. 

279177 140  25 

Bowery  Savings  Bank  No.  755122 . .          2,817  64 
Bowery  Savings  Bank  No.  754977. .         2,949  56 


Value  as  ap- 
praised in  this 
proceeding. 


$8,465  44 
23  93 


1,000  00 

374  85 

2,500  00 

647  15 

3,000  00 

380  59 

18,000  00 

392  25 


$3,447  33   $3,447  33 

114  76 
1,048  68 
974  73 

1,453  07 
1,052  06 

140  25 

2,817  64 
2,949  56 


$48,782  29  $48,782  29 


PART  V  —  PROCEDURE  431 

SCHEDULE  A. 

A3. — Personal  chattels — bonds  and  mortgages,  promissory 
notes,  claims,  insurance,  etc. 

Value  as  ap- 

Estimated        praised  in  this 
market  value.       proceeding. 

Bonds  and  mortgages  as  follows: 

Cor.   Johnson   &  Union   Avenues, 

Brooklyn $12,000  00     $12,000  00 

4*/2%  interest  from  July  1st,  1914  217  50  217  50 

Cor.   5th   Avenue   &  40th   Street, 

Brooklyn 12,000  00       12,000  00 

4?/2%  interest  from  October  1st, 

1914 82  50  82  50 

Jamaica  Avenue,  east  of  Columbia 

Avenue,  Brooklyn 5,500  00         5,500  00 

4^2%  interest  from  November  1st, 

1914 17  19  17  19 

83rd  Street,  west  of  Second  Avenue, 

Brooklyn 5,000  00         5,000  00 

4^2%  interest  from  October  1st, 
1914 34  38  34  38 

83rd  Street,  west  of  Second  Avenue, 

Brooklyn 5,500  00         5,500  00 

41/2%  interest  from  October  1st, 

1914 37  81  37  81 

Adelphi  Street,   south  of  DeKalb 

Avenue,  Brooklyn 4,500  00         4,500  00 

4*/2%  interest  from  October  1st, 
1914 30  94  30  94 

Three  registered  U.  S.  Government 

bonds,  series  dated  August  1, 

1898.    Int.  3%. 

Bond  No.  1729 1,000  00         1,000  00 

Bond  No.  1730. .  1,000  00         1,000  00 


432 


INHEEITANCE  TAXATION 


Bond  No.  20846 

3%  interest  on  same  from  November 
1st,  1914 


Value  as  ap- 

Estimated        praised  in  this 
market  value.       proceeding. 

500  00  500  00 


5  00 


5  00 


$47,425  32     $47,425  32 


SCHEDULE  A. 
A4. — Corporate  Bonds  and  Stocks. 


Certificates  for  33  shares  Common 
Stock  of  Auto  Sales  Gum  & 
Chocolate  Co.,  N.  Y.  Corpora- 
tion capital  of  $6,000,000;  par 
value  of  shares  $100  each.  Market 
quotation  November  25th,  1914,  9 
bid,  10y2  asked 

$3,000  par  value  of  Auto  Sales  Gum 
&  Chocolate  Co.  6%  bonds. 
Market  quotation  November  25th, 
1914,  at  45 

Certificate  for  5,000  shares  of 
Sunday  Nevada  Mining  Co.  Stock, 
p.  v.  $1.00,  S.  Dakota  Corpora- 
tion, capital  $1,500,000 -. 

Certificate  for  10  shares  of  capital 
stock  of  Gas  Engine  &  Power  Co. 
and  Charles  L.  Seabury  &  Co. 
(consolidated),  p.  v.  $1.00.  Capi- 
tal $6,000,000.  N.  Y.  Memo  at- 
tached to  said  certificate  signed 
by  Chas.  Cory  &  John  M.  Cory 
stating  that  each  owns  5  shares. 


Value  as  ap- 

Estimated         praised  in  this 
market  value.       proceeding. 


$297  00         $297  00 


PART  V  —  PROCEDURE 


433 


Property  of  decedent  therein  was 

only  5  shares 

(See  letter  of  Gas  Engine  & 
Power  Co.  &  C.  L.  Seabury 
&  Co.  annexed  as  to  value.) 

Certificate  for  1  share  preferred 
capital  stock  of  Guanajuato  De- 
velopment Company  (N.  J.).  Par 
value  $100.  Capital  $1,000,000 
Pfd. ;  $3,000,000  Common 

500  shares  Capital  stock  of  Chas. 
Cory  &  Son  (N.  Y.).  Capital 
$100,000,  p.  v.  $100  each.  One- 
half  of  entire  capital  stock  was 
owned  by  Chas.  Cory  and  the 
other  half  by  John  M.  Cory.  By 
agreement  between  them  it  was 
provided  that  the  survivor  should 
purchase  the  stock  of  the  one  who 
should  first  die  and  pay  $30,000 
for  same.  Stock  of  deceased  has 
been  sold  by  executor  for  that  sum 
pursuant  to  said  agreement,  a 
copy  of  which  is  hereto  annexed. 


Value  as  ap- 

Estimated        praised  in  this 
market  value.       proceeding. 


250  00 


250  00 


0 


30,000  00  103,400  00 


$31,897  00  $105,300  00 


SCHEDULE  A. 

A5. — Interest  of  decedent  in  any  copartnership  or  business. 
None. 

SCHEDULE  A. 

A6. — Property  left  by  decedent  of  whatever  kind  or  nature 

not  included  in  the  foregoing  sub-schedules. 
None. 

28 


434 


SCHEDULE  B. 
Bl. — Funeral  expenses. 


Kev.    S.    De    Lancey    Townsend, 

Clergyman 

John  Irving,  Jr.,  Undertaker 

Boulevard  Floral  Co.,  Flowers 

T.  Pitbladdo,  Monument  work 

J.  Weir  &  Co.,  Inc.,  Gardeners 


Claimed. 

$100  00 

703  50 

185  50 

42  45 

18  00 


SCHEDULE  B. 
B2. — Administration  expenses. 


Claimed. 


Commissions  of  Executor  to  be  com- 
puted. 

Counsel  fees,  including  cost  of 
advertising  for  claims,  court  fees 
and  incidental  disbursements  esti- 
mated. 


B3.- 


SCHEDULE   B. 

-Debts  of  decedent. 


Guaranty  Trust  Co.,  loan  on  col- 
lateral $600  with  interest  from 
October  14,  1914 

Dr.  Daniel  B.  Brinsmade 

E.  Hofstaetter  &  Co 

Federal  Income  Tax  Jan.  1  to 
Nov.  25,  1914.... 


Claimed. 


$604  00 

116  00 

3  50 

52  63 


Allowed 

in  this 

proceeding. 

$100  00 

703  50 

185  50 

42  45 

18  00 


$1,049  45   $1,049  45 


Allowed 

in.  this 

proceeding. 


$2,500  00       $2,500  00 


Allowed 

in  this 

proceeding. 


$604  00 

116  00 

3  50 

52  63 


$776  13 


$776  13 


PART  V  —  PROCEDURE  435 

SCHEDULE  B. 

B4. —  Deductions  claimed  and  not  included  in  the  preceding 

sub-schedules. 

Allowed 
in  this 
Claimed.  proceeding. 

John  M.  Cory,  brother  and  legatee.       $5,000  00 

Ella  Cory,  sister  and  legatee 5,000  00 

Mary  J.  Cory,  sister  and  legatee. .         5,000  00 

00 


NOTE. — This  was  a  mistake — exemptions  are  not  deductions  and  should  not  be 
set  forth  in  the  inventory  as  they  are  taken  from  the  net  estate. 

SCHEDULE  C. 

Property  passing  by  decedent's  exercise  of  any  power  of 

appointment  vested  in  him  under  the  will,  deed  or  other 

instrument  of  another. 
None. 

SCHEDULE  D. 

Beneficiaries  and  their  interests,  etc. 
John  M.  Cory,  brother  and  legatee, 

e^ual  one-third  of  estate. 
Mary  J.  Cory, 

equal  one-third  of  estate. 
Ella  Cory, 

equal  one-third  of  estate. 

B.— PROCEEDINGS  BEFORE  APPRAISER. 

In  many  States  (but  not  New  York)  the  Surrogate,  Pro- 
bate Judge,  Tax  Commission  or  Comptroller  assess  the  tax 
upon  the  valuations  of  the  inventory,  unless  there  is  some 
reason  for  being  dissatisfied,  in  which  case  supplemental 
affidavits  are  required  or  an  appraiser  is  appointed.  In  case 
of  any  controversy  an  appraiser  is  always  appointed  who 
reports  to  the  Surrogate  or  Probate  Judge  who  assesses  the 
tax  upon  his  report. 


436 


INHERITANCE  TAXATION 


1.  Appraisers. 

a.  APPOINTMENT  AND  REMOVAL. 

In  all  the  large  jurisdictions  permanent  appraisers  are 
appointed.  Such  an  appraiser  is  a  public  officer  with  quasi- 
judicial  functions. 

Matter  of  Hull,  109  App.  Div.  248 ;  95  Supp.  819. 

In  New  York  the  appraisers  are  appointed  by  the  State 
Comptroller,  and  one  of  the  appraisers  so  appointed  must  be 
designated  by  the  Surrogate. 

Matter  of  Sondheim,  69  App.  Div.  5;  74  Supp.  510. 

An  appraiser  so  appointed  is  a  public  officer  and  not  subject 
to  the  Civil  Service  Laws. 

Weeks  v.  Kraft,  147.  App.  Div.  403;  132  Supp.  228. 

Nor  to  the  Veteran  Acts  and  may  be  removed  without 
notice  and  a  hearing  even  though  a  veteran  or  exempt 
fireman. 

People  ex  rel.  McNeile  v.  Glynn,  128  App.  Div.  267;  112  Supp.  695. 
People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35 ;  106  Supp.  956. 

The  Surrogate  may  designate  an  appraiser  on  his  own 
motion  or  upon  petition. 

Matter  of  O'Donohue,  44  App.  Div.  186;  59  Supp.  1087;  60  Supp.  690. 

The  provision  requiring  County  Treasurers  to  act  as 
appraisers  in  certain  counties  is  constitutional. 

Matter  of  Fuller,  62  App.  Div.  428;  71  Supp.  40. 

In  nearly  all  the  States  excepting  New  York  the  appraiser 
is  appointed  and  removed  by  the  court. 

Where  the  court  was  dissatisfied  with  the  appraisal  it  had 
power  of  its  own  motion  to  vacate  the  order  appointing  an 
appraiser  and  appoint  a  new  appraiser  and  direct  him  to 
make  a  new  appraisal  on  the  ground  that  the  original  report 
was  insufficient  and  that  the  court  could  not  determine  the 
tax  therefrom. 

County  Court  v.  Watson,  51  Colo.  405;  118  Pac.  974. 


PART  V  — PROCEDURE  437 

But  the  previously  appointed  appraiser  must  be  removed 
for  neglect  of  duty  or  other  proper  cause  before  a  new 
appraiser  can  be  appointed. 

Wingert  v.  State,  125  Md.  536 ;  94  A.  166. 

And  in  case  of  fraud  or  error  the  court  can  always  order 
a  reappraisal  before  another  appraiser. 

State  v.  District  Court,  41  Mont.  357;  109  Pac.  438. 

The  duty  of  the  Surrogate  to  appoint  an  appraiser  is 
imperative  and  he  can  be  compelled  to  act  by  mandamus. 

Kelsey  v.  Church,  112  App.  Div.  408 ;  98  Supp.  535. 

The  Surrogate  may  act  as  appraiser  under  section  231  of 
the  New  York  statute. 

Matter  of  Baker,  38  Misc.  151;  77  Supp.  170. 

Matter  of  Cameron,  97  App.  Div.  436;  89  Supp.  977;  aff.  181  N.  Y.  560; 

74  N.  E.  1115. 

Matter  of  Coatello.  189  N.  Y.  288 ;  82  N.  E.  139. 
Matter  of  Whitewright,  87  Misc.  534;  151  Supp.  241. 

Where  property  of  a  decedent  is  situated  in  several 
counties,  the  appraiser  appointed  by  the  Surrogate  first 
acquiring  jurisdiction  may  appraise  all. 

Matter  of  Keenan,  22  N.  Y.  St.  Rep.  79 ;  5  Supp.  200. 

b.  POWERS  AND  DUTIES. 

The  functions  of  an  appraiser  are  in  many  respects 
judicial  as  well  as  ministerial. 

Matter  of  Ullmann,  137  N.  Y.  403;  33  N.  E.  480. 

"He  must  have  a  knowledge  of  trusts  and  of  wills,  and 
devises  and  bequests,  and  of  the  descent  and  distribution  of 
property  of  decedents.  He  must  be  an  expert  upon  the  value 
of  stocks  and  bonds  and  personal  property  in  general.  He 
must  be  capable  of  ascertaining  the  value  of  real  property 
and  of  conducting  examinations  and  deciding  questions  of  fact 
as  to  residence,  relationship  and  the  like." 

Weeks  v.  Kraft,  147  App.  Div.  403 ;  132  Supp.  228. 

But  it  is  no  part  of  the  duty  of  an  appraiser  to  write  legal 
opinions,  and  such  an  opinion  must  be  stricken  from  the 
record.  In  so  holding  the  court  said: 


438 


INHERITANCE  TAXATION 


"The  duties  of  an  appraiser  under  the  Tax  Law  are 
specified  in  section  230.  They  do  not  include  the  writing 
of  legal  opinions  or  memoranda  of  law.  The  responsibility 
for  deciding  disputed  questions  of  law  is  placed  upon  the 
Surrogate,  acting  in  his  judicial  capacity,  and  any  assistance 
which  he  may  need  in  the  performance  of  his  duty  is  generally 
supplied  by  the  briefs  submitted  by  the  parties  to  the  appeal. 
While  this  court  does  not  desire  to  interfere  in  any  way  with 
the  individual  preferences  of  appraisers  in  making  their 
reports,  it  feels  bound  to  intimate  that  its  records  should 
not  be  unnecessarily  incumbered,  and  that  memoranda  by 
the  appraisers  on  questions  of  law  should  be  omitted  from 
their  reports.  It  is  unfair  to  any  party  appealing  to  the 
Appellate  Division  from  the  decision  of  the  Surrogate  to  be 
compelled  to  print  as  part  of  the  record  the  legal  opinion  of 
an  appraiser.  The  motion  to  strike  the  memorandum  from 
the  record  is  therefore  granted." 

Matter  of  Von  Bernuth,  103  Misc.  521 ;  171  Supp.  764. 

The  appraiser  has  power  to  issue  subpoenas  and  compel  the 
attendance  of  witnesses.  His  powers  and  duties  are  of  a 
qua si- judicial  character,  and  call  for  the  exercise  of  sound 
judgment,  discretion  and  a  knowledge  of  legal  principles. 
They  partake  of  the  nature  of  the  acts  of  commissioners 
appointed  by  the  court  in  condemnation  proceedings  and  of 
referees  to  hear,  try,  and  determine  the  issues  in  actions, 
or  to  take  proof  in  actions  and  report  the  same  to  the  court 
with  their  opinion  thereon,  all  of  which  demand  upon  the 
part  of  the  incumbent  an  understanding  of  statutory  pro- 
visions and  ability  to  pass  upon  complicated  questions  of  law. 

People  ex  rel.  McKnight  v.  Glynn,  56  Misc.  35 ;  106  Supp.  956. 

"Some  of  the  functions  of  a  taxing  officer  are  ministerial, 
but  it  is  well  established  by  authority  that  in  determining 
the  value  of  the  property  assessed,  the  extent  of  claims  to 
exemption,  etc.,  the  taxing  officer  or  board  acts  judicially." 

Matter  of  Hull,  109  App.  Div.  248;  95  Supp.  819. 

'The  function  of  an  appraiser  is  somewhat  similar  to  that 
of  a  jury  called  by  the  court  in  an  equity  case  to  aid  its 


PAET  V  —  PROCEDURE  439 

conscience.     The  whole  matter  is  with  the  Surrogate  and 
continues  with  him  until  final  determination  after  appeal." 

Matter  of  Thompson,  57  App.  Div.  317-319;  68  Supp.  18. 

An  appraiser  must  rule  on  admission  of  testimony. 

Morgan  v.  Warner,  45  App.  Div.  424-427;  60  Supp.  963;  aff.  162  N.  Y. 
612;  57  N.  E.  1118. 

It  frequently  happens  that  an  appraiser  as  part  of  his 
necessary  duties  must  construe  a  will. 

Matter  of  Cager,  111  N.  Y.  343,  347;  18  N.  E.  866. 
Matter  of  Ullman,  137  N.  Y.  403 ;  33  N.  E.  480. 
Matter  of  Kimberly,  150  N.  Y.  90;  44  N.  E.  945. 
Matter  of  Lynn,  34  Miae.  681;  70  Supp.  730. 
Matter  of  Peters,  69  App.  Div.  465 ;  74  Supp.  1028. 

A  transfer  tax  appraiser  has  jurisdiction  in  the  first 
instance  to  determine  whether  certain  corporate  stock  con- 
stitutes a  part  of  the  estate  to  be  appraised,  and  such  deter- 
mination must  necessarily  precede  the  valuation  of  said  stock 
for  the  purposes  of  the  transfer  tax.  The  jurisdiction  of 
the  appraiser  is  not,  however,  exclusive,  and  on  appeal'  from 
the  order  entered  on  his  report  the  Surrogate  has  power  to 
decide  every  question  that  may  be  raised  in  a  proceeding 
under  the  statute. 

Matter  of  Barnes,  83  Mise.  272;  144  Supp.  794. 

The  court  said  in  People  ex  rel.  McKnight  v.  Glynn,  56 
Misc.  35,  106  Supp.  956: 

"  It  is  alleged  that  the  transfer  tax  appraiser  always  acts 
as  a  representative  of  the  State  Comptroller  rather  than  as 
a  disinterested  arbiter.  This,  if  true,  is  a  violation  of  the 
obligations  of  the  appraiser  and  not  contemplated  by  the  act. 
An  appraiser  should  decide  with  entire  impartiality  the 
questions  arising  before  him,  whether  of  law  or  of  fact  or 
mixed  questions  of  law  and  fact. 

"The  State  Comptroller  is  only  one  of  the  parties  to  the 
proceedings  before  the  appraiser,  and  is  entitled  to  no  more 
consideration  than  the  representatives  of  the  estate.  An 
error  of  the  appraiser  in  this  regard  cannot  enter  into  the 
construction  of  the  statute.  The  Surrogate  may  always 
correct  such  errors,  if  duly  advised. 


440 


INHERITANCE  TAXATION 


"The  powers  and  duties  of  the  tax  appraisers  are  of  a 
quasi- judicial  character.  They  call  for  the  exercise  of  sound 
judgment,  discretion  and  knowledge  of  legal  principles.  They 
demand  upon  the  part  of  the  incumbent  an  understanding 
of  statutory  provisions  and  ability  to  pass  upon  complicated 
questions  of  law. '  ' 

The  tendency  has  been  more  and  more  to  emphasize  the 
judicial  functions  of  the  appraiser.  While  he  cannot  him- 
self issue  a  commission  to  take  testimony  in  a  foreign 
jurisdiction  the  Surrogate  may  issue  the  commission  and 
the  testimony  may  then  be  adduced  before  the  appraiser. 

Matter  of  Wallace,  71  App.  Div.  284;  75  Supp.  838. 

The  appraiser  may  not  determine  questions  of  residence 
but  the  parties  usually  stipulate  that  he  may  take  the  evidence 
and  submit  it  for  determination  to  the  Surrogate. 

Matter  of  Grant,  83  Misc.  257;  144  Supp.  567;  aff.  166  App.  Div.  921; 
151  Supp.  1119. 

2.  Notice. 

a.  NOTICE  is  JURISDICTIONAL. 

A  statute  that  imposes  a  tax  and  provides  for  no  notice  or 
hearing  or  "day  in  court"  for  the  person  who  must  pay  it 
is  unconstitutional. 

Matter  of  Winters,  21  Misc.  552 ;  48  Supp.  1097. 
Matter  of  McPherson,  104  N.  Y.  306 ;  10  N.  E.  685. 
Ferry  v.  Campbell,  110  la.  290 ;  81  N.  W.  604. 
Martin  v.  Pollock,  144  Ga.  605 ;  87  S.  E.  793. 
Matter  of  Haakins  (Cal.),  149  Pac.  576. 

If  there  is  a  provision  for  appeal  and  rehearing  before  the 
court  notice  of  appraisal  is  not  necessary  to  make  the  act 
constitutional. 

Hostetter  v.  State,  26  Ohio  Cir.  Ct.  702. 
^ 

Notice  of  appraisal  and  right  of  appeal  is  sufficient  notice 
and  hearing. 

Matter  of  McPherson   104  N.  Y.  306,  323;  10  N.  E.  685. 
Trippet  v.  State,  149  Cal.  521 ;  86  Pac.  1084. 


PAET  V  —  PROCEDURE  441 

Notice  of  appraisal  must  be  given  to  all  parties  in  interest 
and  failure  to  do  so  will  invalidate  the  proceedings. 

Matter  of  Wolfe,  137  N.  Y.  205 ;  33  N.  E.  156. 

Matter  of  Backhouse,  110  App.  Div.  737;  96  Supp.  466;  aff.  185  N.  Y. 
544;  77  N.  E.  1181. 

So  where  no  proof  of  notice  to  parties  interested  was 
appended  to  report  of  appraiser  the  report  was  remitted  with 
directions  to  give  due  notice  and  hold  another  hearing. 

Matter  of  Froment,  N.  Y.  L.  J.,  November  29,  1916. 

"It  may  be  difficult  in  a  given  case  for  the  court  to  ascer- 
tain the  names  and  post-office  addresses  of  all  persons  inter- 
ested, but  if  the  inconvenience  and  difficulty  encountered  in 
this  regard  is  to  determine  the  power  of  the  court  to  proceed, 
then  there  would  arise  cases  in  which  the  court  would  be  at 
a  loss  as  to  what  disposition  it  should  make  of  a  distributive 
share.  The  court  admitted  the  will  to  probate.  It  may  be 
presumed  that  it  has  knowledge  or  the  means  of  knowledge 
of  all  persons  interested  in  the  property  disposed  of  by  it,  and 
can  impart  this  knowledge  to  the  appraiser  in  its  direction  to 
him  as  to  the  time  which  must  intervene  before  the  appraise- 
ment is  made. 

State  v.  District  Court,  41  Mont.  357,  366 ;  109  Pae.  438. 

And  it  must  specify  the  property  to  be  appraised  to  be 
binding. 

Matter  of  Morgan,  164  App.  Div.  854;  149  Supp.  1022;  aff.  215  N.  Y. 
(mem.). 

The  State  Comptroller  was  not  precluded  from  taking  pro- 
ceedings in  1902  to  assess  the  transfer  tax  upon  an  estate 
where  the  decedent  died,  and  whose  will  was  proved  in  1895, 
and  the  counsel  for  the  estate  was  informed  by  the  Surro- 
gate, upon  the  basis  of  the  executor's  affidavit,  that  the  estate 
was  too  small  to  be  taxable, —  it  appearing  that  no  decree 
was  then  or  ever  entered  taxing  or  exempting  the  estate,  and 
that  consequently  no  notice  of  an  appraisal  was  ever  given 
to  the  persons  legally  entitled  thereto. 

Matter  of  Schmidt,  39  Misc.  77 ;  78  Supp.  879. 


442 


INHERITANCE  TAXATION 


Parties  upon  whom  notice  is  served  are  chargeable  with 
notice  of  all  subsequent  proceedings,  including  the  adjourn- 
ments of  the  hearing  from  time  to  time ;  and  it  is  not  necessary 
that  the  new  notice  be  served  after  adjournment. 

Hanberg  v.  Morgan,  263  HI.  616;  105  N.  E.  720. 

The  proofs  must  also  show  that  officers  representing  the 
people  had  due  notice. 

Matter  of  Bolton,  35  Misc.  688;  72  Supp.  430. 

But  this  is  not  jurisdictional  unless  the  statute  requires  it. 

State  v.  Branch,  132  Ark.  138 ;  200  S.  W.  809. 

But  when  the  district  attorney  appears  his  authority  will 
be  presumed. 

Matter  of  Arnett,  49  Hun,  599 ;  2  Supp.  428. 

b.  NOTICE  BY  MAIL  SUFFICIENT. 

"The  Legislature  not  having  prescribed  the  kind  of  notice, 
it  may  be  personal  or  by  mail.  If  mailed,  and  the  taxpayer 
lives  in  a  city,  the  notice  if  possible  should  be  directed  to 
the  street  and  number  of  his  residence.  It  is  so  provided  in 
St.  1909,  c.  490,  Part  II,  §  3,  requiring  a  collector  of  taxes, 
after  receiving  a  tax  list  and  warrant,  to  send  notice  to  each 
person  who  is  assessed,  whether  resident  or  nonresident,  of 
the  amount  of  his  taxes.  The  commissioner  not  having  com- 
plied with  the  statute,  the  tax  is  uncollectible  and  the 
information  must  be  dismissed  with  costs." 

Attorney-General  v.  Roche,  219  Mass.  601 ;  107  N.  E.  367. 

Notice  of  application  to  assess  a  transfer  tax  should  be 
given  to  a  legatee,  devisee  or  distributee  upon  whose  interest 
a  tax  may  be  assessed.  The  statute  does  not  prescribe  the 
manner  in  which  notice  may  be  given  on  an  application  to 
assess  a  transfer  tax,  but  where  personal  service  is  made 
either  within  or  without  the  State,  the  requirements  of  section 
2529  of  the  Code  of  Civil  Procedure  as  to  the  number  of  days 
which  must  elapse  between  the  date  of  service  and  the  return 
date  governs;  in  case  service  is  made  by  mail,  the  time 


PAET  V  — PBOCEDUEE  443 

between  the  mailing  of  the  notice  of  motion  and  the  return 
day  should  be  double  that  required  in  case  of  personal  service. 

Matter  of  Whitewright,  89  Misc.  97;  151  Supp.  241. 

When  an  affidavit  attached  to  transfer  tax  appraiser's 
report  specifically  alleges  that  notice  of  appraisal  required 
by  the  statute  was  duly  mailed  to  the  executor,  his  denial,  on 
information  and  belief,  that  he  received  the  notice,  held 
insufficient. 

Matter  of  Hart,  98  Mise.  515;  162  Supp.  716. 

Although  this  case  was  reversed  by  the  Appellate  Divi- 
sion, no  criticism  is  made  of  the  ground  taken  by  the  Sur- 
rogate. It  appeared,  however,  jthat  the  appraiser  who  gave 
the  notice  resigned  and  that  another  appraiser  was  appointed 
in  his  place  who  proceeded  without  any  further  notice,  rely- 
ing on  that  given  by  the  former  appraiser.  The  Appellate 
Division  held  that  this  was  not  good  service,  saying: 

"We  think  that  a  transfer  tax  appraisal  ends  with  the 
death,  resignation  or  removal  of  an  appraiser  and  that  each 
appraiser  must  proceed  de  novo.  The  transfer  tax  could  not 
be  validly  determined  without  notice  to  the  parties  inter- 
ested and  an  opportunity  to  be  heard,  and  the  Legislature 
has  so  provided.  There  is  no  statutory  provision  continuing 
an  appraisal  proceeding  commenced  before  one  appraiser 
and  permitting  his  successor  to  take  up  and  complete  his 
work  and  no  decision  sustaining  the  exercise  of  such  power 
in  a  similar  case  is  cited  or  has  been  found.  It  follows, 
therefore,  that  the  order  should  be  reversed." 

Matter  of  Hart,  179  App.  Div.  39;  166  Supp.  188;  aff.  222  N.  Y.  660. 

It  seems  to  be  the  general  doctrine  that  one  appraisal 
exhausts  the  authority  of  the  appraiser.  He  cannot  make  a 
new  appraisal  even  where  property  was  omitted. 

Ee  Freedley,  21  Pa.  St.  33. 

Ee  Monneypenny,  181  Pa.  St.  309;  37  A.  539. 

c.  WHERE  NOTICE  is  IMPOSSIBLE. 

Where  there  is  a  bequest  to  a  charitable  corporation  yet  to 
be  formed  no  service  of  process  or  notice  of  the  appraisement 
proceedings  could  or  would  be  binding  upon  it. 

People  v.  Kellogg,  268  111.  489,  497;  109  N.  E.  304. 


444  INHERITANCE  TAXATION 

d.  PRESUMPTION  OF  NOTICE. 

In  the  absence  of  proof  to  the  contrary  it  will  be  presumed 
that  the  Surrogate  has  given  the  required  notice  to  all  per- 
sons interested  in  the  estate;  but  this  presumption  does  not 
extend  to  appraisers. 

Matter  of  Miller,  110  N.  Y.  216;  18  N.  E.  139. 

And  if  the  Surrogate  in  fact  failed  to  give  notice  the  decree 
may  be  opened. 

Matter  of  Daly,  34  Misc.  148 ;  69  Supp.  494. 

3.  Hearings. 

a.  INFORMAL  UPON  AFFIDAVITS. 

If  the  Tax  Commission's  representative  is  satisfied  with  the 
valuations  of  the  schedules  he  may  accept  them  and  the 
appraiser  will  then  proceed  upon  the  executor's  affidavit. 

Where  the  State  Tax  Commission  is  dissatisfied  with  the 
value  of  an  estate  as  given  in  affidavits  submitted  to  a  transfer 
tax  appraiser  on  behalf  of  the  estate,  he  should  either  examine 
the  affiant  as  to  the  basis  of  his  valuation  or  submit  an 
appraisal  by  some  one  possessing  the  necessary  qualifications 
therefor. 

Matter  of  Gale,  83  Misc.  686;  145  Supp.  301. 

If  the  schedules  do  not  contain  all  the  information  desired 
it  may  be  supplied  by  the  executor,  upon  request,  in  the  form 
of  supporting  or  supplementary  affidavits  of  appraisers  of 
jewelry,  real  estate,  and  the  like.  Where  the  estate  is  of  any 
size,  however,  oral  testimony  is  almost  always  adduced. 

"Inventories  of  estates  of  decedents  made  in  pursuance  of 
an  order  of  the  probate  court  issued  under  authority  of  a 
statute  are  admissible  for  many  purposes  against  every  per- 
son since  they  are  made  by  those  acting  under  authority  of  the 
law.  An  inventory  or  appraisal  has,  however,  been  rejected 
when  offered  against  the  administrator  who  was  in  no  way 
connected  with  it  and  it  was  simply  a  sworn  ex  parte  state- 
ment of  third  persons,  though  it  has  been  held  prima  facie 
evidence  against  him  of  the  value  of  the  assets  in  the  absence 
of  other  proof  of  value." 

Chamberlayne  on  Evidence,  §  3440. 


PART  V  —  PROCEDURE  445 

The  estimate  of  an  appraiser  appointed  by  one  of  the  par- 
ties has  no  conclusive  effect  on  the  rights  of  the  other  except 
where  the  latter  has  co-operated  in  the  appointment. 

Chamberlayne  on  Evidence,  §  2109. 

The  affidavits  must  show  facts,  not  conclusions,  to  have  any 
probative  force  or  support  the  findings  of  the  appraiser. 

Matter  of  G.  C.  Stone,  N.  Y.  L.  J.,  February  18,  1911. 

The  appraiser  cannot  arbitrarily  fix  value  higher  than  that 
disclosed  by  the  affidavit  presented  by  the  executor  in  the 
absence  of  any  evidence  on  the  part  of  the  State  Tax  Com- 
mission. 

Matter  of  Ulrici,  111  Misc.  55;  182  Supp.  516. 

b.  BURDEN  OF  PROOF. 

In  the  first  instance  the  burden  of  proof  rests  upon  the 
Comptroller  to  show  that  assets  are  a  part  of  the  estate. 

Matter  of  Enston,  113  N.  Y.  174;  21  N.  E.  87. 

But  a  prima  facie  case  is  always  sufficient. 

Matter  of  Lane,  39  Misc.  522 ;  80  Supp.  381. 

Circumstantial  evidence  may  sustain  it  and  overcome  the 
direct  assertion  of  an  interested  party. 

Matter  of  Palmer,  117  App.  Div.  360;  102  Supp.  236. 

But  mere  suspicion  that  executor  concealed  assets  is  not 
enough. 

Matter  of  Peck,  149  App.  Div.  912;  133  Supp.  1136. 

"Any  apparent  attempt,  however,  upon  the  part  of  the 
executors  to  evade  the  payment  of  a  just  tax,  however  repre- 
hensible it  may  be,  does  not  authorize  either  the  appraiser  or 
Surrogate  to  make  an  assessment  upon  suspicion  or  otherwise 
than  upon  convincing  evidence  of  the  transfer  of  property  for 
which  the  tax  is  imposed  by  the  statute." 

Matter  of  Kennedy,  113  App.  Div.  4-8;  99  Supp.  72. 


446 


INHERITANCE  TAXATION 


The  burden  rests  on  beneficiary  when  claiming  exemption : 

(1)  As  an  adopted  child: 

Matter  of  Davis,  98  App.  Div.  546;  90  Supp.  244. 
Matter  of  Birdsall,  22  Mise.  180 ;  49  Supp.  450. 
Matter  of  Fisch,  34  Misc.  146;  69  Supp.  493. 

(2)  Under  a  gift  inter  vivos: 

Tompkins  v.  Leary,  134  App.  Div.  14. 
Devlin  v.  Greenwich  Bank,  125  N.  Y.  756;  26  N.  E.  744. 
Matter  of  Lawrence,  N.  Y.  L.  J.,  February  15,  1913. 
Matter  of  Loewi,  75  Misc.  57 ;  134  Supp.  679. 

(3)  As  a  charitable  corporation: 

Matter  of  Townsend,  215  N.  Y.  442. 

The  burden  is  on  the  Comptroller  to  show  that  a  gift  was 
made  in  contemplation  of  death. 

Matter  of  Ahrens,  N.  Y.  L.  J.,  May  14,  1913. 
Matter  of  Palmer,  117  App.  Div.  360;  102  Supp.  326. 

Where  property  is  shown  to  have  belonged  to  the  deceased, 
the  burden  is  on  executors  to  show  that  it  never  came  into 
their  hands. 

Matter  of  Kennedy,  113  App.  Div.  4 ;  99  Supp.  72. 

But  upon  the  Comptroller  to  show  that  the  estate  is  subject 
to  the  tax. 

Matter  of  Wadsworth,  166  Supp.  716. 

The  policy  of  the  law  should,  however,  be  one  of  encourage- 
ment to  the  State  officers  in  their  efforts  to  collect  the  tax  and 
not  one  of  repression. 

Matter  of  Green,  184  App.  Div.  376  (rev.  231  N.  Y.  237;  131  N.  E.  900). 

c.  WITNESSES. 

The  witness  must  answer  the  question  before  the  appraiser 
even  though  objected  to.  The  materiality  is  for  the  Surrogate 
to  determine. 

Matter  of  Bell,  94  Misc.  552;  158  Supp.  142. 

Evidence  as  to  value  must  be  taken  by  appraiser  under  oath. 

Matter  of  Kieth,  114  Misc.  86;  185  Supp.  911. 


PAET  V  — PBOCEDUBE  447 

Opinion  evidence  by  a  witness  duly  qualified  is  competent 
as  to  value. 

Matter  of  Proctor,  41  Misc.  79  ;  83  Supp.  643. 

A  party  calling  a  witness  to  give  his  opinion  on  value  may 
qualify  him  by  showing  his  familiarity  with  the  property  and 
with  other  property  in  the  neighborhood,  his  experience  in  the 
business,  his  .familiarity  with  the  state  of  the  market  and  with 
sales  of  similar  property  in  the  vicinity,  and  any  other  facts 
tending  to  show  his  knowledge  of  the  subject  and  capacity  to 
give  an  opinion  thereon. 

Hancock  v.  Boss,  50  Cal.  Dec.  15. 

'  *  The  affidavit  submitted  to  the  appraiser  was  evidently  pre- 
pared by  the  attorney  for  the  executrix,  and  therefore  the 
allegations  therein  contained  are  not  entitled  to  the  same 
probative  force  as  the  direct  testimony  of  the  deponent.  When 
she  testified  before  the  appraiser  her  answers  to  the  questions 
propounded  to  her  were  in  her  own  words,  the  language  was 
her  own,  and  she  evidently  testified  to  the  facts  from  her  own 
knowledge  and  without  the  adventitious  aid  of  counsel.  As 
she  was  an  interested  witness  the  court  will  assume  the  cor- 
rectness of  the  evidence  that  is  least  advantageous  to  her." 

Matter  of  Thompson,  85  Misc.  291;  147  Supp.  157;  mod.  167  App.  Div. 
356;  153  Supp.  164;  aff.  217  N.  Y.  609. 

''Upon  the  hearing  before  the  appraiser  of  real  estate  ex- 
perts were  examined  on  behalf  of  the  estate  in  order  to  show 
the  value  of  decedent's  real  property  in  this  county.  A  real 
estate  expert  was  also  examined  on  behalf  of  the  State  Comp- 
troller. There  was  a  material  difference  between  their  esti- 
mates of  the  value  of  decedent's  real  property.  The  appraiser 
adopted  the  valuation  of  the  State  Comptroller's  expert.  An 
examination  of  the  testimony  shows  that  this  valuation  was 
not  unreasonable  or  unwarranted,  and  the  Surrogate  there- 
fore will  not  interfere  with  the  finding  of  the  appraiser." 

Matter  of  Turner,  82  Misc.  25;  143  Supp.  692. 

The  report  of  a  financial  expert  on  the  valuation  of  the 
assets  of  a  partnership  or  corporation  must  be  under  oath. 

Matter  of  Newman,  91  Misc.  200;  154  Supp.  1107. 
Matter  of  Chambers,  N.  Y.  L.  J.,  January  31,  1912. 


INHERITANCE  TAXATION 

The  affidavit  of  an  executor  as  to  the  value  of  the  real  estate 
is  competent  before  the  appraiser  as  an  admission  against 
interest. 

Simon  v.  Etgen,  213  N.  Y.  589. 

The  executor  of  a  nonresident  decedent  is  not  obliged  to 
testify  before  the  appraiser  in  reference  to  the  decedent's 
property  without  this  State,  or  as  to  stock  of  foreign  cor- 
porations owned  by  the  nonresident  decedent. 

Matter  of  Bishop,  82  App.  Div.  112;  81  Supp.  474. 

But  if  he  so  refuses  the  debts  in  a  foreign  jurisdiction  can- 
not and  therefore  will  not  be  pro  rated. 

Matter  of  Whiting,  69  Misc.  526;  127  Supp.  960;  aff.  200  N.  Y.  520. 

Where  a  witness  refuses  to  answer  a  material  question  in 
reference  to  a  gift  to  himself  by  the  testator,  he  can  be  pun- 
ished for  contempt  by  the  Surrogate. 

Matter  of  Kennedy,  113  App.  Div.  4-8 ;  9  Supp.  72. 

The  appraisal  of  the  same  real  estate  in  another  proceeding 
is  not  competent  evidence  of  value. 

Matter  of  Mitchell,  N.  Y.  L.  J.,  March  9,  1912. 

Intent  of  parties  to  a  deed  creating  a  revocable  trust  may 
be  shown  by  parol. 

People  v.  Shaffer,  291  111.  142 ;  126  N.  E.  887. 

d.  PERSONAL  TRANSACTIONS  WITH  DECEASED. 

A  residuary  legatee,  son  of  decedent,  may  testify  to  inter- 
views had  by  him  with  the  decedent  tending  to  show  that 
particular  legacy  was  given  to  him  by  the  will  in  payment  of 
a  debt  for  services  rendered  by  him  to  decedent. 

Matter  of  Gould,  19  App.  Div.  352 ;  46  Supp.  506 ;  mod.  156  N.  Y.  423. 

A  legatee  is  not  prohibited  from  testifying  before  an  ap- 
praiser as  to  interviews  had  by  him  with  the  decedent,  and 
which  tend  to  show  why,  or  for  what  purpose  a  particular 
legacy  was  given  to  him  by  the  decedent. 

Matter  of  White,  116  App.  Div.  183. 

Matter  of  Brundage,  31  App.  Div.  348-353;  52  Supp.  362. 


PAKT  V  — PEOCEDUEE  449 

In  inheritance  tax  proceedings  the  testimony  of  a  witness 
as  to  personal  transactions  with  the  deceased  is  not  barred 
by  Sec.  829  of  the  New  York  code. 

Matter  of  Gould,  19  App.  Div.  352;  46  Supp.  506;  aff.  as  to  this  point, 
156  N.  Y.  423. 

But  when  this  is  the  only  testimony  it  should  be  received 
with  caution. 

Matter  of  Thompson,  81  Misc.  86. 

Matter  of  Sharer,  36  Misc.  502;  73  Supp.  1057. 

e.  CORPORATE  BOOKS. 

The  appraiser  may  subpoena  the  production  of  corporate 
books  as  this  is  often  the  only  way  in  which  the  value  of  the 
stock  can  be  established  where  there  were  no  sales  in  the  open 
market. 

Matter  of  Crawford,  85  Misc.  283;  147  Supp.  234. 
Matter  of  Bach,  147  Supp.  229. 

The  Wisconsin  statute  did  not  specifically  give  this  power 
and  a  writ  of  prohibition  was  granted,  the  court  reasoning 
that  a  third  party  should  not  be  compelled  to  produce  private 
books  and  papers. 

State  v.  Carpenter,  129  Wis.  180;  108  N.  W.  641. 

But  the  appraiser  generally  has  power  to  compel  their 
production. 

Ee  Mavis,  14  Pa.  Co.  Ct.  171. 

Books  of  account  are  competent  to  prove  a  claim  against 
an  estate  in  an  inheritance  tax  case  where  the  entries  were 
made  under  the  direction  of  the  deceased. 

People  v.  Lef ens,  269  111.  472 ;  109  N.  E.  965. 

f.  OBJECTIONS. 

Where  no  witnesses  are  examined  and  the  appraisal  is 
made  upon  the  affidavits  furnished  by  the  estate  the  whole 
proceeding  is  informal  and  the  ordinary  rules  of  evidence  do 
not  apply.  On  the  other  hand  where  there  is  a  controversy 
and  testimony  is  adduced  the  proceeding  assumes  the  form  of 
29 


450 


INHERITANCE  TAXATION 


a  trial,  with  issues  joined  and  facts  to  be  determined.  Even 
under  these  circumstances  the  hearing  is  still  of  an  informal 
character. 

"Evidence  given  before  the  appraiser  on  appraisals  for  tax 
purposes  is  generally  informal  in  character  and  the  Common 
Law  rules  of  evidence  appropriate  on  trials  by  jury  are  not 
strictly  applied  and,  indeed,  in  legal  theory,  have  but  little 
application  to  such  proceedings  or  inquisitions  conducted  by 
appraisers." 

Matter  of  Hettie  E.  Green,  99  Misc.  582;  aff.  179  App.  Div.  890. 

"We  think  the  error  of  the  appraiser  in  rejecting  the  evi- 
dence ought  not  to  be  disregarded,  although  there  was  no 
formal  exception  taken  to  the  exclusion  of  the  evidence.  This 
record  comes  to  us  on  an  appeal  from  all  the  proceedings, 
and  not  upon  formal  case  and  exceptions.  It  is  a  case  where 
the  court  can  see  that  the  ruling  may  have  been  very  pre- 
judicial to  the  appellant,  and  we  ought  not,  therefore,  to  say 
that  an  exception  is  indispensable  to  a  review  of  the  errors 
committed  during  the  hearing  before  the  appraiser." 

Matter  of  Brundage,  31  App.  Div.  348;  52  Supp.  362. 

But  it  is  not  safe  for  the  practitioner  to  rely  upon  the 
leniency  of  the  court  and  omit  the  ordinary  precautions  in  tak- 
ing objections  and  exceptions.  The  rules  are  being  applied 
more  and  more  strictly  and  particularly  against  the  taxing 
power.  It  will  be  observed  that  in  the  cases  cited  the  strict 
rules  of  evidence  were  modified  in  favor  of  the  estate.  This 
may  be  entirely  proper ;  but  the  attorneys  for  the  tax  collector 
can  look  for  no  such  assistance. 

For  example :  Where  the  donor  of  stock  has  failed  to  affix 
stock  transfer  stamps  at  the  time  of  the  delivery  of  the  gift 
no  evidence  of  it  can  be  received  by  the  appraiser  pursuant  to 
Sec.  278  of  the  N.  Y.  Tax  Law. 

Matter  of  Church,  176  App.  Div.  910. 

Matter  of  Ball,  161  App.  Div.  79;  146  Supp.  499. 

Matter  of  Paul,  165  Supp.  413;  aff.  181  App.  Div.  932. 

But  if  the  evidence  of  the  gift  has  been  received  by  the  ap- 
praiser without  objection  it  is  too  late  to  move  to  strike  it  out 


PART  V  —  PROCEDURE  451 

on  this  ground  when  the  matter  comes  before  the  Surrogate 
on  appeal  from  the  taxing  order. 

Matter  of  Mills,  172  App.  Div.  530;  158  Supp.  1100;  aff.  219  N.  Y.  100. 
Matter  of  Cleveland,  171  App.  Div.  908;  155  Supp.  1098. 

"No  evidence  of  a  gift  or  sale  of  stock,  where  the  delivery 
of  the  certificate  was  made  without  the  affixing  of  the  required 
stamps  at  the  time  of  the  delivery,  can  be  received.  This  re- 
sults in  making  proof  of  such  sale  or  gift  impossible,  when- 
ever the  defense  that  no  stamp  was  affixed  at  the  time  of. 
delivery  of  the  certificate  of  stock  is  properly  pleaded." 

Matter  of  Raleigh,  75  Misc.  55. 

Bean  v.  Flint,  138  App.  Div.  846;  aff.  204  N.  Y.  153;  97  N.  E.  490.        .      ? 

Mutual  Life  Insurance  Co.  v.  Nicholas,  144  N.  Y.  95. 

Sheridan,  v.  Tucker,  145  N.  Y.  145. 

The  duty  to  affix  the  stamps  is  on  the  donor  and  the  failure 
does  not  affect  the  validity  of  the  gift;  it  merely  bars  the 
proof  of  it  before  the  appraiser.  So  on  appeal  from  an  order 
allowing  discontinuance  the  court  said : 

"Had  the  duty  to  affix  a  transfer  stamp  to  her  father's 
declarations  of  trust  been  on  the  infant  plaintiff,  more  weight 
could  be  given  to  defendant's  argument  that,  despite  her  mo- 
tion to  discontinue,  her  suit  should  go  on.  But  a  gift  of  securi- 
ties by  a  father  to  a  child  non  sui  juris  imposed  on  her  no  such 
duty.  This  was  not  only  from  her  incapacity,  but  because  the 
duty  was  laid  on  the  person  making  the  sale,  transfer,  or  agree- 
ment (Tax  Law,  §  272),  who  was  the  father  and  plaintiff's 
natural  guardian.  Should  such  a  trust  fail  in  equity  because 
of  the  father's  omission  to  stamp  the  papers  he  had  made? 
The  State  law  declares  a  rule  excluding  the  receipt  in  evidence 
of  such  unstamped  transfer,  but  does  not  annul  it. 

"Strong  grounds  must  be  shown  to  move  the  judicial  dis- 
cretion to  force  an  infant  to  carry  on  a  litigation  which  is; 
clearly  against  her  interests  to  continue."  ,1 

Ambrosius  v.  Ambrosius,  167  App.  Div.  244;  152  Supp.  562.  •?.'" '"  } 

tJt&I&jl 

g.  PROOF  OF  FOREIGN  LAW. 

In  all  matters  pertaining  to  nonresident  estates  foreign 
laws  and  decisions  must  be  proved  before  the  appraiser  like 


452 


INHERITANCE  TAXATION 


any  other  fact.  In  the  absence  of  such  proof  it  may  be  pre- 
sumed that  the  law  of  the  foreign  State  is  the  same  as  that  of 
the  State  where  the  proceeding  is  held. 

Matter  of  Kennedy,  20  Misc.  531;  46  Supp.  906. 

First  National  Bank  v.   Broadway   National   Bank,   156   N.   Y.   459;    51 

N.  E.  398. 
Electro  Tint,  Etc.,  Co.  v.  American  Handkerchief  Co.,  130  App.  Div.  564; 

115  Supp.  34. 

If  the  evidence  of  the  foreign  law  consists  of  a  single  writ- 
ten document,  statute  or  decision,  its  construction  is  for  the 
court. 

Kline  v.  Baker,  99  Mass.  253. 

4.  Report. 

a.  WHAT  IT  SHOULD  CONTAIN. 

The  appraiser's  report  should  have  annexed  thereto  all  the 
testimony  and  affidavits  upon  which  it  is  based,  a  schedule  of 
all  the  personal  property  and  the  value  of  each  item  and  an- 
other list  showing  the  real  estate  with  a  brief  description  and 
the  value  thereof,  less  any  mortgage  incumbrances  or  other 
liens  thereon,  the  amount  of  debts  and  testamentary  expenses 
paid  and  the  estimated  commissions  and  additional  expenses 
to  be  incurred  in  the  settlement  of  the  estate,  the  names  and 
relationship  of  all  legatees  and  distributees  and  the  interest 
transferred  to  each  respectively. 

"Corporations  claiming  exemption  should  produce  before 
the  appraiser  proofs  which  clearly  entitle  them  thereto ;  a  copy 
of  the  decedent's  will  should  be  attached  to  the  report  and  a 
summary  statement,  showing  the  aggregate  net  amount  trans- 
ferred, and  the  particular  share  thereof  passing  to  each  per- 
son or  corporation.  The  date  of  decedent's  death  and  the 
names  and  addresses  of  the  executors  or  administrators 
should  be  given. 

"Where  the  mutually  acknowledged  relationship  of  parent 
and  child  is  claimed  to  have  existed  between  the  decedent  and 
a  legatee,  proof  of  such  relationship  should  be  produced  by  the 
executor  or  legatee  by  the  affidavit  or  testimony  of  at  leas' 
two  disinterested  persons  who  have  lived  in  the  neighbor- 


PAET  V  — PROCEDUEE  453 

hood  of  the  decedent  and  can  testify  as  to  such  relationship, 
from  personal  conversation  with  the  decedent  and  observa- 
tions made  during  the  period  which  would  show  that  such 
relationship  commenced  at  or  before  the  child's  fifteenth 
birthday  and  was  continuous  for  at  least  ten  years  there- 
after, and,  since  June  1, 1905,  that  the  parents  of  such  legatee 
were  deceased  at  the  time  the  relationship  commenced,  except 
in  the  case  of  a  stepchild. 

"If  the  value  of  any  assets  or  part  of  the  decedent's  estate 
cannot  be  presently  determined,  or  where  the  appraiser  is  in 
doubt  as  to  the  immediate  taxability  of  any  interest  trans- 
ferred by  the  decedent 's  will,  the  circumstances  in  connection 
therewith  should  be  fully  set  forth  in  the  report  of  the 
appraiser. 

"The  value  of  every  future  or  limited  estate,  income,  in- 
terest, annuity,  or  remainder,  as  determined  by  the  superin- 
tendent of  insurance,  should  be  attached  to  each  copy  of  the 
appraisers'  report  before  such  report  is  filed." 

McElroy  on  the  Transfer  Tax  Law,  p.  403. 

b.  WHAT  IT  MUST  SHOW. 

* '  That  which  is  to  be  reported  by  the  appraiser  is  the  value 
of  the  interest  passing  to  the  beneficiaries  without  any  deduc- 
tion for  any  purpose,  or  under  any  testamentary  direction." 

Matter  of  Swift,  137  N.  Y.  77-87;  32  N.  E.  1096. 

The  report  should  be  made  clearly  to  express  that  it  em- 
braces all  of  the  property  which  may  be  taxed  at  the  date  of 
the  death  of  decedent. 

Matter  of  Earle,  74  App.  Div.  458 ;  77  Supp.  503. 

It  must  show  the  ground  of  all  findings. 

Matter  of  Bolton,  35  Misc.  688 ;  72  Supp.  430. 

And  include  all  property  as  to  which  the  appraiser  is  in 
doubt  whether  it  is  taxable. 

Matter  of  Hendricks,  3  Supp.  281 ;  18  N.  Y.  St.  Kep.  989. 

It  is  insufficient  if  it  shows  that  appraiser  has  appraised 
"All  the  property  of  the  deceased  made  known  to  him  by  the 


454  INHERITANCE  TAXATION 

executor."  Upon  second  proceedings  it  should  clearly  appear 
in  the  report  that  all  of  the  property  remaining  of  the  estate 
is  embraced  within  the  proceedings. 

Matter  of  Earle,  74  App.  Div.  458 ;  77  Supp.  503. 

Where  neither  the  appraiser's  report,  nor  the  order  in  the 
prior  transfer  tax  proceedings  mentioned  assets  which  were 
not  disclosed  to  the  appraiser  by  the  executrix  in  her  peti- 
tion, and  which  may  now  be  valued  for  the  purpose  of  fixing 
the  transfer  tax,  said  order  is  not  res  judicata  and  an  ap- 
praiser may  be  appointed  to  value  the  assets.  In  the  absence 
of  a  specific  finding  in  the  original  report  it  will  not  be  pre- 
sumed that  the  value  of  the  assets  was  ascertainable  nor  that 
his  failure  to  report  them  was  equivalent  to  a  finding  that 
they  were  exempt. 

Matter  of  Carey,  197  App.  Div.  566. 

Where  the  taxing  order  made  no  reference  to  remainders 
and  did  not,  in  terms  or  effect,  confirm  the  appraiser's  report 
as  to  them,  held;  not  res  adjudicata  as  to  such  remainders. 

Matter  of  Mayhon,  177  Supp.  747. 

Matter  of  Goldenberg,  187  App.  Div,  692;  176  Supp.  201. 

c.  WHERE  TAXATION  is  SUSPENDED. 

Where  claims  are  uncertain  or  doubtful  the  right  to  tax 
should  be  reserved  in  the  report. 

Matter  of  Morgan,  36  Misc.  753 ;  74  Supp.  478. 

Matter  of  Eice,  56  App.  Div.  253 ;  61  Supp.  911 ;  68  Supp.  1147. 

Matter  of  Dimon,  82  App.  Div.  107;  81  Supp.  428. 

Matter  of  Westurn,  152  N.  Y.  93;  46  N.  E.  315. 

Where  an  action  is  pending  to  impress  a  trust  upon  prop- 
erty claimed  to  have  been  purchased  with  trust  funds  taxation 
should  be  suspended. 

Matter  of  Early,  107  Misc.  425;  176  Supp.  575. 

But  taxation  should  not  be  suspended  unless  it  appears  that 
decedent's  interest  can  be  determined  more  definitely  in  the 
future. 

Matter  of  Hubbard,  103  Misc.  125;  169  Supp.  325. 


PART  V  —  PROCEDURE  455 

The  market  value  of  a  note  should  be  determined  by  the 
appraiser  and  taxation  should  not  be  suspended  because  there 
is  some  difficulty  in  ascertaining  it. 

Matter  of  Ottman,  166  Supp.  1078. 

If  taxation  is  not  suspended  and  the  report  purports  to 
show  that  certain  legacies  are  the  only  ones  taxable  and  it  is 
confirmed  by  the  Surrogate  the  executor  is  protected  from 
claim  for  taxes  upon  other  legacies  not  included  in  the  assess- 
ment. 

Matter  of  Wolfe,  137  N.  Y.  205;  33  N.  E.  156. 

Where  an  appraiser  files  a  report  by  which  he  finds  that  the 
value  of  the  interests  of  life  beneficiaries  could  not  then  be 
ascertained  and  that  the  remaindermen  were  indefinite  and 
uncertain  and  that  for  these  reasons  the  tax  could  not  then 
be  determined,  and  such  report  is  confirmed  by  an  order  from 
which  no  appeal  is  taken,  such  order  is  binding  upon  the 
Comptroller  and  the  executor  as  long  as  the  estate  remains  in 
the  condition  in  which  it  was  at  the  time  the  order  was  made. 

Matter  of  Lawrence,  96  App.  Div.  29 ;  88  Supp.  1028. 

But  where  the  value  of  the  remainder  interest  was  not  ascer- 
tainable  and  the  appraiser  made  no  mention  of  it  in  his  report, 
held  not  an  adjudication  that  it  was  not  taxable  when  its 
value  was  subsequently  ascertained. 

Matter  of  Ely,  157  App.  Div.  658 ;  142  Supp.  714. 

On  the  other  hand  it  has  been  held  that  where  the  taxation 
of  the  remainder  was  not  suspended  and  it  could  have  been 
presently  valued  the  decree  was  final  in  the  absence  of  appeal 
and  no  tax  could  subsequently  be  collected. 

Matter  of  Morss,  85  Mise.  676;  14  Supp.  41. 
Matter  of  Crerar,  86  App.  Div.  479;  67  Supp.  975. 

d.  FORMS  OF  REPORT. 

Following  is  an  example  of  an  appraiser's  report  in  a  recent 
case  in  New  York  City  and  County : 


456 


INHERITANCE  TAXATION 

SURROGATE'S  COURT, 

COUNTY  or  NEW  YOKK. 


In  the  Matter 

of 

The  Appraisal,  under  the  Transfer  Tax 
Law,  of  the  Estate  of  MARY  HORLER, 
Deceased. 

To  the  Surrogate's  Court  of  the  County  of  New  York: 

I,  John  J.  Lyons,  Transfer  Tax  Appraiser,  having  been 
designated  by  Hon.  John  P.  Cohalan,  one  of  the  Surrogates 
of  the  County  of  New  York,  by  an  order  duly  made  and 
entered  on  the  28th  day  of  October,  1915,  certified  copy  of 
which  order  is  hereto  annexed,  together  with  a  copy  of  the 
petition  upon  which  same  was  granted,  to  appraise  the  estate 
of  the  above-named  decedent,  pursuant  to  the  provisions  of 
the  law  relating  to  taxable  transfers  of  property,  and  having 
given  notice  by  mail  of  the  time  and  place  at  which  I  wouK 
appraise  said  property  to  all  the  persons  entitled  thereto  a? 
provided  in  Section  230  of  the  General  Tax  Law  as  appears 
by  copy  of  such  notice  and  affidavit  of  mailing  thereof  here- 
unto annexed,  and  having  held  such  appraisal  on  the  13th 
day  of  December,  1915,  at  the  office  of  the  Transfer  Ta 
Appraisers  in  and  for  the  County  of  New  York,  Room  3100, 
Woolworth  Building,  233  Broadway,  Borough  of  Manhattan. 
City  of  New  York,  and  having  heard  the  allegations  and 
proofs  of  the  parties  then  and  there  appearing  before  me  and 
offering  the  same,  and  having  given  due  consideration  to  the 
affidavits  and  other  papers  submitted  herein,  and  having  made 
due  and  careful  inquiry  into  all  the  matters  and  things 
brought  before  me  in  this  proceeding,  do  now  make  and  file 
the  following  report. 

FIRST. — I  report  that  the  decedent  herein  died  a  resident  of 
the  State  of  New  York  on  the  24th  day  of  July,  1915,  leaving 
a  Last  Will  and  Testament,  copy  of  which  is  hereunto  annexed, 
which  was  duly  admitted  to  Probate  in  this  Court  on  the  8th 
day  of  October,  1915,  and  that  thereafter  on  the  9th  day  of 
October,  1915,  Letters  Testamentary  upon  the  estate  of  the 


PAET  V  — PEOCEDUEE  457 

said  decedent,  were  duly  issued  by  this  Court  to  James  Horler, 
17  West  10th  Street,  New  York  City,  as  executor. 

SECOND. — I  further  report  that  the  following  appearances 
were  noted  by  me  at  the  appraisal  herein :  Hon.  Lafayette  B. 
Gleason,  attorney  for  the  State  Comptroller.  McEeynolds  & 
Hunter,  Esqrs.,  attorneys  for  Executor,  80  Maiden  Lane, 
New  York  City,  N.  Y. 

THIKD. — I  further  report  that  I  found  the  property  left  by 
the  decedent  herein  or  in  which  said  decedent  had  any  bene- 
ficial interest  to  consist  of  the  items  set  forth  in  Schedule  A 
of  the  affidavit  for  appraisal  of  James  Horler  hereunto  an- 
nexed, and  that  the  fair  market  value  of  each  and  every  of  the 
said  items  at  the  date  of  the  decedent's  death  is  the  amount 
set  down  by  me  opposite  such  item  in  the  column  designated 
"Value  as  appraised  in  this  proceeding"  in  said  Schedule  A. 

FOURTH. — I  further  report  that  the  sums  properly  to  be 
allowed  as  deductions  herein  for  funeral  expenses,  expenses 
of  administration,  debts  of  decedent,  and  so  forth,  are  the 
amounts  set  down  by  me  after  the  several  items  claimed  in  the 
column  designated  "  Allowed  in  this  Proceeding"  in  Schedule 
B  of  said  petition. 

FIFTH. — I  further  report  that  I  find  the  state  and  condition 
of  the  estate  of  said  decedent  at  its  fair  market  value  as  of 
the  date  of  decedent's  death,  the  24th  day  of  July,  1915,  and 
as  appraised  by  me  in  this  proceeding  to  be  as  shown  in  the 
following  summary: 

Real  property  in  Schedule  Al $3,250  00 

Personal  property  in  Schedule  A2 6,016  00 

Personal  property  in  Schedule  A3 28,449  63 

Personal  property  in  Schedule  A4 0 

Personal  property  in  Schedule  A5 0 

Personal  property  in  Schedule  A6 0 

Additional  assets  referred  to  in  Paragraph  3  of 

this  report 0 


Total  Assets x $37,715  63 

(Exclusive  of  property  passing  under  a  Power  of  Appoint- 
ment). 


458 


INHERITANCE  TAXATION 


Subject  to  deductions  as  follows: 

Funeral  expenses,  Bl $400 

Administration  expenses,  B2 100 

Debts,  B3 0 

Other  deductions,  B4 0 

Commissions 0 

Total  Deductions $500  00 

Leaving  a  net  estate  of  which  decedent  died  pos- 
sessed of 37,215  63 

To  which  is  to  be  added  the  value  of  the  property 
passing  by  virtue  of  the  exercise  of  a  power 
of  appointment  vested  in  said  decedent,  and  set 
forth  in  Schedule  C  and  therein  appraised  by 
me  at  the  values  written  in  after  each  item 
respectively  in  the  column  designated  "Value 
as  appraised  in  this  proceeding,"  to  wit: 0 


Making  the  total  of  all  property  passing  upon 
the  death  of  decedent,  of $37,215  63 

SIXTH. — I  further  report  all  the  beneficiaries  entitled  at 
the  time  of  decedent's  death  to  an  interest  in  this  estate  pur- 
suant to  the  provisions  of  law,  and  of  the  said  decedent's 
Last  Will  and  Testament,  the  relationship  of  such  persons  to 
decedent,  the  amount  of  the  share  or  interest  of  each,  and 
whether  such  share  or  interest  is  taxable  in  this  proceeding, 
to  be  as  hereinafter  set  forth,  all  of  said  beneficiaries  being 
of  full  age  and  sound  mind  except  as  otherwise  designated. 

Amount  Amount 

Beneficiaries :  of  Interest  of  Interest 

Exempt.  Taxable. 

Elizabeth  Bogert,  daughter — 
Jewelry,  $325  00 

Legacy,  5,000  00 


$5,325  00       $5,000  00  $325  00 


PAET  V  — PEOCEDUEE  459 


James  Horler,  husband — 
One-half  interest  in 

realty,  $3,250  00 

Eesidence,  28,965  63 


$32,215  63       $5,000  00         $27,215  63 
Respectfully  submitted, 

JOHN  J.  LYONS, 

Appraiser. 
Dated  at  New  York  City,  N.  Y.,  May  22,  1916. 

To  illustrate  a  more  complicated  case.  In  the  Matter  of 
Hernandez,  172  App.  Div.  467;  159  Supp.  59;  aff.  219  N.  Y. 
24,  it  was  held  that  the  decedent  was  a  resident  of  Cuba  at  the 
time  of  his  death,  leaving  a  gross  personal  estate  in  New  York 
of  $560,765.93  and  the  rest  of  his  property  in  Cuba.  It  was 
also  held  that  his  widow,  under  the  laws  of  Cuba,  where  they 
were  married,  was  entitled  to  one-half  of  the  "gananciales" 
or  joint  gains  of  the  marriage.  The  value  of  the  estate  in 
New  York  was  .33165  of  the  total  estate.  The  total  debts  and 
funeral  expenses  amounted  to  $253,254.77. 

The  supplemental  appraiser's  report  pro  rated  the  debts 
and  ascertained  and  deducted  the  "gananciales"  as  follows: 

Gross  estate  in  New  York $560,765  93 

Less: 

Debts $164,898  61 

Funeral  expenses 4,070  03 

Administration  expenses 50,089  59 

Commissions 34,196  54 


$253,254  77 
Pro  rated  at  .33165  to 83,991  94 


Net  estate  in  New  York $476,773  99 

According  to  the  decision  of  the  Surrogate  that 
the  widow  of  decedent  is  entitled  in  her  own 
right  to  one-half  the  estate  of  decedent  over  and 


460  INHERITANCE  TAXATION 

above  the  amount  possessed  by  him  at  the  time 
of  his  marriage,  by  virtue  of  the  laws  of  the 
Kingdom  of  Spain  existing  and  operative  in 
Cuba  at  the  time  of  the  marriage  of  this  decedent, 
said  interest  being  known  as  the  * '  gananciales ' ' 
or  joint  gains,  I  find  that  there  should  be  deducted 
from  decedent's  taxable  estate  a  proportionate 
sum  to  allow  for  the  effect  of  such  right  on  the 
New  York  estate,  and  as  I  find  said  "ganan- 
ciales" to  be  equal  to  .48095  of  decedent's  entire 
estate  including  realty  and  wheresoever  situate, 
I  hereby  allow  said  proportion  of  the  New  York 
estate  as  a  proper  deduction  in  the  sum  of. ...  229,304  45 


The  net  taxable  estate  situate  within  the 
State  of  New  York  being  the  sum  of $247,469  54 

The  rest  of  the  report  followed  the  form  given  in  the  first 
illustration. 

Under  Ch.  432,  L.  1922,  the  assets  in  Cuba  would  also  have 
been  pro  rated. 

NOTE. — Under  ch.  432,  §  1922,  the  assets  in  Cuba  would  also  have  been  pro 
rated. 


C.— PROCEEDINGS  ON  APPEAL. 
1.  Jurisdiction  of  Probate  Court, 
a.  EFFECT  OF  PROBATE  DECREE. 

The  statutes  of  all  the  States  found  the  jurisdiction  as  to 
the  tax  proceeding  upon  the  jurisdiction  to  grant  letters.  But 
where  one  Surrogate  has  already  assumed  jurisdiction  of  a 
tax  proceeding  a  Surrogate  of  another  county  is  without 
jurisdiction,  even  though  he  has  granted  letters. 

Matter  of  Drake,  94  Misc.  70;  157  Supp.  270. 

But  there  must  be  jurisdiction  of  the  parties  or  of  the 
subject  matter. 

Oakman  v.  Small,  282  111.  360;  118  N.  E.  775. 


PAET  V  —  PROCEDURE  461 

A  decree  granting  letters  of  administration  or  admitting  a 
will  to  probate  is  not  conclusive  as  to  the  jurisdictional  fact 
of  residence. 

Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Rep.  1. 
Matter  of  Horton,  217  N.  Y.  363;  111  N.  E.  1066. 

In  the  Horton  case  the  court  said: 

"If  a  probate  court  of  another  State  otherwise  has  juris- 
diction it  may  make  a  decree  admitting  a  will  to  probate 
which  is  binding  upon  nonresidents  even  though  notice  has 
by  statute  been  dispensed  with,  and  such  probate  becomes 
conclusive  in  the  absence  of  contest  within  such  period  as  is 
provided  by  the  laws  of  that  State.  But  the  decision  of  the 
Ohio  court  as  to  the  jurisdictional  fact  of  residence  was  not 
conclusive. ' ' 

It  has  been  held  in  New  York  that  a  decree  admitting  a  will 
to  probate,  where  the  residence  of  the  deceased  was  alleged 
as  a  jurisdictional  fact  in  the  petition,  and  so  found  by  the 
decree,  the  finding  could  not  be  attacked  collaterally  in  the 
New  York  courts. 

Bolton  v.  Shriever,  135  N.  Y.  65 ;  31  N.  E.  1001. 
Flatauer  v.  Loser,  211  N.  Y.  16. 

But,  on  the  other  hand,  the  New  York  courts  are  committed 
to  the  doctrine  that,  although  the  jurisdiction  in  the  transfer 
tax  proceeding  is  founded  upon  the  jurisdiction  in  the  pro- 
bate proceeding,  the  decree  of  probate  is  not  conclusive  upon 
the  Surrogate  in  the  proceedings  to  fix  the  tax,  as  to  the 
residence  of  the  deceased,  nor  are  the  beneficiaries  estopped 
from  attacking  it. 

Matter  of  Grant,  83  Misc.  257;  144  Supp.  567;  aff.  166  App.  Div.  921; 

151  Supp.  1119. 
Matter  of  Hernandez,  172  App.  Div.  467;  159  Supp.  59;  aff.  219  N.  Y.  24. 

In  the  Hernandez  case  the  will  recited  that  deceased  was  a 
resident  of  New  York  County  and  the  petition  for  its  probate 
so  alleged,  also  the  petition  for  the  appointment  of  an  ap- 
praiser. But- when  the  transfer  tax  proceedings  were  fairly 
under  way  the  Cuban  heirs  alleged  that  the  deceased  was  a 
resident  of  Cuba  and  were  successful  in  establishing  that 


462 


INHERITANCE  TAXATION 


contention.  The  Comptroller  appealed  on  the  theory  that  the 
probate  decree  was  conclusive  on  the  inheritance  tax  pro- 
ceedings. 

The  Appellate  Division  in  overruling  his  contention, 
reasoned  thus: 

"It  is  not  a  collateral  action  or  proceeding  in  a  separate 
court,  but  a  part  of  the  process  of  administration  in  the  same 
court.  I  do  not  think  therefore  that  the  rule  laid  down  in 
the  two  cases  applies  (the  Bolt  on  and  Flatauer  cases,  supra). 
It  seems  to  me  that  it  comes  rather  within  the  reasoning  of 
Matter  of  Patterson,  146  N.  Y.  327;  40  N.  E.  990;  where 
letters  of  administration  upon  the  estate  of  a  decedent  had 
been  granted  to  her  surviving  husband  upon  his  petition 
asserting  that  relationship  without  notice  to  the  next  of  kin 
or  any  appearances  by  them,  and  where,  at  a  later  period  he 
filed  his  account  and  the  same  was  settled  by  the  Surrogate 
awarding  payment  of  the  whole  surplus  to  him  as  a  husband. 
Thereafter  the  next  of  kin  filed  a  petition  alleging  that  he  was 
never  in  fact  married  to  the  defendant  but  had  obtained  the 
estate  by  fraud  and  asked  to  have  the  decree  on  the  account- 
ing and  former  distribution  set  aside  and  that  the  assets  in 
the  hands  of  the  administrator  be  paid  over  by  him  to  the 
next  of  kin.  The  appellant  contended  that  as  the  next  of  kin 
claimed  under  and  in  affirmance  of  the  order  appointing 
Patterson  administrator  they  could  not  at  the  same  time 
attack  it  collaterally.  But  the  court  held  that  they  did  not 
attack  that  order  at  all  but,  recognizing  the  authority  of 
Patterson  as  administrator,  they  ask  that  he,  as  lawful  ad- 
ministrator, make  an  honest  and  lawful  distribution.  The 
order  appointing  the  administrator  might  stand  consistently 
with  the  relief  asked.  It  is  true  that  in  that  case  the  next 
of  kin  had  not  been  cited  upon  the  appointment  of  Patterson, 
but  the  position  there  taken  seems  to  me  in  line  with  that 
taken  by  the  respondents  herein,  which  is,  that  conceding  the 
jurisdiction  of  the  Surrogate's  Court  to  admit  the  will  to 
probate  because  decedent  had  property  here  at  the  time  of 
his  death  they  have  the  right  to  show  the  amount  of  such 
property  and  the  extent  of  its  taxability  as  decedent  was  a 


PART  V  — PROCEDURE  463 

resident  of  Cuba  and  not  of  the  State  of  New  York.  Further- 
more, the  State  of  New  York  was  not  a  party  to  the  proceed- 
ing for  the  probate  of  the  decedent's  will.  In  the  cases  relied 
on  by  appellant  the  question  of  estoppel  arose  between  those 
who  had  either  been  parties  to  the  original  decree  jr  privies 
of  such  parties." 

b.  DECREE  OF  DISTRIBUTION. 

A  final  decree  of  distribution  after  claims  for  creditors  have 
been  advertised  bars  a  tax  proceeding  in  another  State  under 
the  "full  faith  and  credit"  clause  of  the  United  States  Con- 
stitution. 

Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Rep.'  1. 

But  it  does  not  relieve  the  executor  or  beneficiary  of  his 
personal  liability,  as  the  State  is  in  no  way  a  party  to  the 
proceedings. 

Attorney-General  v.  Stone,  209  Mass.  186 ;  95  N.  E.  395. 
Attorney-General  v.  Rafferty,  209  Mass.  321 ;  95  N.  E.  747. 

The  court  said  in  the  Stone  case: 

"The  defendant's  liability  could  not  be  affected  or  destroyed 
by  the  action  of  the  Probate  Court  upon  the  accounts  of  the 
administrator  or  of  the  trustee.  Estate,  of  Lander's,  6  Cal, 
App.  744;  93  Pac.  202,  That  action  could  not  operate  col- 
laterally to  bar  the  remedy  now  sought  for.  Neither  the 
second  nor  the  final  account  of  the  trustee  was  allowed  until 
after  the  statute  before  us  had  taken  effect.  If  the  adminis- 
trator did  not  comply  with  the  statute  in  force  when  he  filed 
his  final  account,  this  failure  merely  left  the  succession  tax 
upon  the  residue  of  the  estate  unpaid,  and  so  brought  it 
within  the  operation  of  the  statute  of  1902.  The  Common- 
wealth was  not  a  party  to  any  of  these  accounts,  nor  was  it 
made  so  by  the  publication  of  notice." 

So  it  was  held  that  the  listing  of  bonds  of  a  foreign  cor- 
poration temporarily  within  the  State  in  the  inventory  filed 
for  ancillary  administration  and  the  decree  of  distribution 
thereon  are  not  conclusive  as  to  the  facts  which  entitle  the 


INHERITANCE  TAXATION 

State  to  demand  the  tax  upon  appeal  from  an  order  fixing 
said  tax. 

Estate  of  McCahill,  171  Cal.  482  ;  153  Pae.  930. 

In  a  proceeding  in  equity  to  obtain  distribution  the  court 
may  require  payment  of  the  tax  before  distribution  although 
the  Probate  Court  is  given  special  authority  over  matters  of 
taxation. 

Kentucky  St.  1906,  c.  22,  ss.  13,  14,  15,  confer  jurisdiction 
on  the  County  Court  to  determine  questions  arising  in  rela- 
tion to  the  tax,  but  this  jurisdiction  is  not  exclusive  when  the 
jurisdiction  of  the  court  of  equity  is  invoked  to  distribute  an 
estate  and  the  interest  of  each  or  any  number  of  heirs  at  law 
is  subject  to  the  inheritance  or  other  tax.  The  court  at  the 
instance  of  the  official  representative  of  the  commonwealth 
charged  with  the  duty  of  collecting  such  tax  may  require  its 
payment  out  of  the  share  or  shares  of  those  chargeable  with 
the  tax  before  distributing  the  estate  or  funds  among  them, 
and  thereby  save  both  the  tax  collector  and  the  heirs  the 
trouble  and  expense  of  a  separate  and  independent  proceed- 
ing in  the  County  Court  to  compel  the  payment  of  the  tax. 
The  Circuit  Court,  therefore,  in  requiring  the  payment  of  the 
tax  before  distribution  did  not  exceed  its  jurisdiction." 

Barrett  v.  Continental  Realty  Co.,  130  Ky.  109  ;  114  S.  W.  750. 

c.  JURISDICTION  OF  THE  TAX  PROCEEDINGS. 

The  court  granting  letters  of  administration,  letters  testa- 
mentary or  ancillary  letters  universally  has  jurisdiction  of 
the  inheritance  tax  proceedings  ;  but  it  is  not  necessary  in  case 
of  a  nonresident  that  ancillary  letters  should  actually  have 
been  issued.  If  there  is  property  of  decedent  within  the 
county,  so  that  the  court  would  have  jurisdiction  to  issue  such 
letters,  it  is  sufficient. 

_  Matter  of  Fiteh,  160  N.  Y.  87;  54  N.  E.  701. 


The  court  said:  "The  jurisdiction  of  the  court  is  deter- 
mined by  the  answer  to  the  question:  Had  the  court  power 
to  issue  letters!" 


PAKT  V  — PEOCEDUEE  465 

The  Surrogate  of  the  county  in  which  donee  of  a  power  of 
appointment  resided  has  exclusive  jurisdiction. 

Matter  of  Seaver,  63  App.  Div.  823;  71  Supp.  544. 

Or,  in  case  the  donee  was  a  nonresident,  the  Surrogate 
of  the  county  where  the  real  estate  over  which  the  power  is 
exercised  is  situated. 

Matter  of  Lowndes,  60  Misc.  506;  113  Supp.  1114. 

Where  personal  property  of  a  nonresident  is  located  within 
the  county  its  Surrogate  has  jurisdiction  in  transfer  tax  pro- 
ceedings although  the  said  decedent  owned  real  estate  in 
another  county. 

Matter  of  Arnold,  114  App.  Div.  244;  99  Supp.  740. 

But  when  letters  have  been  issued  the  inheritance  tax  pro- 
ceedings should  be  brought  before  the  same  court. 

Matter  of  Arnold,  114  App.  Div.  244;  99  Supp.  740. 

Where  an  estate  claimed  a  deceased  was  a  resident  of  Con- 
necticut and  the  State  alleged  residence  in  Westchester  county 
the  Surrogate  of  New  York  county  held  that  the  proceeding 
should  be  transferred  to  Westchester  though  the  parties  con- 
sented that  he  should  hear  the  case.  Jurisdiction  cannot  be 
conferred  by  consent. 

Matter  of  Lyon,  116  Mise.  540 ;  191  Supp.  260. 

So,  where  ancillary  letters  had  been  issued  in  Chemung 
County  an  order  appointing  an  appraiser  in  New  York  Count}7 
was  vacated. 

Matter  of  Hathaway,  27  Misc.  474. 

2.  Assessment  of  the  Tax. 

a.  THE  JUDGE  ACTS  AS  TAXING  OFFICER. 

Although  the  statutes  almost  universally  impose  the  duty 
of  assessing  the  tax  upon  the  judge  of  the  court  in  which  the 
estate  is  administered,  the  provisions  have  been  attacked  as 
unconstitutional  in  imposing  ministerial  or  clerical  functions 
upon  a  judicial  officer, — but  this  objection  has  nowhere  been 
sustained. 

30 


466 


INHERITANCE  TAXATION 


As  the  court  said  in  Union  Trust  Co.  v.  Probate  Judge,  125 
Mich.  487;  84  N.  W.  1101,  at  page  494:  "These  duties  are 
necessarily  incident  to  the  settlement  of  estates  and  may  be 
performed  by  the  probate  judge." 

So  it  was  held  in  Wisconsin  that  it  is  the  law,  not  the  court, 
that  fixed  the  tax,  but  that  the  court  "As  an  incident  to  the 
settlement  of  estates  simply  determines,  in  a  judicial  way, 
certain  facts  necessary  to  be  ascertained  to  determine  how 
much  the  tax  fixed  by  law  amounts  to  in  a  given  case.  These 
duties  seem  to  us  as  judicial  in  their  character,  and  very 
properly  entrusted  to  the  County  Court  in  which  the  estate 
is  being  administered." 

Nunnemaeher  v.  State,  129  Wis.  190,  223;  108  N.  W.  627. 

Surrogate  Fowler  of  New  York  County  refused  to  fix  the 
maximum  and  minimum  amounts  under  the  New  York  statute 
in  regard  to  the  immediate  taxation  of  contingent  remainders 
on  the  ground  that  such  mathematical  details  were  for  the 
convenience  of  the  Comptroller,  were  purely  ministerial,  and 
could  not  constitutionally  be  imposed  upon  a  judge  of  a  court 
of  record.  His  opinion  was  long  and  learned  but  he  was  mis- 
taken in  the  law  and  was  reversed  by  the  Appellate  Division. 

The  court  said: 

"It  is  this  latter  determination  which  the  learned  Surro- 
gate has  been  asked  and  has  refused  to  make.  He  has  couched 
his  refusal  in  a  very  vigorous  and  positive  opinion  in  which 
he  has  undertaken  to  demonstrate  at  some  length  that  the 
Surrogate,  now  that  his  court  has  been  made  a  constitutional 
court  and  a  court  of  record,  is  a  judicial  officer  and  that  it  is 
beyond  the  power  of  the  Legislature  itself  to  impose  upon  a 
judicial  officer  the  performance  of  purely  ministerial  and  non- 
judicial  duties  such  as  he  considers  that  the  State  Comp- 
troller asks  him  to  perform  *  *  *.  It  needed  much  le  - 
argument  and  citation  of  authorities  than  has  been  expended 
upon  the  subject  to  prove  that  the  Surrogate  is  a  judicial 
officer  and  that,  as  such,  no  duties  can  be  lawfully  imposed 
upon  him  except  those  of  a  judicial  nature.  We  do  not  agree, 
however,  that  the  determination  which  the  Surrogate  has 
been  asked  to  make  is  wholly  unjudicial  in  its  character  or 


PAET  V  — PROCEDURE 

that  it  is  one  which  cannot  be  made  by  a  court  of  record  estab- 
lished by  the  Constitution  without  a  surrender  of  its  dignity. 
It  is  certainly  no  more  so  than  is  the  act  of  the  Surrogate  in 
fixing  the  amount  of  the  tax  chargeable  upon  a  contingent 
remainder  at  the  highest  rate  possible  under  the  provisions 
of  the  will  although  both  involve  incidentally  the  making  of  a 
mathematical  calculation.  *  *  *  We  find  ourselves  unable 
fully  to  appreciate  the  suggestion  of  the  learned  Surrogate 
that  the  determination  he  is  asked  to  make  is  solely  for  the 
benefit  of  the  State  Comptroller.  It  is  at  least  as  much  for  the 
benefit  of  the  trust  beneficiaries  in  consideration  for  whom 
the  present  act  was  passed  and  above  all  it  is  for  the  benefit 
of  the  due  and  orderly  administration  of  justice  which  re- 
quires that  questions  which  may  give  rise  to  differences  and 
litigation  should,  when  possible  be  avoided  by  apt  and  proper 
judicial  action." 

Matter  of  Spingarn,  175  App.  Div.  806;  162  Supp.  695. 


b.  THE  TAXING  ORDER. 

Under  the  New  York  practice  the  Surrogate  enters  the 
decree  fixing  the  tax  "as  of  course"  and  if  either  party  is 
dissatisfied  an  appeal  lies  to  the  Surrogate  himself.  Although 
this  appeal  is  anomalous  in  form  it  works  out  in  practice 
satisfactorily  for  the  taxing  order  is  really  drawn  by  the 
appraiser  or  the  attorneys  and  approved  by  the  court  "pro 
forma." 

Weston  v.  Goodrich,  86  Hun,  194 ;  33  Supp.  382. 

The  phrase  "as  of  course"  relates  to  the  practice  rather 
than  to  the  law  in  reference  to  the  entry  of  the  order  deter- 
mining the  amount  of  tax,  and  means  that  when  the  report 
of  the  appraiser  is  filed  the  Surrogate  is  to  proceed  with  the 
entry  of  the  order  without  the  intervention  of  any  one. 

Matter  of  Fuller,  62  App.  Div.  428-432;  71  Supp.  40. 

Assuming  that  a  Surrogate,  in  fixing  a  transfer  tax  and 
making  the  decree  assessing  it,  does  not  act  as  Surrogate,  but 


468 


INHERITANCE  TAXATION 


simply  as  a  taxing  officer,  yet  the  decree  upon  the  taxation, 
becomes  a  decree  or  order  of  his  court. 

Matter  of  Scrimgeour,  80  App.  Div.  388;   80  Supp.  636;  aff.  175  N.  Y. 
507;  67  N.  E.  1089. 

A  Surrogate  in  assessing  a  transfer  tax  acts  judicially  and 
not  ministerially.  It  is  true  that  the  power  of  taxation  is  one 
which  belongs  to  the  legislative  department,  and  it  is  equally 
true  that  some  of  the  functions  of  a  taxing  officer  are  minis- 
terial, but  it  is  well  established  by  authority,  that  in  deter- 
mining the  value  of  property  assessed,  the  extent  of  claims 
by  exemption,  etc.,  the  taxing  officer  or  board  acts  judicially. 

Matter  of  Hull,  109  App.  Div.  248;  95  Supp.  819. 

c.  EEPORT  MAY  BE  REMITTED  TO  APPRAISER. 

The  Surrogate  may,  of  his  own  motion,  or  as  a  result  of  the 
appeal  from  the  pro  forma  taxing  order  remit  the  report  to 
the  appraiser  either  before  or  after  entering  the  order 
thereon. 

Matter  of  Lansing,  31  Misc.  148 ;  64  Supp.  1125. 
Matter  of  Kelly,  29  Misc.  169 ;  60  Supp.  1005. 

He  may  require  the  correction  of  mistakes  or  the  taking 
of  further  evidence. 

Matter  of  Baker,  38  Misc.  151;  77  Supp.  170. 
Matter  of  Frolich,  N.  Y.  L.  J.,  April  30,  1913. 
Matter  of  Loster,  N.  Y.  L.  J.,  July  29,  1913. 

And  this  may  be  done  on  motion  after  the  time  to  appeal 
has  expired  on  proper  cause  shown. 

Matter  of  Head,  N.  Y.  L.  J.,  December  22,  1911. 

See  post,  Motions  to  Modify  Decree,  p.  499. 

If  there  is  evidence  to  sustain  the  finding  of  the  appraiser 
and  such  finding  is  not  clearly  against  the  weight  of  evidence 
it  will  not  be  disturbed  by  the  Surrogate  on  appeal  from  the 
pro  forma  taxing  order.  So,  where  the  assessed  value  of  the 
real  estate  was  $58,000,  the  evidence  submitted  for  the  estate 
valued  it  at  $61,000  and  that  produced  on  behalf  of  the  Comp- 
troller that  it  was  worth  $70,000  an  appraisal  of  $68,000  was 
sustained. 

Matter  of  M.  A.  Valentine,  N.  Y.  L.  J.,  June  22,  1915. 


PART  V  —  PROCEDURE  469 

But  the  Surrogate  cannot  assess  the  tax  upon  mere  guess 
and  the  record  before  him  must  show  the  facts  or  it  will  be 
sent  back  for  additional  proof. 

Matter  of  Wunsch,  N.  Y.  L.  J.,  January  24,  1913. 
Matter  of  Dudley,  N.  Y.  L.  J.,  March  4,  1913. 
Matter  of  De  Wollf,  N.  Y.  L.  J.,  February  24,  1913. 

Such  order  is  not  appealable. 

Matter  of  Astor,  137  App.  Div.  922;  122  Supp.  1121. 

Nor  has  the  Supreme  Court  power  to  vacate  such  an  order. 

Matter  of  Smith,  40  App.  Div.  480;  58  Supp.  128. 

d.  FORMS  OF  TAXING  ORDER. 

(1)  Where  There  Are  No  Contingent  Remainders. 

These  are  comparatively  simple  and  a  sample  is  given  with- 
out further  comment. 


Order  Fixing  Tax. 

At  a  Surrogate's  Court  held  in  and  for  the  County 
of  New  York  at  the  Hall  of  Records  in  the 
Borough  of  Manhattan,  City  of  New  York,  on 
the  6th  day  of  June,  1916. 

Present — Hon.  JOHN  P.  COHALAN,  Surrogate. 


In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 

Upon  reading  the  report  of  the  appraiser,  John  J.  Lyons, 
Esq.,  duly  filed  herein  on  the  24th  day  of  May,  1916,  wherein 
it  appears  that  said  decedent  died  on  the  24th  day  of  July, 
1915,  and  upon  motion  of  Lafayette  B.  Gleason,  attorney  for 
the  State  Comptroller, 

IT  is  ORDERED  AND  ADJUDGED  that  the  cash  value  of  the  prop- 
erty referred  to  in  said  report,  the  transfer  of  which  is  subject 


470 


INHERITANCE  TAXATION 


to  the  tax  imposed  by  the  act  in  relation  to  taxable  transfers 
of  property  and  the  tax  to  which  said  transfers  are  liable  is 
as  follows : 

Amount          Amount  of  Amount  Tax 

Beneficiary.  Received.         Exemption.  Taxable.          Assessed. 

Elizabeth  Bogart, 

Daughter,         $5,325  00       $5,000  00          $325  00 

James  Horler, 

Husband,          32,215  63         5,000  00       27,215  63 

JOHN  P.  COHALAN, 

Surrogate. 

(2)  Present  Taxation  of  Contingent  Remainders. 

The  statute  at  first  provided  that  the  tax  should  be  assessed 
against  such  remaindermen  as  a  class  at  the  highest  possible 
rate  with  provisions  for  a  refund  in  case  a  less  amount  proved 
to  be  due  and  Surrogate  Fowler  of  New  York  County  thus 
interpreted  the  provision  in  Matter  of  Simmons,  N.  Y.  Law 
Journal,  June  14, 1912 : 

"As  section  230  of  the  Tax  Law  was  not  changed  by  the 
amendment  of  1910,  it  must  be  presumed  that  the  Legislature 
intended  that  the  provisions  of  that  section  should  apply  to 
the  assessment  of  tax  under  the  new  rates.  Where,  therefore, 
a  remainder  is  contingent,  but  is  limited  to  beneficiaries  of  the 
1%  primary  rates,  it  must  be  taxed  as  if  it  passed  to  a  single 
individual  of  that  class ;  if  it  may  pass  to  beneficiaries  in  the 
classification  of  the  5%  primary  rate,  it  must  be  assessed  as 
if  it  passed  to  a  single  individual  in  that  class. 

"The  remainder  after  the  life  estate  of  decedent's  widow 
should  be  taxed  as  follows :  Mabel  S.  Tilden,  daughter,  sur- 
viving life  estate  in  the  sum  of  $250,000 ;  remainder  after  said 
life  estate  to  be  assessed  against  the  trustees  and  taxed  at 
the  5%  rate.  All  the  rest  and  residue  of  the  remainder  should 
be  assessed  against  the  trustees  for  Joseph  F.  Simmons,  son, 
at  the  rate  of  \%.  The  order  submitted  upon  the  appraiser's 
report  may  contain  a  provision  that,  upon  the  vesting  in  pos- 
session of  any  of  the  remainders,  or  the  exercise  of  any  of 
the  powers  of  appointment  given  by  decedent's  will,  an  appli- 


PAET  V  — PEOCEDUEE  471 

cation  may  be  made  to  modify  the  order  fixing  tax  in  accord- 
ance with  the  actual  devolution  of  the  property." 

In  practice  this  proved  a  hardship  as  money  was  diverted 
from  trust  estates  which  would  in  all  probability  never  reach 
the  treasury  and  in  1911  the  act  (Sec.  241)  was  amended  to 
provide  for  a  temporary  taxing  order  which  should  show  the 
difference  between  the  highest  rate  and  that  which  would  be 
due  if  the  remainder  fell  in  at  once.  This  difference  is  de- 
posited and  interest  paid  to  the  trustees  while  the  rest  goes 
to  the  state  treasury  as  part  of  the  current  revenues. 

Matter  of  Billingsley,  1  State  Dept.  Eep.  569. 

Or  securities  may  be  deposited  in  lieu  of  cash. 

Matter  of  Leuff,  1  State  Dept.  Eep.  567. 

The  practice  was  thus  explained  in  an  opinion  by  the  State 
Comptroller  in  Matter  of  Everett,  3  State  Department 
Reports,  450: 

"To  comply  with  this  provision  the  taxing  order  should 
first  extend  the  tax  on  the  remainders  as  they  would  be  tax- 
able if  they  had  actually  vested  in  possession  on  the  day  of  the 
appraisal,  and  this  statement  should  be  followed  by  the  ex- 
tension of  the  tax  at  the  highest  rate  on  which  there  is  any 
possibility  of  the  remainders  ultimately  vesting;  and  the  dif- 
ference between  the  tax  at  the  highest  rate  and  the  other  tax 
as  shown  to  be  due  in  the  event  of  the  remainders  having 
vested  at  the  date  of  the  appraisal  would  be  the  amount  the 
Comptroller  should  retain  and  pay  the  income  thereon  to  the 
executors  of  the  estate  until  the  remainders  ultimately  vested. 
There  is  a  remainder  to  nieces  in  case  of  the  death  of  all  the 
children  without  issue." 

It  was  this  form  of  order  that  was  approved  by  the  Appel- 
late Division  in  Matter  of  Spingarn,  175  App.  Div.  806;  162 
Supp.  695;  after  Surrogate  Fowler  had  refused  to  sign  it, 
that  learned  jurist  contending  that  the  form  in  Matter  of 
Simmons,  supra,  and  in  Matter  of  Valentine,  88  Misc.  397; 
150  Supp.  733,  was  in  accordance  with  the  statute  and  all  that 
a  judicial  officer  should  be  asked  to  do. 


472 


INHERITANCE  TAXATION 


To  understand  the  problem  we  must  take  an  illustrative 
case,  slightly  changed  as  to  names  and  facts. 

Assume  Testatrix  left  her  surviving  four  children,  Marie, 
Joseph,  Ann,  Julia,  and  a  husband,  Jean  Baptiste.  To  Marie, 
Joseph  and  Ann  she  made  bequests  of  $10,000;  $15,000  and 
$20,000,  respectively,  and  then  gave  a  life  estate  in  the  residue 
to  her  husband,  Jean.  Upon  his  death  the  said  residue  was 
to  be  divided  among  such  children  as  should  then  be  living, 
and  in  the  event  of  the  prior  death  of  any  or  all  of  said  chil- 
dren, without  issue  them  surviving,  then  the  remainder  was 
to  go  to  nieces.  The  fourth  child,  Julia,  is  given  no  specific 
bequest,  but  shares  equally  in  the  remainder  with  the  other 
children  upon  the  death  of  the  husband.  The  residuary  estate 
is  appraised  at  $782,570,  and  the  husband's  life  use  is  cal- 
culated by  the  Insurance  Department  and  valued  at  $215,910. 

The  taxing  order  in  this  supposed  case,  which  is  slightly 
altered  from  an  actual  case,  would,  under  the  bequests 
assumed,  and  pursuant  to  the  rulings  of  the  State  Comp- 
troller as  herein  set  forth,  be  as  follows : 

At  a  Surrogate's  Court  held  in  and  for  the  County 
of  New  York  at  the  Hall  of  Records  in  the 
Borough  of  Manhattan,  City  of  New  York,  on 
the  llth  day  of  June,  1917. 

Present — Hon.  JOHN  P.  COHALAN,  Surrogate. 


In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  ANN  BAPTISTE, 

Deceased. 


Upon  reading  the  report  of  the  appraiser, 

,  Esq.,  duly  filed  herein  on  the  10th  day  of 

June,  1917,  wherein  it  appears  that  said  decedent  died  on  the 
18th  day  of  January,  1917,  and  upon  motion  of  Lafayette  B. 
Gleason,  Attorney  for  the  State  Comptroller, 

IT  is  ORDERED  AND  ADJUDGED,  That  the  cash  value  of  the  prop- 


PAKT  V  — PROCEDURE  473 

erty  referred  to  in  said  report,  the  transfer  of  which  is  subject 
to  the  tax  imposed  by  the  act  in  relation  to  taxable  transfers 
of  property  and  the  tax  to  which  said  transfers  are  liable  is 
as  follows: 

Amount         Amount  of          Amount  Tax 

Beneficiary.  Received.       Exemption          Taxable.          Assessed. 

Jean  Baptiste,  $215,910  00  $5,000  00  $210,910  00  $5,186  40 
Marie  Baptiste,  10,000  00  5,000  00  5,000  00  50  00 
Joseph  Baptiste,  15,000  00  5,000  00  10,000  00  100  00 
Ann  Baptiste,  20,000  00  15,000  00  150  00 
Executors  for  bene- 
fit of  5%  class,  566,660  00  0  566,660  00  42,082  80 

And  it  is  further 

ORDERED  AND  ADJUDGED,  That  of  the  tax  above  assessed 
against  the  Executors  and  Trustees  for  the  benefit  of  the  five 
per  cent  (5%)  class,  the  tax  upon  such  remainder  or  remain- 
ders which  would  be  due  if  the  contingencies  or  conditions 
had  happened  at  the  date  of  the  appraisal  of  the  estate  is  as 
if  the  same  vested  as  follows: 

Amount         Amount  of          Amount  Tax 

Beneficiary.  Received.       Exemption          Taxable.          Assessed. 

Marie  Baptiste,  $141,665  00  0  $141,665  00  $3,099  95 

Joseph  Baptiste,  141,665  00  0   141,665  00  3,199  95 

Ann  Baptiste,      141,665  00  0   141,'665  00  3,299  95 

Julia  Baptiste,     141,665  00  $5,000  00   136,665  00  2,849  95 

The  tax  on  the  remainder  of  $566,660.00  is  computed  as 
follows : 

$25,000  at  5% $1,250  00 

75,000  at  6% 4,500  00 

100,000  at  1% 7,000  00 

366,660  at  8% 29,332  80 

making  a  total  tax  of  $42,082.80. 

If  the  life  tenant  were  dead  at  the  date  of  the  appraisal, 
the  tax  on  the  remainder  interests  would  be  as  set  forth  in 
the  Order,  amounting  to  a  total  of  $12,449.80. 

The  Comptroller  deducts  this  from  the  total  tax  on  the 


474 


INHERITANCE  TAXATION 


residue  and  turns  it  into  the  treasury  as  part  of  the  revenue 
for  the  current  year  from  inheritance  taxation.  The  balance, 
or  $29,633.00,  in  cash  or  securities,  is  deposited,  and  the  in- 
terest paid  to  the  trustees,  until  the  termination  of  the  life 
estate,  when  the  amount  will  be  returned  to  the  estate  unless 
it  proves  taxable  at  the  5%  rate. 

For  recent  cases  involving  taxation  of  contingent  remain- 
ders at  maximum  and  minimum  rates,  see : 

Matter  of  Zborowski,  213  N.  Y.  109. 

Matter  of  Button,  176  App.  Div.  217;  160  Supp.  223;  aff.  220  N.  Y.  770. 

Matter  of  Shearaon,  174  App.  Div.  866;  aff.  220  N.  Y.  584. 

Matter  of  Steinwender,  172  App.  Div.  871;  158  Supp.  779;  aff.  221  N.  Y. 

611. 
People  v.  Starring,  274  111.  289;  113  N.  E.  627. 

The  estate  has  an  absolute  right  under  the  statute  to  de- 
posit securities  instead  of  cash  and  this  right  may  be  enforced 
notwithstanding  the  payment  of  the  full  maximum  to  stop 
interest  and  penalties. 

Matter  of  De  Cordova,  19  App.  Div.  492. 

e.  EFFECT  OF  DECREE  ASSESSING  TAX. 

If  there  is  no  appeal  the  pro  forma  order  fixing  tax  is  the 
final  termination  of  the  tax  proceeding  and  is  final  and  con- 
clusive on  all  questions  of  law  and  fact  litigated  before  the 
Surrogate  of  which  he  had  jurisdiction. 

Matter  of  Lansing,  31  Misc.  148;  64  Supp.  1125. 
Matter  of  Crerar,  56  App.  Div.  479;  67  Supp.  795. 
Matter  of  Schermerhorn,  38  App.  Div.  350;  57  Supp.  26. 
Matter  of  Bice,  56  App.  Div.  253 ;  61  Supp.  911 ;  68  Supp.  1147. 

If  there  is  evidence  to  sustain  the  findings  of  fact,  they  will 
generally  be  sustained  on  appeal  in  the  absence  of  manifest 
error. 

Smith's  Estate,  261  Pa.  51;  104  A.  492. 

MeDougald  v.  Wulzen,  34  Cal.  App.  21 ;  166  Pac.  1033. 

Payment  of  the  tax  does  not  estop  an  appeal  by  one  paying 
it  nor  does  the  issuance  of  a  receipt  prevent  an  appeal  by  the 
State  Tax  Commission. 

Matter  of  Bogart,  25  Misc.  466 ;  55  Supp.  751. 


PART  V  — PROCEDURE  475 

A  decree  of  a  Surrogate  in  a  transfer  tax  proceeding  is 
binding  only  on  questions  of  taxation,  and  any  finding  made 
by  the  appraiser  as  to  the  validity  of  an  alleged  indebtedness 
of  decedent  to  his  executrix  will  not  prevent  the  bringing  of 
an  action  by  legatees  to  determine  the  validity  of  such 
indebtedness. 

Matter  of  Crawford,  85  Misc.  283;  147  Supp.  234. 

In  proceedings  under  the  Inheritance  Tax  Act,  the  deter- 
mination of  the  Surrogate  that  a  certain  amount  of  property 
passed  to  a  residuary  legatee  is  binding  upon  the  question  of 
taxation  only,  and  is  not  conclusive  upon  the  rights  of  parties 
arising  out  of  the  will. 

Amherst  College  v.  Ritch,  151  N.  Y.  282;  45  N.  E.  876. 

Where  a  former  report  of  an  appraiser  determines  the 
value  of  certain  remainder  interests  which  are  held  not 
presently  taxable,  such  determination  and  order  of  the  Surro- 
gate entered  thereon  are  no  bar  to  a  subsequent  proceeding 
to  determine  the  value  of  the  remainders  upon  the  death  of 
the  life  tenant,  "  without  diminution  for  or  on  account  of  any 
valuation  theretofore  made  of  the  particular  estates  for  the 
purposes  of  taxation." 

Matter  of  Irwin,  36  Misc.  277;  73  Supp.  415. 

Matter  of  Mason,  120  App.  Div.  738;  105  Supp.  667;  aff.  sub.  nom. 

Matter  of  Naylor,  189  N.  Y.  556;  82  N.  E.  1129. 

But  the  appraiser's  report  and  the  taxing  order  should  sus- 
pend from  taxation  specifically  such  matters  as  are  reserved. 
The  order  is  final  and  conclusive  as  to  all  questions  raised 
before  the  appraiser  and  is  presumed  to  cover  all  assets 
found  to  be  taxable. 

Matter  of  Wolfe,  137  N.  Y.  205;  33  N.  E.  156. 
Matter  of  Mowry,  114  App.  Div.  904;  100  Supp.  1131. 
Matter  of  Connolly,  38  Misc.  466;  77  Supp.  1032. 

3.  Appeal  to  the  Surrogate, 
a.  NOTICE  OF  APPEAL. 

Under  the  New  York  practice  an  appeal  lies  from  the  pro 
forma  order  to  the  Surrogate  by  the  party  aggrieved,  by 


476 


INHERITANCE  TAXATION 


filing  a  notice  of  appeal  within  sixty  days  of  the  entry  of  the 
order  stating  the  grounds  upon  which  the  appeal  is  taken. 

In  New  York  county  it  is  usually  heard  on  briefs  without 
oral  argument  except  where  the  Surrogate  desires  it,  and  it 
has  been  held  that  an  extension  of  time  to  file  briefs  must 
be  granted  by  the  court  and  not  merely  on  stipulation  of 
attorneys. 

Matter  of  Linley,  N.  Y.  L.  J.,  February  19,  1914. 

When  the  notice  of  appeal  fails  to  state  the  grounds  it  is 
dismissed. 

Matter  of  Stone,  56  Misc.  247;  107  Supp.  385. 
Matter  of  Tracy,  86  Supp.  1024. 

Where  the  statute  requires  the  grounds  of  the  appeal  to 
be  stated,  none  except  those  specified  can  be  considered. 

Matter  of  Davis,  149  N.  Y.  539-548;  44  N.  E.  185. 

The  review  by  the  Surrogate  on  an  appeal  to  him  is  limited 
to  the  items  specified  in  the  notice  of  appeal. 

Matter  of  Wormser,  51  App.  Div.  441;  64  Supp.  897. 
Matter  of  Reynolds,  97  Misc.  555;  163  Supp.  803. 

Matter  of  Weissbach,  111  Misc.  501;  183  Supp.  771. 

.  t 

The  purpose  of  requiring  the  notice  of  appeal  to  the  Surro- 
gate to  state  the  grounds  the  appeal  is  made  upon  was  to 
limit  the  questions  to  be  reviewed  by  him  to  those  only  stated 
in  the  notice,  and  neither  the  Supreme  Court  nor  the  Court 
of  Appeals  can  review  any  question  except  that  reviewed  by 
the  Surrogate. 

Matter  of  Manning,  169  N.  Y.  449-452;  62  N.  E.  565. 

This  rule  was  emphasized  by  the  Appellate  Division  in  the 
recent  case  of  Matter  of  Rockefeller,  177  App.  Div.  786 ;  165 
Supp.  154,  when  the  court  said: 

1 1  On  the  hearing  of  the  appeal  before  the  Surrogate  the  fact 
of  the  payment  of  these  sums  by  the  Executors  to  the  various 
beneficiaries  was  stipulated.  Objection  to  the  reception  of 
the  fact  was  made  by  the  State  Comptroller.  The  Comp- 


PART  V  —  PROCEDURE  477 

troller  offered  certain  evidence  to  which  objection  was  made 
by  the  attorneys  for  the  executors  and  the  Surrogate  ex- 
pressed doubt  as  to  his  power  to  consider  the  evidence,  upon 
the  ground  that  it  was  no  part  of  the  record  before  the 
appraiser. 

"In  our  opinion  he  did  not  have  power  to  consider  the  evi- 
dence. The  statute  requires  the  notice  of  appeal  'shall  state 
the  grounds  upon  which  the  appeal  is  taken'  (Tax  Law,  §  232, 
derived  from  Laws  1892,  ch.  397,  §  13),  and  none  but  those 
specified  can  be  considered.  (Matter  of  Davis,  149  N.  Y.  539, 
548;  44  N.  E.  185;  Matter  of  Manning,  169  id.  449,  451;  62 
N.  E.  565.)  In  the  event  of  new  facts  arising  after  the  notice 
of  appeal  was  filed  it  has  been  held  that  'the  statute  might 
be  construed  so  as  to  permit  the  raising  upon  an  appeal,  of 
a  question  which  did  not  enter  into  the  original  determination 
and  was  first  made  known  after  the  appeal  had  been  taken.' 
(Matter  of  Westurn,  152  N.  Y.  93,  104;  46  N.  E.  315.)  We 
will  not,  therefore,  consider  the  very  interesting  questions 
discussed  in  the  brief  of  the  appellant,  that  until  payment  was 
actually  made  by  the  executors  to  the  beneficiaries,  the  prop- 
erty either  passed  to  the  next  of  kin  subject  to  be  divested  by 
the  exercise  of  the  power,  or  that  it  remains  in  the  trustee 
and  is  subject  to  the  tax.  These  questions  were  not  raised 
before  the  appraiser  and  are  not  specified  in  the  notice  of 
appeal.  If  the  questions  had  been  raised  before  the  appraiser, 
the  fact  of  payment  could  have  been  proved. ' ' 

The  Rockefeller  case  was  recently  distinguished  by  the  Sur- 
rogate of  Bronx  County  who  held  that  he  might  take  evidence 
where  the  notice  of  appeal  covers  the  question,  particularly 
where  the  evidence  was  not  available  before  the  appraiser  on 
account  of  war  conditions. 

Matter  of  Soltau,  116  Misc.  257. 

b.  FORM  OF  NOTICE. 

By  way  of  illustration  the  following  is  given  as  an  example 
of  a  notice  of  appeal  to  the  Surrogate  from  his  pro  forma 
order  fixing  the  tax: 


INHERITANCE  TAXATION 

Notice  of  Appeal  to  the  Surrogate  by  Executor. 

SUBKOGATE'S  COUBT, 

COUNTY  OF  NEW  YORK. 


In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 


SIRS: 

PLEASE  TAKE  NOTICE  that  James  Horler,  individually  and  as 
executor  of  the  Last  Will  and  Testament  of  Mary  Horler,  de- 
ceased, is  dissatisfied  with  the  appraisal  herein  of  the  prop- 
erty of  the  said  Mary  Horler,  deceased,  and  hereby  objects 
to  the  report  of  the  appraiser  filed  herein  on  the  22nd  day  of 
May,  1916,  and  to  the  order  or  decree  made  herein,  fixing, 
assessing  and  determining  the  Transfer  Tax  in  respect  of  the 
property  of  the  said  decedent,  and  entered  herein  on  the  6th 
day  of  June,  1916,  and  hereby  appeals  to  the  Surrogate  from 
said  appraisal  and  said  assessment  and  determination  of  said 
tax,  and  from  said  order  or  decree. 

The  grounds  upon  which  said  appeal  is  taken  are : 

1.  That  the  tax  of  $3.25  imposed  upon  the  sum  of  $5,325 
less  an  exemption  of  $5,000,  stated  in  the  order  as  the  amount 
received  by  Eliza  Bogert  as  beneficiary,  was  unlawful  and 
illegal;  because  the  affidavit  of  James  Horler  and  schedules 
thereto  attached  upon  which  the  appraisal  was  made  show 
that  the  value  of  the  estate  of  Mary  Horler  did  not  exceed  the 
sum  of  $325,  the  said  Mary  Horler  having  been  the  owner 
with  James  Horler,  the  executor,  at  her  death,  of  certain 
other  property  described  in  such  schedules,  which  they  held 
as  joint  tenants,  and  to  which  at  her  death  the  said  James 
Horler  became  entitled  as  survivor,  and  there  did  not  there- 


PART  V  —  PROCEDURE  479 

fore  pass  to  Eliza  Bogert  by  the  death  of  Mary  Horler  any 
property  of  the  value  of  $5,325. 

2.  That  the  value  of  the  transfer  passing  to  Eliza  Bogert 
upon  and  by  the  death  of  Mary  Horler,  did  not  exceed  the 
sum  of  $325,  and  that  such  transfer  is  not  therefore  taxable 
under  the  provisions  of  the  tax  law  of  the  State  of  New 
York  relating  to  taxable  transfers. 

3.  That  the  tax  of  $272.16  imposed  upon  the  sum  of  $32,- 
215.63  less  an  exemption  of  $5,000,  stated  in  the  order  as  the 
amount  received  by  James  Horler  as  beneficiary,  was  and  is 
unlawful  and  illegal  because: 

(a)  The  Taxable  Transfer  Act  of  the  State  of  New  York 
as  amended  by  the  laws  of  1915,  chapter  664,  section  2,  which 
amendment  went  into  effect  May  20,  1915,  under  which  act 
as  so  amended  said  tax  was  imposed,  in  so  far  as  Section  220, 
subdivision  7  thereof,  imposed  a  tax  upon  the  right  of  the 
surviving  tenant  by  the  entirety,  joint  tenant  or  joint  tenants 
to  the  immediate  ownership  or  possession  and  enjoyment  of 
intangible  property  held  in  the  joint  names  of  two  or  more 
persons  prior  to  the  20th  day  of  May,  1915,  the  date  of  taking 
effect  of  such  amendment,  under  a  valid  contract  made  for  a 
valuable  consideration,  is  unconstitutional  and  void,  as  im- 
pairing the  obligation  of  contracts  and  as  taking  property 
without  due  process  of  law  and  as  denying  to  certain  persons 
within  the  jurisdiction  of  the  State  of  New  York  the  equal 
protection  of  the  laws,  and  as  being  an  ex  post  facto  law,  and 
as  abridging  the  privileges  and  immunities  of  citizens  of  the 
United  States,  contrary  to  and  in  violation  of  Article  1,  Sec- 
tion 10,  of  the  Constitution  of  the  United  States,  and  Article  1, 
Section  6,  of  the  Constitution  of  the  State  of  New  York,  and 
contrary  to  and  in  violation  of  the  14th  Amendment  of  the 
Constitution  of  the  United  States. 

(b)  The  property  taxed  by  said  order  as  having  been  re- 
ceived by  James  Horler  as  beneficiary  was  property  held  by 
him  and  the  above  named  decedent  Mary  Horler  at  her  death 
as  joint  tenants  under  written  instruments  and  under  con- 


480 


INHERITANCE  TAXATION 


tracts  made  by  them  for  a  valuable  consideration  prior  to 
May  20,  1915,  and  under  the  laws  of  the  State  of  New  York 
as  in  force  at  the  time  of  the  making,  execution  and  delivery 
of  such  instruments  and  at  the  time  of  the  making  of  said 
contracts  the  property  affected  by  such  instruments  and  such 
contracts  and  the  transfer  thereof  was  not  subject  to  or  liable 
for  the  payment  of  a  transfer  tax  upon  the  death  of  either  of 
said  parties,  the  rights  of  the  said  James  Horler  and  Mary 
Horler  in  such  property  became  fixed  and  vested  prior  to 
May  20,  1915,  and  the  tax  placed  upon  the  said  property  and 
the  transfer  thereof  was  and  is  therefore  contrary  to  and  in 
violation  of  Article  1,  Section  10,  of  the  Constitution  of  the 
United  States,  and  Article  1,  Section  6,  of  the  Constitution 
of  the  State  of  New  York,  and  in  violation  of  the  14th  Amend- 
ment of  the  Constitution  of  the  United  States. 

4.  That  the  tax  of  $272.16  imposed  upon  the  sum  of  $32,- 
215.63  less  an  exemption  of  $5,000  stated  in  said  order  as  the 
amount  received  by  James  Horler  as  beneficiary  was  and  is 
unlawful  and  illegal,  because  at  her  death  Mary  Horler  and 
James  Horler  were  seized  and  possessed  of  the  property  mak- 
ing up  said  sum  of  $32,215.63  as  joint  tenants,  each  of  them 
owning  an  undivided  one-half  interest  in  such  property,  and 
there  was  therefore  only  transferred  from  Mary  Horler  to 
James  Horler  by  her  death  an  undivided  one-half  of  such 
property ;  and  if  any  part  of  said  property  is  taxable  only  the 
said  half  thereof  should  be  taxed  which  was  so  transferred 
to  James  Horler  by  the  death  of  the  above  named  decedent 
Mary  Horler. 

5.  That  it  was  and  is  erroneous  and  unlawful  to  include  in 
the  items  going  to  make  up  the  net  estate  of  Mary  Horler,  de- 
ceased, one-half  of  the  market  value  of  the  real  estate  men- 
tioned and  described  in  Schedule  A  of  the  affidavit  of  the 
Executor  herein,  because  said  real  estate  at  her  death  formed 
no  part  of  her  estate  but  was  held  at  her  death  by  James 
Horler  and  herself  as  joint  tenants  and  upon  her  death  James 
became  entitled  to  the  said  real  estate  as  survivor,  and  the 
transfer  to  James  Horler  as  such  survivor  was  not  and  is 


PART  V  —  PROCEDURE  4gl 

not  a  taxable  transfer  under  the  Taxable  Transfer  Act  of 
the  State  of  New  York. 

Dated,  New  York,  July ,  1916. 

MCREYNOLDS  &  HUNTER, 
Attorneys  for  James  Horler  indi- 
vidually and  as  Executor  of  Mary 
Horler,  deceased. 

Office  and  P.  0.  Address, 

80  Maiden  Lane, 
Manhattan  Borough, 

New  York  City. 
To: 

LAFAYETTE  B.  GLEASON, 

Attorney  for  State  Comptroller,* 

DANIEL  J.  DOWDNEY, 

Clerk  of  the  Surrogate's  Court 
of  the  County  of  New  York. 

4.  Determination  by  Surrogate. 

a.  HEARINGS  ON  APPEAL. 

It  is  not  the  practice  to  appoint  a  special  guardian  for  an 
infant. 

Matter  of  Post,  5  App.  Div.  113;  38  Supp.  977. 

In  Massachusetts  it  is  held  that  a  reappraisal  cannot  be 
applied  for  in  regard  to  one  item  only,  but  the  whole  matter 
must  be  sent  back  and  heard  de  novo.  (This  is  not  the  rule  in 
New  York.) 

Whitney  v.  Tax  Commission,  239  Mass.  188;  125  N.  E.  187. 

Deductions  must  be  claimed  for  debts  and  administration 
expenses  before  the  appraiser  and  cannot  be  urged  as  ground 
for  reversal  of  his  report  on  appeal  to  the  Surrogate  unless 
so  claimed. 

Matter  of  McCaddon,  181  Supp.  584. 

«. 

*  Now  State  Tax  Commission. 

31 


INHERITANCE  TAXATION 

Although  the  review  on  appeal  is  confined  to  the  questions 
raised  by  the  notice,  on  those  questions  the  Surrogate  may 
take  evidence  to  supplement  that  taken  before  the  appraiser. 

Matter  of  Fuller,  62  App.  Div.  428;  71  Supp.  40. 
Matter  of  Gibbs,  60  Misc.  645 ;  113  Supp.  939. 
Matter  of  Bentley,  31  Misc.  656;  66  Supp.  95. 
Matter  of  Thompson,  57  App.  Div.  317;  68  Supp.  18. 

In  the  Thompson  case  the  court  said : 

"The  whole  matter  is  with  the  Surrogate  and  continues 
with  him  until  the  final  determination  after  appeal.  The  pur- 
pose of  the  appeal  from  the  Surrogate  to  the  Surrogate  is  not 
simply  to  review  his  former  determination.  There  is  no  occa- 
sion to  limit  it  to  that.  The  beneficial  result  of  such  a  re- 
hearing would  be  greatly  diminished  if  the  determination  of 
the  Surrogate  could  not  at  that  time  be  treated  as  so  far  open 
as  to  admit  new  testimony." 

The  Comptroller  is  not  estopped  from  appealing  by  accept- 
ing payment  of  so  much  of  the  tax  as  is  conceded  to  be  due. 

Matter  of  Schumacher,  N.  Y.  L.  J.,  March  13,  1914. 

In  order  to  justify  a  reversal  by  the  Surrogate  there  mus  • 
be  a  preponderance  of  evidence  one  way  or  the  other. 

Matter  of  Gilsey,  N.  Y.  L.  J.,  March  10,  1914. 

Where  reappraisal  is  sought  on  appeal  the  papers  must 
show  some  ground  therefor.  Where  they  failed  so  to  do  the 
Surrogate  said:  " There  is  nowhere  contained  in  appellant's 
papers  a  specific  fact,  or  statement  of  any  person  competent 
to  judge  that  this  stock  is  worth  one  dollar  more  than  the  sum 
for  which  it  has  been  appraised." 

Matter  of  Johnson,  37  Misc.  542;  75  Supp.  1046. 

Discovery  of  new  facts  must  be  shown  to  entitle  the  Comp- 
troller to  order  appointing  appraiser  to  tax  assets  the  valua- 
tion of  which  in  a  previous  appraisal  had  been  suspended. 

Matter  of  De  Sala,  N.  Y.  L.  J.,  July  20,  1912. 

As  to  new  facts  discovered  since  the  hearing  before  the 
appraiser  the  Surrogate  may  take  evidence  even  though  they 
were  not  specified  in  the  notice  of  appeal : 


PART  V—  PROCEDURE  483 

"We  think  the  statute  ought  to  be  construed  so  as  to  permit 
the  raising  upon  appeal,  of  a  question  which  did  not  enter  into 
the  original  determination,  and  which  was  first  made  known 
after  the  appeal  had  been  taken,  and  after  the  expiration  of 
the  sixty  days.  The  Surrogate  had  jurisdiction  of  the  appeal 
by  the  notice  actually  given,  and  it  would  be  an  unwise  con- 
struction of  the  act  to  limit  the  hearing  so  as  to  exclude  the 
consideration  of  a  new  question  subsequently  arising,  on  the 
ground  that  it  was  not  specified  in  the  notice  of  appeal." 

Matter  of  Westurn,  152  N.  Y.  93,  104  j  46  N.  E.  315. 

But  this  is  confined  strictly  to  newly  discovered  evidence. 
It  does  not  apply  when  the  testimony  might  just  as  well  have 
been  put  in  before  the  appraiser. 

Matter  of  Rockefeller,  177  App.  Div.  786;  165  Supp.  154. 

Nor  to  objections  that  might  have  been  taken  before  him. 

Matter  of  Mills,  172  App.  Div.  530;  158  Supp.  1100;  aff.  219  N.  Y.  100. 

b.  ON  MOTIONS  TO  EXEMPT. 

As  we  have  seen,  a  question  as  to  inheritance  taxation  may 
be  raised  on  a  motion  to  exempt  the  estate  from  taxation, 
without  the  appointment  of  an  appraiser. 

Where  such  a  motion  is  made  on  the  ground  of  nonresidence 
the  Surrogate  may  take  proofs  of  the  facts  or  send  to  a  referee 
although  the  moving  affidavits  are  uncontradicted. 

Matter  of  Hyde,  218  N.  Y.  55. 

Matter  of  Bishop,  111  App.  Div.  545;  97  Supp.  1098;  appeal  dismissed, 
188  N.  Y.  635. 

But  where  an  appraiser  has  been  appointed  and  a  tax  has 
been  imposed  the  proper  remedy  is  by  appeal  and  not  by 
motion  to  exempt. 

Matter  of  Cowie,  49  App.  Div.  612 ;  63  Supp.  608. 
Matter  of  Barnum,  129  App.  Div.  418;  114  Supp.  33. 
Matter  of  Lowry,  89  App.  Div.  226;  85  Supp.  924. 

t 

c.  ORDER  KEMITTING  EEPORT. 

After  hearing  upon  appeal  from  the  pro  forma  decree 
assessing  tax  the  Surrogate,  acting  judicially,  makes  a  second 
order  affirming,  modifying  or  reversing  the  original  order; 


484 


INHERITANCE  TAXATION 


or  he  may  remit  the  whole  proceeding  back  to  the  appraiser 
for  further  testimony  or  for  proceedings  in  accordance  with 
'the  Surrogate's  view  of  the  law.  Upon  such  an  order  the 
appraiser  makes  a  second  or  supplemental  report  upon  which 
a  second  taxing  order  is  entered  and  from  which  a  second 
appeal  lies  to  the  Surrogate. 

As  an  example,  the  following  order,  remitting  the  report 
to  the  appraiser,  was  entered  in  the  Horler  case : 

Order  Remitting  Report  to  Appraiser. 

At  a  Surrogate's  Court  held  in  and  for  the  County 
of  New  York,  at  the  Hall  of  Records  in  the 
Borough  of  Manhattan,  on  the  27th  day  of 
December,  1916. 

Present — Hon.  ROBERT  LUDLOW  FOWLER,  Surrogate. 

"""""""•N. 

In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 


The  appeal  of  James  Horler,  individually  and  as  executor 
of  the  Last  Will  and  Testament  of  Mary  Horler,  deceased, 
from  the  appraisal  and  report  filed  herein  on  May  22,  1916, 
and  from  the  order  entered  herein  on  June  6,  1916,  fixing, 
assessing  and  determining  the  Transfer  Tax  in  respect  to 
the  property  of  the  said  testatrix  Mary  Horler,  having  duly 
come  on  to  be  heard  and  having  been  heard  by  me ; 

Now,  upon  the  facts  appearing  before  me,  and  after  hearing 
McReynolds  &  Hunter,  attorneys  for  James  Horler,  indi- 
vidually and  as  executor,  and  Lafayette  B.  Gleason,  Esq., 
attorney  for  the  *  Comptroller  of  the  State  of  New  York;  and 
due  deliberation  having  been  had  and  having  filed  my  opinion 
herein  on  November  27,  1916 ; 

IT  is  ORDERED,  ADJUDGED  AND  DECREED,  that  the  interest  which 

*  Now  State  Tax  Commission. 


PAET  V  —  PROCEDURE  485 

passed  to  decedent's  husband  James  Horler  in  the  real  estate 
and  premises  No.  305  Hewes  Street,  Brooklyn  Borough,  New 
York  City,  by  virtue  of  the  conveyance  made  by  her  on  Novem- 
ber 5,  1914,  and  which  included  the  right  to  the  possession  of 
the  said  real  estate  in  fee  simple  in  the  event  of  his  surviving- 
the  decedent  is  not  subject  to  a  tax  under  the  provisions  of 
the  Transfer  Tax  Law  of  the  State  of  New  York ;  and 

IT    IS    FURTHER    ORDERED,    ADJUDGED    AND    DECREED,    that    the 

right  of  James  Horler,  as  survivor  to  the  $11,500.00  of  bonds 
and  mortgages  which  he  and  the  decedent  held  as  joint  tenants 
at  the  time  of  her  death  under  the  instruments  of  assignment 
and  transfer  made  by  the  decedent  during  October  and 
November,  1914,  being  derived  from  a  contract  made  and 
entered  into  for  a  valuable  consideration,  is  not  subject  to  a 
tax  under  the  provisions  of  the  Transfer  Tax  Law  of  the 
State  of  New  York ;  and 

IT    IS    FURTHER    ORDERED,    ADJUDGED    AND    DECREED,    that    the 

right  of  James  Horler,  as  survivor  to  the  $116,000.00  bond 
and  mortgage,  which  the  decedent  and  he  held  as  joint  tenants 
at  the  time  of  her  death  under  the  instrument  of  assignment 
and  transfer  made  by  him  on  November  5,  1914,  to  the  dece- 
dent, being  derived  from  a  contract  made  and  entered  into  for 
a  valuable  consideration,  is  not  subject  to  a  tax  under  the  pro- 
visions of  the  Transfer  Tax  Law  of  the  State  of  New  York; 
and 

IT    IS    FURTHER    ORDERED,    ADJUDGED    AND    DECREED,    that    the 

bank  accounts  which  were  held  in  the  Irving  Savings  Institu- 
tion and  in  the  Emigrants'  Industrial  Savings  Bank  in  the 
joint  names  of  decedent  and  her  husband  James  Horler  at 
the  time  of  her  death  and  which  were  so  Jield  in  their  joint 
names  prior  to  the  enactment  of  Chapter  664  of  the  Laws  of 
1915  did  not  constitute  any  part  of  the  estate  of  decedent 
subject  to  the  provisions  of  the  Transfer  Tax  Law,  and  the 
right  of  James  Horler  to  the  said  bank  accounts  as  survivor, 
is  not  subject  to  a  tax  under  the  Transfer  Tax  Law  of  the 
State  of  New  York ;  and 

IT    IS    FURTHER    ORDERED,    ADJUDGED    AND    DECREED,    that    the 

order  entered  herein  on  June  6,  1916,  fixing,  assessing  and 


486 


INHERITANCE  TAXATION 


determining  a  transfer  tax  in  respect  to  the  property  of  the 
decedent  Mary  Horler,  be  and  the  same  hereby  is  in  all 
respects  reversed ;  and 

IT    IS    FURTHEK    ORDERED,    ADJUDGED    AND    DECREED,    that    the 

Appraiser's  report,  filed  herein  on  May  22,  1916,  and  upon 
which  said  order  of  June  6,  1916,  was  made,  be  and  the  same 
hereby  is  remitted  to  the  said  Appraiser  for  correction  in  the 
manner  indicated  in  the  opinion  filed  herein  on  November  27, 

1916. 

ROBERT  LUDLOW  FOWLER, 

Surrogate. 

d.  SUPPLEMENTAL  REPORT  OF  APPRAISER. 

Upon  the  order  remitting  the  original  report,  the  appraiser 
makes  a  supplemental  report,  of  which  the  following  is  an 
example : 

Supplemental  Report  of  Appraiser. 

SURROGATE'S  COURT, 

NEW  YORK  COUNTY. 


In  the  Matter 

of 

The  Appraisal,  under  the  Transfer  Tax 
Law,  of  the  Estate  of  MARY  HORLER, 
Deceased. 

I,  John  J.  Lyons,  having  been  duly  designated  to  appraise 
the  estate  of  the  above  mentioned  decedent,  having  made  and 
filed  my  report  herein  on  the  22nd  day  of  May,  1916,  and  an 
order  having  subsequently  been  entered  remitting  said  report 
to  me  for  the  purpose  of  correction  in  the  manner  indicated 
in  the  opinion  filed  herein  on  November  27,  1916,  by  Hon. 
Robert  Ludlow  Fowler,  Surrogate,  New  York  County,  do 
hereby  submit  this  as  a  supplemental  and  amended  report : 

First. — Paragraph  First  of  the  original  report  is  confirmed. 

Second. — I    further    report    the    following    appearances: 


PAET  V  — PROCEDURE  487 

Lafayette  B.  Gleason,  Esq.,  attorney  for  State  Comptroller; 
McBeynolds  &  Hunter,  Esqs.,  attorneys  for  Executor,  80 
Maiden  Lane,  New  York  City. 

Third. — Paragraph  Fifth  of  the  original  report  as  amended 
in  the  following  particulars : 

Schedule  Al,  real  estate,  premises  known  as  305  Hewes 
Street,  Brooklyn,  Kings  County,  New  York,  assessed  at 
$6,300,  valued  at  $6,500,  held  by  decedent  and  her  husband, 
James  Horler,  as  joint  tenants.  Original  report  taxed  half, 
$3,250.  Amended  to  read  ' '  Exempt. ' ' 

Schedule  A2  recited  two  bank  accounts,  aggregating  with 
interest  $6,016,  held  in  joint  accounts,  payable  to  either  or 
the  survivor,  by  this  decedent  and  her  husband,  James  Horler. 
Original  report  taxed  in  full,  $6,016.  Amended  to  read 
"  Exempt." 

Schedule  A3  recited  items  of  personal  property,  jewelry, 
etc.,  valued  at  $325  and  mortgages,  held  jointly  by  this  dece- 
dent and  her  husband,  James  Horler,  aggregating,  with 
accrued  interest,  $28,124.63.  These  mortgages,  taxed  in  orig- 
inal report  in  full,  should  be  reported  as  "Exempt."  Total 
assets  under  paragraph  Fifth  should  therefore  be  amended  to 
$325,  and  deductions  of  $500  confirmed,  and  net  estate 
therefore  shows  "Deficit." 

Fourth. — Paragraph  Sixth  should  therefore  be  amended  to 
read  as  follows :  "As  no  beneficiary  is  to  receive  an  amount 
equal  to  or  exceeding  the  amount  of  the  statutory  exemption, 
I  find  no  tax  to  accrue  in  this  proceeding." 

Respectfully  submitted, 

JOHN  J.  LYONS,  Appraiser. 
Dated,  New  York  City,  N.  Y.,  March  17,  1917. 

e.  SECOND  TAXING  ORDER. 

Upon  the  supplemental  report  of  the  appraiser  a  second 
taxing  order  is  entered.  In  the  illustrative  case,  under  the 
Surrogate's  views  of  the  law,  the  entire  estate  was  exempt. 
The  order  upon  the  supplemental  report  was,  accordingly,  as 
follows : 


INHERITANCE  TAXATION 

\ 

Order  on  Supplemental  Report. 

At  a  Surrogate's  Court  held  in  and  for  the  County 
of  New  York,  at  the  Hall  of  Eecords  in  the 
Borough  of  Manhattan,  City  of  New  York,  on 
the  4th  day  of  April,  1917. 

Present — Hon.  EGBERT  LUDLOW  FOWLER,  Surrogate. 


In  the  Matter 

of 

An  Application  to  adjust  the  Transfer 
Tax  upon  the  Estate  of  MARY  HORLER, 
Deceased. 


On  reading  the  supplemental  report  of  John  J.  Lyons,  Esq., 
the  appraiser,  filed  herein  on  the  17th  day  of  March,  1917, 
wherein  it  appears  that  the  said  decedent  died  on  the  twenty- 
fourth  day  of  July,  1915,  and  on  motion  of  McBeynolds  & 
Hunter,  attorneys  for  the  Executor  herein,  it  is 

ORDERED  AND  ADJUDGED  that  the  transfer  of  the  property  of 
which  said  decedent  died  seized  and  possessed,  and  referred 
to  in  said  report,  is  exempt  from  tax  under  the  act  in  relation 
to  taxable  transfers  of  property. 

EGBERT  LUDLOW  FOWLER,  Surrogate. 

f.  NOTICE  OF  APPEAL  FROM  SECOND  TAXING  ORDER. 

From  the  second  taxing  order,  in  the  illustrative  case,  the 
Comptroller  appealed  to  the  Surrogate,  stating  the  grounds 
of  his  appeal  as  follows : 


PART  V  —  PROCEDURE  4g9 

Notice  of  Appeal  to  the  Surrogate  by  Comptroller. 

SURROGATE'S  COURT, 
NEW  YORK  COUNTY. 


In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 


SIRS: 

PLEASE  TAKE  NOTICE  that  the  Comptroller  of  the  State  of 
New  York  is  dissatisfied  with  the  appraisal  herein  of  the 
property  of  the  above  named  decedent  as  made  and  set  forth 
in  the  report  of  the  appraiser,  filed  herein  on  the  17th  day  of 
March,  1917,  and  with  the  order  fixing  and  assessing  the 
transfer  tax  in  respect  to  the  transfer  of  the  property  of  said 
decedent,  made  and  entered  herein  on  the  4th  day  of  April, 
1917,  and  hereby  appeals  to  the  Surrogate  from  the  said  order 
assessing  tax  as  aforesaid,  on  the  ground  that  the  same  failed 
to  tax  certain  real  estate  valued  at  $6,500  held  by  decedent  and 
her  husband  as  joint  tenants,  and  two  bank  accounts  amount- 
ing to  $6,016,  standing  in  the  name  of  decedent  and  her 
husband,  and  certain  personal  property  and  mortgages  held 
jointly  by  decedent  and  her  husband. 
Dated,  New  York,  April  6,  1917. 
Yours,  etc., 

LAFAYETTE  B.  GLEASON, 
Attorney  for  State  Comptroller,* 

Office   and   P.   0.   Address,   233 
Broadway,   Borough  of  Man- 
To  :  hattan,  New  York  City. 
MESSRS.  McREYNOLDs  &  HUNTER, 
Attorneys  for  Executor, 

86  Maiden  Lane,  New  York  City. 
DANIEL  J.  DOWDNEY,  ESQ., 

Clerk  of  Surrogate's  Court. 

*  Now  State  Tax  Commission. 


490 


INHERITANCE  TAXATION 


g.  TAXING  ORDER  UPON  SECOND  APPEAL. 

If  any  portion  of  the  estate  in  the  Horler  case  was  taxable 
a  second  order  fixing  tax,  in  the  same  form  as  the  original 
order,  would  have  been  entered.  As  the  whole  estate  was 
exempt,  under  the  court's  ruling,  the  following  order  was 
entered : 


Taxing  Order  Upon  Second  Appeal. 

At  a  term  of  the  Surrogates'  Court  held  in  and 
for  the  County  of  New  York  at  the  Hall  of 
Records,  Borough  of  Manhattan,  New  York  City, 
on  the  24th  day  of  April,  1917. 

Present — Hon.  EGBERT  LUDLOW  FOWLER,  Surrogate. 


In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 

James  Horler,  individually  and  as  Executor  under  the  Will 
of  the  above  named  decedent,  having  appealed  from  the  report 
of  the  appraiser  duly  filed  herein  on  the  22d  day  of  May,  1916, 
and  the  order  fixing  tax  thereon  on  the  6th  day  of  June,  1916, 
and  on  the  hearing  of  said  appeal  the  Surrogate  having 
reversed  the  order  fixing  tax  and  remitted  the  matter  to  the 
appraiser,  and  a  new  appraisement  having  been  had  and  filed 
herein  on  the  17th  day  of  March,  1917,  and  an  order  having 
been  entered  thereon  on  the  4th  day  of  April,  1917,  and  the 
Comptroller  having  appealed  from  said  last  named  order  and 
report  of  the  appraiser  to  the  Surrogate  on  the  ground  set 
forth  in  said  Notice  of  Appeal. 

Now,  after  hearing  Messrs.  McEeynolds  &  Hunter,  attor- 
neys for  James  Horler  as  Executor,  and  due  deliberation 
having  been  had,  it  is 

ORDERED  that  the  said  appeal  of  the  Comptroller  of  the 
State  of  New  York  is  hereby  denied,  and  the  order  fixing  tax 


PAET  V  — PROCEDURE  491 

entered  herein  on  the  4th  day  of  April,  1917,  be  and  the  same 
hereby  is  in  all  respects  affirmed. 

EGBERT  LUDLOW  FOWLER,  Surrogate. 

h.  NOTICE  OF  APPEAL  TO  APPELLATE  DIVISION. 

From  the  order  thus  entered  the  Comptroller  appealed  to 
the  Appellate  Division,  which  appeal  is  now  pending.  The 
notice  of  appeal  was  as  follows : 

Notice  of  Appeal  to  the  Appellate  Division. 

SUKBOGATE'S  COUKT, 
NEW  YORK  COUNTY. 


In  the  Matter 

of 

The  Transfer  Tax  upon  the  Estate  of 
MARY  HORLER, 

Deceased. 

SIRS: 

PLEASE  TAKE  NOTICE  that  the  Comptroller  of  the  State  of 
New  York  hereby  appeals  to  the  Appellate  Division  of  the 
Supreme  Court  for  the  First  Judicial  Department  from  the 
orders  of  this  Court  dated  December  27th,  1916,  reversing 
the  order  fixing  tax  and  remitting  the  report  to  the  appraiser, 
the  order  of  exemption  on  the  supplemental  report  made  and 
entered  on  the  4th  day  of  April,  1917,  and  from  the  order 
denying  the  appeal  of  the  Comptroller  made  and  entered  on 
the  24th  day  of  April,  1917,  and  from  each  and  every  part  of 
said  orders. 

Dated,  New  York,  May  4th,  1917. 

Yours,  &c., 

LAFAYETTE  B.  GLEASON, 
Attorney  for  State  Comptroller,* 

Appellant, 

Office  and  P.  0.  Address,  Wool- 
worth  Building,  Borough  of 
Manhattan,  New  York  City. 

*  Now  State  Tax  Commission. 


492  INHERITANCE  TAXATION 

To: 

DANIEL  J.  DOWDNEY,  ESQ., 

Clerk  of  the  Surrogates'  Court, 

New  York  County. 
McKEYNOLDS  &  HUNTER,  ESQS., 
Attorneys  for  Executor, 
80  Maiden  Lane, 
New  York  City. 

5.  Before  the  Appellate  Courts. 

From  the  determination  of  the  probate  court  an  appeal  lies 
in  all  jurisdictions  to  the  appellate  courts  following  generally 
the  practice  on  appeals  from  all  decrees  and  orders  of  the 
court  of  probate. 

But  the  right  of  appeal  is  not  a  vested  right. 

Crittenberger  v.  State,  63  Ind.  App.  151;  114  N.  E.  225. 

And  does  not  lie  where  not  explicitly  given  by  the  statute. 

State  v.  Bolwinn's  Estate,  141  Ark.  481;  217  S.  W.  464. 

And  the  State  or  county  has  the  same  right  of  appeal  as 
the  executor  under  the  statutes. 

Re  Hopeman's  Estate,  167  Neb.  792. 

Under  the  practice  in  many  States  the  appeal  brings  up  the 
whole  question  de  novo,  and  defenses  may  be  altered  or  new 
defenses  made. 

Seviers'  Executors  v.  Commonwealth,  181  Ky.  49;  203  S.  W.  1070. 

In  New  York  the  questions  raised  on  appeal  are  limited  by 
the  notice  of  appeal. 

a.  WHO  MAY  APPEAL. 

Some  question  arises  as  to  how  far  an  executor  may  litigate 
a  question  over  the  amount  of  inheritance  taxes  in  which  he 
is  interested  only  to  the  extent  of  his  personal  liability. 

So,  when  the  question  as  to  taxation  was  submitted  to  the 
Appellate  Division  on  an  agreed  state  of  facts  and  the  execu- 
tors only  appealed  while  all  other  parties  acquiesced,  it  was 
held  that  the  executor  did  not  have  an  appealable  interest. 

Isham  v.  N.  Y.  Assn.  for  the  Poor,  177  N.  Y.  218;  69  N.  E.  367. 


PAKT  V  — PROCEDURE  493 

So,  it  was  held  in  Pennsylvania  that  the  executors  were  not 
interested  in  the  question  whether  a  tax  was  presently  due  and 
payable.  The  court  said: 

"The  further  question  argued,  whether  the  tax  is  now  due 
and  payable,  is  not  raised  by  this  record.  The  appeal  is  by 
the  executors  and  trustees  and  it  does  not  appear  that  they 
have  any  interest  in  the  question.  The  executors  are  nowhere 
made  chargeable  with  the  tax  until  distribution." 

Handley's  Estate,  181  Pa.  St.  339,  347;  37  A.  587. 

On  the  other  hand,  it  was  held  in  Illinois,  that  where  a 
trustee,  who  in  good  faith  believes  that  an  inheritance  tax  has 
been  assessed  illegally  or  in  an  improper  amount,  may  appeal 
from  the  judgment  not  only  to  preserve  the  rights  of  the  bene- 
ficiaries but  to  protect  himself  from  personal  liability  in  case 
he  should  pay  a  claim  that  might  afterwards  be  adjudged 
illegal. 

People  v.  Northern  Trust  Co.,  266  111.  139;  107  N.  E.  100. 

An  executor  always  has  the  right  to  appeal  to  the  Surro- 
gate from  the  pro  forma  order  fixing  tax. 

Matter  of  Cornell,  66  App.  Div.  167,  171 ;  73  Supp.  32 ;  modified  170  N.  Y. 
423;  63  N.  E.  445. 

On  the  one  hand,  it  is  not  just  that  the  entire  estate  should 
be  put  to  an  expense  in  opposing  the  tax  against  a  single  bene- 
ficiary. On  the  other  hand,  the  executor  usually  represents  all 
beneficiaries  before  the  appraiser  and  the  Surrogate.  In  a 
recent  case  the  executor  was  interested  both  individually  and 
as  executor  and  appealed  only  in  the  second  capacity.  The 
Appellate  Division,  in  sustaining  the  appeal,  said: 

"It  is  also  urged  by  the  respondent  that  the  appellant  as 
executrix  is  not  aggrieved  by  the  order  assessing  a  transfer 
tax  and  hence  her  appeal  raises  no  question.  The  notice  of 
appeal  does  not,  necessarily,  purport  to  be  an  appeal  by  the 
executrix.  The  use  of  the  word  executrix,  it  might  be  urged, 
is  merely  descriptive,  but  assuming  that  the  appeal  is  taken 
by  her  as  executrix,  we  think  she  had  a  right  to  appeal.  In 
Matter  of  Cornell,  66  App.  Div.  167;  73  Supp.  32,  it  was  held 


INHERITANCE  TAXATION 

that  'the  executor  as  such  is  entitled  to  appeal  from  an  order 
and  decree  fixing  a  transfer  tax.  He  is  made  personally  liable 
for  the  tax  and  is  a  party  aggrieved  within  the  meaning  of  the 
provisions  of  the  Code  of  Civil  Procedure  relating  to  appeals. ' 
The  Court  of  Appeals  modified  the  order  of  the  Appellate 
Division  (170  N.  Y.  423;  63  N.  E.  445)  and  in  doing  so  I  think 
necessarily  held  that  the  appeal  was  properly  taken  by  the 
executor. 

"But  independent  of  authority  it  must  be  that  an  executor 
of  an  estate  against  which  a  transfer  tax  has  been  imposed 
has  such  an  interest  therein  as  entitles  him  to  have  an  order 
imposing  the  tax  reviewed  on  appeal." 

Matter  of  Dalsimer,  167  App.  Div.  365;  153  Supp.  58;  aff.  217  N.  Y.  608. 

The  true  rule  probably  is  that  an  executor  can  appeal  only 
in  so  far  as  he  protects  himself  from  his  personal  liability; 
and,  beyond  that,  the  expense  of  the  litigation  should  be  borne 
by  those  directly  interested. 

In  New  York  a  foreign  executor  is  held  to  have  the  right  to 
appeal. 

Matter  of  Cornell,  66  App.  Div.  167,  171;    73   Supp.   32;   modified   170 
N.  Y.  423. 

b.  ORDER  APPEALED  FROM. 

In  a  recent  case  it  was  contended  by  the  attorney  for  the 
estate  before  the  Appellate  Division  that  the  notice  of  appeal 
should  be  not  only  from  the  order  of  the  Surrogate  upon 
appeal  to  him  from  the  pro  forma  order  fixing  the  tax  but 
from  all  the  intermediate  orders,  including  an  order  remitting 
the  report  to  the  appraiser;  but  the  point  was  ignored,  and 
the  established  practice  of  appealing  only  from  the  order  of 
the  Surrogate  upon  appeal  to  him  in  his  judicial  capacity  was 
tacitly  approved. 

Matter  of  Hernandez,  172  App.  Div.  467;  159  Supp.  59;  aff.  219  N.  Y.  24. 

Where,  after  an  appeal  from  a  Surrogate's  decree  in  a 
transfer  tax  proceeding,  the  matter  is  remitted  to  the  ap- 
praiser and  the  Surrogate  makes  the  usual  order  fixing  the 
cash  value  of  the  property  transferred  and  the  amount  of  the 


PART  V  — PROCEDURE  495 

taxes,  no  appeal  lies  from  his  order  as  a  taxing  officer  directly 
to  the  Appellate  Division. 

Matter  of  Vietor,  160  App.  Div.  32 ;  144  Supp.  918. 

The  Surrogate  acts  merely  as  assessor  in  determining  the 
tax.  When  he  acts  judicially  and  makes  an  order  on  appeal 
from  the  taxing  order  there  is  no  second  appeal  to  the  Surro- 
gate but  direct  to  the  Appellate  Division. 

Matter  of  Steinwender,  176  App.  Div.  517;  158  Supp.  779;  aff.  221  N.  Y. 
611. 

Where  the  notice  of  appeal  states  that  it  is  from  the  order 
of  January  24,  1903,  as  resettled  by  order  of  March  24,  1903. 
the  resettled  order  is  the  one  appealed  from. 

Matter  of  Post,  85  App.  Div.  611 ;  82  Supp.  1079. 

And  the  discretion  of  the  Surrogate  in  refusing  to  resettle 
an  order  is  not  reviewable  on  appeal. 

Matter  of  Sondheim,  69  App.  Div.  5;  74  Supp.  510. 

When  the  Court  of  Appeals  has  directed  the  modification 
of  a  Surrogate's  taxing  order  fixing  a  transfer  tax,  a  party  to 
that  appeal  cannot  thereafter  raise  de  novo  any  of  the  ques- 
tions which  were  determined  or  which  might  have  been  deter- 
mined, by  a  second  appeal  taken  within  sixty  days  from  the 
entry  of  the  taxing  order  by  the  Surrogate. 

Matter  of  Cook,  125  App.  Div.  114;  109  Supp.  417;  aff.  194  N.  Y.  400; 
87  N.  E.  786. 

"When  we  keep  in  mind  the  fact  that  the  Surrogate  is  a 
mere  taxing  officer  or  assessor,  when  acting  under  section  231, 
no  incongruity  is  presented,  although  it  is  somewhat  unusual 
that  a  judicial  officer  should  sit  in  review  of  his  own  decision 
as  an  assessor.  It  is,  however,  to  be  said  that  on  an  appeal 
to  the  Surrogate,  acting  judicially,  a  complete  record  is  sub- 
mitted and  both  sides  are  heard.  We  are  of  opinion  that  the 
Appellate  Division  properly  dismissed  the  Comptroller's 
appeal  from  the  order  of  the  Surrogate  made  when  acting  as 
a  taxing  officer." 

Matter  of  Costello,  189  N.  Y.  288 ;  82  N.  E.  139. 


496 


INHERITANCE  TAXATION 


c.  SERVICE  OF  NOTICE  OF  APPEAL. 

Failure  to  file  the  notice  of  appeal  in  the  office  of  the  Surro- 
gate, within  the  time  prescribed  by  this  section,  is  not  excused 
by  an  admission  by  the  attorney  for  the  State  Comptroller  of 
service  of  a  notice  of  appeal. 

A  court  or  judge  cannot  extend  the  time  within  which  an 
appeal  may  be  taken.  (Code  Civ.  Pro.,  §  784.) 

Matter  of  Seymour,  144  App.  Div.  151  j  128  Supp.  775. 

An  appeal  to  the  Appellate  Division  must  be  taken  within 
thirty  days  after  service  upon  the  attorney  for  the  appellant 
of  a  copy  of  the  judgment  or  order  appealed  from,  and  a 
written  notice  of  the  entry  thereof.  The  period  of  limitation 
does  not  begin  to  run  until  the  prevailing  party  serves  the 
necessary  notice  upon  the  attorney  for  the  other  side,  and  the 
service  of  the  other  papers  and  even  the  written  admission  of 
such  papers  signed  by  the  other  attorney  do  not  start  the  time 
of  limitation  running. 

McGraer  v.  Abbott,  47  App.  Diy.  191 ;  62  Supp.  123. 

d.  PAPERS  ON  APPEAL. 

These  must  include  all  that  were  acted  upon  by  the  Surro- 
gate, including  the  will. 

Astor  v.  State,  25  N.  J.  Eq.  303 ;  72  A.  78. 

And  the  rules  require  a  certificate  to  this  effect  from  the 
clerk  of  the  Surrogate's  Court,  but  this  is  usually  waived 
and  immaterial  papers  eliminated  by  stipulation ;  the  follow- 
ing being  the  customary  form : 

Stipulation  Waiving  Certification. 

Pursuant  to  Section  3301  of  the  Code  of  Civil  Procedure, 
it  is  hereby  stipulated  that  the  papers  as  hereinbefore  printed 
consist  of  true  and  correct  copies  of  the  notice  of  appeal,  the 
order  appealed  from,  and  all  the  papers  upon  which  the  court 
below  acted  in  making  the  orders  appealed  from  and  the  whole 
thereof,  now  on  file  in  the  office  of  the  Clerk  of  the  Surro- 
gate's Court  of  the  county  of  New  York. 


PAET  V  — PBOCEDTJRE  497 

Certification  thereof  in  pursuance  of  Section  1353  of  the 
Code  of  Civil  Procedure  is  hereby  waived. 
Dated,  New  York,  May  23,  1917. 

LAFAYETTE  B.  GLEASON, 

Attorney  for  State  Comptroller.* 
McREYNOLDS  &  HUNTER, 

Attorneys  for  the  Executor. 

e.  COSTS. 

In  New  York  costs  are  not  allowed  on  appeal  to  the  Surro- 
gate from  pro  forma  taxing  orders.  (L.  1908,  ch.  310.) 

Prior  to  that  statute  costs  were  in  the  discretion  of  the 
Surrogate. 

Matter  of  Eaton,  55  Misc.  472;  106  Supp.  682. 

On  proceedings  to  collect  by  the  district  attorney  costs  are 
still  in  the  Surrogate's  discretion  and  will  be  imposed  against 
the  State  where  the  proceedings  were  unjustifiable. 

Matter  of  Brady,  N.  Y.  L.  J.,  February  5,  1913. 

The  Appellate  Division,  when  reversing  an  order  denying 
an  application,  the  granting  of  which  was  not  opposed  by  the 
party  against  whom  it  was  made,  will  not  award  costs  of  the 
appeal  against  such  party. 

Matter  of  Collins,  104  App.  Div.  184;  93  Supp.  342. 

Where  a  final  order  assessing  a  transfer  tax  upon  a  trust 
fund  which  came  into  the  possession  of  the  trustees  after  dece- 
dent's death  is  reversed  by  the  Appellate  Division,  the  only 
costs  which  can  be  allowed  to  appellant  are  the  costs  of  the 
appeal,  viz.:  $20  before  argument  and  $40  for  argument, 
besides  disbursements. 

Matter  of  Wright,  89  Misc.  108;  151  Supp.  378. 

A  bill  of  costs  in  the  Court  of  Appeals  may  be  awarded  to 
each  respondent  represented  by  separate  counsel. 

Matter  of  Gibson,  157  N.  Y.  680. 

And  the  State  Comptroller  may  tax  a  bill  of  costs  against 
each  of  two  unsuccessful  appellants  where  so  represented. 

Matter  of  Saunders,  86  Misc.  582;  149  Supp.  461. 
*  Now  State  Tax  Commission. 

32 


498 


INHERITANCE  TAXATION 


f.  APPEALS  TO  COURT  or  APPEALS. 

By  a  recent  amendment  these  can  only  be  taken  where  there 
is  a  reversal  by  the  Appellate  Division,  or  the  decision  is  not 
unanimous,  unless  leave  to  appeal  is  granted  on  motion  by 
the  court  below  and  if  denied  by  that  court,  on  motion  to  the 
Court  of  Appeals.  The  amendment  took  effect  June  1, 1917. 

Such  appeals  are  limited  to  questions  of  law. 

Matter  of  Thome,  162  N.  Y.  238. 

And  must  be  from  a  final  order. 

Matter  of  Browne,  195  N.  Y.  522;  88  N.  E.  1115. 
Matter  of  Vivanti,  204  N.  Y.  513. 

A  question  certified  by  the  Appellate  Division  will  not  be 
reviewed  if  it  involves  a  question  of  fact. 

Matter  of  Martin,  219  N.  Y.  557;  114  N.  E.  1071. 

Or  if  it  is  not  raised  by  the  record. 

Matter  of  Teller,  223  N.  Y.  565. 

Where  the  Surrogate  is  reversed  and  the  order  of  the 
Appellate  Division  is  silent  on  the  question  it  will  be  presumed 
by  the  Court  of  Appeals  that  the  reversal  was  on  questions  of 
law  only. 

Matter  of  Keefe,  164  N.  Y.  352-. 

The  order  fixing  tax  is  a  final  order  and  appealable. 

Satte's  Estate,  59  Mont.  220;  195  Pac.  1033. 

g.  To  SUPREME  COURT  OF  THE  UNITED  STATES. 

The  record  must  show  that  a  Federal  question  is  involved 
and  that  it  was  brought  to  the  attention  of  the  State  court. 

Sec.  709  U.  S.  Revised  Statutes. 

Matter  of  Stickney,  185  N.  Y.  107;  77  N.  E.  993;  writ  of  error  dismissed, 

sub.  nom.;  Stickney  v.  Kelsey,  209  U.  S.  419;  28  S.  Ct.  Rep.  508. 
Matter  of  Houdayer,  150  N.  Y.  37;  44  N.  E.  718;  writ  of  error  dismissed 

sub.  nom.;  Scudder  v.  Comptroller,  175  U.  S.  32;  20  S.  Ct.  Rep.  26. 
Dana  v.  Dana,  250  TJ.  S.  220.     Appeal  from  Dana  v.  Dana,  227  Mass.  562, 

dismissed. 

'When  no  such  ground  has  been  presented  to  or  considered 
by  the  courts  of  the  State,  it  cannot  be  said  that  those  courts 


PAET  V  — PEOCEDUBE  499 

have  disregarded  the  Constitution  of  the  United  States,  and 
this  court  has  no  jurisdiction." 

Scudder  v.  Comptroller  of  New  York,  175  U.  S.  32-36;  20  S.  Ct.  Eep.  26. 

Where  judicial  proceedings  in  one  State  are  relied  upon  as 
a  defense  to  an  assessment  by  the  authorities  of  another  State, 
a  right  under  the  Constitution  of  the  United  States  is  specially 
set  up  and  claimed,  though  it  was  not  in  terms  stated  to  be 
such  a  right. 

Tilt  v.  Kelsey,  207  U.  S.  43;  28  S.  Ct.  Eep.  1. 

Where  the  best  that  can  be  said  for  the  plaintiffs  in  error 
is  that  the  action  of  the  State  court  was  ambiguous,  the  United 
States  Supreme  Court  will  resolve  the  ambiguity  against  the 
parties  complaining,  who  are  bound  to  show  clearly  that  a 
Federal  right  was  impaired,  rather  than  endeavor  to  spell  out 
a  Federal  question  to  aid  a  defense  which  is  merely  technical 
and  destitute  of  substantial  merit. 

Stickney  v.  Kelsey,  209  U.  S.  419 ;  28  S.  Ct.  Eep.  508. 

D.— SUBSEQUENT  PROCEEDINGS. 

1.  Motions  to  Modify  Decree. 

It  frequently  happens  that  beneficiaries  discover  some 
reason  why  we  think  the  tax  should  not  be  paid  after  the 
time  to  appeal  from  the  taxing  order  has  expired.  The  only 
remedy  is  by  motion  to  modify  or  vacate  the  taxing  order. 
Such  motions  must  be  on  notice  to  the  State  Tax  Commission. 
They  cannot  be  entertained  ex  parte. 

Matter  of  Fulton,  30  Misc.  70. 

Even  though  no  claim  was  made  before  the  appraiser  for 
deduction  of  dower  and  60  days  within  which  to  appeal  have 
expired,  the  Surrogate  may  modify  the  order. 

Matter  of  Delafield,  109  Misc.  342;  179  Supp.  762. 

The  remedy  by  appeal  is  not  exclusive  and  the  executor  may 
move  to  vacate  the  order  on  proper  grounds  instead  of  pro- 
ceeding by  appeal. 

Matter  of  Preston,  108  Misc.  535;  178  Supp.  447. 


500 


INHEEITANCE  TAXATION 


The  Surrogate  has  power  to  direct  State  Comptroller  to 
make  refund  where  taxing  order  has  been  modified  within  two 
years  under  section  225  of  the  N.  Y.  statute. 

Matter  of  Eedmond,  190  App.  Div.  180;  179  Supp.  307. 

a.  WHERE  THERE  WAS  A  MISTAKE  OF  FACT. 

This  may  be  corrected  on  motion,  and  where  there  is  no 
dispute  and  the  mistake  is  obvious,  the  Surrogate  may  correct 
it  without  sending  the  matter  back  to  an  appraiser. 

Matter  of  Cameron,  97  App.  Div.  436;  89  Supp.  977;  aff.  181  N.  Y.  560; 
74  N.  E.  1115. 

Where  the  Surrogate  has  by  order  confirmed  the  appraiser's 
report  without  noticing  that  it  is  defective,  he  has  authority 
to  vacate  his  order  of  confirmation  and  send  the  report  back 
to  the  appraiser  for  correction. 

Matter  of  Earle,  74  App.  Div.  458 ;  77  Supp.  503. 

A  mistake  in  an  administrator's  affidavit  whereby  stock 
worth  $14,193  was  appraised  at  $47,310  was  corrected  though 
the  two-year  limitation  had  elapsed. 

Matter  of  Boyle,  92  Mise.  143;  156  Supp.  173. 

Where  a  debt  had  been  inadvertently  overlooked  the  deduc- 
tion was  allowed  on  mo-tion  and  the  order  modified  by  reducing 
the  tax  proportionately. 

Matter  of  Campbell,  50  Misc.  485. 

Where  the  executor  believed  that  notes  would  be  paid  by  the 
makers  at  the  time  of  the  appraisal,  but  they  proved  worthless, 
decree  modified. 

Matter  of  Sherar,  25  Misc.  138 ;  54  Supp.  930. 

But  where  newly  discovered  evidence  as  to  domicile  would 
not  change  the  result,  a  motion  to  reopen  the  case  on  the 
ground  of  mistake  was  properly  denied. 

Ee  Harkness,  54  Cal.  Dec.  602,  810;  169  Pac.  78. 

An  allegation,  in  a  petition  by  the  State  Comptroller  of  his 
belief,  based  upon  conclusions  of  counsel,  that  deceased  was 
at  time  of  death  possessed  of  certain  valuable  paintings,  not 


PART  V  — PROCEDURE  501 

reported  to  appraiser,  unsupported  by  affidavits,  is  insufficient 
to  warrant  vacating  a  decree  and  reopening  tax  proceedings. 

An  application  under  Code  Civil  Procedure,  §  2490,  subd.  6, 
providing  for  new  trial,  to  reopen  tax  proceedings,  to  deter- 
mine decedent's  domicile  because  of  newly  discovered  evi- 
dence, where  based  upon  the  unverified  statement  of  the  State 
Comptroller,  by  his  counsel,  will  not  be  considered. 

Where  decedent's  will  was  probated  in  another  State,  and 
the  Comptroller  had  ample  time  to  acquaint  himself  with  the 
proceedings  before  trial  of  tax  proceedings,  he  cannot  set  up 
facts  from  an  appraisement  therein,  then  more  than  six  months 
old,  as  newly  discovered  evidence  for  a  new  trial. 

An  application  by  the  State  Comptroller  for  a  new  trial  in 
tax  proceedings  in  decedent's  estate  to  contest  the  matter  of 
decedent's  residence  must  show  by  affidavits  that  the  State 
Comptroller  at  the  time  of  trial  did  not  have  knowledge  of  the 
alleged  newly  discovered  facts  concerning  the  domicile  of 
deceased. 

Matter  of  Gates,  170  Supp.  299. 

Where  the  appraiser  misconstrued  a  will  and  a  beneficiary 
paid  tax  on  property  which  proved  afterwards  not  to  belong 
to  him, — held  a  mistake  of  fact  and  tax  refunded. 

Matter  of  Willetts,  119  A.   D.   119;    100  Supp.   850;    104   Supp.    1150; 
aff.  190  N.  Y.  527;  82  N.  E.  1134. 

So,  where  a  mathematical  mistake  was  made  in  computing 
the  tax. 

Matter  of  Scott,  208  N.  Y.  602. 

And  generally,  clerical  errors  are  cured  on  such  motions. 

Matter  of  Henderson,  157  N.  Y.  423;  52  N.  E.  183. 

b.  WHERE  THERE  WAS  LACK  OF  JURISDICTION. 

Such  motions  are  granted  where  the  moving  papers  show 
that  the  appraiser  lacked  jurisdiction,  as  when  both  parties 
mistakenly  supposed  that  the  estate  was,  under  the  law,  sub- 
ject to  a  transfer  tax. 

Matter  of  Scrimgeour,  175  N.  Y.  507;  67  N.  E.  1089. 


502 


INHERITANCE  TAXATION 


A  petition  to  exempt  property  must  be  verified  and  where 
upon  information  and  belief  sources  of  information  should  be 
stated  or  it  has  no  probative  force,  proceeding  reopened. 

Matter  of  Scully,  197  App.  Div.  639. 

Or  where  the  tax  has  been  paid  under  an  unconstitutional 
statute. 

Matter  of  O 'Berry,  91  App.  Div.  3;  86  Supp.  269;  aff.  179  N.  Y.  285; 

72  N.  E.  109. 

Norton  v.  Selby  County,  118  U.  S.  425;  6  S.  Ct.  Eep.  1121. 
Aetna  Insurance  Co.  v.  Mayor,  153  N.  Y.  331 ;  47  N.  E.  593. 

Although  the  transfer  tax  has  been  levied,  the  Surrogate 
has  power  to  modify  his  decree,  when  the  remaindermen,  who 
failed  to  appear  on  the  appraisal,  were  only  notified  that  their 
father's  estate  would  be  appraised,  and  the  appraisal  included 
property  belonging  to  a  trust  fund  over  which  the  father 
exercised  an  appointment  in  favor  of  such  remaindermen. 

Matter  of  Backhouse,  110  App.  Div.  737;  96  Supp.  466;  aff.  185  N.  Y. 
545;  77  N.  E.  1181. 

A  Surrogate  has  power  on  a  motion  to  vacate  so  much  of  a 
decree  assessing  property  subject  to  a  transfer  tax  as  was 
made  without  jurisdiction  after  the  time  to  appeal  from  said 
order  has  expired. 

Matter  of  Jones,  54  Misc.  202;  105  Supp.  932. 

Matter  of  Silliman,  79  App.  Div.  98;  80  Supp.  336;  aff.  175  N.  Y.  513; 
67  N.  E.  1090. 

So,  where  the  appraiser  taxed  property  passing  under  a 
power  of  appointment  and  the  heirs  were  held  to  receive  it 
from  an  ancestor  and  not  under  the  power ;  the  time  to  appeal 
had  long  expired  and  the  motion  to  modify  was  granted  six 
years  later. 

The  court  said : 

"In  making  the  motion  to  modify  the  order,  and  on  the 
appeal,  the  executor  contended  that  both  the  tax  appraiser 
and  the  Surrogate  were  without  jurisdiction  to  impose  a  tax 
on  these  interests,  inasmuch  as  there  was  no  question  of  fact 
involved,  and  on  the  uncontroverted  facts  as  matter  of  law  the 
children  took  nothing  so  far  as  these  interests  are  concerned 


PART  V  — PROCEDURE  503 

from  the  testatrix.  The  children  of  the  testatrix  are,  of  course, 
concluded  by  the  determination  of  the  tax  appraiser  as  con- 
firmed by  the  Surrogate,  with  respect  to  the  value  and  the  tax 
on  any  property  they  took  by  virtue  of  their  mother's  will, 
but  not  so,  we  think,  with  respect  to  any  of  the  three  interests 
in  question  which  they  did  not  take  under  her  will.  It  has 
been  held  with  respect  to  property  passing  under  a  will,  which 
is  not  subject  to  the  transfer  tax,  that  there  is  no  jurisdiction 
to  impose  the  tax,  and  that  it  should  be  refunded  after  having 
been  paid." 

Matter  of  Coogan,  27  Misc.  563;  59  Supp.  Ill;  aff.  45  App.  Div.  628; 

61  Supp.  1144;  162  N.  Y.  613;  57  N.  E.  1107. 
Matter  of  Morgan,  164  App.  Div.  854;  149  Supp.  1022;   aff.  215  N.  Y. 

(mem.). 

c.  MAY  NOT  CORRECT  AN  ERROR  OF  LAW. 
An  error  of  law  can  be  corrected  by  appeal  only. 

Matter  of  Niven,  29  Misc.  550;  61  Supp.  956. 

A  decree  of  the  Surrogate  cannot  be  opened  to  correct  an 
error  of  law  made  in  calculating  executors '  commissions,  and 
the  remedy  is  by  an  appeal  from  the  decree.  If  the  Surrogate 
erred  in  allowing  the  commissions  objected  to,  the  error  was 
one  of  law  and  not  a  clerical  mistake. 

Matter  of  Montieth,  27  Misc.  163;  58  Supp.  379. 

A  debt  overlooked  at  the  time  of  the  appraisal  was  held  not 
sufficient  ground  in  Matter  of  Hamilton,  41  Misc.  268;  84 
Supp.  44 ;  but  such  relief  is  usually  granted. 

And  where  the  application  is  based  on  the  proposition  that 
the  appraisal  was  too  high  after  the  time  to  appeal  has  expired 
the  motion  is  to  correct  an  error  of  law  and  not  a  mistake  of 
fact  and  is  invariably  denied. 

Matter  of  Van  Nest,  N.  Y.  L.  J.,  November  8,  1913;  aff.  168  App.  Div. 

(mem.). 
Matter  of  Wallace,  28  Misc.  603 ;  59  Supp.  1084. 

When  the  moving  affidavits  merely  stated  that  the  assets  had 
been  overvalued  supported  only  by  appraisal  of  real  estate 
brokers  at  a  much  lower  figure,  application  denied. 

Matter  of  Barnum,  129  App.  Div.  418 ;  114  Supp.  33. 


INHERITANCE  TAXATION 

The  same  rule  applied  against  the  State  where  undervalua- 
tion claimed  without  facts  to  support  the  assertion. 

Matter  of  Johnson,  37  Mise.  542 ;  75  Supp.  1046. 

When  the  moving  papers  disclosed  no  other  ground  than  the 
sale  of  real  estate  at  a  lower  figure  the  Surrogate  has  no  power 
to  modify  the  decree  assessing  tax. 

Matter  of  Lowry,  89  App.  Div.  226;  85  Supp.  924. 

The  same  rule  is  applied  against  the  State:  The  mere  fact 
that  assets  have  since  sold  for  a  larger  sum  than  the  value 
fixed  on  the  appraisal  is  not  ground  for  vacating  the  decree. 

Matter  of  Bruce,  59  Supp.  1083. 

Of  course  if  the  discrepancy  were  sufficient  to  indicate  fraud 
the  fact  would  be  competent,  coupled  with  other  evidence. 

Where  the  facts  were  in  the  possession  of  the  executors 
which  might  have  reduced  the  appraised  value  and  were  not 
disclosed  there  is  no  ground  for  re-opening  the  case.  So, 
where  a  beneficiary  paid  the  tax  and  eight  years  afterwards 
sought  a  refund  on  the  ground  that  he  took  the  property  by 
deed  from  the  deceased,  inter  vivos,  and  the  deed  was  not 
recorded  nor  produced  on  the  appraisal  it  was  held  that  he 
was  not  entitled  to  a  refund. 

Matter  of  Mather,  90  App.  Div.  382;  85  Supp.  657. 

On  the  other  hand  the  mistake  may  be  one  of  mixed  law 
and  fact  where  the  relief  is  usually  granted.  To  illustrate: 
Taxes  computed  on  a  mutually  mistaken  construction  of  law 
and  fact  or  paid  as  a  temporary  payment  should  be  refunded. 
Money  paid  by  executors  on  a  life  estate,  in  ignorance  of  the 
fact  that  the  life  estate  had  been  terminated  by  death,  may  be 
recovered  back  by  the  executors  as  paid  under  a  mistake  of 
fact.  This  is  not  a  voluntary  payment,  as  to  constitute  a 
voluntary  payment  it  must  be  made  with  full  knowledge  of  all 
the  facts  and  circumstances.  WTiere  a  beneficiary  under  mis- 
conception of  the  law  advances  the  money  to  pay  more  than 
was  really  chargeable  to  him,  and  where  the  property  is  sold 


PART  V  —  PROCEDURE  505 

for  the  tax,  he  is  subrogated  to  the  rights  of  the  State  and 
should  be  repaid  what  he  has  erroneously  expended. 

Sherman  v.  United  States,  178  U.  S.  150,  152 ;  20  Sup.  Ct.  779. 

Matter  of  Skinner,  106  App.  Div.  217;  94  Supp.  144;  mod.  92  Supp.  972. 

Kahn  v.  Herold,  147  Fed.  575;  aff.  86  C.  C.  A.  598;  159  Fed.  608;  163 

Fed.  947. 
Matter  of  Wilcox,  118  Supp.  254. 

d.  LACHES. 

Where  a  charitable  corporation  failed  to  appear  before  the 
appraiser  and  claim  exemption  or  to  notify  its  attorney  of  the 
bequest  in  time  to  appeal  the  court  refused  to  grant  relief  on 
motion  to  modify  the  decree  fixing  the  tax.  It  said : 

"By  subdivision  6  of  Section  2490,  Code  of  Civil  Procedure, 
the  Surrogate  is  authorized  'to  open,  vacate,  modify  or  set 
aside  or  to  enter  as  of  a  former  time,  a  decree  or  order  of  his 
court;  or  to  grant  a  new  trial  or  a  new  hearing  for  fraud, 
newly-discovered  evidence,  clerical  error,  or  other  sufficient 
cause  only  in  the  same  manner,  as  a  court  of  record  and  of 
general  jurisdiction  exercises  the  same  powers. '  The  petition 
presented  to  the  Surrogate  does  not  allege  fraud,  newly-dis- 
covered evidence  or  clerical  error.  Did  it  allege  'other  suffi- 
cient cause'?  That  question  was  one  addressed  to  the  judicial 
discretion  of  the  Surrogate,  and  he  determined  that  the  over- 
sight of  the  respondent  and  failure  on  its  part  to  bring  to 
the  attention  of  its  attorneys  information  possessed  by  it, 
when  it  was  notified  of  the  hearing  before  the  appraiser,  was 
not  sufficient  cause  to  grant  a  new  hearing.  He  might  also 
have  determined  that  the  allegations  presented  in  the  petition 
did  not  disclose  that  the  respondent  would  on  said  statement 
be  entitled  to  exemption.  For  the  reasons  stated  the  order 
of  the  Appellate  Division  must  be  reversed  and  the  order  of 
the  Surrogate  affirmed,  without  costs." 

Matter  of  Townsend,  215  N.  Y.  442. 

So  where  the  appraiser  failed  to  deduct  proportionate  com- 
missions on  foreign  assets  and  the  executor  neglected  to  take 
any  appeal,  application  denied. 

Matter  of  Badger,  N.  Y.  L.  J.,  June  8,  1912. 


506 


INHERITANCE  TAXATION 


e.  BAD  FAITH. 

Of  course  the  court  will  not  grant  such  an  application  where 
there  is  reason  to  believe  that  it  is  not  made  in  good  faith. 
This  was  very  recently  illustrated  in  a  rather  curious  case 
before  the  New  York  County  Surrogate's  Court.  The  opinion 
speaks  for  itself: 

"This  is  an  application  by  a  person  claiming  to  be  the  sole 
heir  and  next  of  kin  of  the  decedent  for  an  order  vacating 
the  order  heretofore  entered  which  adjudged  that  the  dece- 
dent was  not  a  resident  of  this  State  at  the  time  of  his  death, 
and  that  his  estate  therefore  was  not  subject  to  a  tax  under 
the  provisions  of  the  Tax  Law  of  this  State.  After  an  ap- 
praiser had  been  designated  by  this  court  to  appraise  the 
estate  of  the  decedent  subject  to  a  transfer  tax,  the  executor 
made  an  application  to  vacate  the  order  designating  the  ap- 
praiser and  to  declare  the  estate  exempt  from  taxation  upon 
the  ground  that  the  decedent  had  his  domicile  in  France  at 
the  time  of  his  death.  The  State  Comptroller  did  not  oppose 
the  motion,  and  an  order  was  entered  adjudging  that  the 
estate  was  exempt  from  taxation  because  the  decedent  was 
not  a  resident  of  this  State.  The  present  applicant  formally 
consented  to  the  entry  of  that  order.  Subsequently  the  appli- 
cant's claim  to  a  part  of  the  estate  was  contested  by  other 
persons  upon  the  ground  that  under  the  law  of  France  the 
property  passed  to  the  contestants  and  not  to  the  applicant. 
Apparently  realizing  the  validity  of  this  claim  the  applicant 
now  comes  to  this  court  and  asks  that  the  order  of  exemption 
be  vacated  and  that  it  be  adjudged  that  the  decedent  had  his 
domicile  in  this  State.  He  had  no  compunction  in  joining  in 
the  application  to  this  court  to  declare  the  decedent  a  resi- 
dent of  France  when  such  adjudication  rendered  him  exempt 
from  the  payment  of  a  transfer  tax  in  this  State,  and  now  that 
he  finds  it  to  his  interest  to  have  the  court  make  a  contrary 
adjudication,  he  has  no  hesitation  in  reversing  his  position 
and  contending  that  the  decedent  had  his  domicile  in  this 
State.  The  court  looks  with  grave  distrust  upon  such  an 
application.  As  far  as  the  petitioner  is  concerned  there  is  no 
newly  discovered  evidence  submitted  on  this  application  and 


PAET  V  —  PROCEDURE  507 

no  reason  is  adduced  which  would  warrant  the  court  in  vacat- 
ing the  order  heretofore  entered.  The  petitioner's  right  to 
the  property  will  be  amply  protected  in  the  accounting  pro- 
ceeding now  pending,  and  the  right  of  the  State  to  a  tax  upon 
the  estate  of  the  decedent  may  be  determined  by  this  court  in 
a  proper  proceeding  brought  for  that  purpose.  Application 
denied." 

Matter  of  Chadwick,  N.  Y.  L.  J.,  June  23,  1917. 

f .  STATUTES  OF  LIMITATION. 

The  general  rule  has  been  well  stated  to  be,  * '  that  no  laches 
is  to  be  imputed  to  the  state  and  against  her;  that  no  time 
runs  so  as  to  bar  her  rights." 

Josselyn  v.  Stone,  28  Miss.  753. 

This  is  the  rule  in  the  absence  of  an  express  statute  limiting 
the  State  in  its  right  to  maintain  an  action  for  the  collection 
of  the  inheritance  tax. 

The  Supreme  Court  of  Kansas  has  stated  the  rule  to  be  that 
statutory  limitations  do  not  run  against  the  State  when  it 
sues  in  its  sovereign  capacity,  unless  the  statute  expressly 
includes  the  State  or  the  legislative  intention  to  include  it  is 
shown  by  the  clearest  implication. 

State  v.  Dixon,  90  Kan.  594;  135  Pac.  568. 
State  v.  Gerhards,  99  Kan.  462 ;  162  Pac.  1149. 

Following  this  rule,  the  Kansas  court  has  held  that  no  in- 
action, procrastination,  or  delay  on  the  part  of  the  public 
officers  will  prevent  the  State  from  collecting  its  inheritance 
tax. 

State  v.  Nagle,  100  Kan.  495;  164  Pac.  1073. 

Under  the  California  practice  the  executor  may  demur  to 
the  petition  and  thus  raise  the  question  of  limitation. 

Chambers  v.  Gallagher,  177  Cal.  704;  171  Pac.  971. 

And  where  the  act  provides  that  the  proceeding  to  collect 
the  tax  must  be  commenced  within  one  year  after  death  in 
case  of  a  gift  in  contemplation,  the  proceeding  must  be  brought 


508 


INHERITANCE  TAXATION 


within  that  period  although  the  act  imposes  a  lien  on  the 
property  in  the  hands  of  the  donee. 

Chambers  v.  Gibson,  178  Cal.  416;  173  Pac.  752. 

An  order  for  a  refund  will  not  be  made  where  the  tax  has 
been  paid  and  the  statute  of  limitations  has  intervened. 

Matter  of  Hoople,  179  N.  Y.  308;  72  N.  E.  22S. 

Matter  of  Buckingham,  106  App.  Div.  13;  94  Supp.  130. 

Matter  of  Von  Post,  35  Misc.  367;  71  Supp.  1039. 

Where  the  limitation  is  specifically  fixed  by  the  taxing 
statute  the  general  limitations  do  not  apply. 

Miller  v.  Wolfe,  115  Tenn.  234;  89  S.  W.  398. 

And  the  statute  may  be  retroactive,  affecting  payments 
already  made ;  Matter  of  Hoople,  supra,  where  the  court  said : 

"  It  is  a  fundamental  principle  of  our  jurisprudence  that  no 
action  will  lie  against  a  sovereign  state,  or  any  of  its  officers, 
to  enforce  an  obligation  of  the  State  without  express  legisla- 
tive permission  (People  v.  Dennison,  84  N.  Y.  272;  Lewis  v. 
State,  of  N.  Y.,  96  N.  Y.  71;  Locke  v.  State  of  N.  Y.,  140  N.  Y. 
480;  35  N.  E.  476;  Smith  v.  Reeves,  178  U.  S.  436;  Flagg  v. 
Bradford,  181  Mass.  315) ;  and  when  a  State  does  abdicate 
this  attribute  of  sovereignty  and  permits  itself  to  be  sued,  the 
citizen  who  benefits  by  such  an  act  of  grace  acquires  no  vested 
right  thereby,  but  simply  a  privilege  voluntarily  granted  by 
the  State,  which  may  be  hedged  about  with  terms  and  condi- 
tions, and  may  be  withdrawn  as  freely  as  it  was  given.  (Beers 
v.  Arkansas,  20  How.  (U.  S.)  527;  Parmenter  v.  State  of 
N.  Y.,  135  N.  Y.  154;  31  N.  E.  1035 ;  Baltser  v.  North  Carolina, 
161  U.  S.  240;  Railroad  Co.  v.  Tennessee,  101  U.  S.  337;  Rail- 
road Co.  v.  Alabama,  101  U.  S.  832.) 

"In  the  light  of  these  principles  it  is  obvious  that  the 
statutes  under  discussion  (chap.  399,  Laws  1892;  chap.  284, 
Laws  1897;  chap.  382,  Laws  1900)  invested  the  respondent 
with  no  absolute  right,  but  conferred  upon  him  a  mere  privi- 
lege, the  extent  and  duration  of  which  depended  entirely  upon 
the  language  conferring  it." 

General  statutes  of  limitation  do  not  run  against  the  State 
in  transfer  tax  proceedings. 

Bradford  v.  Storey,  189  Mass.  104;  75  N.  E.  256. 


PART  V  — PROCEDURE  509 

Where  a  proceeding  to  collect  was  brought  within  the  limi- 
tation and  was  amended  after  the  limitation  had  run  to  in- 
crease the  demand,  held  that  it  related  back  to  the  commence- 
ment of  the  proceeding,  and  was  within  the  statute,  as  it  did 
not  set  up  a  new  cause  of  action. 

Connell  v.  Crosby,  210  111.  380;  71  N.  E.  350. 

There  is  no  limit  to  the  time  within  which  a  court  can  set 
aside  a  taxing  order  for  lack  of  jurisdiction,  and  it  is  not  con- 
cerned with  what  further  proceedings  may  be  taken  to  recover 
the  money  paid  thereunder  to  the  State. 

Matter  of  Tucker,  108  Misc.  425;  178  Supp.  446. 

2.  Motions  to  Remit  Penalty. 

Most  of  the  statutes  provide  that  interest  may  be  reduced 
from  10%  to  6%  in  case  of  "unavoidable  delay."  Such  reduc- 
tion must  be  secured  on  motion  to  remit  the  penalty. 

On  such  motion  the  burden  of  proving  that  the  delay  was 
unavoidable  is  on  the  estate. 

People  v.  Prout,  53  Hun,  541;  6  Supp.  457;  aff.  117  N.  Y.  650. 

And  the  affidavits  must  make  a  sufficient  case.  So  when 
they  merely  recited  that  the  executors  and  trustees  were  non- 
residents, had  no  actual  notice  of  the  tax  law,  or  that  any  tax 
was  due  the  application  was  denied. 

Matter  of  Read,  204  N.  Y.  672. 

Many  of  the  statutes  provide  that  litigation  to  oppose  the 
tax  shall  not  be  construed  as  "unavoidable  delay."  In  the 
absence  of  such  a  provision  the  Wisconsin  court  so  con- 
strued it. 

"Litigation  to  determine  doubtful  and  perplexing  questions 
as  to  the  liability  of  transferees  for  the  inheritance  tax  and 
delays  occasioned  thereby  constitute  'necessary  litigation  or 
other  unavoidable  delay.' — 10%  penalty  remitted." 

State  v.  Pabst,  139  Wis.  561 ;  121  N.  W.  351. 
Matter  of  Moore,  90  Hun,  62 ;  35  Supp.  782. 

Where  proceedings  to  collect  the  tax  were  pending  while 
the  18  months  expired,  held  "unavoidable  delay." 

Com.  v.  Brigham's  Admr.  (Ky.),  220  S.  W.  727. 


510 


INHERITANCE  TAXATION 


When  the  tax  would  be  the  same  whether  the  deceased  died 
testate  or  intestate  the  pendency  of  a  will  contest  cannot  be 
pleaded  as  unavoidable  delay. 

Shelton  v.  Campbell,  109  Tenn.  690;  72  S.  W.  112. 

"Unavoidable  delay"  may  be  a  misnomer  of  the  trustee 
named  in  the  will  which  was  not  discovered  for  some  time. 

In  re  Banks,  5  Pa.  Co.  Ct.  614. 

The  practice  is  for  the  Surrogate  not  to  entertain  a  motion 
to  remit  penalty  until  after  the  report  of  the  appraiser  has 
been  filed. 

Matter  of  Theodore  Schumacher,  N.  Y.  L.  J.,  July  29,  1914. 

The  Surrogate  has  not  power  to  direct  that  no  interest  shall 
be  charged.  He  is  limited  to  directing,  upon  a  proper  case 
shown,  a  reduction  of  the  interest  from  10%  to  6%  in  accord- 
ance with  the  provisions  of  the  second  sentence  of  §  223. 

Matter  of  Golden,  N.  Y,  L.  J.,  July  29,  1914. 

It  is  the  penalty  alone  that  can  be  remitted.  There  is  no 
provision  in  any  of  the  statutes  for  the  remission  of  the  in- 
terest when  it  has  once  accrued  and  the  rights  of  the  State  have 
vested  thereto. 

Matter  of  Griggs,  163  Supp.  1096. 

It  is  not  a  matter  of  equitable  relief  and  therefore  payment 
to  the  wrong  official  under  a  misapprehension  of  the  law  is  not 
ground  for  the  granting  of  relief  that  is  not  within  the  power 
of  the  court  to  afford. 

People  ex  rel.  Lown  v.  Cook,  158  App.  Div.  74;  142  Supp.  692;  aff.  209 
N.  Y.  578. 

Application  to  remit  the  interest  can  only  be  made  to  the 
court  upon  motion,  and  is  not  to  be  the  subject  of  an  appeal 
from  the  decree  fixing  the  tax. 

Matter  of  De  Graaf,  24  Misc.  147;  153  Supp.  591. 

Application  for  the  remission  of  interest  will  be  denied  un- 
less it  is  shown  that  the  reasons  required  by  the  statute  existed 
and  caused  the  delay. 

Matter  of  Wormser,  51  App.  Div.  441 ;  64  Supp.  897. 


PART  V  — PEOCEDUEE  511 

Belief  from  the  payment  of  interest  will  not  be  granted 
where  the  only  reasons  given  were  that  the  executors  were 
ignorant  of  the  law,  or  that  such  payment  will  be  a  hardship 
to  the  legatee. 

Matter  of  Platt,  8  Misc.  144;  29  Supp.  396. 

The  appraiser  cannot  remit  the  penalty.  Special  applica- 
tion showing  grounds  therefor  must  be  made  to  the  Surrogate. 

Matter  of  Skinner,  106  App.  Div.  217;  94  Supp.  144. 

' '  The  order  fixing  tax  was  entered  before  the  expiration  of 
the  eighteen  months  within  which  the  tax  could  be  paid  with- 
out penalty,  and  as  the  executrix  failed  to  take  advantage  of 
this  fact  the  application  is  denied." 

Matter  of  Brower,  N.  Y.  L.  J.,  July  15,  1913. 

Neither  is  payment  into  court  under  a  court  order  a  pay- 
ment and  discharge  of  the  tax. 

Pitman  v.  State  (Okla.),  158  Pac.  1137. 

3.  Mandamus. 

The  Surrogate  cannot  by  order  direct  the  Comptroller  to 
refund  a  tax  already  paid. 

Matter  of  J.  H.  B.  Dwight,  N.  Y.  L.  J.,  January  19,  1915. 

Matter  of  Meyer,  N.  Y.  L.  J.,  January  31,  1914. 

Matter  of  Tillinghast,  94  Misc.  76;  157  Supp.  379;  aff.  184  App.  Div.  886. 

a.  WHEN  WRIT  GRANTED. 

Mandamus  is  the  proper  remedy  to  compel  a  refund  where 
the  tax  has  been  paid  erroneously,  as  where  the  decree  of  the 
Surrogate  was  entered  without  jurisdiction. 

Matter  of  Coogan,  27  Misc.  563;  59  Supp.  Ill;  aff.  162  N.  Y.  613;  57 
N.  E.  1107. 

An  abridgment  of  interest  by  exercise  of  power  of  appoint- 
ment under  a  will  authorizes  a  refund  with  3%  interest  under 
section  230  of  the  New  York  statute. 

People  ex  rel.  v.  Travis,  107  Misc.  377;  176  Supp.  765;  aff.  191  App.  Div 
129;  180  Supp.  659. 


INHERITANCE  TAXATION 

Where  the  tax  has  been  paid  erroneously  mandamus  will  lie 
to  compel  the  payment  of  interest  on  the  amount  so  refunded. 

Matter  of  Hanf ord,  113  App.  Div.  894 ;  aflf.  186  N.  Y.  547. 
Matter  of  Wood,  91  App.  Div.  3 ;  86  Supp.  269. 

It  will  lie  to  compel  a  refund  from  the  County  Treasurer 
before  the  tax  has  been  turned  over  to  the  State  Treasury. 

Matter  of  Park,  8  Misc.  550;  29  Supp.  1081. 

But  if  the  County  Treasurer  has  turned  over  the  fund 
recourse  must  be  had  against  the  Comptroller. 

Matter  of  Howard,  54  Hun,  305 ;  7  Supp.  594. 
Matter  of  Hall,  54  Hun,  637 ;  7  Supp.  595. 

It  lies  at  the  instance  of  the  State  Treasurer  to  compel  a 
County  Treasurer  to  turn  over  the  inheritance  tax  moneys 
collected  by  him. 

People  v.  Raymond,  188  HI.  454;  59  N.  E.  7. 

Mandamus  lies  to  compel  the  Surrogate  to  appoint  an 
appraiser : 

"Of  course  before  acting  on  his  own  motion,  the  Surrogate 
must  determine  whether  the  facts  within  his  official  knowledge 
are  such  as  to  require  action,  and  before  acting  upon  the  ap- 
plication of  an  interested  party  he  must  determine  whether 
a  proper  application  has  been  made,  but  his  duty  to  act  is  just 
as  imperative  in  either  case  as  is  the  duty  of  local  assessors  to 
obey  the  command  of  the  statute  respecting  the  performance 
of  their  duty,  and  there  is  no  more  reason  for  saying  that  he 
has  a  discretion  in  the  matter  than  there  is  for  saying  that 
any  officer  charged  with  the  performance  of  a  public  duty  has 
a  discretion  whether  he  will  discharge  such  duty. ' ' 

Kelsey  v.  Church,  112  App.  Div.  408 ;  98  Supp.  535. 

Mandamus  will  lie  to  compel  the  Comptroller  to  issue  a 
receipt  where  the  tax  has  been  paid.  Upon  a  petition  for  writ 
of  mandate  to  compel  the  State  Comptroller  to  countersign 
receipt  for  inheritance  tax,  the  court  held  that  the  law  con- 
templates the  payment  of  the  tax  by  any  legatee  or  heir  of 
the  amount  due  from  him,  so  that  he  may  presently  come  into 
possession  of  his  legacy  or  inheritance,  and  the  receipt  attest- 


PART  V  —  PROCEDURE  513 

ing  its  payment  should  be  countersigned  by  the  Comptroller, 
and  should  be  allowed  in  the  executor's  account.  The  Comp- 
troller has  no  judicial  discretion  by  which  he  may  exercise  the 
right  to  refuse  to  countersign  a  receipt  as  directed  by  the 
statute.  "In  countersigning  the  receipt  the  Comptroller  de- 
cides nothing,  nor  should  the  receipt  be  so  framed  as  to  bind 
the  State,  or  to  conclude  its  right  to  have  the  question  reviewed 
on  appeal  should  the  State  desire  to  appeal  from  the  action  of 
the  court. ' '  A  writ  of  mandate  lies  in  proper  cases  to  compel 
the  Comptroller  to  countersign  the  receipt  for  the  inheritance 
tax. 

Becker  v.  Nye,  8  Cal.  Dec.  129. 

b.  WHEN  WRIT  REFUSED. 

But  if  there  is  a  dispute  as  to  the  amount  of  tax  due  and  a 
receipt  has  been  given  "on  account"  mandamus  will  not  be 
granted. 

People  ex  rel.  Lown  v.  Cook,  158  App.  Div.  74;  142  Supp.  692;  aff.  209 
N.  Y.  578. 

Nor  will  the  writ  be  allowed  where  the  tax  has  been  paid 
in  another  estate  and  must  be  refunded  to  the  executors  of 
that  estate. 

People  ex  rel.  Ripley  v.  Williams,  69  Misc.  402 ;  127  Supp.  749. 

Mandamus  does  not  lie  to  compel  a  court  to  enter  a  final 
decree  without  payment  of  the  tax. 

Strauss  v.  Costello,  29  N.  D.  215;  150  N.  W.  874. 

The  court  said  at  page  222: 

' '  But  it  is  contended  by  the  appellant  that  the  County  Court 
refused  to  act  and  that  the  writ  will  lie  to  compel  action.  We 
do  not  so  construe  the  attitude  of  the  judge  of  the  County 
Court.  He  did  act.  He  took  jurisdiction  of  the  application 
for  the  granting  and  entry  of  a  decree  of  fi.ial  distribution  and 
acted  thereon,  holding  that  the  petitioner  had  not  shown  facts 
entitling  him  to  such  a  decree.  If  the  judge  was  in  error,  it 
constituted  an  erroneous  decision  on  an  application  of  which 
he  had  taken  cognizance  and  was  an  error  in  judgment  re- 
viewable  on  appeal ;  and  was  not  a  refusal  to  take  jurisdiction 
33 


514 


INHERITANCE  TAXATION 


or  to  act.  Mandamus  does  not  lie  to  correct  errors  of  law 
occurring  in  course  of  proceedings  in  the  inferior  court.  Hav- 
ing assumed  jurisdiction,  the  only  function  the  writ  could 
serve,  if  issued,  would  be  to  direct  the  judge  of  the  County 
Court  what  character  of  judgment  to  enter.  This  is  seldom,  if 
ever,  proper." 

Mandamus  does  not  lie  to  compel  Comptroller  to  accept  the 
nomination  of  an  appraiser  by  the  Surrogate  under  the  New 
York  statute. 

Duell  v.  Glynn,  191  N.  Y.  357;  84  N.  E.  282. 

Where  there  is  a  right  of  appeal  given  from  the  order  a 
superior  court  will  not  restrain  the  action  of  a  lower  court  in 
fixing  an  inheritance  tax. 

Cross  v.  Superior  Court,  2  Cal.  App.  342;  83  Pac.  815. 

4.  Proceedings  to  Collect  Delinquent  Taxes. 

Such  proceedings  cannot  be  entertained  if  commenced  before 
the  expiration  of  the  eighteen  months  allowed  by  the  New 
York  statute  for  payment  without  interest. 

Frazer  v.  People,  6  Dem.  174;  3  Supp.  134. 

But  notice  to  the  Comptroller  of  a  proposed  decree  which 
does  not  provide  for  the  payment  of  any  transfer  tax  does  not 
bar  a  subsequent  proceeding  to  collect  it. 

Matter  of  Pearsall,  149  Supp.  36. 

An  affidavit  merely  alleging  the  opinion  of  the  Comptroller 
or  District  Attorney  that  a  tax  is  due  and  not  paid  is  insuffi- 
cient. It  must  disclose  all  the  material  facts. 

Matter  of  McCarthy,  5  Misc.  276;  25  Supp.  987. 

Error  in  fixing  tax  on  some  other  basis  than  market  value 
must  be  corrected  by  appeal ;  it  cannot  be  availed  of,  in  a  col- 
lateral proceeding  to  collect  the  tax,  as  a  defense. 

Hanberg  v.  Morgan,  263  111.  616;  105  N.  E.  720. 

The  decree  fixing  the  tax  is  final  and  conclusive  on  the  de- 
fendant in  a  proceeding  to  collect  it,  where  no  appeal  was 
taken. 

Matter  of  Hackett,  14  Misc.  282 ;  35  Supp.  1051. 
Attorney-General  v.  Skehill,  217  Mass.  364;  104  N.  E.  748. 


PART  V  — PROCEDURE  515 

The  only  remedy  is  a  motion  to  modify  the  decree. 

Matter  of  Clarkson,  149  Supp.  32. 

Sale  to  pay  tax  must  be  made  by  the  executor  within  the 
same  time  as  to  pay  debts. 

Archibald  v.  Maurath,  92  N.  J.  Eq.  357;  113  A.  6. 

Registers  of  wills  in  Pennsylvania  may  constitutionally  col- 
lect the  tax. 

Lucerne  County  v.  Morgan,  263  Pa.  St.  458;  107  A.  17. 

i 

5.  Personal  Liability  of  Executor  or  Administrator. 

Under  the  Federal  Act  of  1921  the  liability  ceases  if  the 
tax  is  not  fixed  within  a  year  after  a  proper  return  has  been 
filed.  It  extends,  as  far  as  the  State  tax  is  concerned,  only 
to  property  within  the  State  at  the  date  of  testator's  death, 
or  which  afterwards  comes  into  his  hands. 

People  v.  Union  Trust  Co.,  255  111.  168;  99  N.  E.  377. 

Failure  to  deduct  the  tax  before  delivering  the  property 
to  a  legatee  makes  the  executor  personally  liable  for  the  tax 
under  the  statutes. 

Matter  of  Weed,  10  Misc.  628 ;  32  Supp.  777. 
Matter  of  Allen,  9  Pa.  Co.  Ct.  328. 

On  this  theory  the  executor  has  a  cause  of  action  against 
the  legatee  for  the  amount  of  the  tax  which  he  refuses  or 
neglects  to  pay. 

Parish  v.  Adams  (Ga.  App.),  95  S.  E.  749. 

i  '  It  is  the  duty  of  the  personal  representative  in  every  case 
where  a  tax  is  due  under  this  act,  before  paying  over  any 
legacy  or  distributive  share,  to  exact  from  the  person  who  is 
to  receive  it,  or  retain  in  his  hands  out  of  the  legacy  or  dis- 
tributive share,  a  sum  sufficient  to  pay  the  tax.  If  he  does  not 
he  runs  the  risk  of  paying  it  out  of  his  own  property." 

Hunter  v.  Husted,  45  N.  C.  141. 

When  the  failure  to  pay  is  due  to  his  own  misconduct  he  is 
personally  liable. 

Hopkins'  Appeal,  77  Conn.  644;  60  A.  657. 


516 


INHERITANCE  TAXATION 


Testamentary  trustees  knew  of  a  deed  by  testator  convey- 
ing away  property  but  failed  to  disclose  it  and  permitted  an 
inheritance  tax  to  be  assessed  against  the  whole  estate — held 
personally  liable  to  cestui  que  trust. 

Lorenz  v.  Weller,  367  111.  230;  108  N.  E.  306. 

Where  executrix  resigns  without  paying  tax  the  court  can 
appoint  an  administrator  de  bonis  non  to  collect  it. 

Chamberlain  v.  Steeher,  78  Ohio  St.  271 ;  85  N.  E.  526. 

The  executor  cannot  be  discharged  on  final  accounting  un- 
less he  produces  receipt  for  all  transfer  taxes  though  the  assets 
have  shrunk  in  value  through  no  fault  or  negligence  of  his. 

Matter  of  Lovell,  107  Misc.  214;  177  Supp.  458. 

The  executor  is  made  by  statute  an  agent  of  the  State  in  the 
collection  of  the  tax  and  personally  responsible  therefor. 

Nation  v.  Green,  188  Ind.  697;  123  N.  E.  163. 

An  executor  cannot  be  held  personally  liable  for  tax  on  prop- 
erty without  the  State  which  never  comes  into  his  possession, 
but  must  be  included  in  his  inventory. 

Gallup  'a  Appeal,  76  Conn.  617;  57  A.  699. 
Matter  of  Kubler,  N.  Y.  L.  J.,  August  6,  1915. 

The  executor  should  not  be  charged  with  5%  interest  upon 
the  amount  of  the  transfer  tax  upon  the  estate  upon  the 
ground  that  he  should  have  had  the  tax  assessed  and  paid 
within  six  months  after  the  death  of  the  testator,  where  the 
testator  died  October  10,  1896,  and  probate  was  issued  Feb- 
ruary 3,  1897,  and  the  tax  was  assessed  May  27,  1897. 

In  re  Sudds,  32  Misc.  182 ;  66  Supp.  231. 

In  Matter  of  Alfred  W.  Kubler,  N.  Y.  Law  Journal,  August 
6,  1915,  Surrogate  Cohalan  held:  "This  is  an  appeal  by  the 
executors  from  the  transfer  tax  appraiser's  report  and  the 
order  entered  thereon,  upon  the  ground  that  these  do  not  each 
contain  a  provision  exempting  the  executors  from  such  lia- 


PAET  V  —  PROCEDURE  517 

bility  as  arises,  with  which  they  would  be  chargeable  for  the 
payment  of  the  transfer  tax  upon  that  portion  of  decedent's 
estate  amounting  to  $29,326.48,  which  at  the  time  of  his  death 
and  still  is  situated  at  Basel,  Switzerland,  and  which  will  be 
administered  in  that  country.  Neither  the  executors  nor  this 
court  appear  to  have  any  control  over  the  disposition  of  this 
money  (Matter  of  Dingman,  66  App.  Div.  228 ;  72  Supp.  694 ; 
Matter  of  Marshing,  N.  Y.  Law  Journal,  March  6, 1907).  The 
appeal  is  sustained  and  the  executors  relieved  from  liability 
for  tax  on  the  transfer  of  the  said  portion  of  decedent's  estate 
situated  in  Basel,  Switzerland.  The  order  fixing  tax  will  be 
modified  in  accordance  with  the  terms  of  this  decision." 

Where,  after  a  hearing  upon  proper  notice  to  all  parties  in- 
terested, it  is  adjudged  that  an  executor  has  been  unable  to 
collect  the  moneys  for  the  payment  of  a  tax  imposed  under 
the  Transfer  Tax  Law  from  the  transferred  property,  through 
the  destruction  of  the  property  or  obliteration  of  its  value 
during  the  process  of  administration  without  fault  or  delin- 
quency upon  his  part,  the  executor  is  not  personally  liable  for 
the  tax,  and  the  provisions  of  this  section  with  reference  to  his 
final  accounting  are  not  applicable. 

Matter  of  Meyer,  209  N.  Y.  386;  103  N.  E.  713. 
Matter  of  Huber,  86  App.  Div.  458;  83  Supp.  769. 

Where  the  executrix  has  paid  a  tax  to  the  Federal  govern- 
ment which  was  not  a  proper  charge  against  the  estate,  this 
should  not  be  surcharged  against  the  executrix  where  it  is 
admitted  that  the  sum  may  be  recovered  back. 

Matter  of  Marx,  117  App.  Div.  890 ;  103  Supp.  446. 


6.  Personal  Liability  of  Beneficiaries. 

Where  no  executor  or  administrator  has  been  appointed  the 
tax  may  be  enforced  by  proceedings  against  the  persons  re- 
ceiving the  property,  but  the  personal  representatives  are 
primarily  liable  and  action  must  first  be  brought  against  the 
executor  or  administrator,  if  there  is  one. 

Richter  v.  Commonwealth,  180  Ky.  4;  201  S.  W.  456. 


INHERITANCE  TAXATION 

And,  generally,  personal  liability  extends  to  the  beneficiaries 
under  the  statutes,  though  most  of  them  make  it  a  condition 
precedent  that  they  must  first  have  received  the  property. 

Matter  of  Hubbard,  21  Misc.  566. 

Matter  of  McGee,  N.  Y.  L.  J.,  February  7,  1913 ;  aff.  160  App.  Div.  890 ; 

144  Supp.  1127. 

Succession  of  Pargoud,  13  La.  Ann.  267. 
Wilhelmi  v.  Wade,  65  Mo.  39. 
Matter  of  Gihon,  169  N.  Y.  443 ;  62  N.  E.  561. 
Matter  of  Thomson,  12  Phila.  (Pa.)  36. 
In  re  Lotzgesell,  62  Wash.  352 ;  113  Pac.  1105. 
United  States  v.  Tappan,  Fed.  Gas.  No.  16,431. 
United  States  v.  Trucks,  27  Fed.  541. 
United  States  v.  Kelly,  27  Fed.  542. 
Montague  v.  State,  74  Md.  481,  487. 

Personal  liability  cannot  extend  to  foreign  executor. 

Goodrich  v.  Eoch.  Trust  &  S.  D.  Co.,  173  App.  Div.  577;  160  Supp.  454. 

If  the  tax  is  imposed  upon  the  right  to  receive  the  property 
the  fact  that  the  beneficiaries  reside  within  the  State  may  be 
sufficient  to  found  jurisdiction. 

Oakman  v.  Small,  282  111.  360;  118  N.  E.  775. 

But  it  has  been  held  in  North  Carolina,  under  the  statute 
of  that  State  that  the  mere  fact  that  the  beneficiaries  are 
residents  within  the  jurisdiction  is'  not  enough  on  which  to 
predicate  jurisdiction  to  assess  the  tax  where  neither  the 
decedent  nor  the  property  are  situated  within  the  State. 

State  v.  Brim,  27  N.  C.  300. 
State  v.  Brevard,  62  N.  C.  141. 

7.  Compromise  Agreements. 

Most  of  the  statutes  provide  for  a  compromise  agreement 
between  the  executor  and  the  State  officials  where  the  amount 
of  the  tax  is  contingent  or  for  any  reason  difficult  of  ascertain- 
ment; but  such  agreements  are  within  the  discretion  of  the 
taxing  officers,  nor  are  they  obliged  to  accept  the  computations 
of  an  actuary,  under  such  circumstances. 

Mitnon  v.  Burrill,  229  Mass.  140;  118  N.  E.  274. 

Where  a  tax  on  contingent  remainders  was  settled  by  a 
compromise  agreement,  duly  entered  into  by  the  State  Comp- 


PAET  V  — PROCEDURE  519 

troller  and  approved  by  the  Attorney-General  as  provided  by 
statute  in  the  father's  estate,  a  power  of  appointment  exer- 
cised by  the  son  was  held  not  taxable  in  spite  of  the  statute 
providing  for  the  taxation  of  transfers  under  powers  of 
appointment  in  the  estate  of  the  donee  of  the  power. 

Matter  of  Lewisohn,  107  Misc.  582;  177  Supp.  799. 

8.  Application  of  Tax  Money. 

The  inheritance  tax,  like  every  other  tax,  must  be  for  a 
public  purpose  and  is  generally  paid  into  the  general  fund 
of  the  treasury,  though  some  States  devote  it  to  specific  pur- 
poses. So  it  has  been  held  that  a  provision  that  such  tax 
moneys  be  applied  to  the  maintenance  of  a  State  university 
is  valid. 

State  v.  Henderson,  160  Mo.  190;  60  S.  W.  1093. 

9.  Interest. 

Many  of  the  statutes  provide  for  a  penalty  of  10%  after 
the  lapse  of  eighteen  months  which  may  be  reduced  to  6% 
upon  motion  and  good  cause  shown.  Under  these  acts  the 
court  has  no  power  to  remit  the  interest  altogether  but  may 
only  reduce  it  as  provided  in  the  statutes. 

Matter  of  Ermann,  169  Supp.  207. 
People  v.  Baldwin,  287  111.  87. 

10.  Discount. 

Allowance  of  5%  discount  if  tax  is  paid  within  six  months  is 
a  mere  inducement  to  the  prompt  payment  of  the  tax. 

People  v.  Baldwin,  287  111.  87. 


520 


INHERITANCE   TAXATION 


PART  VI- THE  STATUTES 


PAGE 

A.  General  Review  of  the  State  Statutes 522 

1.  Wherein  They  Agree  522 

a.  Transfers  by  Will  and  Intestacy 522 

b.  Transfers  in  Avoidance   - 522 

c.  Common  Law  Transfers    523 

d.  Powers  of  Appointment    523 

e.  Life  Estates  524 

f .  Remainders 524 

g.  Executors  and  Their  Duties  525 

h.  Appraisal 526 

i.   Valuation 526 

j.   Interest,  Discount  and  Penalty 527 

k.  Banks  and  Trust  Companies 531 

1.    The  Interest  Taxed    531 

2.  Wherein  They  Differ  532 

a.  Collaterals  and  Strangers  Only 532 

b.  Nonresident   Decedents    532 

c.  Tangibles  and  Intangibles   533 

d.  Reciprocal  Statutes  . . . . ' 533 

e.  Double  Taxation    534 

3.  As  Producers  of  Revenue 535 

a.  The  Rate  535 

b.  Exemptions v 536 

c.  Facts  as  to  Revenue 537 

B.  The  Federal  Statute   539 

1.  History  and  Development   539 

a.  Revolutionary  War  Tax  1797  to  1802 540 

b.  Civil  War  Tax  1862  to  1870 540 

c.  Spanish  War  Tax  1898  to  1902 540 

2.  The  Act  of  1916  and  Amendments 542 

a.  Constitutionality    Sustained    542 

b.  Construction  by  Federal  Courts 546 

c.  Construction  by  the  State  Courts 548 

d.  Ultimate  Repeal  Probable  556 

3.  Rates  of   Tax 558 

a.  Under  Act  of  September  8,  1916 558 

b.  Under  Amendment  of  March  3,  1917 559 

c.  Additional  War  Tax  after  October  3,  1917 559 

4.  Act  of  1916 560 

5.  Amendment  of  March  3,  1917 567 


PART  VI  — THE  STATUTES  521 

B.  The  Federal  Statute — Continued.  PAGE 

6.  Amendment  of  October  3,  19171 568 

7.  Statute  of  1918 569 

8.  Statute  of  1921    578 

9.  Regulations  under  1921  Statute 590 

C.  The  New  York  Statute 695 

1.  History  and  Development    695 

a.  Frequent  Changes  695 

b.  List  of  the  Statutes 695 

c.  The  First  Statutes  Taxing  Only  Collaterals 697 

d.  The  Act  of  1892  Taxing  Direct  Inheritances 697 

e.  The  Act  of  1896 — Powers  of  Appointment 698 

f .  Amendment  of  1899 — Highest  Rate 700 

g.  Act  of  1905— Real  Estate  Added 700 

2.  The  Present  Act  and  Its  Amendments 701 

a.  The  Original  Statute  of  1909 701 

b.  The  "Reign  of  Terror  Act" 701 

c.  A  Radical  Change  in  Theory  as  to  the  Transfer  Taxed 702 

d.  The  Amendments  of  1911 — Tangibles  and  Intangibles 703 

e.  The  Tax  Extended  to  Curtesy 704 

f .  Maximum  and  Minimum  Rates 704 

3.  The  Problem  as  the  Property  of  Nonresidents 705 

a.  The  Previous  Policy  of  the  State 705 

b.  Real  Estate  of  Corporations 705 

c.  Copartnership  Assets    706 

d.  Capital  Invested  in  Business 707 

e.  Attempt  to  Define  a  Resident 710 

f.  Distinction  Between  Tangibles  and  Intangibles  Abolished 713 

4.  Recent  Amendments   , 713 

a.  Exemptions 713 

b.  Joint  Estates 714 

c.  Tenancy  by  the  Entirety 715 

d.  Computations 715 

e.  The  New  Rates  and  Exemptions 715 

f .  Minor  Amendments  of  1917,  1918,  1919 719 

g.  Amendments  of  1921  and  1922 720 

5.  Additional  Tax  on  Investments  (Repealed  by  ch.  644,  L.  1920) 721 

a.  The  Statute    722 

b.  Held  Unconstitutional  by  the  Lower  Courts 724 

c.  Act  Sustained  by  the  Court  of  Appeals 725 

d.  Questions  of  Construction 732 

(1)  As  to  Personal  Property  Assessment 732 

(2)  As  to  Exemptions   734 

(3)  Bonds  Secured  by  Mortgages 734 

6.  Text  of  the  New  York  Statute  with  Amendments  to  Date 735 


522 


INHERITANCE  TAXATION 


PART  VI  —  THE  STATUTES 


A.— GENERAL  REVIEW  OF  THE  STATE  STATUTES. 

The  Federal  Government  and  all  the  States  of  the  Union 
except  Alabama,  Florida,  South  Carolina,  Mississippi  and 
New  Mexico  now  impose  inheritance  taxes. 

1.  Wherein  They  Agree. 

While  the  various  statutes  differ  widely  as  to  rates,  exemp- 
tions and  the  policy  of  taxing  the  personal  property  of  non- 
residents they  are  all  built  on  the  same  general  plan  and  are 
largely  copied  one  from  the  other  with  only  minor  differences 
of  procedure. 

a.  TRANSFERS  BY  WILL  AND  INTESTACY. 

The  statutes  all  tax  transfers  by  will  or  intestacy  and  all 
but  Ehode  Island,  Utah,  and  the  United  States  confine  the  tax 
to  the  amount  passing  at  death  to  each  beneficiary,  the  tax 
being  on  the  right  to  receive.  Rhode  Island  taxes  both  the 
entire  estate  for  the  right  of  the  decedent  to  transfer  it  and 
the  share  of  each  beneficiary  for  the  right  to  receive  it.  The 
Federal  statute  and  that  of  Utah  tax  the  entire  net  estate  of 
the  decedent  for  the  right  to  transfer  it  to  the  living  successors. 

b.  TRANSFERS  IN  AVOIDANCE. 

All  the  statutes  tax  transfers  by  deed,  grant,  sale  or  gift 
made  "in  contemplation  of  death  or  intended  to  take  effect  in 
possession  or  enjoyment  at  or  after  death." 

California,  Colorado,  Delaware,  Georgia,  Kansas,  Maine, 
Massachusetts,  New  York,  Nevada,  Ehode  Island,  Vermont, 
Wisconsin  and  the  Federal  Act  add  the  provision  that  such 
transfers  must  be  made  without  "adequate"  consideration 


PAET  VI—  THE  STATUTES  523 

or  "fair  consideration  by  a  bona  fide  purchaser  in  money  or 
money's  worth." 

This  amendment  is  construed  rather  to  clarify  and  explain 
than  alter  the  law. 

Estate  of  Eeynolds,  169  Cal.  600 ;  147  Pac.  268. 

When  a  transfer  is  made  without  such  consideration  within 
one  year  of  death  it  is  deemed  to  be  in  contemplation  thereof 
by  the  statute  of  Colorado.  When  so  made  within  two  years, 
by  the  Federal  statute  and  Indiana,  and  when  so  made  within 
six  years  by  the  statute  of  Wisconsin.  In  Missouri  the  trans- 
fer is  deemed  to  be  "in  contemplation"  when  made  "without 
valuable  and  adequate  consideration"  and  in  North  Dakota 
when  so  made  within  six  years. 

c.  COMMON  LAW  TRANSFERS. 

(1)  Joint  estates:  After  much  litigation  the  courts  inclined 
to  the  view  that  the  succession  of  one  joint  tenant  to  the  whole 
estate  on  the  death  of  the  other  was  not  a  transfer  taxable 
under  the  statutes.    Such  transfers  are  now  specifically  taxed 
in  New  York,  California  and  by  the  Federal  Act  by  declaring 
successions  to  the  sole  estate  by  joint  tenants  a  taxable  trans- 
fer.    Recent  amendments  in  several  other  States  have  fol- 
lowed suit. 

(2)  Dower,  Curtesy,  Community  Property:  Most  of  the 
statutes  now  tax  a  husband's  curtesy  and  right  to  his  wife's 
personalty  under  common  law  right.    With  the  exception  of 
two  or  three  States,  the  statutes  all  exempt  dower.     Until 
1917  California  taxed  a  widow's  community  succession,  but 
now  exempts  it,  as  does  Louisiana;  but  the  Federal  statute 
taxes  it. 

d.  POWERS  OF  APPOINTMENT. 

Successions  under  powers  of  appointment  have  been  the 
source  of  much  legislative  concern  and  have  been  fruitful  of 
litigation.  They  continually  present  problems  as  to  whether 
the  succession  is  under  the  will  or  deed  creating  the  power  or 
under  the  exercise  of  the  power  by  its  donee  and  what  hap- 


524 


INHERITANCE  TAXATION 


pens  when  the  power  is  not  exercised.     These  methods  are 
followed : 

(1)  California  (prior  to  1917)   and  New  Jersey  tax  the 
succession  under  such  powers  to  the  estate  of  the  creator  of 
the  power. 

(2)  Arkansas,  Indiana,  New  York,  Oklahoma  and  West 
Virginia  tax  the  exercise  of  the  power  as  though  the  prop- 
erty in  fact  belonged  to  the  donee  thereof,  but  are  silent  as 
to  the  nonexercise  of  the  power. 

(3)  California  (statute  1917),  Colorado,  Connecticut,  Idaho, 
Illinois,    Massachusetts,    Minnesota,    Ehode    Island,    South 
Dakota  and  Wisconsin  tax  the  exercise  of  the  power  and  also 
tax  the  succession  on  failure  to  exercise  it  as  though  it  had 
been  the  property  of  the  donee  and  not  of  the  creator  of  the 
power. 

The  other  States  and  Federal  Act  leave  transfers  by  powers 
of  appointment  to  judicial  construction. 

e.  LIFE  ESTATES. 

All  the  statutes  provide  for  the  immediate  valuation  of  life 
estates  and  remainders  and  under  the  statutes  or  the  practice 
of  the  courts  this  is  universally  done  by  the  use  of  the  various 
mortality  tables  at  the  prescribed  rate  of  interest.  As  to 
these,  the  States  widely  differ  and  the  whole  subject  is 
reviewed  ante  under  Life  Estates  and  Remainders. 

f.  REMAINDERS. 

The  States  differ  as  to  whether  the  tax  on  the  remainder 
shall  be  collected  at  once  or  postponed  until  the  beneficiary 
gets  the  property.  In  case  of  contingent  remainders  where 
the  amount  of  the  property  itself  is  uncertain,  as  in  case  of 
life  estates  with  power  to  invade  the  principal,  the  taxation 
of  the  remainder  is  usually  suspended  unless  the  tax  is  com- 
pounded by  a  settlement  agreement  which  nearly  all  the 
statutes  permit  in  such  cases. 

Eight  States  make  the  tax  on  all  remainders  due  at  once: 
Arkansas,  Delaware,  Georgia,  Maryland,  Maine,  New  Hamp- 


PART  VI  — THE  STATUTES  525 

shire,  Ohio  and  West  Virginia,  though  the  practice  is  to  sus- 
pend the  tax  where  the  amount  is  uncertain. 

These  States  postpone  contingent  remainder  taxation  until 
the  beneficiary  becomes  entitled  to  the  property,  usually  pro- 
viding that  security  must  be  given  in  case  of  personal  prop- 
erty :  Michigan,  Missouri,  New  Jersey,  North  Dakota,  Okla- 
home,  Oregon,  Pennsylvania,  Tennessee,  Utah  and  Wash- 
ington. 

The  usual  practice  is  to  give  the  remainderman  of  per- 
sonal property  an  election  not  to  pay  the  tax  until  he  re- 
ceives the  property  provided  he  files  a  bond  to  pay  the  tax 
with  interest  with  an  inventory  of  the  property  and  renews 
the  bond  every  five  (5)  years.  This  is  the  law  in  Arizona, 
California,  Idaho,  Illinois,  Indiana,  Iowa,  Kansas,  Ken- 
tucky, Massachusetts,  Michigan,  Montana,  Missouri,  Nevada, 
New  Jersey,  Oklahoma,  Oregon,  Pennsylvania,  Rhode 
Island,  Wisconsin,  Wyoming.  Some  of  these  States  extend 
this  to  real  estate,  others  let  the  tax  remain  a  lien  during 
the  life  tenure. 

In  case  of  contingent  remainders  these  States  assess  the 
tax  at  the  highest  possible  rate  with  provision  for  a  refund 
if  a  lower  rate  turns  out  to  be  due:  California,  Colorado, 
Idaho,  Illinois,  Indiana,  New  York,  Minnesota,  and  South 
Dakota.  The  provision  has  been  the  source  of  much  litiga- 
tion. 

Rhode  Island  and  Wisconsin  on  the  other  hand  tax  the 
contingent  remainder  at  the  lowest  possible  rate  and  require 
adjustment  if  a  higher  rate  is  ultimately  due. 

Connecticut  makes  the  contingent  remainder  rate  the  same 
as  that  of  the  life  tenant  with  provision  for  ultimate  adjust- 
ment of  any  difference  on  the  falling  in  of  the  remainder. 

In  all  the  States  the  general  principle  is  the  same,  the 
variations  being  as  to  when  the  tax  falls  due  and  the  rate 
at  which  it  is  imposed. 

i 

g.    EXECUTOKS  AND  THEIR  DUTIES. 

Nearly  all  the  statutes  require  the  executor  or  adminis- 
trator to  file  a  sworn  inventory  which  is  made  the  basis  for 


526 


INHERITANCE  TAXATION 


the  appraisal  of  the  estate  and  the  assessment  of  the  tax. 
They  all  hold  him  personally  liable  for  the  tax.  They  all 
require  him  to  deduct  the  tax  from  a  money  legacy  or  col- 
lect it  from  the  beneficiary,  if  in  property,  and  forbid  him 
to  deliver  it  until  the  tax  is  paid.  They  all  make  the  tax  a 
lien  and  provide  that  the  property,  or  so  much  thereof  as  is 
necessary,  may  be  sold  to  pay  the  tax  as  in  case  of  debts. 
They  all  require  him  to  pay  the  tax  to  the  proper  official 
and  secure  a  receipt  which  must  be  produced  as  a  voucher 
on  final  accounting.  They  all  provide  that  no  final  decree 
settling  his  accounts  may  be  granted  until  it  is  shown  that 
the  tax  has  been  paid  or  that  none  is  due.  Bequests  to 
executors  in  lieu  of  commissions  are  universally  taxed  where 
they  exceed  the  statutory  compensation  for  services. 

h.  APPRAISAL. 

All  of  the  statutes  use  the  machinery  of  the  Probate  Courts 
for  the  collection  of  the  tax  and  most  of  them  require  the 
judge  or  Surrogate  having  jurisdiction  to  grant  letters  testa- 
mentary or  of  administration  to  assess  it  on  appraisal.  Some 
States  permit  the  sworn  inventory  to  stand  as  the  appraisal 
unless  the  Treasurer,  Comptroller  or  Tax  Commissioner  is 
dissatisfied;  but  provide  for  the  appointment  of  an  ap- 
praiser if  there  is  any  question  in  dispute  who  proceeds, 
upon  due  notice  to  all  parties  interested,  to  appraise  the 
estate  at  its  fair  market  value,  usually  the  value  at  the  death 
of  the  decedent.  From  the  appraisal  so  made  there  is  always 
an  appeal  to  the  Probate  Court  which  may  order  a  re- 
appraisal or  assess  the  tax  and  from  such  decree  an  appeal 
lies  in  the  same  manner  as  from  other  decrees  unless  special 
provisions  are  made  as  to  time,  etc.  In  all  these  features  the 
statutes  are  practically  identical. 

Provisions  are  also  usually  made  for  motions  to  exempt  an 
estate  which  is  obviously  not  taxable  without  the  formality 
of  an  appraisal. 

i.  VALUATION. 

The  time  when  the  tax  falls  due  is  the  time  when  the 
value  must  be  fixed  but  losses  in  process  of  administration 


PART  VI  — THE  STATUTES  527 

have  so  often  occurred  and  beneficiaries  so  frequently  have 
been  assessed  upon  the  transfer  for  the  property  they  never 
in  fact  have  received  that  the  recent  statutes  enacted  by 
Connecticut,  Rhode  Island  and  the  Federal  Government 
allow  a  deduction  for  losses  during  administration  except 
those  due  merely  to  the  rise  and  fall  in  the  price  of  stocks. 
This  is  a  relief  which  the  courts  cannot  give  and  will  doubt- 
less be  generally  adopted  in  other  States. 

j.  INTEREST,  DISCOUNT  AND  PENALTY. 

Following  is  a  synopsis  of  the  provisions  of  the  statutes 
with  regard  to  rates  of  interest  and  discount: 

Federal  Tax. — Due  one  year  after  death  but  the  Commis- 
sioner may  grant  an  extension  not  exceeding  three  years. 
If  not  paid  within  one  year  and  six  months  6%  interest  from 
the  expiration  of  one  year  added  to  tax.  If  tax  cannot  be 
determined  an  amount  sufficient  to  pay  it,  in  opinion  of  col- 
lector may  be  deposited.  This  saves  all  interest  unless  it 
proves  insufficient.  If  not  sufficient,  interest  at  10%  is 
charged  if  not  paid  within  thirty  days  after  notice  by 
collector. 

Arizona. — Due  at  death,  after  12  months  interest  at  8% 
from  death. 

Arkansas. — Due  at  death,  interest  at  6%  after  6  months, 
after  12  months  10%  penalty  in  addition  to  interest,  except 
in  case  of  unavoidable  delay  when  penalty  is  remitted — no 
discount. 

California. — Due  at  death,  no  interest  until  18  months, 
after  that  10%  from  date  of  death,  in  case  of  unavoidable 
delay  may  be  reduced  to  7%.  If  paid  within  6  months  5% 
discount. 

Colorado. — Due  at  death,  after  one  year  interest  at  10% 
from  date  of  death,  discount  of  5%  if  paid  within  6  months. 

Connecticut. — Due  14  months  after  death;  after  that  in- 
terest at  9%,  but  court  may  extend  time  of  payment.  No 
discount. 

Delaware. — Taxes  payable  within  13  months.  No  provi- 
sion for  interest.  Legal  rate  is  6%.  No  discount. 


528 


INHERITANCE  TAXATION 


Georgia. — Due  at  death,  no  interest  until  after  12  months, 
then  from  date  of  death  unless  unavoidable  delay  in  deter- 
mining the  amount  of  tax,  in  that  case  interest  from  date  of 
determination.  No  rate  specified.  Legal  rate  1%. 

Hawaii. — Due  at  death.  No  interest  for  18  months;  after 
that  10%  from  date  of  death  which  may  be  reduced  to  7 %  in 
case  of  unavoidable  delay.  Discount  of  5%  if  paid  within  one 
year. 

Idaho. — Due  at  death.  No  interest  until  after  one  year; 
then  10%  reduced  to  6%  in  case  of  unavoidable  delay.  Dis- 
count of  5%  if  paid  within  six  months. 

Illinois. — Taxes  due  at  death  and  interest  at  6%  charged 
from  that  time  unless  paid  within  6  months  when  no  interest 
charged  and  a  discount  of  5%  allowed. 

Indiana. — Tax  due  at  death.  No  interest  for  18  months; 
after  that  10%  from  date  of  death,  discount  of  5%  if  paid 
within  one  year. 

Iowa. — At  death,  no  interest  for  18  months;  after  that  8% 
from  date  of  death. 

Kansas. — One  year  from  death  except  gifts  in  contempla- 
tion of  death  on  which  tax  accrues  at  date  of  gift.  No  pro- 
vision as  to  interest.  Legal  rate  is  6%. 

Kentucky. — Due  at  death.  No  interest  for  18  months,  after 
that  10%  from  date  of  death ;  may  be  reduced  to  6%  in  case 
of  unavoidable  delay.  Discount  of  5%  if  paid  within  9 
months. 

Louisiana. — Due  6  months  after  death  from  which  time  2% 
a  month  until  paid,  but  court  may  remit  interest  in  case  of 
litigation  or  unavoidable  delay.  No  discount. 

Maine. — Due  two  years  after  death,  after  that  6%  interest. 
No  discount. 

Maryland. — No  interest  until  after  12  months,  then  6% 
from  date  of  death.  No  discount. 

Massachusetts. — Due  within  one  year  after  the  executor 
or  administrator  qualifies;  after  that  interest  is  charged. 
Kate  not  specified.  Legal  rate  5%.  Discount  at  rate  of  4% 
per  annum  if  paid  before  due. 

Michigan. — Due  at  death,  no  interest  for  18  months;  after 


PART  VI  —  THE  STATUTES  529 

that  8%,  may  be  reduced  to  6%  in  case  of  unavoidable  delay. 
Discount  of  5%  if  paid  within  one  year. 

Minnesota. — Due  at  death,  no  interest  charged  for  one  year, 
after  that  7%  from  date  of  death,  may  be  reduced  to  6%  in 
case  of  unavoidable  delay.  No  discount. 

Mississippi. — Due  30  days  after  notice  of  amount;  after 
that  8%.  No  discount. 

Missouri. — Due  at  death.  No  interest  for  six  months,  after 
that  6%  from  date  of  death.  If  not  paid  within  one  year 
executor  must  file  a  bond.  No  discount. 

Montana. — Due  at  death.  If  paid  within  1  year  discount 
of  5%.  If  not  so  paid  interest  at  10%  which  may  be  reduced 
to  6%  in  case  of  unavoidable  delay. 

Nebraska. — Due  at  death  with  interest  at  7%,  but  if  paid 
within  one  year  interest  rebated.  No  discount. 

Nevada. — Due  at  death,  no  interest  until  after  18  months, 
then  10%  from  date  of  death  unless  unavoidable  delay,  then 
1%.  If  paid  within  6  months,  discount  of  5%. 

New  Hampshire. — Due  two  years  after  executor  or  adminis- 
trator qualifies  by  giving  bonds.  No  interest  until  then,  after 
that  10%.  No  discount. 

New  Jersey. — Due  at  death,  no  interest  for  one  year,  after 
that  10%  from  end  of  year  which  may  be  reduced  to  6%  in 
case  of  unavoidable  delay. 

New  Mexico. — Due  12  months  after  executor  qualifies. 
Court  may  extend  time.  After  that  interest  at  legal  rate. 

New  York. — Due  at  date  of  transfer.  No  interest  for  18 
months,  after  that  10%,  which  may  be  reduced  to  6%  in  case 
of  unavoidable  delay.  Discount  of  5%  if  paid  within  6 
months. 

North  Carolina. — Due  at  death,  no  interest  for  one  year, 
after  that  6%  for  one  year,  10%  thereafter,  but  Tax  Commis- 
sion may  remit  all  interest  for  good  cause  shown.  If  paid 
within  six  months  a  discount  of  3%  allowed. 

North  Dakota. — Due  at  death,  no  interest  for  one  year, 
after  that  10%  from  date  of  accrual,  which  may  be  reduced 
to  6%  in  case  of  unavoidable  delay,  until  cause  of  delay  is 
removed,  then  10%.    No  discount. 
34 


530 


INHERITANCE  TAXATION 


Ohio. — Due  at  death.  No  interest  for  one  year.  After  that 
8%.  May  be  reduced  to  5%  for  unavoidable  delay.  Dis- 
count of  \%  for  each  full  month  the  payment  anticipates  the 
lapse  of  one  year. 

Oklahoma. — Due  at  death.  Except  contingent  remainders 
which  are  due  when  beneficiaries  get  property.  10%  interest 
charged  from  date  when  due.  No  discount. 

Oregon. — Due  at  death.  No  interest  for  8  months,  then  8% 
from  death,  which  may  be  reduced  to  6%  in  case  of  unavoid- 
able delay.  If  paid  within  8  months  discount  of  5%. 

Pennsylvania. — Due  at  death.  No  interest  for  one  year, 
after  that  12%,  which  may  be  reduced  to  6%  in  case  of 
unavoidable  delay.  Discount  of  5%  if  paid  within  3  months. 

Rhode  Island. — Due  30  days  after  notice  of  amount  of  tax 
to  executor  or  administrator.  Interest  at  8%  after  such 
notice. 

South  Carolina. — Payable  within  one  year  after  executor 
or  administrator  has  qualified.  After  that  1%  interest  for 
first  year  and  10%  thereafter. 

South  Dakota. — Due  at  death,  payable  as  soon  as  deter- 
mined. No  interest  until  one  year  from  death,  then  7%  from 
date  of  death,  which  may  be  reduced  to  6%  in  case  of 
unavoidable  delay.  No  discount. 

Tennessee. — Due  one  year  after  death.  No  interest  until 
then,  after  that  6%.  If  paid  within  6  months  after  death 
discount  of  5%. 

Texas. — Due  at  death  with  interest  from  that  date  unless 
paid  within  6  months  when  interest  is  rebated.  No  rate 
prescribed  but  legal  rate  is  6%.  No  discount. 

Utah. — Due  at  death  but  no  interest  for  15  months,  after, 
that  8%,  but  time  may  be  extended  by  court  or  in  case  of 
nonresidents  by  Attorney-General. 

Vermont. — Due  two  years  after  death.  No  rate  prescribed 
for  interest  after  that.  Legal  rate  is  6%. 

Virginia. — Due  at  date  of  transfer.  After  4  months  in- 
terest at  10%. 

Washington. — Due  at  death.  No  interest  for  15  months. 
After  15  months  8%  except  in  case  of  unavoidable  delay  when 


PAET  VI  — THE  STATUTES  531 

8%  is  charged  only  after  cause  of  delay  has  been  removed. 
No  discount. 

West  Virginia. — If  not  paid  within  six  months  interest  at 
10%  and  an  additional  penalty  of  10%,  but  Tax  Commission 
may  remit  both  for  good  cause  shown. 

Wisconsin. — Due  at  death.  No  interest  for  18  months ;  after 
that  10%  from  date  of  death  which  may  be  reduced  to  6%  in 
case  of  unavoidable  delay.  If  paid  within  one  year  discount 
of  5%. 

Wyoming. — If  paid  within  1  year  discount  of  5%.  If  not 
so  paid  interest  at  8%  from  date  of  death  which  may  be 
reduced  to  6%  in  case  of  unavoidable  delay. 

All  of  the  statutes  make  provision  for  the  collection  of 
delinquent  taxes  by  the  Attorney-General  or  District  Attorney. 

k.  BANKS  AND  TRUST  COMPANIES. 

Most  of  the  States  make  stringent  regulations  as  to  the 
disclosure  by  banks  and  trust  companies  of  assets  belonging 
to  decedents.  They  are  generally  required  to  notify  the  State 
Treasurer  or  Comptroller  ten  days  before  delivering  any 
property  to  an  executor  or  administrator  and  they  are  some- 
times required  to  hold  enough  of  the  assets  in  their  hands  to 
pay  the  tax.  The  bank  or  trust  company  violating  these  pro- 
visions is  penalized  and  held  liable  for  the  tax.  Some  of  the 
States  extend  this  provision  to  all  corporations  within  the 
State,  making  them  liable  for  the  tax  if  they  transfer  stock 
of  nonresident  decedents  on  their  books  without  notifying  the 
taxing  officer. 

1.  THE  INTEREST  TAXED. 

The  early  statutes  imposed  inheritance  taxes  upon  the  en 
tire  estate  of  the  decedent;  but  all  the  States  but  Utah  now 
impose  the  tax  upon  the  share  of  each  beneficiary.  Khode 
Island,  in  its  statute  of  1916,  which  is  in  many  respects  a 
model  law,  imposes  two  taxes, — first  a  tax  of  one-half  of  1% 
upon  the  entire  estate  ' '  for  the  right  to  transfer, ' '  and  second, 
graded  taxes  upon  the  beneficial  shares  "for  the  right  to 
receive. ' ' 


532 


INHERITANCE  TAXATION 


2.  Wherein  They  Differ. 

As  we  have  seen,  the  general  plan  of  the  statutes  is  iden- 
tical, and  the  procedure  for  assessment  and  collection  varies 
more  in  detail  than  in  essentials.  In  the  matter  of  rates  and 
exemptions  and  in  the  policy  adopted  as  to  transfers  by  non- 
resident decedents,  the  divergencies  are  radical.  In  the  mat- 
ter of  nonresidents  the  conflicting  theories  and  conflicting 
statutes  often  impose  oppressive  double  taxation,  on  the  one 
hand,  while  on  the  other,  large  estates  frequently  escape  the 
tax  altogether. 

a.  COLLATERALS  AND  STRANGERS  ONLY. 

The  early  statutes  in  most  of  the  States  taxed  only  trans- 
fers to  collaterals  and  strangers.  Maryland  and  Texas  still 
preserve  this  policy  and  impose  no  tax  on  a  transfer  to 
direct  heirs. 

The  other  States  all  tax  transfers  to  direct  heirs  and  grade 
the  rates  according  to  degrees  of  relationship.  The  bequests 
to  collaterals  and  strangers  are  universally  taxed  at  a  higher 
rate  than  the  others. 

b.  NONRESIDENT  DECEDENTS. 

Nearly  all  the  States  tax  all  property  of  nonresidents  within 
the  State  with  the  following  exceptions : 

New  York. — Taxes  real  estate,  goods,  wares  and  merchan- 
dise, stock  in  domestic  corporations,  and  where  represented 
by  interest  in  real  estate  within  the  State  the  stock  of  foreign 
corporations  and  the  bonds,  notes  and  mortgages  of  domestic 
corporations  to  the  extent  of  that  interest,  as  well  as  capital 
invested  in  business  within  the  State  and  copartnership 
interests  within  the  State,  including  good  will. 

Massachusetts. — Taxes  all  property  of  nonresidents  within 
the  State  unless  the  State  of  domicile  exempts  such  property 
owned  by  Massachusetts  residents,  in  that  case  the  excess  of 
the  Massachusetts  tax  over  the  tax  imposed  by  the  State  of 
domicile  only  is  taxed. 

New  Jersey. — Taxes  real  estate,  goods,  wares  and  mer- 
chandise and  stock  in  New  Jersey  corporations. 


PART  VI  — THE  STATUTES  533 

Delaware,  Maryland  and  Nebraska. — Tax  all  property  of 
nonresidents  within  the  State  except  stock  in  domestic  cor- 
porations the  transfer  of  which  is  not  taxed. 

Tennessee. — Taxes  all  property  of  nonresidents  within  the 
State  except  transfers  of  stock  in  Tennessee  except  where 
such  transfers  are  taxed  by  the  State  of  domicile  and  double 
taxation  would  result. 

Rhode  Island  and  Vermont. — Tax  only  the  real  estate  of 
nonresidents. 

c.  TANGIBLES  AND  INTANGIBLES. 

Pennsylvania  arrives  at  this  result  by  legal  construction, 
its  courts  holding  that  the  intangibles  of  nonresidents  "  fol- 
low the  domicile  of  their  owner,"  but  that  "tangible"  assets 
have  a  situs  within  the  State  apart  from  their  owner,  but 
the  act  of  1919  does  not  recognize  the  distinction. 

New  York  in  1911  enacted  the  Pennsylvania  doctrine  into 
law  upon  the  theory  that  the  other  States  would  follow  its 
lead;  but  only  a  few  have  done  so,  and  New  York  has  finally 
abandoned  the  doctrine.  By  subsequent  amendments  it  taxed 
stock  of  nonresident  real  estate  corporations,  as  it  was  found 
that  large  nonresident  real  property  owners  were  incorporat- 
ing their  holdings.  The  whole  of  a  nonresident  interest  in  a 
copartnership  is  taxed,  and  an  attempt  has  been  made  to 
define  a  resident  as  a  person  who  stays  in  the  State  a  few 
months  each  year.  It  was  the  failure  of  this  provision  to 
accomplish  the  legislative  purpose  that  led  to  the  final 
abandonment  of  the  distinction  between  tanglibles  and 
intangibles  in  1919. 

This  distinction  has  now  been  abandoned  by  all  the  States 
that  originally  undertook  to  enforce  it.  The  practical  result 
is  to  tax  the  tangibles  of  residents  in  foreign  jurisdictions 
while  exempting  the  real  estate  of  such  residents  so  located. 

d.  RECIPROCAL  STATUTES. 

The  plan  of  attempting  to  control  the  policy  of  sister  States 
by  offering  rewards  or  penalizing  its  inhabitants  has  been 
tried  in  Connecticut  and  Massachusetts,  but  the  latter  State 


534 


INHERITANCE  TAXATION 


has  abandoned  the  idea.  Massachusetts,  however,  exempts 
property  of  her  own  resident  decedents  when  it  is  taxed  in 
another  State,  unless  the  tax  is  less  than  that  of  Massachu- 
setts, when  the  beneficiary  must  pay  the  difference. 

Maine  exempted  transfers  of  personal  property  within  that 
State  by  nonresident  decedents  who  were  domiciled  in  States 
that  do  not  tax  similar  transfers  by  residents  of  Maine,  but 
this  provision  was  repealed  by  chapter  266,  Laws  of  1917. 

Eeciprocal  provisions  have  proved  a  failure  or  have  not 
been  adopted  by  a  sufficient  number  of  States  to  be  useful. 

e.  DOUBLE  TAXATION. 

Nearly  all  the  States  now  tax  property  of  nonresidents 
transferred  within  the  State,  and  the  trend  of  the  new  statutes 
has  been  in  that  direction,  particularly  in  the  Western  States. 
This  confessedly  results  in  double  taxation;  but  the  other 
theory  permits  large  estates  to  escape  without  paying  any 
tax.  Three-fourths  of  the  States  having  abolished  the  legal 
fiction  that  movables  follow  the  person  as  to  nonresidents; 
it  remains  for  each  State  to  follow  the  example  of  Massa- 
chusetts and  West  Virginia  and  relieve  its  own  inhabitants 
from  double  taxation  by  exempting  them  when  they  have 
paid  inheritance  taxes  in  another  State  of  an  equal  or  greater 
amount,  but  the  trend  is  in  the  other  direction  and  West  Vir- 
ginia repealed  its  reciprocal  provision  in  1921. 

A  more  practical  plan  has  been  suggested  by  the  annual 
conference  of  the  National  Tax  Association  where  38  States 
were  represented  in  1921  by  their  elected  or  appointed  offi- 
cials. It  proposes  the  general  adoption  of  a  flat  tax  on  non- 
resident estates  similar  to  that  of  New  Hampshire.  The 
following  resolution  was  adopted  by  the  conference : 

:<WHEKEAS,  this  conference,  although  opposed  to  the  levy 
of  State  inheritance  taxes  upon  property  passing  at  death 
under  the  laws  of  a  State  other  than  that  in  which  the  dece- 
dent was  domiciled  at  time  of  death,  recognizes  the  fact  that 
such  taxes  are  now  imposed  and  are  likely  to  continue  in 
force  for  some  time  to  come; 


PART  VT  —  THE  STATUTES  535 

"AND  WHEREAS,  the  adniinistration  of  such  laws  as  now 
framed  is  ordinarily  difficult  and  complex  and  imposes  undue 
expense  upon  the  estates  affected  thereby,  and  frequently 
causes  long  delay  in  their  administration, 

"RESOLVED,  that  it  is  the  sense  of  this  conference  that  it 
is  highly  important  that  the  administration  of  such  laws 
should  be  simplified: 

"The  conference  recommends  to  tax  officials  and  the  Legis- 
latures of  the  several  States  a  careful  consideration  of  the 
flat  rate  tax  recently  adopted  in  New  Hampshire  as  present- 
ing a  practical  and  feasible  plan  whereby  simplicity  in  admin- 
istration may  be  brought  about  without  loss  of  revenue: 

"RESOLVED  FURTHER,  that  a  copy  of  the  foregoing  preamble 
and  resolution  with  a  copy  of  the  New  Hampshire  law  or  a 
description  thereof  be  sent  to  the  Governors  and  inheritance 
tax  officials  of  the  several  States." 

Virginia  is  thus  far  the  only  State  to  follow  the  example 
of  New  Hampshire. 

3.  As  Producers  of  Revenue. 

The  only  legitimate  object  of  taxation  is  to  produce  revenue 
and  generally  its  purpose  is  to  produce  as  much  revenue  as 
possible  with  the  least  inconvenience  and  burden  to  the  com- 
munity. The  prime  factors  governing  the  amount  of  revenue 
to  be  derived  from  inheritance  taxes  are  the  rates  of  tax  and 
exemptions. 

a.  THE  RATE. 

Generally  the  rate  is  small  to  near  relatives  and  higher  as 
to  collaterals  and  strangers,  and  increases  in  proportion  to 
the  amount  of  the  bequest  or  distributive  share.  The  tax  on 
transfers  to  collaterals  and  strangers  in  some  States  runs 
as  high  as  30%  on  amounts  in  excess  of  one  million  and 
usually  to  15%. 


536 


INHERITANCE  TAXATION 


b.  EXEMPTIONS. 

The  tendency  has  been  to  increase  the  number  and  amount 
of  exemptions.  This  has  also  tended  to  reduce  the  revenue. 

In  this  connection  the  following  excerpt  from  the  report 
of  the  New  York  Comptroller  for  1915  is  significant : 

"The  net  receipts  from  inheritance  taxes  for  the  fiscal  year 
ended  September  30,  1914,  was  $11,162,478.40. 

"There  were  8,947  reports  of  appraisal  examined  and  filed 
and  11,608  orders  received  from  the  Surrogates'  courts  of 
the  several  counties  of  this  State. 

"The  small  percentage  of  estates  subject  to  the  graded 
rates  of  tax,  as  shown  by  the  appraisals  for  the  past  two 
years,  justifies  me  in  calling  to  your  attention  the  necessity  of 
reducing  both  the  exemptions  allowed  on  individual  transfers 
as  well  as  the  several  limitations  beyond  which  the  next  higher 
rate  of  tax  becomes  effective,  if  the  State  is  to  receive  an- 
nually from  this  source  of  revenue  the  amount  of  tax  that  the 
present  statute  was  expected  to  produce. 

"From  1892  till  July  11,  1910,  individual  transferees  were 
not  allowed  an  exemption  of  any  amount  whatsoever  if  the 
whole  estate  exceeded  $10,000  and  passed  to  those  in  the  \% 
class,  or  exceeded  $500  and  some  part  thereof  passed  to  per- 
sons in  the  5%  class. 

"By  the  amendment  of  1910  a  father,  mother,  widow  or 
minor  child  was  given  an  exemption  of  $5,000.  The  other 
persons  in  the  1%  class  were  allowed  an  exemption  of  $500, 
and  those  in  the  5%  class  an  exemption  of  $100. 

"Under  the  present  statute  (Chapter  732,  Laws  of  1911) 
each  person  in  the  1%  class  is  given  an  exemption  of  $5,000, 
and  those  in  the  5%  class  are  given  an  exemption  of  $1,000. 

"Owing  to  the  present  large  exemptions,  almost  every  es- 
tate between  $10,000  and  $30,000  where  the  property  passes 
to  those  in  the  1%  class  is  wholly  exempt.  This  amendment 
eliminates  from  25%  to  40%  of  the  estates  in  most  of  the 
counties  of  the  State  which  under  the  old  law  would  have 
been  taxable. 

'  *  The  statute  still  recognizes  two  classes  of  taxable  persons. 
Persons  related  to  the  decedent  as  a  father,  mother,  brother, 


PAKT  VI  —  THE  STATUTES  537 

sister,  wife  or  widow  of  a  son  or  the  husband  of  a  daughter, 
lineal  descendants,  etc.,  are  referred  to  as  the  1%  class,  while 
transfers  to  more  remote  relatives,  such  as  uncle,  aunt, 
nephew,  niece,  cousin,  or  to  persons  unrelated,  are  referred 
to  as  the  5%  class. 

"The  present  limitations  of  $50,000,  $250,000  and  $1,000,000 
upon  which  the  corresponding  progressive  rate  per  cent  is 
computed  are  purely  arbitrary  amounts  placed  in  the  statute 
without  the  knowledge  since  gained  that  in  almost  every 
million  dollar  estate  the  individual  transfer  seldom  reaches 
the  maximum  of  the  present  2%  rate." 

The  amendments  to  the  statute  in  1916  by  the  New  York 
Legislature  were  adopted  in  view  of  the  fact  that  the  receipts 
had  fallen  from  thirteen  millions  in  1913  to  seven  millions  in 
1916,  nearly  50%.  The  effect  of  the  amendment  is  already 
demonstrated.  The  proceeds  for  1917  were  $13,791,000  under 
the  1916  amendment.  In  1920  they  were  $18,135,506.75,  and 
yet  the  highest  rate  of  tax  under  any  circumstances  is  only 
8%. 

c.  FACTS  AS  TO  EEVENUE. 

As  stated  in  the  first  two  editions  of  this  work  the  total 
inheritance  taxes  collected  in  all  the  States  amounted  to  only 
$27,000,000  annually. 

Since  that  time  the  statutes  in  all  the  States  have  been  made 
more  effective  and  the  collection  of  the  tax  has  been  enforced 
with  greater  care.  The  result  is  that  in  the  last  fiscal  year  the 
several  States  have  collected  nearly  sixty-six  millions  and  the 
Federal  government  one  hundred  and  three  millions,  a  total 
of  $169,420,295.06. 

Although  the  State  collections  have  more  than  doubled  the 
revenue  from  this  source  is  disappointing  in  all  but  three  or 
four  jurisdictions. 

Of  the  total  tax  New  York  collects  nearly  one-third.  Her 
rates  are  not  excessive,  but  the  Tax  Commission  is  repre- 
sented by  counsel  in  every  county  in  the  State  and  the  methods 
of  collection  have  been  perfected  by  long  experience. 

With  five  States  estimated  the  following  table  shows  the 
inheritance  collections  throughout  the  country  in  1920: 


538  INHERITANCE  TAXATION 

Arkansas $116,951  71 

•Arizona 100,000  00 

*Calif ornia 3,000,000  00 

Colorado 1,294,305  61 

Connecticut 1,987,766  81 

Delaware 162,838  15 

Georgia 210,000  00 

Idaho 47,765  02 

Illinois 2,923,723  47 

Indiana 660,000  00 

Iowa 680,839  82 

Kansas 426,177  77 

Kentucky ' 235,059  10 

Louisiana 100,000  00 

Maine 594,125  92 

Maryland 696,546  29 

Massachusetts 4,854,722  96 

Michigan 780,189  13 

Minnesota 1,056,790  34 

Missouri 1,472,222  70 

Mississippi 65,637  04 

Montana 37,158  53 

•Nebraska , .  100,000  00 

Nevada 18,578  82 

New  Hampshire    210,728  54 

New  Jersey  5,192,497  75 

New  Mexico 

New  York 18,135,506  73 

North  Carolina 603,229  92 

•North  Dakota  200,000  00 

Ohio 3,000,000  00 

Oklahoma 147,000  00 

Oregon 594,014  35 

Pennsylvania 8,000,000  00 

Rhode  Island 1,403,306  20 

South  Dakota   203,037  49 

Tennessee 375,878  00 

Texas 547,227  30 

Utah 525,038  08 

Vermont 143,335  66 

Virginia 199,538  00 

Washington 439,453  16 

West  Virginia  725,000  00 

•Wisconsin 3,500,000  00 

Wyoming 60,000  00 


Total  State  Taxes  $65,792,190  37 

United  States   103,628,104  69 


Total $169,420,295  06 

Estimated.  =^=== 


PART  VI  — THE  STATUTES  539 

Eecent  amendments  have  increased  the  rates  and  made  the 
penalties  more  stringent,  and  much  has  been  done  to  make 
the  collection  of  the  tax  more  efficient.  Many  of  the  States 
now  make  an  appropriation  for  the  expenses  of  collection 
and  provide  the  collecting  officers  with  adequate  legal  assist- 
ance. Every  estate  of  taxable  proportions  has  astute  and 
vigilant  attorneys  employed  to  minimize  the  tax  or  evade  it 
if  possible.  Several  of  the  States  have  amended  their  statutes 
to  authorize  the  employment  of  special  transfer  tax  attorneys. 
New  York  has  over  one  hundred  attorneys  so  employed,  and 
such  States  as  California,  Wisconsin  and  Illinois,  where  a 
comparatively  large  revenue  is  secured,  are  following  her 
example,  with  the  result  that  the  increased  revenue  is  out  of 
all  proportion  to  the  extra  cost. 

An  abstract  of  all  the  State  statutes,  with  the  important 
sections  in  full  and  the  rest  carefully  digested,  is  given  in  the 
Appendix. 

B.— THE  FEDERAL  STATUTE. 

1.  History  and  Development. 

Inheritance  taxes  have  been  imposed  by  the  United  States 
Government  only  under  pressure  of  emergency  caused  by 
war,  and  have  been  repealed  as  soon  as  that  pressure  was 
removed,  on  the  theory  that  such  taxes  were  primarily  a 
source  of  revenue  tacitly  reserved  to  the  State  governments 
for  their  support.  Four  times  in  its  history  war  conditions 
have  produced  such  taxes.  They  may  be  known  as  the 
Revolutionary  war  tax,  enacted  in  1797  and  repealed  in  1802 ; 
the  Civil  war  tax,  enacted  in  1862  and  repealed  in  1870;  the 
Spanish  war  tax,  enacted  in  1898  and  repealed  in  1902;  and 
the  present  German  war  tax. 

The  statute  now  in  force  has  been  twice  amended  and  twice 
re-enacted.  The  dates  are  important.  As  to  persons  dying 
after  September  8,  1916,  and  prior  to  March  3,  1917,  the  first 
statute  is  in  effect.  The  amendments  of  March  3,  1917,  are 
in  effect  until  October  3,  1917.  The  estate  of  persons  dying 
after  that  date  and  before  February  24,  1919,  are  subject  to 
the  additional  war  rates  imposed  by  the  amendment  of  that 


540 


INHERITANCE  TAXATION 


date.  As  to  persons  dying  after  February  24,  1919,  the 
Federal  act  of  that  date  takes  effect,  and  the  amendments 
under  the  revenue  act  of  1921  takes  effect  November  23,  1921. 

a.  THE  BEVOLUTIONART  WAR  TAX. 

This  was  enacted  July  6,  1797,  as  a  stamp  duty,  the  stamps 
being  affixed  to  receipts  given  by  the  legatee  to  the  executor. 
(Chapter  11,  1  Stat.  527.)  The  statute  closely  followed  the 
legal  duty  imposed  in  the  mother  country.  It  was  paid  by 
the  legatee  and  not  out  of  the  estate.  The  act  was  repealed 
as  soon  as  the  country  somewhat  recovered  from  the  war  debt 
pressure,  the  repealing  act  being  Chapter  17,  2  Stat.  148,  June 
30,  1802. 

It  had  none  of  the  features  of  the  most  recent  inheritance 
tax  statutes  and  was,  strictly  speaking,  more  to  be  classed 
as  a  duty  or  impost  than  a  tax.  It  imposed  a  fee  of  25  cents 
on  legacies  from  $50  to  $100 ;  50  cents  on  legacies  from  $100 
to  $500;  and  $1.00  additional  for  every  additional  $500. 

b.  THE  CIVIL  WAR  TAX. 

For  sixty  years  the  Federal  Government  ignored  this  source 
of  revenue,  but  was  once  more  driven  to  it  by  the  conditions 
in  1862.  By  Chapter  1119,  12  Stat.  433,  485,  another  inherit- 
ance tax  was  imposed. 

This  was  also  a  legacy  and  probate  stamp  tax,  closely  fol- 
lowing an  English  model  of  that  date.  It  involved  as  well  as 
the  tax  on  the  legacy  a  probate  tax  on  the  entire  estate. 

This  statute  also  was  different  in  theory  and  in  manner  of 
collection  from  any  of  the  modern  inheritance  tax  statutes. 

This  tax  ranged  from  50  cents  to  $20  on  estates  valued  at 
from  $50,000  to  $100,000  and  $10  for  every  additional  $50,000 
or  part  thereof. 

The  act  was  amended  in  1864  and  1866,  and  was  repealed 
July  14,  1870,  by  Chapter  255,  Stat.  1870. 

c.  THE  SPANISH  WAR  TAX. 

This  statute  was  enacted  June  13,  1898  (30  U.  S.  Stat.,  p. 
464),  and  was  amended  March  2,  1901  (31  U.  S.  Stat.,  p.  946), 


PART  VI  — THE  STATUTES 


541 


to  exempt  charitable  corporations  and  regulating  procedure. 
It  was  repealed  April  12,  1902,  and  taxes  on  charitable  be- 
quests collected  between  1898  and  1901  were  refunded  by  32 
U.  S.  Stat,  p.  406. 

The  act  was  a  tax  on  beneficiaries  for  the  right  to  receive 
and  was  modeled  after  the  pattern  of  many  of  the  State 
statutes  now  in  force.  It  taxed  only  personal  property  pass- 
ing by  will,  intestate  laws  or  "deed,  grant,  bargain,  sale  or 
gift  made  or  intended  to  take  effect  in  possession  or  enjoy- 
ment after  the  death"  of  the  grantor,  etc. 

It  did  not  tax  estates  valued  at  less  than  $10,000.  When 
they  exceeded  that  sum  a  tax  was  levied  on  the  whole  amount 
at  these  rates. 

TABLE  OF  RATES  UNDER  FEDERAL  ACT  OF  1898 


GRAI 

>BD  RATE 

3  OP  TAX 

CLASS  OR  RELATIONSHIP 

Dp  to 
25,000 

25,000 
to 
100,000 

100,000 
to 
500,000 

500,000 
to 
1,000,000 

In  excess 
of 
1,000,000 

Lineal    issue,    lineal    ancestor,    brother    or 

Per  cen 
l 

Percent 
If 

Per  cent 
U 

Per  cent 
2} 

Per  cent 
21 

if 

2i 

3 

3} 

4 

Aunt  or  uncle  and  their  descendants    

3 

4 

6 

7J 

9 

Brother  or  sister  of  grand  parents  and  their 
descendants  

4 

6 

8 

10 

12 

5 

7J 

10 

12J 

15 

Inheritances  of  the  husband  or  wife  were  altogether  exempt, 
and  by  act  of  1901  all  charitable,  religious,  educational,  etc., 
bequests  were  exempted. 

These  taxes  were  superimposed  over  and  above  the  taxes 
collected  by  the  States,  and  it  will  be  observed  that  the  rates 
were  less  burdensome  than  under  the  present  Federal  act. 

It  should  be  borne  in  mind,  however,  that  under  this  tax 
real  estate  was  exempted  altogether,  thus  reducing  the  size 
of  all  estates  liable  to  the  tax,  and  that  contingent  remainders 
were  not  taxed. 

Vanderbilt  v.  Eidman,  196  U.  S.  480 ;  25  S.  Ct.  331. 
Herold  v.  Shanley,  146  Fed.  20 ;  76  C.  C.  A.  478. 
Heberton  v.  McClain,  135  Fed.  226. 
Brown  v.  Kinney,  137  Fed.  1018. 


542 


INHEEITANCE  TAXATION 


2.  The  Act  of  1916  and  Amendments. 

Pressure  caused  by  war  conditions,  particularly  the  falling 
off  of  taxable  imports  and  the  necessary  preparations  for 
defense,  caused  the  Federal  Government  once  more  to  resort 
to  estates  as  a  source  of  revenue.  By  the  revenue  act  ap- 
proved September  8,  1916,  the  present  tax  was  enacted,  and 
was  amended  March  3,  1917,  by  greatly  increasing  the  rates, 
which  run  up  to  15%  on  estates  in  excess  of  five  million.  The 
rates  were  again  increased  by  the  amendments  of  October, 
1917,  and  yet  again  by  the  re-enactment  of  February  24,  1919. 
They  were  not  affected  by  the  revenue  act  of  November  23, 
1921. 

a.  CONSTITUTIONALITY  SUSTAINED. 

In  the  earlier  editions  of  this  work  doubt  was  expressed  as 
to  the  constitutionality  of  the  Federal  estate  tax,  especially 
the  act  of  1916,  but  the  Supreme  Court  of  the  United  States 
has  sustained  it  in  a  recent  decision :  New  York  Trust  Com- 
pany v.  Eisner,  256  U.  S.  345;  65  L.  Ed.  620. 

This  decision  clears  up  many  obscurities  in  the  law  and 
places  the  right  of  the  Government  to  tax  estates  upon  their 
transmission  from  the  testator  beyond  all  question.  It  asserts 
that  consequent  inequalities  among  the  beneficiaries  do  not 
concern  the  Government. 

In  the  last  analysis  the  Federal  estate  tax  was  a  war 
measure  and  has  been  sustained  as  such. 

The  opinion  of  the  court  by  Mr.  Justice  Holmes  is  in  full 
as  follows: 

"This  is  a  suit  brought  by  the  executors  of  one  Purdy  to 
recover  an  estate  tax  levied  under  the  Act  of  Congress  of 
September  8,  1916,  chap.  463,  title  2,  sec.  201,  39  Stat.  at  L. 
756,  777,  Comp.  Stat.  sees.  6336a,  6336y2b,  Fed.  Stat.  Anno. 
Supp.  1918,  p.  305,  and  paid  under  duress  on  December  14, 
1917.  According  to  the  complaint,  Purdy  died  leaving  a  will 
and  codicil  directing  that  all  succession,  inheritance,  and 
transfer  taxes  should  be  paid  out  of  the  residuary  estate, 
which  was  bequeathed  to  the  descendants  of  his  brother.  The 
value  of  the  residuary  estate  was  $427,414.96,  subject  to  some 


PAET  VI  — THE  STATUTES  543 

administration  expenses.  The  executors  had  been  required 
to  pay  and  had  paid  inheritance  and  succession  taxes  to  New 
York  ($32,988.97)  and  other  states  ($4,780.91)  amounting  in 
all  to  $37,769.88.  The  gross  estate  as  denned  in  sec.  202  of 
the  act  of  Congress,  was  $769,799.39;  funeral  expenses  and 
expenses  of  administration,  except  the  above  taxes,  $61,- 
322.08;  leaving  a  net  value  for  the  payment  of  legacies,  ex- 
cept as  reduced  by  the  taxes  of  the  United  States,  of  $670,- 
707.43.  The  plaintiffs  were  compelled  to  pay  $23,910.77  to  the 
United  States,  no  deduction  of  any  part  of  the  above-men- 
tioned $37,769.88  being  allowed.  They  allege  that  the  act  of 
Congress  is  unconstitutional,  and  also  that  it  was  miscon- 
strued in  not  allowing  a  reduction  of  State  inheritance  and 
succession  taxes  as  charges  within  the  meaning  of  sec.  203. 
On  demurrer  the  district  court  dismissed  the  suit. 

*  *  By  sec.  201  of  the  act, '  a  tax  *  *  *  equal  to  the  follow- 
ing percentages  of  the  value  of  the  net  estate,  to  be  deter- 
mined as  provided  in  section  two  hundred  and  three,  is  hereby 
imposed  upon  the  transfer  of  the  net  estate  of  every  decedent 
dying  after  the  passage  of  the  act  *  *  * '  with  percentages 
rising  from  1  per  centum  of  the  amount  of  the  net  estate  not 
in  excess  of  $50,000  to  10  per  centum  of  the  amount  in  excess 
of  $5,000,000.  Section  202  gives  the  mode  of  determining  the 
value  of  the  gross  estate.  Then,  by  section  203,  it  is  enacted : 
'That  for  the  purpose  of  the  tax  the  value  of  the  net  estate 
shall  be  determined:  (a)  In  the  case  of  a  resident,  by  deduct- 
ing from  the  value  of  the  gross  estate  (1)  such  amounts  for 
funeral  expenses,  administration  expenses,  claims  against  the 
estate,  unpaid  mortgages,  losses  incurred  during  the  settle- 
ment of  the  estate  arising  from  fires,  storms,  shipwreck  or 
other  casualty,  and  from  theft,  when  such  losses  are  not  com- 
pensated for  by  any  insurance  or  otherwise,  support  during 
the  settlement  of  the  estate  of  those  dependent  upon  the 
decedent,  and  such  other  charges  against  the  estate  as  are 
allowed  by  the  laws  of  the  jurisdiction,  whether  within  or 
without  the  United  States,  under  which  the  estate  is  being 
administered;  and  (2)  an  exemption  of  $50,000.'  The  tax 
is  to  be  due  in  one  year  after  the  decedent's  death.  Section 


544 


INHERITANCE  TAXATION 


204.  Within  thirty  days  after  qualifying,  the  executor  is  to 
give  written  notice  to  the  collector,  and  later  to  make  return 
of  the  gross  estate,  deductions  allowed,  net  estate  and  the  tax 
payable  thereon.  Section  205.  The  executor  is  to  pay  the 
tax.  Section  207.  The  tax  is  a  lien  for  two  years  on  the 
gross  estate  except  such  part  as  is  paid  out  for  allowed 
charges,  section  209,  and  if  not  paid  within  sixty  days  after 
it  is  due,  is  to  be  collected  by  a  suit  to  subject  the  decedent's 
property  to  be  sold.  Section  208.  In  case  of  collection  from 
some  person  other  than  the  executor,  the  same  section  pro- 
vides for  contribution  from  or  marshaling  of  persons  sub- 
ject to  equal  or  prior  liability.  'It  being  the  purpose  and 
intent  of  this  title  that  so  far  as  is  practicable  and  unless 
otherwise  directed  by  the  will  of  the  decedent  the  tax  shall 
be  paid  out  of  the  estate  before  its  distribution.'  These  pro- 
visions are  assailed  by  the  plaintiffs  in  error  as  unconsti- 
tutional interference  with  the  rights  of  the  States  to  regulate 
descent  and  distribution,  as  unequal,  and  as  a  direct  tax,  not 
apportioned  as  the  Constitution  requires. 

"The  statement  of  the  constitutional  objections  urged  im- 
ports on  its  face  a  distinction  that,  if  correct,  evidently 
hitherto  has  escaped  this  court.  See  United  States  v.  Field, 
Feb.  28,  1921  (—  U.  S.  —  ante,  335,  41  Sup.  Ct.  Kep.  256.) 
It  is  admitted,  as  since  Knowlton  v.  Moore,  178  U.  S.  41,  44 
L.  Ed.  969;  20  Sup.  Ct.  Kep.  747,  it  has  to  be,  that  the  United 
States  has  power  to  tax  legacies,  but  it  is  said  that  the  tax 
is  cast  upon  a  transfer  while  it  is  being  effectuated  by  the 
State  itself,  and  therefore  is  an  intrusion  upon  its  processes ; 
whereas  a  legacy  tax  is  not  imposed  until  the  process  is  com- 
plete. An  analogy  is  sought  in  the  difference  between  the 
attempt  of  a  State  to  tax  commerce  among  the  States  and  its 
right  after  the  goods  become  mingled  with  the  general  stock 
in  the  State.  A  consideration  of  the  parallel  is  enough  to 
direct  the  fallacy.  A  tax  that  was  directed  solely  against 
goods  imported  into  the  State,  and  that  was  determined  by 
the  fact  of  importation,  would  be  no  better  after  the  goods 
were  at  rest  in  the  State  than  before.  It  would  be  as  much 
an  interference  with  commerce  in  one  case  as  in  the  other. 


PART  VI  — THE  STATUTES  545 

/.  M.  Darnell  &  Son  Company  v.  Memphis,  208  U.  S.  113 ;  52 
L.  Ed.  413;  28  Sup.  Ct.  Rep.  247;  Welton  v.  Missouri,  91  U.  S. 
275 ;  23  L.  Ed.  347.  Conversely,  if  a  tax  on  the  property  dis- 
tributed by  the  laws  of  a  State,  determined  by  the  fact  that 
distribution  has  been  accomplished,  is  valid,  a  tax  deter- 
mined by  the  fact  that  distribution  is  about  to  begin  is  no 
greater  interference  and  is  equally  good. 

"Knowlton  v.  Moore,  178  U.  S.  41,  supra,  dealt,  it  is  true, 
with  a  legacy  tax.  But  the  tax  was  met  with  the  same  objec- 
tion; that  it  usurped  or  interfered  with  the  exercise  of  State 
powers,  and  the  answer  to  the  objection  was  based  on  general 
considerations,  and  treated  the  'power  to  transmit  or  the 
transmission  or  receipt  of  property  by  death'  as  all  standing 
on  the  same  footing.  178  U.  S.  57,  59.  After  the  elaborate 
discussion  that  the  subject  received  in  that  case,  we  think  it- 
unnecessary  to  dwell  upon  matters  that  in  principle  were  dis- 
posed of  there.  The  same  may  be  said  of  the  argument  that 
the  tax  is  direct,  and  therefore  is  void  for  want  of  apportion- 
ment. It  is  argued  that  when  the  tax  is  on  the  privilege  of 
receiving,  the  tax  is  indirect  because  it  may  be  avoided; 
whereas  here  the  tax  is  inevitable,  and  therefore  direct.  But 
that  matter  also  is  disposed  of  by  Knowlton  v.  Moore,  not  by 
an  attempt  to  make  some  scientific  distinction,  which  would 
be  at  least  difficult,  but  on  an  interpretation  of  language  by 
its  traditional  use, — on  the  practical  and  historical  ground 
that  this  kind  of  tax  has  always  been  regarded  as  the  an- 
tithesis of  a  direct  tax, — 'has  ever  been  treated  as  a  duty  or 
excise,  because  of  the  particular  occasion  which  gives  rise  to 
its  levy.'  178  U.  S.  81-83.  Upon  this  point  a  page  of  his- 
tory is  worth  a  volume  of  logic. 

"The  inequalities  charged  upon  the  statute,  if  there  is  an 
intestacy,  are  all  inequalities  in  the  amounts  that  beneficiaries 
might  receive  in  case  of  estates  of  different  values,  of  dif- 
ferent proportions  between  real  and  personal  estate,  and  of 
different  numbers  of  recipients;  or,  if  there  is  a  will,  affect 
legatees.  As  to  the  inequalities  in  the  case  of  a  will,  they 
must  be  taken  to  be  contemplated  by  the  testator.  He  knows 
the  law  and  the  consequences  of  the  disposition  that  he  makes. 
35 


546  INHERITANCE  TAXATION 

As  to  intestate  successors,  the  tax  is  not  imposed  upon  them, 
"but  precedes  them;  and  the  fact  that  they  may  receive  less 
or  different  sums  because  of  the  statute  does  not  concern  the 
United  States. 

"There  remains  only  the  construction  of  the  act.  The  argu- 
ment against  its  constitutionality  is  based  upon  a  premise 
that  is  unfavorable  to  the  contention  of  the  plaintiffs  in  error 
upon  this  point.  For  if  the  tax  attaches  to  the  estate  before 
distribution, — if  it  is  a  tax  on  the  right  to  transmit,  or  on  the 
transmission  at  its  beginning, — obviously  it  attaches  to  the 
whole  estate,  except  so  far  as  the  statute  sets  a  limit. 
'Charges  against  the  estate,'  as  pointed  out  by  the  court  be- 
low, are  only  charges  that  affect  the  estate  as  a  whole,  and 
therefore  do  not  include  taxes  on  the  right  of  individual  bene- 
ficiaries. This  reasoning  excludes  not  only  the  New  York 
succession  tax,  but  those  paid  to  other  States,  which  can  stand 
no  better  than  that  paid  in  New  York.  What  amount  New 
York  may  take  as  a  basis  of  taxation,  and  questions  of  priority 
between  the  United  States  and  the  State,  are  not  open  in 
this  case." 

b.  CONSTRUCTION  BY  THE  FEDERAL  COURTS. 
(1)  Deductions  of  State  Taxes. 

That  State  taxes  are  not  a  deduction  in  determining  the 
amount  of  the  net  estate  under  the  Federal  act  is  made  clear 
in  the  case  of  N.  Y.  Trust  Co.  v.  Eisner,  supra.  This  is  on 
the  ground  that  "charges  against  the  estate"  only  include 
charges  against  that  estate  as  a  whole  and  not  payments  by 
individual  beneficiaries. 

But  the  Circuit  Court  of  Appeals  had  held  that  payments 
of  inheritance  taxes  by  individual  New  York  beneficiaries 
were  not  a  deduction  from  their  income  tax  on  the  ground 
that  the  New  York  transfer  tax  was  against  the  estate  and 
not  against  the  beneficiary. 

Prentiss  v.  Eisner,  260  Fed.  589. 

The  United  States  Supreme  Court  refused  a  writ  of  error 
in  this  case ;  but  it  has  decided  the  Trust  Co.  case,  supra,  on  a 


PART  VI  —  THE  STATUTES  547 

theory  incompatible  with  the  reasoning  in  the  Prentiss  case. 
The  United  States  authorities  have  therefore  decided  to 
ignore  the  Prentiss  case,  on  the  theory  that  it  has  been  over- 
ruled and  payments  of  State  inheritance  taxes  by  individual 
beneficiaries  are  now  allowed  as  a  deduction. 

(2)  Power  of  Appointment. 

A  general  power  of  appointment  by  will  does  not  vest  any 
estate  in  the  donee  of  the  power,  even  though  there  are  rights 
of  creditors  which  might  be  enforced  in  equity.  The  prop- 
erty is  not  subject  to  distribution  as  a  part  of  the  estate  and 
is  not  subject  to  the  Federal  tax  under  the  act  of  1916.  The 
fact  that  the  act  of  1919  expressly  included  property  so  pass- 
ing indicates  a  legislative  doubt  whether  it  was  taxed  by  the 
act  of  1916. 

U.  S.  v.  Field,  255  U.  S.  257;  41  S.  Ct.  Eep.  256. 

(3)  Gifts  in  Contemplation  of  Death. 

That  the  act  of  1916  is  not  retroactive  as  to  such  gifts  is 
the  decision  of  the  United  States  Supreme  Court  and  such 
gifts  are  therefore  not  taxable  when  made  by  decedents  dying 
prior  to  February  24,  1919.  Whether  the  act  of  the  latter 
date  is  constitutional  in  taxing  such  gifts  retroactively  is 
still  to  be  determined. 

Schwab  v.  Doyle,  66  Law  Ed.  461,  —  U.  S.  — . 

(4)  Transfers  Taking  Effect  at  Death. 

The  act  of  1916  is  not  retroactive  as  to  such  gifts  and  they 
are  not  taxable  under  that  statute.  Whether  they  are  con- 
stitutionally taxable  under  the  act  of  February  24,  1919, 
remains  to  be  determined. 

Trust  Co.  v.  Wardell,  66  Law  Ed.  464,  —  U.  S.  — . 

(5)  Joint  Tenants  and  Entireties. 

Where  created  prior  to  the  act  of  1916  are  not  taxable 
under  that  statute.  They  are  specifically  taxed  under  the 
act  of  1919,  and  the  question  remains  whether  the  United 
States  Supreme  Court  will  apply  the  doctrine  of  Matter  of 


548  INHERITANCE  TAXATION 

Lyon,  233  N.  Y.  208,  holding  entireties  to  be  vested  and  not 
taxable  retroactively. 

Knox  v.  McElligott,  66  Law  Ed.  468,  —  U.  S.  — . 

(6)  Exempt  Bonds  Taxable. 

Municipal  bonds  and  other  exempt  securities  are  to  be 
included  as  part  of  the  estate  taxable  under  the  Federal  act. 

Greiner  v.  Lewellyn,  66  Law  Ed.  381,  —  U.  S.  — . 

c.  CONSTRUCTION  BY  THE  STATE  COURTS. 

Numerous  cases  on  the  construction  of  the  Federal  act  have 
arisen  in  the  State  courts.  In  Matter  of  Bierstadt,  178  App. 
Div.  836;  166  Supp.  168,  the  question  at  issue  was  whether 
the  Federal  tax  was  to  be  deducted  from  the  value  of  the 
estate  subject  to  the  tax  levied  by  the  State  of  New  York. 
The  attorney  for  the  executor  appellant  urged  that  the  Fed- 
eral tax  was  not  on  the  succession  but  was  plainly  a  tax  on 
property,  and  therefore  was  a  deduction.  The  court  said  in 
discussing  the  nature  of  the  Federal  tax: 

"Mary  S.  Bierstadt,  deceased,  left  a  will  by  which  she 
disposed  of  an  estate  valued  at  upwards  of  two  million  dol- 
lars. Of  this  estate  she  disposed  of  upwards  of  one  million, 
two  hundred  thousand  dollars  by  legacies  of  specific  sums, 
and  gave  the  residue  to  certain  named  relatives.  No  com- 
plaint is  made  of  the  assessment  of  the  property  thus  devised 
so  far  as  concerns  the  taxability  of  the  several  transfers  under 
the  State  Transfer  Tax  Law,  except  that  the  executors-appel- 
lants claim  that  the  tax  to  be  paid  under  the  Federal  Eevenue 
Act  of  1916,  estimated  to  amount  to  $57,309.58,  should  be 
deducted  from  the  gross  estate  left  by  the  testatrix,  before  the 
tax  due  under  the  laws  of  the  State  of  New  York  is  cal- 
culated. This  claim  is  based  upon  the  proposition  that  the 
tax  provided  for  in  the  Federal  Eevenue  Act  is  a  tax  upon 
the  estate,  as  such,  and  not  upon  the  transfer  of  the  prop- 
erty under  the  will  and  the  laws  of  this  State,  of  which  the 
deceased  was  a  resident. 

"A  similar  claim  for  the  deduction  of  the  succession  tax 
levied  under  the  Federal  War  Revenue  Act  of  1898  was 


PAET  VI  — THE  STATUTES  549 

decided  adversely  to  the  claimant  in  Matter  of  Gihon,  169 
N.  Y.  443,  wherein  it  was  held  that  the  Federal  tax  was  not 
a  tax  upon  the  property  transferred,  but  one  upon  the  trans- 
fer itself,  the  amount  of  the  tax  being  measured  by  the  value 
of  the  property  affected  by  the  transfers.  If,  therefore,  the 
tax  imposed  by  the  act  of  1916  is,  like  that  imposed  by  the 
act  of  1898,  a  tax  upon  the  transfer  and  not  upon  the  prop- 
erty transferred,  the  claim  of  the  executors  was  rightly  denied. 
It  is  argued,  however,  that  the  Federal  Eevenue  Act  of  1916 
differs  radically  from  the  War  Revenue  Act  of  1898,  in  that 
under  the  act  of  1916  the  tax  is  imposed  distinctly  and  un- 
equivocally upon  the  property  transferred,  and  that  by  no 
construction  can  it  be  held  to  be  merely  a  tax  upon  the  trans- 
fer of  the  property.  Without  expressing  an  opinion  upon 
this  construction  of  the  act,  it  will  suffice  to  say  that  if  it 
must  be  construed  as  the  executors  claim  that  it  must  be,  it 
would  be  invalid  on  constitutional  grounds  and  no  tax  could 
lawfully  be  collected  under  it.  (Knowlton  v.  Moore,  178 
N.  Y.  41;  Matter  of  Gihon,  supra.}  If  so,  it  would  be  clearly 
improper  to  deduct  it  from  the  gross  estate  before  estimating 
the  amount  of  the  tax  to  be  paid  under  the  State  law. 

"So,  in  either  aspect  of  the  law,  whether  it  merely  pro- 
vided for  a  tax  upon  the  transfer  of  the  property,  or  pro- 
vides for  a  tax  upon  the  property  itself  which  is  transferred, 
the  order  appealed  from  is  right.  It  is  quite  apparent  that 
the  executors  will  be  confronted  with  serious  questions  which 
must  be  decided  before  they  can  safely  proceed  to  finally 
distribute  the  estate.  With  those  questions,  however,  we  are 
not  now  concerned.  All  we  are  called  upon  to  decide  is  that 
the  executors  are  not  entitled  to  deduct  from  the  gross  estate, 
as  an  expense  of  administration,  the  estimated  tax  provided 
for  in  the  Federal  Revenue  Act  of  1916,  before  the  amount 
of  the  tax  under  the  State  law  is  fixed. 

"The  order  appealed  from  is  affirmed  with  $10  costs  and 
disbursements. 

"All  concur. " 

Coincident  with  the  decision  in  the  Bierstadt  case,  Matter 
of  Sherman  was  decided  by  the  Third  Department  (179  App. 


550  INHERITANCE  TAXATION 

Div.  497)  and  was  affirmed  by  the  Court  of  Appeals  without 
opinion  (222  N.  Y.  540).  In  this  case  the  court  reasoned 
thus:  "The  conditions  of  transfer  have  been  embodied  in 
the  statute  by  the  Transfer  Tax  Law.  If  the  Federal  Govern- 
ment may  impose  an  inheritance  tax  which  is  entitled  to  be 
deducted  from  the  estate  prior  to  the  assessment  of  the  State 
transfer  tax,  it  has  interfered  with  such  conditions  and  has 
diminished  the  amount  which  the  State  has  appropriated  as 
a  condition  of  the  transfer  by  the  percentage  upon  the  sum 
appropriated  by  the  Federal  Government.  The  State  trans- 
fer tax  will  thus  have  become  one,  not  upon  the  whole  estate 
transmitted,  but  one  upon  the  whole  estate,  less  the  amount 
of  the  Federal  tax.  This  lessening  of  the  transfer  tax,  while 
not  large  in  the  estate  at  bar,  would  aggregate  a  very  con- 
siderable sum  when  applied  to  all  the  estates  subject  to  tax 
within  the  State.  The  constitutionality  of  a  Federal  act 
entitled  to  such  construction  and  effect  might  well  be 
doubted. ' ' 

The  courts  of  other  States  have  not  been  inclined  to  follow 
the  position  of  the  New  York  courts  on  this  question.  In 
New  Jersey  the  question  arose  in  Re  Roebling's  Estate,  89 
N.  J.  Eq.  163;  104  Atl.  295,  where  the  court  said: 

"The  highest  courts  in  two  of  the  States  have  recently  de- 
cided the  question,  reaching  opposite  conclusions.  The  Min- 
nesota Supreme  Court  held  that  the  Federal  tax  should  be 
deducted.  (State  v.  Probate  Court  of  Hennepin  County 
[Minn.],  166  N.  W.  125.)  The  Court  of  Appeals  of  New  York 
held  to  the  contrary  view.  (In  re  Sherman  Estate,  supra.} 
The  New  York  Supreme  Court  allows  that  its  transfer  tax  is 
based  upon  the  amounts  passing  to  the  respective  trans- 
ferees, but  holds  to  the  view  that  the  conditions  of  transfer, 
as  embodied  in  its  Transfer  Tax  Act,  comprehend  the  clear 
market  value  of  the  property  at  the  time  of  the  transfer, 
exclusive  of  Federal  tax,  and  expressed  the  opinion  that  if 
the  Federal  Government  may  impose  an  inheritance  tax 
which  is  entitled  to  be  deducted  from  the  estate  prior  to  the 
assessment  of  the  estate  transfer  tax,  it  has  interfered  with 
such  conditions,  and  that  the  constitutionality  of  a  Federal 


PAET  VI  —  THE  STATUTES  551 

act  entitled  to  such  a  construction  and  effect  might  well  be 
doubted.  If  the  court  had  acknowledged  the  Federal  tax  as 
levied  upon  the  estate  transferred,  doubtless  a  different 
result  would  have  been  reached. 

"In  the  earlier  case,  Matter  of  Gihon,  supra,  the  Court  of 
Appeals  had  before  it  the  question  whether  the  Federal  legacy 
tax  of  1898  was  a  deduction.  It  said: 

"  '  Neither  the  amount  of  the  State  tax,  nor  the  amount  of 
the  Federal  inheritance  tax  imposed  under  the  War  Revenue 
Act  of  1898,  was  deductible,  because  each  was  a  tax,  not  upon 
property,  but  upon  succession — that  is,  a  tax  on  a  legatee  for 
the  privilege  of  succeeding  to  the  property — and  was  payable 
out  of  his  legacy,  not  out  of  the  estate' — a  tacit  evincement 
that  if  the  Federal  tax  had  been  upon  the  estate,  and  not  upon 
the  legacies,  it  would  have  been  deductible  from  the  assets  of 
the  estate  before  computing  the  State  transfer  tax.  Previous 
to  the  decision  in  the  Gihon  case,  the  Supreme  Court  of  Massa- 
chusetts, in  Hooper  v.  Shaw,  176  Mass.  190;  57  N.  E.  361, 
decided  that  the  legacy  tax  of  the  War  Eevenue  Act  of  June 
13,  1898  (ch.  448,  30  Stat.  448),  should  be  deducted  in  ascer- 
taining the  State's  succession  tax.  In  view  of  the  fact  that 
both  Federal  and  State  taxes  were  imposed  upon  the  same 
successions,  and  were  payable  by  the  beneficiaries,  it  is  diffi- 
cult to  reconcile  the  deliverance  in  that  case  to  the  principles 
of  the  Gihon  case.  The  appraisement  upon  which  the  tax 
was  assessed  will  be  reduced  by  the  sum  of  the  Federal  tax." 

The  Minnesota  case  referred  to  by  the  New  Jersey  court 
takes  the  position  that  the  Federal  act  is  constitutional.  The 
court  says:  "We  think  the  claim  that  the  Federal  act  im- 
poses a  tax  upon  the  estate  and  not  upon  the  transfer  to 
beneficiaries,  and  for  that  reason  is  inhibited  by  the  Federal 
constitution,  is  not  well  founded.  True,  the  Federal  act 
differs  radically  from  the  Minnesota  act  and  imposes  the  tax 
upon  the  'transfer  of  the  net  estate,'  but  the  net  estate,  as 
defined  by  the  act,  is  the  net  value  of  the  property  left  for 
distribution  to  the  beneficiaries  after  all  proper  charges,  in- 
cluding all  charges  imposed  by  the  laws  of  the  jurisdiction, 
have  been  paid  and  deducted." 

State  v.  Probate  Court,  Hennepin  County,  166  N.  W.  125. 


552  INHERITANCE  TAXATION 

The  courts  of  Pennsylvania  have  also  considered  the  Bier- 
stadt  case  and  refused  to  follow  it.  In  Knight's  Estate,  261 
Pa.  537;  104  Atl.  765,  the  court  said:  "The  tax  which  the 
Commonwealth  exacts  is  5%  of  the  clear  value  of  all  estate 
passing  from  the  person  dying  possessed  thereof  to  any  per- 
son other  than  those  specifically  exempted,  and  every  legal 
charge  against  the  estate  must  therefore  be  deducted  before 
the  clear  value  can  be  ascertained.  Obviously  the  clear  value 
taxable  under  the  law  of  this  State  can  only  thus  be  ascer- 
tained after  the  payment  of  the  tax  due  the  United  States. 
Otherwise  a  legatee,  heir  or  next  of  kin  is  paying  the  Com- 
monwealth a  tax  upon  something  that  never  passed  to  him. 
Such  a  result  would  be  unjust  and  highly  inequitable  and 
shocking  to  one's  sense  of  reason  and  justice.  Indeed,  a  case 
might  readily  be  imagined  where  concurrent  taxation  at  a 
high  rate  might  absorb  the  entire  estate,  which  would  then 
become  almost  like  the  hereditas  damnosa  of  the  early  Eoman 
law." 

But  the  Pennsylvania  statute  of  1919  declares  the  Federal 
tax  not  a  deduction. 

The  courts  of  Connecticut  also  allow  the  Federal  tax  as  a 
deduction  and  reason  thus  as  to  its  nature  and  effect : 

"The  Federal  act  of  1916  imposes  a  tax  payable  out  of  the 
estate  before  distribution,  thus  differing  from  the  Federal 
inheritance  tax  of  1908,  payable  by  the  individual  beneficiaries. 
It  is  not  a  tax  upon  specific  legacies  nor  upon  residuary 
legatees.  It  is  taken  from  the  net  estate  before  the  distribu- 
tive shares  are  determined,  rather  than  off  the  distributive 
shares.  Its  payment  diminishes  pro  tanto  the  share  of  each 
beneficiary.  The  executor  or  administrator  must  pay  the  tax 
out  of  the  estate  before  the  shares  of  the  legatees  are  ascer- 
tained. It  is  an  obligation  of  the  estate  and  payable  like  any 
expense  which  falls  under  the  head  of  administration  expenses. 
The  tax  paid  is  no  part  of  the  estate  at  the  time  of  distribu- 
tion ;  it  has  passed  from  the  estate  and  the  share  of  the  bene- 
ficiary is  diminished  by  just  so  much." 

Corbin  v.  Townshend,  92  Conn.  501;  101  A.  834. 


PAET  VI  — THE  STATUTES  553 

The  question  has  subsequently  arisen  in  New  York  and 
Massachusetts  in  a  different  form.  The  will  may  direct  that 
the  tax  be  charged  upon  legacies  or  paid  out  of  the  residuary 
estate.  In  the  absence  of  such  direction  is  the  tax  to  be  appor- 
tioned among  all  the  beneficiaries  or  paid  out  of  the  residuary 
estate  I  The  court  holds  that  the  latter  is  the  alternative,  and 
thus  reasons: 

"While  the  act  provides  for  a  just  and  equitable  contribu- 
tion it  does  not  undertake  to  lay  down  any  specific  rule  by 
which  such  a  determination  is  to  be  made.  Indeed,  the  act 
recognizes  the  right  of  the  transferor  to  apportion  the  tax 
among  the  beneficiaries  and  to  charge  their  respective  shares 
as  he  may  see  fit  to  do.  Here  the  will  gives  no  specific  direc- 
tions respecting  the  apportionment  of  taxes  or  other  claims. 
It  makes  certain  specific  bequests  and  legacies,  closing  with 
a  residuary  clause,  disposing  of  the  residuary  estate.  The 
residue  of  the  estate  means  what  is  left  after  the  payment  of 
debts'  and  other  charges  against  the  estate  and  the  specific 
bequests  and  legacies.  There  is  nothing  in  the  will  to  indi- 
cate that  such  a  tax  as  this  should  be  apportioned  so  as  to 
include  the  specific  legatees. " 

Matter  of  Hamlin,  185  App.  Div.  183 ;  aff.  226  N.  Y.  407. 

Where  the  will  makes  no  other  provision  for  its  payment 
the  Federal  tax  must  be  paid  out  of  the  residuary  estate. 
' '  The  benefaction  conferred  by  the  residuary  clause  of  a  will 
is  only  of  that  which  remains  after  all  paramount  claims  upon 
the  estate  of  the  testator  are  satisfied." 

Plunkett  v.  Old  Colony  Trust  Co.,  233  Mass.  471 ;  124  N.  E.  265. 

Surrogate  Fowler  of  New  York  county  arrived  at  a  different 
result  and  held  that  the  tax  should  be  assessed  proportionately 
against  the  specific  legatees.  This  was  his  reasoning : 

"The  question  is,  From  what  fund  or  funds  is  this  tax  to 
be  paid,  and,  if  it  is  to  be  taken  from  different  funds,  in  what 
proportion  is  the  deduction  "from  the  respective  funds  to  be 
made?  WTiile  the  act  provides  that  the  tax  is  imposed  upon 
the  transfer  of  the  estate,  and  not  upon  the  transfer  of  the 
interests  of  the  respective  legatees,  it  would  be  obviously  un- 
just to  the  residuary  legatees  to  deduct  the  tax  in  toto  from 


554  INHERITANCE  TAXATION 

the  estate  in  the  same  manner  as  administration  expenses  are 
deducted.  The  will  of  testator  was  executed  before  the  pas- 
sage of  the  revenue  act,  and  there  would  therefore  be  no 
justification  for  assuming  that  he  contemplated  the  enact- 
ment of  such  a  law  and  the  payment  of  the  tax  exclusively 
out  of  the  shares  of  the  residuary  legatees. 

"The  will  being  silent  upon  the  question,  it  should  be 
decided  by  the  court  upon  principles  of  equity  and  "justice,  and 
it  would  be  inequitable  to  charge  the  children  of  the  testator, 
wTho  are  residuary  legatees,  with  the  payment  of  this  tax  while 
exempting  from  such  payment  collateral  relatives  who  are 
the  recipients  of  substantial  testamentary  gifts  from  the  testa- 
tor. It  seems,  therefore,  that  the  tax  should  be  deducted  pro- 
portionately from  each  legacy,  and  that  the  amount  to  be 
deducted  is  that  proportion  of  the  entire  tax  assessed  against 
the  estate  which  the  individual  legacy  bears  to  the  entire  net 
estate.  By  way  of  illustration,  if  the  entire  net  estate  were 
$100,000  there  would  be  an  exemption  of  $50,000,  the  tax 
under  the  act  of  1916  would  be  $500,  and  the  proportion  of 
such  tax  which  should  be  deducted  by  the  executor  from  a 
legacy  of  $10,000  would  be  obtained  by  multiplying  500  by 
10,000  and  dividing  the  result  by  100,000. 

"The  'net'  estate  to  be  used  in  computing  the  proportion  of 
the  tax  to  be  paid  by  a  legatee  is  not  the  net  estate  as  defined 
in  the  revenue  act,  but  the  net  estate  as  ascertained  under  the 
law^s  of  this  State  by  deducting  funeral  expenses,  administra- 
tion expenses,  and  debts  from  the  gross  value  of  the  estate. 

"As  the  tax  is  imposed  upon  the  estate,  and  not  upon  the 
interest  of  the  individual  legatee,  the  executors  should  adopt 
the  same  rule  in  ascertaining  the  amount  of  tax  to  be  deducted 
from  the  corpus  of  the  trust  fund  directed  to  be  held  for  the 
life  beneficiaries. 

Matter  of  Douglass,  171  Supp.  950. 

The  opinion  of  Judge  Fowler  is  here  given  because  the 
conclusion  he  reached  has  appealed  to  the  courts  of  other 
States.  As  far  as  New  York  and  Massachusetts  are  concerned, 
however,  the  law  is  settled  the  other  way. 

Matter  of  Hamlin,  226  N.  Y.  407. 


PART  VI  —  THE  STATUTES  555 

Mr.  Justice  Hogan,  writing  for  the  court,  in  the  Hamlin 
case,  refers  to  the  discussion  in  the  Ways  and  Means  Com- 
mittee of  the  House  and  quotes  from  the  statement  of  Chair- 
man Kitchin  that  the  Federal  tax  is  not  an  inheritance  tax 
but  an  estate  tax  that  does  not  concern  itself  with  the  distribu- 
tion among  beneficiaries  (p.  415).  Discussing  the  1919  amend- 
ments, he  says,  at  page  419:  "  Counsel  for  the  appellants 
also  calls  attention  to  the  amendments  made  to  the  law  of 
1916  by  the  act  of  Congress  of  February,  1919,  which  in  effect 
provides  that  the  value  of  the  gross  estate  of  the  decedent 
shall  include  'to  the  extent  of  the  amount  receivable  by  the 
executor  as  insurance  under  policies  taken  out  by  the  decedent 
upon  his  own  life;  and  to  the  extent  of  the  excess  of  $40,000 
of  the  amount  receivable  by  all  other  beneficiaries  as  insur- 
ance under  policies  taken  out  by  the  decedent  upon  his  own 
life  (§  6336y2c,  new  §  402);'  also  amendment  to  §  6336y2j, 
new  §  408,  which  provides:  'If  any  part  of  the  gross  estate 
consists  of  proceeds  of  policies  of  insurance  upon  the  life  of 
the  decedent  receivable  by  a  beneficiary  other  than  the  execu- 
tor, the  executor  shall  be  entitled  to  recover  from  such  bene- 
ficiary such  portion  of  the  total  tax  paid  as  the  proceeds  in 
excess  of  $40,000  of  such  policies  bears  to  the  net  estate.  If 
there  is  more  than  one  such  beneficiary  the  executor  shall  be 
entitled  to  recover  from  such  beneficiaries  at  the  same  ratio, ' 
and  submits  that  the  Congress  required  the  beneficiaries  Of 
insurance  policies  and  of  transfers  made  in  contemplation  of 
death  to  pay  a  tax  on  their  respective  interests  computed  on 
the  basis  of  the  whole  net  estate,  while  under  the  decision  of 
the  Appellate  Division  in  the  case  at  bar  all  general  legatees 
would  receive  their  legacies  in  full.  Counsel  in  his  brief  ex- 
pressed a  doubt  as  to  the  constitutionality  of  such  amend- 
ment; but  such  question  is  not  before  us,  and  reference  is 
made  to  the  same  only  as  bearing  on  the  intention  of  the  act 
of  1916.  Viewed  from  that  standpoint,  the  conclusions 
already  expressed  as  to  the  act  of  1916  remain  unchanged. 
I  have  deemed  it  unnecessary  to  refer  to  the  power  of  Con- 
gress to  enact  the  law  under  consideration.  To  one  interested 
in  such  question  the  careful  and  exhaustive  opinion  of  Mr. 


556  INHERITANCE  TAXATION 

Justice  White  in  the  Knowlton  case,  178  U.  S.  41,  will  be  of 
interest." 

For  other  recent  cases  on  this  question,  see  ante,  p.  375. 

d.  ULTIMATE  EEPEAL  PROBABLE. 

While  the  Federal  tax  is  a  war  measure  and  must  continue  to 
be  levied  during  the  period  of  readjustment  it  takes  from  the 
States  a  source  of  revenue  peculiarly  their  own.  As  was 
pointed  out  many  years  ago  the  right  to  transmit  a  man's 
property  at  death  is  not  a  privilege  bestowed  by  the  Federal 
government.  That  was  not  one  of  the  powers  delegated  to 
Congress  by  the  Constitution. 

Matter  of  Becker,  26  Misc.  633;  57  Supp.  940. 

This  source  of  revenue  justly  belongs  to  the  State  govern- 
ment by  whose  laws  the  devolution  of  estates  is  regulated. 
The  Federal  tax  is  unduly  burdensome  in  proportion  to  the 
revenue  received  and  history  will  undoubtedly  repeat  itself  in 
its  ultimate  repeal. 

At  the  annual  conference  of  the  National  Tax  Association 
in  the  fall  of  1921  the  following  resolutions  were  adopted : 

''Whereas  at  the  first  conference  of  the  National  Tax  Asso- 
ciation, held  in  1907,  it  was  resolved  that  it  was  the  sense  of 
that  conference  that  inheritance  taxes  should  be  reserved 
wholly  for  the  use  of  the  several  States,  which  resolution  has 
been  reaffirmed  at  subsequent  conferences ;  and 

"Whereas  inheritance  taxes  have  not  heretofore  been  im- 
posed by  the  Federal  government  except  as  emergency  meas- 
ures in  time  of  war ;  and 

"Whereas  the  Federal  estate  tax  now  in  force  imposes  an 
unduly  heavy  burden  of  expense  upon  the  estates  of  deceased 
persons,  in  addition  to  the  tax  itself,  out  of  proportion  to  the 
revenue  received  by  the  government,  seriously  interferes  with 
the  administration  of  such  estates,  and  delays  final  settlement : 

"Beit  resolved,  That  the  estate  tax  should  be  recognized  by 
Congress  as  a  war  measure  only  and  should  be  repealed  at  the 
earliest  possible  moment. 

"Resolved,  That  the  secretary  of  the  National  Tax  Associa- 


PART  VI  — THE  STATUTES  557 

tion  be  requested  to  take  appropriate  action  to  bring  to  the 
attention  of  Congress  the  resolution  passed  by  this  confer- 
ence. ' ' 

An  attempt  was  made  in  the  U.  S.  Senate  to  increase  the 
Federal  rates  on  large  estates  to  a  point  as  high  as  50%. 
The  above  resolution  was  called  to  the  attention  of  the  Senate 
by  Senator  Wadsworth  of  New  York  and  the  proposition  to 
increase  the  rates  was  finally  abandoned.  In  the  course  of  the 
debate  Senator  Wadsworth  said : 

"Mr.  President,  on  a  former  occasion — I  will  confess  that 
it  was  some  years  ago — I  addressed  the  Senate  on  the  ques- 
tion of  the  imposition  by  the  Federal  government  of  inherit- 
ance taxes.  As  I  recollect,  inheritance  taxes  were  resorted 
to  by  the  Federal  government  for  war  purposes,  and  as  such 
I  think  they  are  not  objectionable ;  and  certainly  it  can  be  said 
that  they  produce  revenue  to  the  governments  imposing  them, 
whether  they  be  State  or  National  governments,  in  a  manner 
that  may  be  termed  easy  for  the  collecting  agency.  Now, 
however,  we  have  emerged  from  the  war  period,  and  whereas 
the  effects  of  the  war  are  still  upon  us  in  a  financial  sense,  I 
think  it  is  proper  for  us  to  give  some  consideration  at  this 
moment  as  to  what  functions  the  Federal  government  shall 
perform  in  the  matter  of  imposing  taxes,  especially  when  they 
come  into  direct  competition  with  taxes  which  for  many,  many 
years  have  been  imposed  by  the  State  governments. 

"Perhaps  I  should  not  take  the  time  of  the  Senate  were  this 
last  amendment  not  offered.  Were  the  Finance  Committee 
satisfied  to  permit  the  highest  tax  upon  inheritances  to  remain 
at  25  per  cent  in  the  highest  bracket,  I  think  the  question  would 
not  be  acute;  but  now  the  proposal  is  to  raise  the  highest 
bracket  to  50  per  cent,  and  in  my  humble  judgment  that  does 
make  this  question  exceedingly  acute. 

"I  know  that  it  has  been  our  fashion  to  sit  here  in  Washing- 
ton as  parts  of  the  machinery  of  the  Federal  government  and 
to  lay  taxes  in  our  revenue  bills  without  paying  much  atten- 
tion to  what  the  States  are  doing,  and  forgetting,  I  fear,  a 
goodly  portion  of  the  time  that  the  several  States  of  this 
Union  have  exceedingly  heavy  burdens  to  carry,  that  their 
governments  are  sovereign  in  their  nature,  that  the  obliga- 


558  INHERITANCE  TAXATION 

tions  which  they  have  to  perform  cannot  be  performed  by  the 
Federal  government,  and  for  one  I  hope  they  never  will  be 
attempted.  So,  starting  many  years  ago,  the  State  govern- 
ments commenced  to  develop  the  field  of  inheritance  taxes  in 
order  to  build  up  their  revenue  and  meet  their  obligations. ' ' 

In  the  course  of  the  debate  Senator  King  off ered  the  follow- 
ing amendment,  which,  though  not  adopted  would  seem  to 
afford  a  possible  solution  of  the  whole  problem : 

"That  the  President  is  authorized  and  requested  to  invite 
the  governments  of  the  several  States  of  the  Union  to  appoint 
representatives  to  confer  with  representatives  to  be  appointed 
by  the  President,  to  consider  the  general  question  of  the  rela- 
tion between  Federal  and  State  taxation,  cooperation  in  the 
laying  and  levying  of  taxes,  and  particularly  the  matter  of  the 
conflicting  Federal  and  State  taxes  upon  the  estates  of 
deceased  persons,  and  means  for  the  accommodation  of  such 
conflicts,  and  for  the  allocation  or  distribution  of  the  revenues 
derived  from  inheritance  taxes  as  between  the  Federal  gov- 
ernment and  the  several  States." 

In  spite  of  the  burdensome  and  excessive  rates  imposed  by 
the  Federal  Estate  tax  the  revenues  resulting  are  not  propor- 
tionate to  the  undue  taxation  of  business  interests.  As  one 
Senator  expressed  it,  the  method  is  that  of  "killing  the  goose 
that  lays  the  golden  egg. ' ' 

3.  Rates  of  Tax. 

a.  UNDER  ACT  OF  SEPT.  8, 1916. 

The  rates  imposed  by  the  act  of  1916  upon  net  estates  of 
those  dying  after  September  8  of  that  year  and  prior  to 
March  3,  1917,  are  as  follows : 

Up  to  $50,000  —  1  per  cent $500 

On  the  next     $100,000  —  2  per  cent 2,000 

On  the  next     $100,000  —  3  per  cent 3,000 

On  the  next      $200,000  —  4  per  cent 8.000 

On  the  next      $550,000  —  5  per  cent 27,500 

On  the  next  $1,000,000  —  6  per  cent 60,000 

On  the  next  $1,000,000  —  7  per  cent 70,000 

On  the  next  $1,000,000  —  8  per  cent 80,000 

On  the  next  $1,000,000  —  9  per  cent 90,000 

On  all  amounts  in  excess  of  $5,000,000  ten  per  cent. 


PART  VI  — THE  STATUTES  559 

b.  UNDER  AMENDMENT  or  MARCH  3,  1917. 

The  rates  established  by  the  amendment  of  March  3,  1917, 
on  net  estates  of  those  dying  after  that  date  are  as  follows : 

Up  to  $50,000  —  1%  per  cent $750 

On  the  next     $100,000  —   3       per  cent 3,000 

On  the  next      $100,000  —   4%  per  cent 4,500 

On  the  next      $200,000  —   6      per  cent 12,000 

On  the  next     $550,000  —   7%  per  cent 41,250 

On  the  next  $1,000,000  —   9       per  cent 90,000 

On  the  next  $1,000,000  — 10%  per  cent 105,000 

On  the  next  $1,000,000  —  12       per  cent 120,000 

On  the  next  $1,000,000  —  13%  per  cent 135,000 

On  all  amounts  in  excess  of  $5,000,000  fifteen  per  cent. 

c.  ADDITIONAL  WAR  TAX  AFTER  OCT.  3,  1917. 

Title  IX  of  the  War  Kevenue  Act  of  October  3,  1917,  im- 
poses the  following  in  addition  to  those  above : 

Upon  the  transfer  of  each  net  estate  of  any  decedent  dying  after  the  passage 
of  this  Act:  a  tax  equal  to  the  following  percentages  of  its  value: 

Per  cent 

Net  Estate  not  excess  of  $50,000 % 

Exceeds        $50,000  not  over      $150,000 1 

150,000    "       "         250,000 1% 

250,000    "       "         450,000 2 

450,000    "       "      1,000,000 2% 

1,000,000    "       "      2,000,000 3 

2,000,000    "       "      3,000,000 3% 

3,000,000    "       "      4,000,000 4 

4,000,000    "       "      5,000,000 4% 

5,000,000    "       "      8,000,000 5 

8,000,000    "       "    10,000,000 7 

10,000,000 10 

No  tax  shall  be  paid  on  the  transfer  of  the  net  estate  of  any  decedent  dying 
while  serving  in  the  military  or  naval  forces  of  the  United  States,  during  the 
continuance  of  the  present  war,  or  if  death  results  from  injuries  received  or 
disease  contracted  in  such  service  within  one  year  after  the  termination  of  such 
war.  . 


d.  TABULATION  OF  RATES. 

Following  is  a  tabulation  of  all  rates  under  the  Federal  act 
and  its  successive  amendments,  including  the  rates  in  force 
February  24,  1919,  which  were  not  changed  by  the  new  act  of 
November  23,  1921 : 


560 


INHERITANCE  TAXATION 


Blocks 

Act  of 

Amended 

Amended 

Revenue 

Sept.  fc, 

March  3, 

Oct.  3, 

Act  of 

1916 

1917 

1917 

1919 

Net  estate 

not    exceeding    $50,000 

1% 

1%% 

2% 

1% 

Net  estate 

$50,000—     $150,000 

2% 

3    % 

4% 

2% 

Net  estate 

$150,000—     $250,000 

3% 

4Mi% 

6% 

3% 

Net  estate 

$250,000—     $450,000 

4% 

6    % 

8% 

4% 

Net  estate 

$450,000—     $750,000 

5% 

7%% 

10% 

6% 

Net  estate 

$750,000—  $1,000,000 

5% 

7%% 

10% 

8% 

Net  estate 

$1,000,000—  $1,500,000 

6% 

9    % 

12% 

10% 

Net  estate 

$1,500,000—  $2,000,000 

6% 

9    % 

12% 

12% 

Net  estate 

$2,000,000—  $3,000,000 

7% 

10fc« 

14% 

14% 

Net  estate 

$3,000,000—  $4,000,000 

8% 

12    % 

16% 

16% 

Net  estate 

$4,000,000—  $5,000,000 

9% 

13%% 

18% 

18% 

Net  estate 

$5,000,000—  $8,000,000 

10% 

15    % 

20% 

20% 

Net  estate 

$8,000,000—  $10,000,000 

10% 

15    % 

22% 

22% 

Net  estate 

exceeding  $10,000,000 

10% 

15    % 

25% 

25% 

I. 

THE  STATUTES. 
4.  The  Act  of  1916. 

The  Federal  estate  tax,  in  effect  September  8,  1916,  is  as 
follows : 

SEC.  200.  That  When  used  in  this  title— 

The  term  "person"  includes  partnerships,  corporations, 
and  associations ; 

The  term  "United  States"  means  only  the  States,  the  Terri- 
tories of  Alaska  and  Hawaii,  and  the  District  of  Columbia ; 

The  term  "executor"  means  the  executor  or  administrator 
of  the  decedent,  or,  if  there  is  no  executor  or  administrator, 
any  person  who  takes  possession  of  any  property  of  the  dece- 
dent ;  and 

The  term  "collector"  means  the  collector  of  internal 
revenue  of  the  district  in  which  was  the  domicile  of  the  dece- 
dent at  the  time  of  his  death,  or,  if  there  was  no  such  domicile 
in  the  United  States,  then  the  collector  of  the  district  in  which 
is  situated  the  part  of  the  gross  estate  of  the  decedent  in  the 
United  States,  or,  if  such  part  of  the  gross  estate  is  situated 
in  more  than  one  district,  then  the  collector  of  internal  revenue 
at  Baltimore,  Maryland. 

SEC.  201.  That  a  tax  (hereinafter  in  this  title  referred  to 
as  the  tax),  equal  to  the  following  percentages  of  the  value 
of  the  net  estate,  to  be  determined  as  provided  in  section  two 


PART  VI  —  THE  STATUTES  561 

hundred  and  three,  is  hereby  imposed  upon  the  transfer  of 
the  net  estate  of  every  decedent  dying  after  the  passage  of 
this  Act,  whether  a  resident  or  nonresident  of  the  United 
States : 

One  per  centum  of  the  amount  of  such  net  estate  not  in 
excess  of  $50,000; 

Two  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $50,000  and  does  not  exceed  $150,000; 

Three  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $150,000  and  does  not  exceed  $250,000; 

Four  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $250,000  and  does  not  exceed  $450,000; 

Five  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $450,000  and  does  not  exceed  $1,000,000 ; 

Six  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $1,000,000  and  does  not  exceed  $2,000,000; 

Seven  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $2,000,000  and  does  not  exceed  $3,000,000 ; 

Eight  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $3,000,000  and  does  not  exceed  $4,000,000; 

Nine  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $4,000,000  and  does  not  exceed  $5,000,000 ;  and 

Ten  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $5,000,000. 

SEC.  202.  That  the  value  of  the  gross  estate  of  the  dece- 
dent shall  be  determined  by  including  the  value  at  the  time 
of  his  death  of  all  property,  real  or  personal,  tangible  or 
intangible,  wherever  situated: 

(a)  To  the  extent  of  the  interest  therein  of  the  decedent 
at  the  time  of  his  death  which  after  his  death  is  subject  to 
the  payment  of  the  charges  against  his  estate  and  the  expenses 
of  its  administration  and  is  subject  to  distribution  as  part 
of  his  estate. 

(b)  To  the  extent  of  any  interest  therein  of  which  the  dece- 
dent has  at  any  time  made  a  transfer,  or  with  respect  to 
which  he  has  created  a  trust,  in  contemplation  of  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  his  death, 
except  in  case  of  a  bona  fide  sale  for  a  fair  consideration  in 

36 


562  INHERITANCE  TAXATION 

money  or  money's  worth.  Any  transfer  of  a  material  part  of 
his  property  in  the  nature  of  a  final  disposition  or  distribu- 
tion thereof,  made  by  the  decedent  within  two  years  prior  to 
his  death,  without  a  consideration,  shall,  unless  shown  to  the 
contrary,  be  deemed  to  have  been  made  in  contemplation  of 
death  within  the  meaning  of  this  title ;  and 

(c)  To  the  extent  of  the  interest  therein  held  jointly  or  as 
tenants  in  the  entirety  by  the  decedent  and  any  other  person, 
or  deposited  in  banks  or  other  institutions  in  their  joint  names 
and  payable  to  either  or  the  survivor,  except  such  part  thereof 
as  may  be  shown  to  have  originally  belonged  to  such  other 
person  and  never  to  have  belonged  to  the  decedent. 

For  the  purpose  of  this  title  stock  in  a  domestic  corporation 
owned  and  held  by  a  nonresident  decedent  shall  be  deemed 
property  within  the  United  States,  and  any  property  of  which 
the  decedent  has  made  a  transfer  or  with  respect  to  which  he 
has  created  a  trust,  within  the  meaning  of  subdivision  (b)  of 
this  section,  shall  be  deemed  to  be  situated  in  the  United 
States,  if  so  situated  either  at  the  time  of  the  transfer  or  the 
creation  of  the  trust,  or  at  the  time  of  the  decedent's  death. 

SEC.  203.  That  for  the  purpose  of  the  tax  the  value  of  the 
net  estate  shall  be  determined — 

(a)  In  the  case  of  a  resident,  by  deducting  from  the  value 
of  the  gross  estate — 

(1)  Such   amounts   for   funeral   expenses,   administration 
expenses,  claims  against  the  estate,  unpaid  mortgages,  losses 
incurred  during  the  settlement  of  the  estate  arising  from 
fires,  storms,  shipwreck,  or  other  casualty,  and  from  theft, 
when  such  losses  are  not  compensated  for  by  insurance  or 
otherwise,  support  during  the  settlement  of  the  estate  of  those 
dependent  upon  the  decedent,  and  such  other  charges  against 
the  estate,  as  are  allowed  by  the  laws  of  the  jurisdiction, 
whether  within  or  without  the  United  States,  under  which 
the  estate  is  being  administered ;  and 

(2)  An  exemption  of  $50,000; 

(b)  In  the  case  of  a  nonresident,  by  deducting  from  the 
value  of  that  part  of  his  gross  estate  which  at  the  time  of  his 
death  is  situated  in  the  United  States  that  proportion  of  the 


PART  VI  — THE  STATUTES  563 

deductions  specified  in  paragraph  (1)  of  subdivision  (a)  of 
this  section  which  the  value  of  such  part  bears  to  the  value 
of  his  entire  gross  estate,  wherever  situated.  But  no  deduc- 
tions shall  be  allowed  in  the  case  of  a  nonresident  unless  the 
executor  includes  in  the  return  required  to  be  filed  under 
section  two  hundred  and  five  the  value  at  the  time  of  his  death 
of  that  part  of  the  gross  estate  of  the  nonresident  not  situated 
in  the  United  States. 

SEC.  204.  That  the  tax  shall  be  due  one  year  after  the  dece- 
dent's death.  If  the  tax  is  paid  before  it  is  due  a  discount  at 
the  rate  of  five  per  centum  per  annum,  calculated  from  the 
time  payment  is  made  to  the  date  when  the  tax  is  due,  shall 
be  deducted.  If  the  tax  is  not  paid  within  ninety  days  after 
it  is  due  interest  at  the  rate  of  ten  per  centum  per  annum 
from  the  time  of  the  decedent's  death  shall  be  added  as  part 
of  the  tax,  unless  because  of  claims  against  the  estate,  neces- 
sary litigation,  or  other  unavoidable  delay  the  collector  finds 
that  the  tax  cannot  be  determined,  in  which  case  the  interest 
shall  be  at  the  rate  of  six  per  centum  per  annum  from  the 
time  of  the  decedent's  death  until  the  cause  of  such  delay  is 
removed,  and  thereafter  at  the  rate  of  ten  per  centum  per 
annum.  Litigation  to  defeat  the  payment  of  the  tax  shall  not 
be  deemed  necessary  litigation. 

SEC.  205.  That  the  executor,  within  thirty  days  after 
qualifying  as  such,  or  after  coming  into  possession  of  any 
property  of  the  decedent,  whichever  event  first  occurs,  shall 
give  written  notice  thereof  to  the  collector.  The  executor 
shall  also,  at  such  times  and  in  such  manner  as  may  be 
required  by  the  regulations  made  under  this  title,  file  with 
the  collector  a  return  under  oath  in  duplicate,  setting  forth 
(a)  the  value  of  the  gross  estate  of  the  decedent  at  the  time 
of  his  death,  or,  in  case  of  a  nonresident,  of  that  part  of  his 
gross  estate  situated  in  the  United  States;  (b)  the  deduc- 
tions allowed  under  section  two  hundred  and  three;  (c)  the 
value  of  the  net  estate  of  the  decedent  as  defined  in  section 
two  hundred  and  three;  and  (d)  the  tax  paid  or  payable 
thereon;  or  such  part  of  such  information  as  may  at  the  time 


564  INHERITANCE  TAXATION 

be  ascertainable  and  such  supplemental  data  as  may  be  neces- 
sary to  establish  the  correct  tax. 

Eeturn  shall  be  made  in  all  cases  of  estates  subject  to  the 
tax  or  where  the  gross  estate  at  the  death  of  the  decedent 
exceeds  $60,000,  and  in  the  case  of  the  estate  of  every  non- 
resident any  part  of  whose  gross  estate  is  situated  in  the 
United  States.  If  the  executor  is  unable  to  make  a  complete 
return  as  to  any  part  of  the  gross  estate  of  the  decedent,  he 
shall  include  in  his  return  a  description  of  such  part  and  the 
name  of  every  person  holding  a  legal  or  beneficial  interest 
therein,  and  upon  notice  from  the  collector  such  person  shall 
in  like  manner  make  a  return  as  to  such  part  of  the  gross 
estate.  The  Commissioner  of  Internal  Eevenue  shall  make 
all  assessments  of  the  tax  under  the  authority  of  existing 
administrative  special  and  general  provisions  of  law  relating 
to  the  assessment  and  collection  of  taxes. 

SEC.  206.  That  if  no  administration  is  granted  upon  the 
estate  of  a  decedent,  or  if  no  return  is  filed  as  provided  in 
section  two  hundred  and  five,  or  if  a  return  contains  a  false 
or  incorrect  statement  of  a  material  fact,  the  collector  or 
deputy  collector  shall  make  a  return  and  the  Commissioner 
of  Internal  Kevenue  shall  assess  the  tax  thereon. 

SEC.  207.  That  the  executor  shall  pay  the  tax  to  the  col- 
lector or  deputy  collector.  If  for  any  reason  the  amount  of 
the  tax  cannot  be  determined,  the  payment  of  a  sum  of  money 
sufficient,  in  the  opinion  of  the  collector,  to  discharge  the  tax 
shall  be  deemed  payment  in  full  of  the  tax,  except  as  in  this 
section  otherwise  provided.  If  the  amount  so  paid  exceeds 
the  amount  of  the  tax  as  finally  determined,  the  Commissioner 
of  Internal  Eevenue  shall  refund  such  excess  to  the  executor. 
If  the  amount  of  the  tax  as  finally  determined  exceeds  the 
amount  so  paid  the  commissioner  shall  notify  the  executor  of 
the  amount  of  such  excess.  From  the  time  of  such  notification 
to  the  time  of  the  final  payment  of  such  excess  part  of  the 
tax,  interest  shall  be  added  thereto  at  the  rate  of  ten  per 
centum  per  annum,  and  the  amount  of  such  excess  shall  be  a 
lien  upon  the  entire  gross  estate,  except  such  part  thereof  as 


PART  VI  — THE  STATUTES  565 

may  have  been  sold  to  a  bona  fide  purchaser  for  a  fair  con- 
sideration in  money  or  money's  worth. 

The  collector  shall  grant  to  the  person  paying  the  tax 
duplicate  receipts,  either  of  which  shall  be  sufficient  evidence 
of  such  payment,  and  shall  entitle  the  executor  to  be  credited 
and  allowed  the  amount  thereof  by  any  court  having  jurisdic- 
tion to  audit  or  settle  his  accounts. 

SEC.  208.  That  if  the  tax  herein  imposed  is  not  paid  within 
sixty  days  after  it  is  due,  the  collector  shall,  unless  there  is 
reasonable  cause  for  further  delay,  commence  appropriate 
proceedings  in  any  court  of  the  United  States,  in  the  name 
of  the  United  States,  to  subject  the  property  of  the  decedent 
to  be  sold  under  the  judgment  or  decree  of  the  court.  From 
the  proceeds  of  such  sale  the  amount  of  the  tax,  together  with 
the  costs  and  expenses  of  every  description  to  be  allowed  by 
the  court,  shall  be  first  paid,  and  the  balance  shall  be  deposited 
according  to  the  order  of  the  court,  to  be  paid  under  its  direc- 
tion to  the  person  entitled  thereto.  If  the  tax  or  any  part 
thereof  is  paid  by,  or  collected  out  of  that  part  of  the  estate 
passing  to  or  in  the  possession  of,  any  person  other  than  the1 
executor  in  his  capacity  as  such,  such  person  shall  be  entitled 
to  reimbursement  out  of  any  part  of  the  estate  still  undis- 
tributed or  by  a  just  and  equitable  contribution  by  the  persons 
whose  interest  in  the  estate  of  the  decedent  would  have  been 
reduced  if  the  tax  had  been  paid  before  the  distribution  of 
the  estate  or  whose  interest  is  subject  to  equal  or  prior 
liability  for  the  payment  of  taxes,  debts,  or  other  charges 
against  the  estate,  it  being  the  purpose  and  intent  of  this  title 
that  so  far  as  is  practicable  and  unless  otherwise  directed  by 
the  will  of  the  decedent  the  tax  shall  be  paid  out  of  the  estate 
before  its  distribution. 

SEC.  209.  That  unless  the  tax  is  sooner  paid  in  full,  it  shall 
be  a  lien  for  ten  years  upon  the  gross  estate  of  the  decedent, 
except  that  such  part  of  the  gross  estate  as  is  used  for  the 
payment  of  charges  against  the  estate  and  expenses  of  its 
administration,  allowed  by  any  court  having  jurisdiction 
thereof,  shall  be  divested  of  such  lien. 

If  the  decedent  makes  a  transfer  of,  or  creates  a  trust  with 


566  INHEEITANCE  TAXATION 

respect  to,  any  property  in  contemplation  of  or  intended  to 
take  effect  in  possession  or  enjoyment  at  or  after  his  death 
(except  in  the  case  of  a  bona  fide  sale  for  a  fair  consideration 
in  money  or  money's  worth)  and  if  the  tax  in  respect  thereto 
is  not  paid  when  due,  the  transferee  or  trustee  shall  be  per- 
sonally liable  for  such  tax,  and  such  property,  to  the  extent  of 
the  decedent's  interest  therein  at  the  time  of  such  transfer, 
shall  be  subject  to  a  like  lien  equal  to  the  amount  of  such  tax. 
Any  part  of  such  property  sold  by  such  transferee  or  trustee 
to  a  bona  fide  purchaser  for  a  fair  consideration  in  money  or 
money's  worth  shall  be  divested  of  the  lien  and  a  like  lien 
shall  then  attach  to  all  the  property  of  such  transferee  or 
trustee,  except  any  part  sold  to  a  bona  fide  purchaser  for  a 
fair  consideration  in  money  or  money's  worth. 

SEC.  210.  That  whoever  knowingly  makes  any  false  state- 
ment in  any  notice  or  return  required  to  be  filed  by  this  title 
shall  be  liable  to  a  penalty  of  not  exceeding  $5,000,  or  im- 
prisonment not  exceeding  one  year,  or  both,  in  the  discretion 
of  the  court. 

Whoever  fails  to  comply  with  any  duty  imposed  upon  him 
by  section  two  hundred  and  five,  or,  having  in  his  possession 
or  control  any  record,  file,  or  paper,  containing  or  supposed 
to  contain  any  information  concerning  the  estate  of  the  dece- 
dent, fails  to  exhibit  the  same  upon  request  to  the  Commis- 
sioner of  Internal  Eevenue  or  any  collector  or  law  officer  of 
the  United  States,  or  his  duly  authorized  deputy  or  agent, 
who  desires  to  examine  the  same  in  the  performance  of  his 
duties  under  this  title,  shall  be  liable  to  a  penalty  of  not 
exceeding  $500,  to  be  recovered,  with  costs  of  suit,  in  a  civil 
action  in  the  name  of  the  United  States. 

SEC.  211.  That  all  administrative,  special,  and  general  pro- 
visions of  law,  including  the  laws  in  relation  to  the  assessment 
and  collection  of  taxes,  not  heretofore  specifically  repealed 
are  hereby  made  to  apply  to  this  title  so  far  as  applicable 
and  not  inconsistent  with  its  provisions. 

SEC.  212.  That  the  Commissioner  of  Internal  Revenue,  with 
the  approval  of  the  Secretary  of  the  Treasury,  shall  make 
such  regulations,  and  prescribe  and  require  the  use  of  such 


PART  VI  — THE  STATUTES  567 

books  and  forms,  as  he  may  deem  necessary  to  carry  out  the 
provisions  of  this  title. 

5.  Amendment  of  March  3,  1917. 

SEC.  300.  That  section  two  hundred  and  one,  Title  II,  of  the 
Act  entitled  "An  Act  to  increase  the  revenue,  and  for  other 
purposes,"  approved  September  eighth,  nineteen  hundred  and 
sixteen,  be,  and  the  same  is  hereby,  amended  to  read  as  fol- 
lows: 

"SEC.  201.  That  a  tax  (hereinafter  in  this  title  referred 
to  as  the  tax),  equal  to  the  following  percentages  of  the  value 
of  the  net  estate,  to  be  determined  as  provided  in  section  two 
hundred  and  three,  is  hereby  imposed  upon  the  transfer  of 
the  net  estate  of  every  decedent  dying  after  the  passage  of  this 
Act,  whether  a  resident  or  nonresident  of  the  United  States : 

One  and  one-half  per  centum  of  the  amount  of  such  net 
estate  not  in  excess  of  $50,000 ; 

Three  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $50,000  and  does  not  exceed  $150,000; 

Four  and  one-half  per  centum  of  the  amount  by  which  such 
net  estate  exceeds  $150,000  and  does  not  exceed  $250,000 ; 

Six  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $250,000  and  does  not  exceed  $450,000 ; 

Seven  and  one-half  per  centum  of  the  amount  by  which  such 
net  estate  exceeds  $450,000  and  does  not  exceed  $1,000,000 ; 

Nine  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $1,000,000  and  does  not  exceed  $2,000,000; 

Ten  and  one-half  per  centum  of  the  amount  by  which  such 
net  estate  exceeds  $2,000,000  and  does  not  exceed  $3,000,000 ; 

Twelve  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $3,000,000  and  does  not  exceed  $4,000,000; 

Thirteen  and  one-half  per  centum  of  the  amount  by  which 
such  net  estate  exceeds  $4,000,000  and  does  not  exceed 
$5,000,000;  and 

Fifteen  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $5,000,000." 

SEC.  301.  That  the  tax  on  the  transfer  of  the  net  estate  of 
decedent  dying  between  September  eighth,  nineteen  hundred 


568  INHERITANCE  TAXATION 

and  sixteen,  and  the  passage  of  this  Act  shall  be  computed  at 
the  rates  originally  prescribed  in  the  Act  approved  September 
eighth,  nineteen  hundred  and  sixteen. 

6.  Amendment  of  October  3,  1917. 

SEC.  900.  That  in  addition  to  the  tax  imposed  by  section 
two  hundred  and  one  of  the  Act  entitled  "An  Act  to  increase 
the  revenue,  and  for  other  purposes,"  approved  September 
eighth,  nineteen  hundred  and  sixteen,  as  amended— 

(a)  A  tax  equal  to  the  following  percentages  of  its  value  is 
hereby  imposed  upon  the  transfer  of  each  net  estate  of  every 
decedent  dying  after  the  passage  of  this  Act,  the  transfer  of 
which  is  taxable  under  such  section  (the  value  of  such  net 
estate  to  be  determined  as  provided  in  Title  II  of  such  Act  of 
September  eighth,  nineteen  hundred  and  sixteen) : 

One-half  of  one  per  centum  of  the  amount  of  such  net  estate 
not  in  excess  of  $50,000 ; 

One  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $50,000  and  does  not  exceed  $150,000 ; 

One  and  one-half  per  centum  of  the  amount  by  which  such 
net  estate  exceeds  $150,000  and  does  not  exceed  $250,000 ; 

Two  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $250,000  and  does  not  exceed  $450,000 ; 

Two  and  one-half  per  centum  of  the  amount  by  which  such 
net  estate  exceeds  $450,000  and  does  not  exceed  $1,000,000; 

Three  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $1,000,000  and  does  not  exceed  $2,000,000; 

Three  and  one-half  per  centum  of  the  amount  by  which  such 
net  estate  exceeds  $2,000,000  and  does  not  exceed  $3,000,000 ; 

Four  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $3,000,000  and  does  not  exceed  $4,000,000; 

Four  and  one-half  per  centum  of  the  amount  by  which  such 
net  estate  exceeds  $4,000,000  and  does  not  exceed  $5,000,000; 

Five  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $5,000,000  and  does  not  exceed  $8,000,000 ; 

Seven  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $8,000,000  and  does  not  exceed  $10,000,000 ;  and 


PAKT  VI  — THE  STATUTES  569 

Ten  per  centum  of  the  amount  by  which  such  net  estate 
exceeds  $10,000,000. 

SEC.  901.  That  the  tax  imposed  by  this  title  shall  not  apply 
to  the  transfer  of  the  net  estate  of  any  decedent  dying  while 
serving  in  the  military  or  naval  forces  of  the  United  States, 
during  the  continuance  of  the  war  in  which  the  United  States 
is  now  engaged,  or  if  death  results  from  injuries  received  or 
disease  contracted  in  such  service,  within  one  year  after  the 
termination  of  such  war.  For  the  purpose  of  this  section  the 
termination  of  the  war  shall  be  evidenced  by  the  proclamation 
of  the  President. 

7.  Statute  of  1918,  in  effect  Feb.  24,  1919. 

TITLE  IV  or  THE  REVENUE  ACT  OF  1918. 

SEC.  400.  That  when  used  in  this  title 

The  term  " executor"  means  the  executor  or  administrator 
of  the  decedent,  or,  if  there  is  no  executor  or  administrator, 
any  person  who  takes  possession  of  any  property  of  the  dece- 
dent ;  and 

The  term  ''collector"  means  the  collector  of  internal 
revenue  of  the  district  in  which  was  the  domicile  of  the  dece- 
dent at  the  time  of  his  death,  or,  if  there  was  no  such  domicile 
in  the  United  States,  then  the  collector  of  the  district  in  which 
is  situated  the  part  of  the  gross  estate  of  the  decedent  in  the 
United  States,  or,  if  such  part  of  the  gross  estate  is  situated 
in  more  than  one  district,  then  the  collector  of  internal  revenue 
of  such  district  as  may  be  designated  by  the  Commissioner. 

SEC.  401.  That  (in  lieu  of  the  tax  imposed  by  Title  II  of 
the  Revenue  Act  of  1916,  as  amended,  and  in  lieu  of  the  tax 
imposed  by  Title  IX  of  the  Revenue  Act  of  1917)  a  tax  equal 
to  the  sum  of  the  following  percentages  of  the  value  of  the  net 
estate  (determined  as  provided  in  section  403)  is  hereby  im- 
posed upon  the  transfer  of  the  net  estate  of  every  decedent 
dying  after  the  passage  of  this  Act,  whether  a  resident  or  non- 
resident of  the  United  States : 

1  per  centum  of  the  amount  of  the  net  estate  not  in  excess 
of  $50,000; 

2  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$50,000  and  does  not  exceed  $150,000 ; 


570  INHERITANCE  TAXATION 

3  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$150,000  and  does  not  exceed  $250,000 ; 

4  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$250,000  and  does  not  exceed  $450,000 ; 

6  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$450,000  and  does  not  exceed  $750,000 ; 

8  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$750,000  and  does  not  exceed  $1,000,000 ; 

10  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$1,000,000  and  does  not  exceed  $1,500,000; 

12  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$1,500,000  and  does  not  exceed  $2,000,000; 

14  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$2,000,000  and  does  not  exceed  $3,000,000; 

16  per  centum  of  the  amount  by  which  the  net  estate 
exceeds  $3,000,000  and  does  not  exceed  $4,000,000; 

18  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$4,000,000  and  does  not  exceed  $5,000,000; 

20  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$5,000,000  and  does  not  exceed  $8,000,000; 

22  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$8,000,000  and  does  not  exceed  $10,000,000;  and 

25  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$10,000,000. 

The  taxes  imposed  by  this  Title  or  by  Title  II  of  the  Kevenue 
Act  of  1916  (as  amended  by  the  Act  entitled  "An  Act  to 
provide  increased  revenue  to  defray  the  expenses  of  the  in- 
creased appropriations  for  the  army  and  navy  and  the  exten- 
sions of  fortifications,  and  for  other  purposes,"  approved 
March  3,  1917)  or  by  Title  IX  of  the  Revenue  Act  of  1917, 
shall  not  apply  to  the  transfer  of  the  net  estate  of  any  dece- 
dent who  has  died  or  may  die  while  serving  in  the  military  or 
naval  forces  of  the  United  States  in  the  present  war  or  from 
injuries  received  or  disease  contracted  while  in  such  service, 
and  any  such  tax  collected  upon  such  transfer  shall  be 
refunded  to  the  executor. 

SEC.  402.  That  the  value  of  the  gross  estate  of  the  decedent 
shall  be  determined  by  including  the  value  at  the  time  of  his 


PAET  VI  — THE  STATUTES  571 

death  of  all  property,  real  or  personal,  tangible  or  intangible, 
wherever  situated 

(a)  To  the  extent  of  the  interest  therein  of  the  decedent  at 
the  time  of  his  death  which  after  his  death  is  subject  to  the 
payment  of  the  charges  against  his  estate  and  the  expenses 
of  its  administration  and  is  subject  to  distribution  as  part  of 
his  estate; 

(b)  To  the  extent  of  any  interest  therein  of  the  surviving 
spouse,  existing  at  the  time  of  the  decedent's  death  as  dower, 
curtesy,  or  by  virtue  of  a  statute  creating  an  estate  in  lieu 
of  dower  or  curtesy; 

(c)  To  the  extent  of  any  interest  therein  of  which  the  dece- 
dent has  at  any  time  made  a  transfer,  or  with  respect  to  which 
he  has  at  any  time  created  a  trust,  in  contemplation  of  or 
intended  to  take  effect  in  possession  or  enjoyment  at  or  after 
his  death  (whether  such  transfer  or  trust  is  made  or  created 
before  or  after  the  passage  of  this  Act),  except  in  case  of  a 
bona  fide  sale  for  a  fair  consideration  in  money  or  money's 
worth.    Any  transfer  of  a  material  part  of  his  property  in  the 
nature  of  a  final  disposition  or  distribution  thereof,  made  by 
the  decedent  within  two  years  prior  to  his  death  without  such 
a  consideration,  shall,  unless  shown  to  the  contrary,  be  deemed 
to  have  been  made  in  contemplation   of  death  within  the 
meaning  of  this  title ; 

(d)  To  the  extent  of  the  interest  therein  held  jointly  or  as 
tenants  in  the  entirety  by  the  decedent  and  any  other  person, 
or  deposited  in  banks   or  other  institutions  in  their  joint 
names  and  payable  to  either  or  the  survivor,  except  such  part 
thereof  as  may  be  shown  to  have  originally  belonged  to  such 
other  person  and  never  to  have  belonged  to  the  decedent ; 

(e)  To  the  extent  of  any  property  passing  under  a  general 
power  of  appointment  exercised  by  the  decedent  (1)  by  will, 
or  (2)  by  deed  executed  in  contemplation  of,  or  intended  to 
take  effect  in  possession  or  enjoyment  at  or  after,  his  death, 
except  in  case  of  a  bona  fide  sale  for  a  fair  consideration  in 
money  or  money's  worth;  and 

(f )  To  the  extent  of  the  amount  receivable  by  the  executor 
as  insurance  under  policies  taken  out  by  the  decedent  upon 
his  own  life;  and  to  the  extent  of  the  excess  over  $40,000  of 


572  INHEBITANCE  TAXATION 

the  amount  receivable  by  all  other  beneficiaries  as  insurance 
under  policies  taken  out  by  the  decedent  upon  his  own  life. 

SEC.  403.  That  for  the  purpose  of  the  tax  the  value  of  the 
net  estate  shall  be  determined 

(a)  In  the  case  of  a  resident,  by  deducting  from  the  value 
of  the  gross  estate 

(1)  Such   amounts   for   funeral   expenses,   administration 
expenses,  claims  against  the  estate,  unpaid  mortgages,  losses 
incurred  during  the  settlement  of  the  estate  arising  from 
fires,  storms,  shipwreck,  or  other  casualty,  or  from  theft, 
when  such  losses  are  not  compensated  for  by  insurance  or 
otherwise,  and  such  amounts  reasonably  required  and  actually 
expended  for  the  support  during  the  settlement  of  the  estate 
of  those  dependent  upon  the  decedent,  as  are  allowed  by  the 
laws  of  the  jurisdiction,  whether  within  or  without  the  United 
States,  under  which  the  estate  is  being  administered,  but  not 
including  any  income  taxes  upon  income  received  after  the 
death  of  the  decedent,  or  any  estate,  succession,  legacy,  or 
inheritance  taxes; 

(2)  An  amount  equal  to  the  value  at  the  time  of  the  dece- 
dent's death  of  any  property,  real,  personal,  or  mixed,  which 
can  be  identified  as  having  been  received  by  the  decedent  as 
a  share  in  the  estate  of  any  person  who  died  within  five  years 
prior  to  the  death  of  the  decedent,  or  which  can  be  identified 
as  having  been  acquired  by  the  decedent  in  exchange  for 
property  so  received,  if  an  estate  tax  under  the  Revenue  Act 
of  1917  or  under  this  Act  was  collected  from  such  estate,  and 
if  such  property  is  included  in  the  decedent's  gross  estate; 

(3)  The  amount  of  all  bequests,  legacies,  devises,  or  gifts, 
to  or  for  the  use  of  the  United  States,  any  state,  territory, 
any  political  subdivision  thereof,  or  the  District  of  Columbia, 
for  exclusively  public  purposes,  or  to  or  for  the  use  of  any 
corporation  organized  and  operated  exclusively  for  religious, 
charitable,  scientific,  literary,  or  educational  purposes,  includ- 
ing the  encouragement  of  art  and  the  prevention  of  cruelty 
to  children  or  animals,  no  part  of  the  net  earnings  of  which 
inures  to  the  benefit  of  any  private  stockholder  or  individual, 
or  to  a  trustee  or  trustees  exclusively  for  such  religious, 
charitable,  scientific,  literary,  or  educational  purposes.    This, 


PART  VI  — THE  STATUTES  573 

deduction  shall  be  made  in  Case  of  the  estates  of  all  decedents 
who  have  died  since  December  31, 1917 ;  and 

(4)  An  exemption  of  $50,000; 

(b)  In  the  case  of  a  nonresident,  by  deducting  from  the 
value  of  that  part  of  his  gross  estate  which  at  the  time  of  his 
death  is  situated  in  the  United  States 

(1)  That  proportion  of  the  deductions  specified  in  para- 
graph (1)  of  subdivision  (a)  of  this  section  which  the  value 
of  such  part,  bears  to  the  value  of  his  entire  gross  estate, 
wherever  situated,  but  in  no  case  shall  the  amount  so  deducted 
exceed  10  per  centum  of  the  value  of  that  part  of  his  gross 
estate  which  at  the  time  of  his  death  is  situated  in  the  United 
States ; 

(2)  An  amount  equal  to  the  value  at  the  time  of  the  dece- 
dent's death  of  any  property,  real,  personal,  or  mixed,  which 
can  be  identified  as  having  been  received  by  the  decedent  as  a 
share  in  the  estate  of  any  person  who  died  within  five  years 
prior  to  the  death  of  the  decedent,  or  which  can  be  identified 
as  having  been  acquired  by  the  decedent  in  exchange  for  prop- 
erty so  received,  if  an  estate  tax  under  the  Eevenue  Act  of 
1917  or  under  this  Act  was  collected  from  such  estate,  and  if 
such  property  is  included  in  that  part  of  the  decedent's  gross 
estate  which  at  the  time  of  his  death  is  situated  in  the  United 
States ;  and 

(3)  The  amount  of  all  bequests,  legacies,  devises,  or  gifts, 
to  or  for  the  use  of  the  United  States,  any  state,  territory, 
any  political  subdivision  thereof,  or  the  District  of  Columbia, 
for  exclusively  public  purposes,  or  to  or  for  the  use  of  any 
domestic  corporation  organized  and  operated  exclusively  for 
religious,  charitable,  scientific,  literary,  or  educational  pur- 
poses, including  the  encouragement  of  art  and  the  prevention 
of  cruelty  to  children  or  animals,  no  part  of  the  net  earnings 
of  which  inures  to  the  benefit  of  any  private  stockholder  or 
individual,  or  to  a  trustee  or  trustees  exclusively  for  such 
religious,  charitable,  scientific,  literary,  or  educational  pur- 
poses within  the  United  States.    This  deduction  shall  be  made 
in  case  of  the  estates  of  all  decedents  who  have  died  since 
December  31,  1917  and 

No  deductions  shall  be  allowed  in  the  case  of  a  nonresident 


574  INHERITANCE  TAXATION 

unless  the  executor  includes  in  the  return  required  to  be  filed 
under  section  404  the  value  at  the  time  of  his  death  of  that 
part  of  the  gross  estate  of  the  nonresident  not  situated  in  the 
United  States. 

For  the  purpose  of  this  title  stock  in  a  domestic  corporation 
owned  and  held  by  a  nonresident  decedent,  and  the  amount 
receivable  as  insurance  upon  the  life  of  a  nonresident  dece- 
dent where  the  insurer  is  a  domestic  corporation,  shall  be 
deemed  property  within  the  United  States,  and  any  property 
of  which  the  decedent  has  made  a  transfer  or  with  respect  to 
which  he  has  created  a  trust,  within  the  meaning  of  subdivi- 
sion (c)  of  section  402,  shall  be  deemed  to  be  situated  in  the 
United  States,  if  so  situated  either  at  the  time  of  the  transfer 
or  the  creation  of  the  trust,  or  at  the  time  of  the  decedent's 
death. 

In  the  case  of  any  estate  in  respect  to  which  the  tax  under 
existing  law  has  been  paid,  if  necessary  to  allow  the  benefit 
of  the  deduction  under  paragraph  (3)  of  subdivision  (a)  or 
(b)  the  tax  shall  be  redetermined  and  any  excess  of  tax.  paid 
shall  be  refunded  to  the  executor. 

SEC.  404.  That  the  executor,  within  sixty  days  after  qualify- 
ing as  such,  or  after  coming  into  possession  of  any  property 
of  the  decedent,  whichever  event  first  occurs,  shall  give  written 
notice  thereof  to  the  collector.  The  executor  shall  also,  at 
such  times  and  in  such  manner  as  may  be  required  by  regula- 
tions made  pursuant  to  law,  file  with  the  collector  a  return 
under  oath  in  duplicate,  setting  forth  (a)  the  value  of  the 
gross  estate  of  the  decedent  at  the  time  of  his  death,  or,  in 
case  of  a  nonresident,  of  that  part  of  his  gross  estate  situated 
in  the  United  States;  (b)  the  deductions  allowed  under  sec- 
tion 403;  (c)  the  value  of  the  net  estate  of  the  decedent  as 
defined  in  section  403;  and  (d)  the  tax  paid  or  payable 
thereon ;  or  such  part  of  such  information  as  may  at  the  time 
be  ascertainable  and  such  supplemental  data  as  may  be  neces- 
sary to  establish  the  correct  tax. 

Return  shall  be  made  in  all  cases  where  the  gross  estate  at 
the  death  of  the  decedent  exceeds  $50,000,  and  in  the  case  of 
the  estate  of  every  nonresident  any  part  of  whose  gross  estate 
is  situated  in  the  United  States.  If  the  executor  is  unable  to 


PART  VI  —  THE  STATUTES  575 

make  a  complete  return  as  to  any  part  of  the  gross  estate  of 
the  decedent,  he  shall  include  in  his  return  a  description  of 
such  part  and  the  name  of  every  person  holding  a  legal  or 
beneficial  interest  therein,  and  upon  notice  from  the  collector 
such  person  shall  in  like  manner  make  a  return  as  to  such 
part  of  the  gross  estate.  The  Commissioner  shall  make  all 
assessments  of  the  tax  under  the  authority  of  existing  admin- 
istrative special  and  general  provisions  of  law  relating  to  the 
assessment  and  collection  of  taxes. 

SEC.  405.  That  if  no  administration  is  granted  upon  the 
estate  of  a  decedent,  or  if  no  return  is  filed  as  provided  in 
section  404,  or  if  a  return  contains  a  false  or  incorrect  state- 
ment of  a  material  fact,  the  collector  or  deputy  collector  shall 
make  a  return  and  the  Commissioner  shall  assess  the  tax 
thereon. 

SEC.  406.  That  the  tax  shall  be  due  one  year  after  the  dece- 
dent's death;  but  in  any  case  where  the  Commissioner  finds 
that  payment  of  the  tax  within  one  year  after  the  decedent's 
death  would  impose  undue  hardship  upon  the  estate,  he  may 
grant  an  extension  of  time  for  the  payment  of  the  tax  for  a 
period  not  to  exceed  three  years  from  the  due  date.  If  the 
tax  is  not  paid  within  one  year  and  180  days  after  the  dece- 
dent's death,  interest  at  the  rate  of  6  per  centum  per  annum 
from  the  expiration  of  one  year  after  the  decedent's  death 
shall  be  added  as  part  of  the  tax. 

SEC.  407.  That  the  executor  shall  pay  the  tax  to  the  col- 
lector or  deputy  collector.  If  the  amount  of  the  tax  cannot 
be  determined,  the  payment  of  a  sum  of  money  sufficient,  in 
the  opinion  of  the  collector,  to  discharge  the  tax  shall  be 
deemed  payment  in  full  of  the  tax,  except  as  in  this  section 
otherwise  provided.  If  the  amount  so  paid  exceeds  the 
amount  of  the  tax  as  finally  determined,  the  Commissioner 
shall  refund  such  excess  to  the  executor.  If  the  amount  of  the 
tax  as  finally  determined  exceeds  the  amount  so  paid,  the  col- 
lector shall  notify  the  executor  of  the  amount  of  such  excess 
and  demand  payment  thereof.  If  such  excess  part  of  the  tax 
is  not  paid  within  thirty  days  after  such  notification,  interest 
shall  be  added  thereto  at  the  rate  of  10  per  centum  per  annum 
from  the  expiration  of  such  thirty  days'  period  until  paid, 


576  INHERITANCE  TAXATION 

and  the  amount  of  such  excess  shall  be  a  lien  upon  the  entire 
gross  estate,  except  such  part  thereof  as  may  have  been  sold 
to  a  bona  fide  purchaser  for  a  fair  consideration  in  money  or 
money's  worth. 

The  collector  shall  grant  to  the  person  paying  the  tax 
duplicate  receipts,  either  of  which  shall  be  sufficient  evidence 
of  such  payment,  and  shall  entitle  the  executor  to  be  credited 
and  allowed  the  amount  thereof  by  any  court  having  jurisdic- 
tion to  audit  or  settle  his  accounts. 

SEC.  408.  That  if  the  tax  herein  imposed  is  not  paid  within 
180  days  after  it  is  due,  the  collector  shall,  unless  there  is 
reasonable  cause  for  further  delay,  proceed  to  collect  the  tax 
under  the  provisions  of  general  law,  or  commence  appro- 
priate proceedings  in  any  court  of  the  United  States,  in  the 
name  of  the  United  States,  to  subject  the  property  of  the 
decedent  to  be  sold  under  the  judgment  or  decree  of  the  court. 
From  the  proceeds  of  such  sale  the  amount  of  the  tax,  together 
with  the  costs  and  expenses  of  every  description  to  be  allowed 
by  the  court,  shall  be  first  paid  and  the  balance  shall  be  de- 
posited according  to  the  order  of  the  court,  to  be  paid  under 
its  direction  to  the  person  entitled  thereto. 

If  the  tax  or  any  part  thereof  is  paid  by,  or  collected  out 
of  that  part  of  the  estate  passing  to  or  in  the  possession  of, 
any  person  other  than  the  executor  in  his  capacity  as  such, 
such  person  shall  be  entitled  to  reimbursement  out  of  any  part 
of  the  estate  still  undistributed  or  by  a  just  and  equitable  con- 
tribution by  the  persons  whose  interest  in  the  estate  of  the 
decedent  would  have  been  reduced  if  the  tax  had  been  paid 
before  the  distribution  of  the  estate  or  whose  interest  is 
subject  to  equal  or  prior  liability  for  the  payment  of  taxes, 
debts,  or  other  charges  against  the  estate,  it  being  the  pur- 
pose and  intent  of  this  title  that  so  far  as  is  practicable  and 
unless  otherwise  directed  by  the  will  of  the  decedent  the  tax 
shall  be  paid  out  of  the  estate  before  its  distribution.  If  any 
part  of  the  gross  estate  consists  of  proceeds  of  policies  of 
insurance  upon  the  life  of  the  decedent  receivable  by  a  bene- 
ficiary other  than  the  executor,  the  executor  shall  be  entitled 
to  recover  from  such  beneficiary  such  portion  of  the  total  tax 
paid  as  the  proceeds,  in  excess  of  $40,000,  of  such  policies 


PART  VI  — THE  STATUTES  577 

bear  to  the  net  estate.  If  there  is  more  than  one  such  bene- 
ficiary the  executor  shall  be  entitled  to  recover  from  such 
beneficiaries  in  the  same  ratio. 

SEC.  409.  That  unless  the  tax  is  sooner  paid  in  full,  it  shall 
be  a  lien  for  ten  years  upon  the  gross  estate  of  the  decedent, 
except  that  such  part  of  the  gross  estate  as  is  used  for  the 
payment  of  charges  against  the  estate  and  expenses  of  its 
administration,  allowed  by  any  court  having  jurisdiction 
thereof,  shall  be  divested  of  such  lien.  If  the  Commissioner 
is  satisfied  that  the  tax  liability  of  an  estate  has  been  fully 
discharged  or  provided  for,  he  may,  under  regulations  pre- 
scribed by  him  with  the  approval  of  the  Secretary,  issue  his 
certificate  releasing  any  or  all  property  of  such  estate  from 
the  lien  herein  imposed. 

If  (a)  the  decedent  makes  a  transfer  of,  or  creates  a  trust 
with  respect  to,  any  property  in  contemplation  of  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  his  death 
(except  in  the  case  of  a  bona  fide  sale  for  a  fair  consideration 
in  money  or  money's  worth)  or  (b)  if  insurance  passes  under 
a  contract  executed  by  the  decedent  in  favor  of  a  specific 
beneficiary,  and  if  in  either  case  the  tax  in  respect  thereto  is 
not  paid  when  due,  then  the  transferee,  trustee,  or  beneficiary 
shall  be  personally  liable  for  such  tax,  and  such  property,  to 
the  extent  of  the  decedent's  interest  therein  at  the  time  of 
such  transfer,  or  to  the  extent  of  such  beneficiary's  interest 
under  such  contract  of  insurance,  shall  be  subject  to  a  like 
lien  equal  to  the  amount  of  such  tax.  Any  part  of  such  prop- 
erty sold  by  such  transferee  or  trustee  to  a  bona  fide  pur- 
chaser for  a  fair  consideration  in  money  or  money's  worth 
shall  be  divested  of  the  lien  and  a  like  lien  shall  then  attach 
to  all  the  property  of  such  transferee  or  trustee,  except  any 
part  sold  to  a  bona  fide  purchaser  for  a  fair  consideration  in 
money  or  money's  worth. 

SEC.  410.  That  whoever  knowingly  makes  any  false  state- 
ment in  any  notice  or  return  required  to  be  filed  under  this 
title  shall  be  liable  to  a  penalty  of  not  exceeding  $5,000,  or 
imprisonment  not  exceeding  one  year,  or  both. 

Whoever  fails  to  comply  with  any  duty  imposed  upon  him 
by  section  404,  or,  having  in  his  possession  or  control  any 
37 


578  INHERITANCE  TAXATION 

record,  file,  or  paper,  containing  or  supposed  to  contain  any 
information  concerning  the  estate  of  the  decedent,  or,  having 
in  his  possession  or  control  any  property  comprised  in  the 
gross  estate  of  the  decedent,  fails  to  exhibit  the  same  upon 
request  to  the  Commissioner  or  any  collector  or  law  officer  of 
the  United  States,  or  his  duly  authorized  deputy  or  agent, 
who  desires  to  examine  the  same  in  the  performance  of  his 
duties  under  this  title,  shall  be  liable  to  a  penalty  of  not 
exceeding  $500,  to  be  recovered,  with  costs  of  suit,  in  a  civil 
action  in  the  name  of  the  United  States. 

8.  Statute  of  1921,  in  effect  Nov.  23,  1921. 

TITLE  IV. — REVENUE  ACT  1921. 

SEC.  400.  That  when  used  in  this  title— 

The  term  "executor"  means  the  executor  or  administrator 
of  the  decedent,  or,  if  there  is  no  executor  or  administrator, 
any  person  in  actual  or  constructive  possession  of  any  prop- 
erty of  the  decedent ; 

The  term  "net  estate"  means  the  net  estate  as  determined 
under  the  provisions  of  section  403 ; 

The  term  "month"  means  calendar  month;  and 

The  term  "Collector"  means  the  collector  of  internal 
revenue  of  the  district  in  which  was  the  domicile  of  the  dece- 
dent at  the  time  of  his  death,  or,  if  there  was  no  such  domicile 
in  the  United  States,  then  the  collector  of  the  district  in 
which  is  situated  the  part  of  the  gross  estate  of  the  decedent 
in  the  United  States,  or,  if  such  part  of  the  gross  estate  is 
situated  in  more  than  one  district,  then  the  collector  of  inter- 
nal revenue  of  such  district  as  may  be  designated  by  the  Com- 
missioner. 

SEC.  401.  That,  in  lieu  of  the  tax  imposed  by  Title  IV  of 
the  Revenue  Act  of  1918,  a  tax  equal  to  the  sum  of  the  follow- 
ing percentages  of  the  value  of  the  net  estate  (determined  as 
provided  in  section  403)  is  hereby  imposed  upon  the  transfer 
of  the  net  estate  of  every  decedent  dying  after  the  passage  of 
this  Act,  whether  a  resident  or  nonresident  of  the  United 
States : 

1  per  centum  of  the  amount  of  the  net  estate  not  in  excess 
of  $50,000; 


PART  VI  — THE  STATUTES  579 

2  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$50,000  and  does  not  exceed  $150,000; 

3  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$150,000  and  does  not  exceed  $250,000; 

4  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$250,000  and  does  not  exceed  $450,000; 

6  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$450,000  and  does  not  exceed  $750,000 ; 

8  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$750,000  and  does  not  exceed  $1,000,000; 

10  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$1,000,000  and  does  not  exceed  $1,500,000; 

12  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$1,500,000  and  does  not  exceed  $2,000,000; 

14  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$2,000,000  and  does  not  exceed  $3,000,000; 

16  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$3,000,000  and  does  not  exceed  $4,000,000; 

18  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$4,000,000  and  does  not  exceed  $5,000,000; 

20  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$5,000,000  and  does  not  exceed  $8,000,000; 

22  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$8,000,000  and  does  not  exceed  $10,000,000;  and 

25  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$10,000,000. 

The  taxes  imposed  by  this  title  or  by  Title  II  of  the  Revenue 
Act  of  1916  (as  amended  by  the  Act  entitled  "An  Act  to  pro- 
vide increased  revenue  to  defray  the  expenses  of  the  increased 
appropriations  for  the  Army  and  Navy  and  the  extensions  of 
fortifications,  and  for  other  purposes,"  approved  March  3, 
1917)  or  by  Title  IX  of  the  Eevenue  Act  of  1917,  or  by  Title 
IV  of  the  Revenue  Act  of  1918,  shall  not  apply  to  the  transfer 
of  the  net  estate  of  any  decedent  who  has  died  or  may  die 
from  injuries  received  or  disease  contracted  in  line  of  duty 
while  serving  in  the  military  or  naval  forces  of  the  United 
States  in  the  war  against  the  German  Government,  or  to  the 
transfer  of  the  net  estate  of  any  citizen  of  the  United  States 
who  has  died  or  may  die  from  injuries  received  or  disease  con- 


580  INHEEITANCE  TAXATION 

tracted  in  line  of  duty  while  serving  in  the  military  or  naval 
forces  of  any  country  while  associated  with  the  United  States 
in  the  prosecution  of  such  war,  or  prior  to  the  entrance  therein 
of  the  United  States,  and  any  tax  collected  upon  such  transfer 
shall  be  refunded  to  the  estate  of  such  decedent. 

SEC.  402.  That  the  value  of  the  gross  estate  of  the  decedent 
shall  be  determined  by  including  the  value  at  the  time  of  his 
death  of  all  property,  real  or  personal,  tangible  or  intangible, 
wherever  situated — 

(a)  To  the  extent  of  the  interest  therein  of  the  decedent  at 
the  time  of  his  death  which  after  his  death  is  subject  to  the 
payment  of  the  charges  against  his  estate  and  the  expenses 
of  its  administration  and  is  subject  to  distribution  as  part  of 
his  estate; 

(b)  To  the  extent  of  any  interest  therein  of  the  surviving 
spouse,  existing  at  the  time  of  the  decedent's  death  as  dower, 
curtesy,  or  by  virtue  of  a  statute  creating  an  estate  in  lieu  of 
dower  or  curtesy; 

(c)  To  the  extent  of  any  interest  therein  of  which  the  dece- 
dent has  at  any  time  made  a  transfer,  or  with  respect  to  which 
he  has  at  any  time  created  a  trust,  in  contemplation  of  or  in- 
tended to  take  effect  in  possession  or  enjoyment  at  or  after 
his  death  (whether  such  transfer  or  trust  is  made  or  created 
before  or  after  the  passage  of  this  Act),  except  in  case  of  a 
bona  fide  sale  for  a  fair  consideration  in  money  or  money's 
worth.    Any  transfer  of  a  material  part  of  his  property  in  the 
nature  of  a  final  disposition  or  distribution  thereof,  made  by 
the  decedent  within  two  years  prior  to  his  death  without  such 
a  consideration,  shall,  unless  shown  to  the  contrary,  be  deemed 
to  have  been  made  in  contemplation  of  death  within  the  mean- 
ing of  this  title ; 

(d)  To  the  extent  of  the  interest  therein  held  jointly  or  as 
tenants  in  the  entirety  by  the  decedent  and  any  other  person, 
or  deposited  in  banks  or  other  institutions  in  their  joint  names 
and  payable  to  either  or  the  survivor,  except  such  part  thereof 
as  may  be  shown  to  have  originally  belonged  to  such  other 
person  and  never  to  have  been  received  or  acquired  by  the 
latter  from  the  decedent  for  less  than  a  fair  consideration  in 
money  or  money's  worth:  Provided,  That  where  such  prop- 


PART  VI  — THE  STATUTES  581 

erty  or  any  part  thereof,  or  part  of  the  consideration  with 
which  such  property  was  acquired,  is  shown  to  have  been  at 
any  time  acquired  by  such  other  person  from  the  decedent  for 
less  than  a  fair  consideration  in  money  or  money's  worth, 
there  shall  be  excepted  only  such  part  of  the  value  of  such 
property  as  is  proportionate  to  the  consideration  furnished 
by  such  other  person:  Provided  further,  That  where  any 
property  has  been  acquired  by  gift,  bequest,  devise,  or  in- 
heritance, as  a  tenancy  in  the  entirety  by  the  decedent  and 
spouse,  or  where  so  acquired  by  the  decedent  and  any  other 
person  as  joint  tenants  and  their  interests  are  not  otherwise 
specified  or  fixed  by  law,  then  to  the  extent  of  one-half  of  the 
value  thereof; 

(e)  To  the  extent  of  any  property  passing  under  a  general 
power  of  appointment  exercised  by  the  decedent  (1)  by  will, 
or  (2)  by  deed  executed  in  contemplation  of,  or  intended  to 
take  effect  in  possession  or  enjoyment  at  or  after,  his  death, 
except  in  case  of  a  bona  fide  sale  for  a  fair  consideration  in 
money  or  money's  worth;  and 

(f )  To  the  extent  of  the  amount  receivable  by  the  executor 
as  insurance  under  policies  taken  out  by  the  decedent  upon 
his  own  life;  and  to  the  extent  of  the  excess  over  $40,000  of 
the  amount  receivable  by  all  other  beneficiaries  as  insurance 
under  policies  taken  out  by  the  decedent  upon  his  own  life. 

SEC.  403.  That  for  the  purpose  of  the  tax  the  value  of  the 
net  estate  shall  be  determined — 

(a)  In  the  case  of  a  resident,  by  deducting  from  the  value 
of  the  gross  estate — 

(1)  Such  amounts  for  funeral  expenses,  administration  ex- 
penses, claims  against  the  estate,  unpaid  mortgages  upon,  or 
any  indebtedness  in  respect  to,  property  (except,  in  the  case 
of  a  resident  decedent,  where  such  property  is  not  situated 
in  the  United  States),  losses  incurred  during  the  settlement 
of  the  estate  arising  from  fires,  storms,  shipwreck,  or  other 
casualty,  or  from  theft,  when  such  losses  are  not  compensated 
for  by  insurance  or  otherwise,  and  such  amounts  reasonably 
required  and  actually  expended  for  the  support  during  the 
settlement  of  the  estate  of  those  dependent  upon  the  decedent, 
as  are  allowed  by  the  laws  of  the  jurisdiction,  whether  within 


582  INHERITANCE  TAXATION 

or  without  the  United  .States,  under  which  the  estate  is  being 
administered,  but  not  including  any  income  taxes  upon  income 
received  after  the  death  of  the  decedent,  or  any  estate,  suc- 
cession, legacy,  or  inheritance  taxes; 

(2)  An  amount  equal  to  the  value  of  any  property  forming 
a  part  of  the  gross  estate  situated  in  the  United  States  of  any 
person  who  died  within  five  years  prior  to  the  death  of  the 
decedent  where  such  property  can  be  identified  as  having  been 
received  by  the  decedent  from  such  prior  decedent  by  gift, 
bequest,  devise,  or  inheritance,  or  which  can  be  identified  as 
having  been  acquired  in  exchange  for  property  so  received: 
Provided,  That  this  deduction  shall  be  allowed  only  where  an 
estate  tax  under  this  or  any  prior  Act  of  Congress  was  paid 
by  or  on  behalf  of  the  estate  of  such  prior  decedent,  and  only 
in  the  amount  of  the  value  placed  by  the  Commissioner  on 
such  property  in  determining  the  value  of  the  gross  estate  of 
such  prior  decedent,  and  only  to  the  extent  that  the  value  of 
such  property  is  included  in  the  decedent's  gross  estate  and 
not  deducted  under  paragraphs  (1)  or  (3)  of  subdivision  (a) 
of  this  section.    This  deduction  shall  be  made  in  case  of  the 
estates  of  all  decedents  who  have  died  since  September  8, 
1916; 

(3)  The  amount  of  all  bequests,  legacies,  devises,  or  trans- 
fers, except  bona  fide  sales  for  a  fair  consideration  in  money 
or  money's  worth,  in  contemplation  of  or  intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  the  decedent's 
death,  to  or  for  the  use  of  the  United  States,  any  State,  Terri- 
tory, any  political   subdivision  thereof,   or  the   District   of 
Columbia,  for  exclusively  public  purposes,  or  to  or  for  the 
use  of  any  corporation  organized  and  operated  exclusively 
for  religious,  charitable,  scientific,  literary,  or  educational 
purposes,  including  the  encouragement  of  art  and  the  pre- 
vention of  cruelty  to  children  or  animals,  no  part  of  the  net 
earnings  of  which  inures  to  the  benefit  of  any  private  stock- 
holder or  individual,  or  to  a  trustee  or  trustees  exclusively 
for  such  religious,  charitable,  scientific,  literary,  or  educa- 
tional purposes.    This  deduction  shall  be  made  in  case  of  the 
estates  of  all  decedents  who  have  died  since  December  31, 
1917;  and 


PART  VI  — THE  STATUTES  583 

(4)  An  exemption  of  $50,000; 

(b)  In  the  case  of  a  nonresident,  by  deducting  from  the 
value  of  that  part  of  his  gross  estate  which  at  the  time  of  his 
death  is  situated  in  the  United  States — 

(1)  That  proportion  of  the  deductions  specified  in  para- 
graph (1)  of  subdivision  (a)  of  this  section  which  the  value 
of  such  part  bears  to  the  value  of  his  entire  gross  estate, 
wherever  situated,  but  in  no  case  shall  the  amount  so  deducted 
exceed  10  per  centum  of  the  value  of  that  part  of  his  gross 
estate  which  at  the  time  of  his  death  is  situated  in  the  United 
States ; 

(2)  An  amount  equal  to  the  value  of  any  property  forming 
a  part  of  the  gross  estate  situated  in  the  United  States  of 
any  person  who  died  within  five  years  prior  to  the  death  of 
the  decedent  where  such  property  can  be  identified  as  having 
been  received  by  the  decedent  from  such  prior  decedent  by 
gift,  bequest,  devise,  or  inheritance,  or  which  can  be  identified 
as  having  been  acquired  in  exchange  for  property  so  received : 
Provided,  That  this  deduction  shall  be  allowed  only  where  an 
estate  tax  under  this  or  any  prior  Act  of  Congress  was  paid 
by  or  on  behalf  of  the  estate  of  such  prior  decedent,  and  only 
in  the  amount  of  the  value  placed  by  the  Commissioner  on 
such  property  in  determining  the  value  of  the  gross  estate  of 
such  prior  decedent,  and  only  to  the  extent  that  the  value  of 
such  property  is  included  in  that  part  of  the  decedent's  gross 
estate  which  at  the  time  of  his  death  is  situated  in  the  United 
States  and  not  deducted  under  paragraphs  (1)  or  (3)  of  sub- 
division (b)  of  this  section.    This  deduction  shall  be  made  in 
case  of  the  estates  of  all  decedents  who  have  died  since  Sep- 
tember 8,  1916 ;  and 

(3)  The  amount  of  all  bequests,  legacies,  devises,  or  trans- 
fers, except  bona  fide  sales  for  a  fair  consideration,  in  money 
or  money's  worth,  in  contemplation  of  or  intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  the  decedent's 
death,  to  or  for  the  use  of  the  United  States,  any  State,  Terri- 
tory, any  political  subdivision  thereof,  or  the  District  of 
Columbia,  for  exclusively  public  purposes,  or  to  or  for  the 
use  of  any  domestic  corporation  organized  and  operated  ex- 
clusively for  religious,  charitable,  scientific,  literary,  or  educa- 


584  INHERITANCE  TAXATION 

tional  purposes,  including  the  encouragement  of  art  and  the 
prevention  of  cruelty  to  children  or  animals,  no  part  of  the 
net  earnings  of  which  inures  to  the  benefit  of  any  private 
stockholder  or  individual,  or  to  a  trustee  or  trustees  ex- 
clusively for  such  religious,  charitable,  scientific,  literary,  or 
educational  purposes  within  the  United  States.  This  deduc- 
tion shall  be  made  in  case  of  the  estates  of  all  decedents  who 
have  died  since  December  31,  1917. 

No  deduction  shall  be  allowed  in  the  case  of  a  nonresident 
unless  the  executor  includes  in  the  return  required  to  be  filed 
under  section  404  the  value  at  the  time  of  his  death  of  that 
part  of  the  gross  estate  of  the  nonresident  not  situated  in 
the  United  States. 

For  the  purpose  of  this  title  stock  in  a  domestic  corporation 
owned  and  held  by  a  nonresident  decedent  shall  be  deemed 
property  within  the  United  States,  and  any  property  of  which 
the  decedent  has  made  a  transfer  or  with  respect  to  which  he 
has  created  a  trust,  within  the  meaning  of  subdivision  (c)  of 
section  402,  shall  be  deemed  to  be  situated  .in  the  United 
States,  if  so  situated  either  at  the  time  of  the  transfer  or  the 
creation  of  the  trust,  or  at  the  time  of  the  decedent's  death. 

The  amount  receivable  as  insurance  upon  the  life  of  a  non- 
resident decedent,  and  any  moneys  deposited  with  any  per- 
son carrying  on  the  banking  business,  by  or  for  a  nonresident 
decedent  who  was  not  engaged  in  business  in  the  United  States 
at  the  time  of  his  death,  shall  not,  for  the  purpose  of  this  title, 
be  deemed  property  within  the  United  States. 

Missionaries  duly  commissioned  and  serving  under  boards 
of  foreign  missions  of  the  various  religious  denominations  in 
the  United  States,  dying  while  in  the  foreign  missionary  ser- 
vice of  such  boards,  shall  not,  by  reason  merely  of  their  in- 
tention to  permanently  remain  in  such  foreign  service,  be 
deemed  nonresidents  of  the  United  States,  but  shall  be  pre- 
sumed to  be  residents  of  the  State,  the  District  of  Columbia, 
or  the  Territories  of  Alaska  or  Hawaii  wherein  they  respec- 
tively resided  at  the  time  of  their  commission  and  their 
departure  for  such  foreign  service. 

In  the  case  of  any  estate  in  respect  to  which  the  tax  has 
been  paid,  if  necessary  to  allow  the  benefit  of  the  deduction 


PAET  VI  — THE  STATUTES  585 

under  paragraphs  (2)  and  (3)  of  subdivision  (a)  or  (b)  the 
tax  shall  be  redetermined  and  any  excess  of  tax  paid  shall  be 
refunded  to  the  executor. 

SEC.  404.  That  the  executor,  within  two  months  after  the 
decedent's  death,  or  within  a  like  period  after  qualifying  as 
such,  shall  give  written  notice  thereof  to  the  collector.  The 
executor  shall  also,  at  such  times  and  in  such  manner  as  may 
be  required  by  regulations  made  pursuant  to  law,  file  with  the 
collector  a  return  under  oath  in  duplicate,  setting  forth  (a) 
the  value  of  the  gross  estate  of  the  decedent  at  the  time  of  his 
death,  or,  in  case  of  a  nonresident,  of  that  part  of  his  gross 
estate  situated  in  the  United  States;  (b)  the  deductions 
allowed  under  section  403;  (c)  the  value  of  the  net  estate  of 
the  decedent  as  defined  in  section  403;  and  (d)  the  tax  paid 
or  payable  thereon ;  or  such  part  of  such  information  as  may 
at  the  time  be  ascertainable  and  such  supplemental  data  as 
may  be  necessary  to  establish  the  correct  tax. 

Return  shall  be  made  in  all  cases  where  the  gross  estate  at 
the  death  of  the  decedent  exceeds  $50,000,  and  in  the  case  of 
the  estate  of  every  nonresident  any  part  of  whose  gross  estate 
is  situated  in  the  United  States.  If  the  executor  is  unable  to 
make  a  complete  return  as  to  any  part  of  the  gross  estate  of 
the  decedent,  he  shall  include  in  his  return  a  description  of 
such  part  and  the  name  of  every  person  holding  a  legal  or 
beneficial  interest  therein,  and  upon  notice  from  the  collector 
such  person  shall  in  like  manner  make  a  return  as  to  such  part 
of  the  gross  estate.  The  Commissioner  shall  make  all  assess- 
ments of  the  tax  under  the  authority  of  existing  administra- 
tive special  and  general  provisions  of  law  relating  to  the 
assessment  and  collection  of  taxes. 

SEC.  405.  That  if  no  administration  is  granted  upon  the 
estate  of  a  decedent,  or  if  no  return  is  filed  as  provided  in 
section  404,  or  if  a  return  contains  a  false  or  incorrect  state- 
ment of  a  material  fact,  the  collector  or  deputy  collector  shall 
make  a  return  and  the  Commissioner  shall  assess  the  tax 
thereon. 

SEC.  406.  That  the  tax  shall  be  due  and  payable  one  year 
after  the  decedent's  death;  but  in  any  case  where  the  Com- 
missioner finds  that  payment  of  the  tax  within  such  period 


586  INHERITANCE  TAXATION 

would  impose  undue  hardship  upon  the  estate,  he  may  grant 
an  extension  or  extensions  of  time  for  payment  not  to  exceed 
three  years  from  the  due  date. 

The  executor  shall  pay  the  tax  to  the  collector  or  deputy 
collector,  and  to  such  portion  of  the  tax,  not  paid  within  one 
year  and  six  months  after  the  decedent's  death,  interest  at 
the  rate  of  6  per  centum  per  annum  from  the  expiration  of  one 
year  after  such  death  shall  be  added  as  part  of  the  tax  irre- 
spective of  any  extension  or  extensions  of  time  that  may  have 
been  granted  for  the  payment  of  the  tax,  or  any  portion 
thereof. 

SEC.  407.  That  where  the  amount  of  tax  shown  upon  a  re- 
turn made  in  good  faith  has  been  fully  paid,  or  time  for  pay- 
ment has  been  extended,  as  provided  in  section  406,  beyond 
one  year  and  six  months  after  the  decedent's  death,  and  an 
additional  amount  of  tax  is,  after  the  expiration  of  such 
period  of  one  year  and  six  months,  found  to  be  due,  then  such 
additional  amount  shall  be  paid  upon  notice  and  demand  by 
the  collector,  and  if  it  remains  unpaid  for  one  month  after 
such  notice  and  demand  there  shall  be  added  as  part  of  the 
tax  interest  on  such  additional  amount  at  the  rate  of  10  per 
centum  per  annum  from  the  expiration  of  such  period  until 
paid,  and  such  additional  tax  and  interest  shall,  until  paid, 
be  and  remain  a  lien  upon  the  entire  gross  estate. 

The  collector  shall  grant  to  the  person  paying  the  tax  dupli- 
cate receipts,  either  of  which  shall  be  sufficient  evidence  of 
such  payment,  and  shall  entitle  the  executor  to  be  credited 
and  allowed  the  amount  thereof  by  any  court  having  juris- 
diction to  audit  or  settle  his  accounts. 

If  the  executor  files  a  complete  return  and  makes  written 
application  to  the  Commissioner  for  determination  of  the 
amount  of  the  tax  and  discharge  from  personal  liability  there- 
for, the  Commissioner,  as  soon  as  possible  and  in  any  event 
within  one  year  after  receipt  of  such  application,  shall  notify 
the  executor  of  the  amount  of  the  tax,  and  upon  payment 
thereof  the  executor  shall  be  discharged  from  personal  lia- 
bility for  any  additional  tax  thereafter  found  to  be  due,  and 
shall  be  entitled  to  receive  a  receipt  or  writing  showing  such 
discharge:  Provided,  however,  That  such  discharge  shall  not 


PART  VI  — THE  STATUTES  587 

operate  to  release  the  gross  estate  from  the  lien  of  any  addi- 
tional tax  that  may  thereafter  be  found  to  be  due  while  the 
title  to  such  gross  estate  remains  in  the  heirs,  devisees,  or 
distributees  thereof;  but  no  part  of  such  gross  estate  shall  be 
subject  to  such  lien  or  to  any  claim  or  demand  for  any  such 
tax  if  the  title  thereto  has  passed  to  a  bona  fide  purchaser  for 
value. 

SEC.  408.  That  if  the  tax  herein  imposed  is  not  paid  on  or 
before  the  due  date  thereof  the  collector  shall,  upon  instruc- 
tion from  the  Commissioner,  proceed  to  collect  the  tax  under 
the  provisions  of  general  law,  or  commence  appropriate  pro- 
ceedings in  any  court  of  the  United  States,  in  the  name  of  the 
United  States,  to  subject  the  property  of  the  decedent  to  be 
sold  under  the  judgment  or  decree  of  the  court.  From  the 
proceeds  of  such  sale  the  amount  of  the  tax,  together  with 
the  costs  and  expenses  of  every  description  to  be  allowed  by 
the  court,  shall  be  first  paid,  and  the  balance  shall  be  deposited 
according  to  the  order  of  the  court,  to  be  paid  under  its  direc- 
tion to  the  person  entitled  thereto. 

If  the  tax  or  any  part  thereof  is  paid  by,  or  collected  out  of 
that  part  of  the  estate  passing  to  or  in  the  possession  of,  any 
person  other  than  the  executor  in  his  capacity  as  such,  such 
person  shall  be  entitled  to  reimbursement  out  of  any  part  of 
the  estate  still  undistributed  or  by  a  just  and  equitable  con- 
tribution by  the  persons  whose  interest  in  the  estate  of  the 
decedent  would  have  been  reduced  if  the  tax  had  been  paid 
before  the  distribution  of  the  estate  or  whose  interest  is  sub- 
ject to  equal  or  prior  liability  for  the  payment  of  taxes,  debts, 
or  other  charges  against  the  estate,  it  being  the  purpose  and 
intent  of  this  title  that  so  far  as  is  practicable  and  unless 
otherwise  directed  by  the  will  of  the  decedent  the  tax  shall  be 
paid  out  of  the  estate  before  its  distribution.  If  any  part  of 
the  gross  estate  consists  of  proceeds  of  policies  of  insurance 
upon  the  life  of  the  decedent  receivable  by  a  beneficiary  other 
than  the  executor,  the  executor  shall  be  entitled  to  recover 
from  such  beneficiary  such  portion  of  the  total  tax  paid  as 
the  proceeds,  in  excess  of  $40,000,  of  such  policies  bear  to  the 
net  estate.  If  there  is  more  than  one  such  beneficiary  the 


588  INHERITANCE  TAXATION 

executor  shall  be  entitled  to  recover  from  such  beneficiaries 
in  the  same  ratio. 

SEC.  409.  That  unless  the  tax  is  sooner  paid  in  full,  it  shall 
be  a  lien  for  ten  years  upon  the  gross  estate  of  the  decedent, 
except  that  such  part  of  the  gross  estate  as  is  used  for  the 
payment  of  charges  against  the  estate  and  expenses  of  its 
administration,  allowed  by  any  court  having  jurisdiction 
thereof,  shall  be  divested  of  such  lien.  If  the  Commissioner 
is  satisfied  that  the  tax  liability  of  an  estate  has  been  fully 
discharged  or  provided  for,  he  may,  under  regulations  pre- 
scribed by  him  with  the  approval  of  the  Secretary,  issue  his 
certificate  releasing  any  or  all  property  of  such  estate  from 
the  lien  herein  imposed. 

If  (a)  the  decedent  makes  a  transfer  of,  or  creates  a  trust 
with  respect  to,  any  property  in  contemplation  of  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  his  death 
(except  in  the  case  of  a  bona  fide  sale  for  a  fair  consideration 
in  money  or  money's  worth)  or  (b)  if  insurance  passes  under 
a  contract  executed  by  the  decedent  in  favor  of  a  specific 
beneficiary,  and  if  in  either  case  the  tax  in  respect  thereto  is 
not  paid  when  due,  then  the  transferee,  trustee,  or  beneficiary 
shall  be  personally  liable  for  such  tax,  and  such  property,  to 
the  extent  of  the  decedent's  interest  therein  at  the  time  of 
such  transfer,  or  to  the  extent  of  such  beneficiary's  interest 
under  such  contract  of  insurance,  shall  be  subject  to  a  like 
lien  equal  to  the  amount  of  such  tax.  Any  part  of  such  prop- 
erty sold  by  such  transferee  or  trustee  to  a  bona  fide  purchaser 
for  a  fair  consideration  in  money  or  money's  worth  shall  be 
divested  of  the  lien  and  a  like  lien  shall  then  attach  to  all  the 
property  of  such  transferee  or  trustee,  except  any  part  sold 
to  a  bona  fide  purchaser  for  a  fair  consideration  in  money  or 
money's  worth. 

SEC.  410.  That  whoever  knowingly  makes  any  false  state- 
ment in  any  notice  or  return  required  to  be  filed  under  this 
title  shall  be  liable  to  a  penalty  of  not  exceeding  $5,000,  or 
imprisonment  not  exceeding  one  year,  or  both. 

Whoever  fails  to  comply  with  any  duty  imposed  upon  him 
by  section  404,  or,  having  in  his  possession  or  control  any 
record,  file,  or  paper,  containing  or  supposed  to  contain  any 


PART  VI  — THE  STATUTES  589 

information  concerning  the  estate  of  the  decedent,  or,  having 
in  his  possession  or  control  any  property  comprised  in  the 
gross  estate  of  the  decedent,  fails  to  exhibit  the  same  upon 
request  to  the  Commissioner  or  any  collector  or  law  officer  of 
the  United  States,  or  his  duly  authorized  deputy  or  agent, 
who  desires  to  examine  the  same  in  the  performance  of  his 
duties  under  this  title,  shall  be  liable  to  a  penalty  of  not  ex- 
ceeding $500,  to  be  recovered,  with  costs  of  suit,  in  a  civil 
action  in  the  name  of  the  United  States. 

SEC.  411.  (a)  That  the  term  "resident"  as  used  in  this 
title  includes  a  citizen  of  the  United  States  with  respect  to 
whose  property  any  probate  or  administration  proceedings 
are  had  in  the  United  States  Court  for  China.  Where  no 
part  of  the  gross  estate  of  such  decedent  is  situated  in  the 
United  States  at  the  time  of  his  death,  the  total  amount  of 
tax  due  under  this  title  shall  be  paid  to  or  collected  by  the 
clerk  of  such  court,  but  where  any  part  of  the  gross  estate  of 
such  decedent  is  situated  in  the  United  States  at  the  time  of 
his  death,  the  tax  due  under  this  title  shall  be  paid  to  or  col- 
lected by  the  collector  of  the  district  in  which  is  situated  the 
part  of  the  gross  estate  in  the  United  States,  or,  if  such  part 
is  situated  in  more  than  one  district,  then  the  collector  of  such 
district  as  may  be  designated  by  the  Commissioner. 

(b)  For  the  purpose  of  this  section  the  clerk  of  the  United 
States  Court  for  China  shall  be  a  collector  for  the  territorial 
jurisdiction  of  such  court,  and  taxes  shall  be  collected  by  and 
paid  to  him  in  the  same  manner  and  subject  to  the  same  pro- 
visions of  law,  including  penalties,  as  the  taxes  collected  by 
and  paid  to  a  collector  in  the  United  States. 

(c)  The  proviso  in  the  Act  entitled  "An  Act  making  ap- 
propriation for  the  Diplomatic  and  Consular  Service  for  the 
fiscal  year  ending  June  30,  1921,"  approved  June  4,  1920, 
which  reads  as  follows:  "Provided,  That  in  probate  and  ad- 
ministration proceedings  there  shall  be  collected  by  said  clerk, 
before  entering  the  order  of  final  distribution,  to  be  paid  into 
the  Treasury  of  the  United  States,  the  same  inheritance  taxes 
from  time  to  time  collected  under  the  laws  enacted  by  the 
Congress  of  the  United  States  from  the  estates  of  decedents 
residing  within   the   territorial   jurisdiction   of   the   United 
States,"  is  hereby  repealed. 


590  INHERITANCE  TAXATION 

9.  Regulations  (63)  under  1921  Statute. 

The  numerous  changes  effected  by  the  Estate  Tax  Act  of 
1921  made  necessary  an  entire  revision  of  the  Regulations  of 
the  Treasury  Department,  controlling  the  procedure  for  its 
enforcement  and  collection.  These  regulations  were  approved 
and  promulgated  August  1, 1922  (as  Regulations  No.  63),  and 
apply  to  the  estates  of  all  persons  dying  subsequent  to 
November  23,  1921.  As  to  the  estates  of  persons  dying  prior 
to  that  date  the  procedure  remains  unchanged.  They  must 
be  administered  under  the  prior  statutes  and  the  regulations 
promulgated  thereunder. 

The  new  regulations,  as  issued  by  the  United  States  Treas- 
ury Department,  are  as  follows: 


REGULATIONS  RELATING  TO  THE  ESTATE  TAX 

Under  Title  IV  of  the  Revenue  Act  of  1921. 


TABLE  OF  CONTENTS 

(The  section  numbers  refer  to  the  statute,  and  the  article  numbers 
to  the  regulations.) 

PAQE 

SECTION  400.  Definitions 594 

SECTION  401.  Description  of  tax   594 

Article    1.  The  various  statutes   595 

2.  Transfers  reached  595 

3.  Neither  a  property  nor  an  inheritance  tax 596 

4.  Description  of  taxable  estates 596 

5.  Definition  of  ' '  resident ' '  and  ' '  nonresident " 596 

6.  Manner  of  determining  liability 597 

7.  Bates  of  tax    597 

8.  Computation  of  tax 598 

9.  Exempt  estates    601 

10.  Exemption  must  be  proved ,. 602 

SECTION  402.  Gross   estate    604 

SECTION  402.  (a)  General 604 

Article  11.  Character  of  interests  included 604 

12.  Specific  property  to  be  included 605 

13.  Value 606 

14.  Rules  for  valuation  of  property 606 

(1)  Real  estate    606 

(2)  Stocks  and  bonds 606 

(3)  Interest   in  business ' 609 


REGULATIONS 

SECTION  402.  (a)  General— Continued. 

Article  14.  Eules  for  valuation  of  property — Continued.  PAGE 

(4)  Notes,  secured  and  unsecured 610 

(5)  Cash  on  hand  or  on  deposit 610 

(6)  Patents,   trade-marks,    and   copyrights 610 

(7)  Accounts  receivable,  claims,  judgments,  etc 610 

(8)  Other  property  611 

(9)  Household  and  personal  effects — General  provisions....  611 

(a)  When  value  is  less  than  $2,000 612 

(b)  When  value  is  more  than  $2,000 6i2 

(c)  Appraisers  and  basis  of  appraisals 613 

15.  Valuation  of  annuities,  and  of  life  and  remainder  interests...  613 

SECTION  402.  (b)  Dower  and  curtesy  617 

Article  16.  Dower  and  curtesy  617 

SECTION  402.  (c)  Transfers  by  decedent  in  his  lifetime 618 

Article  17.  Nature  and  time  of  transfer 618 

18.  Transfers  in  contemplation  of  death — Nature  of  transfer 618 

19.  Transfers  intended  to  take  effect  at  or  after  death — General. .  619 

20.  Reservation    of    income 620 

21.  Power  of  revocation  or  control 620 

22.  Valuation  of  property  transferred 621 

SECTION  402.   (d)   Property  held  jointly 621 

Article  23.  Property  held  jointly  or  as  tenants  by  the  entirety 621 

24.  Taxable  portion  622 

SECTION  402.  (e)  Property  passing  under  power  of  appointment 624 

Article  25.  General  rules   624 

26.  Powers  exercised  before  and  after  February  24,  1919 624 

SECTION  402.   (f )  Insurance 625 

Article  27.  Taxable    insurance    625 

28.  Insurance  in  favor  of  the  estate 626 

29.  Insurance  receivable  by  other  beneficiaries 626 

30.  Effective  date  of  insurance  provisions 626 

31.  Valuation  of  insurance 627 

SECTION  403.  Deductions 627 

SECTION  403.   (a)  Deductions — Estates  of  residents 627 

SECTION  403.  (a)  (1)  General 627 

Article  32.  Deduction  of  claims,  expenses,  etc 627 

33.  Effect  of   court   decree 628 

34.  Funeral   expenses    629 

35.  Administration  expenses    629 

36.  Executor 's  commissions   630 

37.  Attorney 's  fees   630 

38.  Miscellaneous    administration    expenses ' 631 

39.  Claims  against  the  estate 631 

40.  Taxes 631 

41.  Unpaid  mortgages 632 

42.  Losses  from  casualty  or  theft 632 

43.  Support  of  dependents   633 

SECTION  403.  (a)  (2)  Property  previously  taxed 633 

Article  44.  Deduction  of  the  value  of  transfers  taxed  within  five  years. . . .   634 

45.  Property  originally  received    635 

46.  Property  acquired  in  exchange 635 


592  INHERITANCE  TAXATION 

PAGE 

SECTION  403.  (a)  (3)  Transfers  for  public,  charitable,  etc.,  uses 636 

Article  47.  Transfers  for  public,  charitable,  religious,  etc.,  uses 636 

48.  Religious,  charitable,  scientific,  and  educational  corporations...  637 

49.  Proof    required    638 

50.  Conditional   bequests    638 

51.  Effective  date    638 

SECTION  403.   (a)  (4)  Specific  exemption    639 

Article  52.  Specific  exemption  639 

SECTION  403.  (b)  Estates  of  nonresidents  639 

Article  53.  Situs  of  property  of  nonresident  decedents 639 

SECTION  403.  (b)  (1)  (2)  (3)  Deductions 640 

Article  54.  Net  estate  641 

55.  Deduction  of  claims,  expenses,  etc 641 

56.  Deduction  of  value  of  transfers  taxed  within  five  years 642 

57.  Deduction  of  value  of  transfers  for  public,  charitable,  religious, 

etc.,  uses    643 

58.  Determination   of  net   estate 643 

59.  Payment  of  tax  644 

SECTION  404.  Preliminary  notice    644 

Article  60.  When  notice  required    644 

61.  Notice  by  executor  or  administrator 644 

62.  Notice  by  others  than  duly  qualified  executor  or  administrator.  645 

63.  Exemption    claimed    on    account    of    military    service;    notice 

required 645 

64.  Preliminary  notice ;  estates  of  nonresidents 645 

65.  Transfer  agents'  notice;  estates  of  nonresidents 646 

66.  Transfer  of  stocks  and  bonds  of  nonresident  decedents;  how 

made 647 

SECTION  404.  The  return   648 

Article  67.  When  return  required — Date  of  filing 648 

68.  Persons  liable  for  return 649 

69.  Preparation  for  return    649 

70.  Supplemental  data    650 

71.  Procedure  where  no  return  has  been  made 650 

72.  Investigation  of  returns    650 

73.  Return  of  estates  of  nonresidents 652 

74.  Estates   of   nonresidents — Supplemental   data 652 

75.  Returns  confidential    653 

76.  Disclosure  to  persons  having  material  interest 653 

77.  Attorneys  must  have  authorization 653 

SECTION  405.  Revised  statutes,  Sec.  3176.     Return  by  collector  or  Commis- 
sioner    654 

Article  78.  Return  by  collector  or  Commissioner 654 

SECTION  406.  Payment  of  tax  and  interest 655 

SECTION  407.  Adjustment  of  tax — Interest  655 

Article  79.  Payment  of  tax ;  general 655 

80.  Payment  by  bonds  or  uncertified  check 656 

81.  The  executor  shall  pay  the  tax 657 

82.  Extension  of  time  for  payment 658 

83.  Interest  on  tax    .                                                                                .  658 


REGULATIONS  593 

PAGE 

SECTION  408.  Collection  of  tax   659 

Article  84.  Remedy  not  exclusive  659 

SECTION  408.  Reimbursement 659 

Article  85.  Right  to  reimbursement  not  enf orcible  by  Bureau 660 

SECTION  409.  Lien — Remedy  against  transferee  and  insurance  beneficiary...  660 

SECTION  407.  Discharge  of  executor  from  personal  liability 660 

Article  86.  Property  subject  to  lien  661 

87.  Release  of  lien  662 

SECTION  410.  Revised  Statutes,  Sec.  3176.  Penalties 663 

Article  88.  Nature  of  penalties   664 

89.  Penalties  for  false  or  fraudulent  notice  or  return 664 

90.  Penalty  for  failure  to  file  notice  or  return 664 

91.  Penalty  for  failure  to  exhibit  records  or  property 664 

Revised  Statutes,  Sees.  3220,  3225,  3228.    Claims  for  abatement  and  refund..  665 

Article  92.  Kinds  of  relief   665 

93.  Claim  for  abatement    666 

94.  Accrual  of  interest  as  affected  by  abatement  claim 666 

95.  Limitation  of  time  to  file  claim  for  abatement  of  additional  tax  666 

96.  Claim  for  refund    667 

97.  Payment  of  claims  and  interest 668 

Revised  Statutes,   Sees.   3329,   5292,  5293.     Power  to   compromise  or  remit 

penalties 668 

Article  98.  Power  to  compromise  or  remit 669 

Revised  Statutes,  Sec.  3467.    Personal  liability  of  executor 669 

Article  99.  Extent   of   liability    670 

SECTIONS  1308,  1310.  Examination  of  records  and  taking  of  testimony 670 

Article  100.  Securing  evidence — Taking  testimony   670 

101.  Power  to  compel  compliance ., 671 

SECTIONS  1300,  1307.  Remedies  for  collection 671 

Article  102.  Remedies  for  collection  of  tax 671 

103.  Executor 's  duty  to  keep  records 672 

104.  Executor's  duty  to  render  statements 672 

SECTION    411.  Estates  administered  in  the  United  States  Court  for  China. .  672 

SECTION  1400.  Scope  of  repeal    672 

Article  105.  Scope  of  repeal  673 

106.  Promulgation  of  regulations    673 

Appendix 674 

38 


594  INHERITANCE  TAXATION 


REGULATIONS. 

ESTATE  TAX. 

Except  as  otherwise  specified,  the  section  references  are  to  the  Revenue  Act  of  1921. 

SEC.  400.    That  when  used  in  this  title — 

The  term  "  executor  "  means  the  executor  or  administrator  of  the  decedent,  or, 
if  there  is  no  executor  or  administrator,  any  person  in  actual  or  constructive 
possession  of  any  property  of  the  decedent; 

The  term  "  net  estate  "  means  the  net  estate  as  determined  under  the  provisions 
of  section  403; 

The  term  "  month  "  means  calendar  month ;  and 

The  term  "  collector "  means  the  collector  of  internal  revenue  of  the  district 
in  which  was  the  domicile  of  the  decedent  at  the  time  of  his  death,  or,  if  there 
was  no  such  domicile  in  the  United  States,  then  the  collector  of  the  district  in 
which  is  situated  the  part  of  the  gross  estate  of  the  decedent  in  the  United  States, 
or,  if  such  part  of  the  gross  estate  is  situated  in  more  than  one  district,  then 
the  collector  of  internal  revenue  of  such  district  as  may  be  designated  by  the 
Commissioner. 

SEC.  401.  That,  in  lieu  of  the  tax  imposed  by  Title  IV  of  the  Revenue  Act  of 
1918,  a  tax  equal  to  the  sum  of  the  following  percentages  of  the  value  of  the 
net  estate  (determined  as  provided  in  section  403)  is  hereby  imposed  upon  the 
transfer  of  the  net  estate  of  every  decedent  dying  after  the  passage  of  this  Act, 
whether  a  resident  or  non-resident  of  the  United  States: 

1  per  centum  of  the  amount  of  the  net  estate  not  in  excess  of  $50,000; 

2  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $50,000  and  does 
not  exceed  $150,000; 

3  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $150,000  and  does 
not  exceed  $250,000; 

4  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $250,000  and  does 
not  exceed  $450,000; 

6  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $450,000  and  does 
not  exceed  $750,000; 

8  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $750,000  and  does 
not  exceed  $1,000,000; 

10  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $1,000,000  and 
does  not  exceed  $1.500,000; 

12  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $1,500,000  and 
does  not  exceed  $2,000,000; 

14  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $2,000,000  and 
does  not  exceed  $3,000,000; 

16  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $3,000,000  and 
does  not  exceed  $4,000,000 ; 

18  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $4,000,000  and 
does  not  exceed  $5,000,000; 


REGULATIONS  595 

20  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $5,000,000  and 
does  not  exceed  $8,000,000; 

22  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $8.000,000  and 
does  not  exceed  $10,000,000;  and 

25  per  centum  of  the  amount  by  which  the  net  estate  exceeds  $10,000,000. 

The  taxes  imposed  by  this  title  or  by  Title  II  of  the  Revenue  Act  of  1916 
(as  amended  by  the  Act  entitled  "  An  Act  to  provide  increased  revenue  to  defray 
the  expenses  of  the  increased  appropriations  for  the  Army  and  Navy  and  the 
extensions  of  fortifications,  and  for  other  purposes,"  approved  March  3,  1917) 
or  by  Title  IX  of  the  Revenue  Act  of  1917,  or  by  Title  IV  of  the  Revenue  Act  of 
1918,  shall  not  apply  to  the  transfer  of  the  net  estate  of  any  decedent  who  has 
died  or  may  die  from  injuries  received  or  disease  contracted  in  line  of  duty 
while  serving  in  the  military  or  naval  forces  of  the  United  States  in  the  war 
against  the  German  Government,  or  to  the  transfer  of  the  net  estate  of  any 
citizen  of  the  United  States  who  has  died  or  may  die  from  injuries  received  or 
disease  contracted  in  line  of  duty  while  serving  in  the  military  or  naval  forces 
of  any  country  while  associated  with  the  United  States  in  the  prosecution  of 
such  war,  or  prior  to  the  entrance  therein  of  the  United  States,  and  any  tax 
collected  upon  such  transfer  shall  be  refunded  to  the  estate  of  such  decedent. 

Article  1.  The  various  statutes. — The  Federal  estate  tax 
was  first  imposed  by  the  Act  of  September  8,  1916.  This  law 
was  amended  by  the  Act  of  March  3,  1917  (Title  III),  and  the 
Act  of  October  3,  1917  (Title  IX).  These  two  statutes 
increased  the  rate  of  tax.  The  Revenue  Act  of  1918  (Title 
IV),  which  became  effective  6.55  p.  m.,  Washington,  D.  C., 
time,  February  24,  1919,  reduced  the  rates  applicable  to  the 
smaller  net  estates  as  compared  with  those  of  Title  IX  of  the 
Revenue  Act  of  1917,  and  contained  a  number  of  provisions 
not  found  in  any  of  the  prior  acts.  The  Revenue  Act  of  1921 
(Title  IV)  became  effective  at  3.55  p.  m.,  Washington,  D.  C., 
time,  November  23,  1921.  It  reenacts  without  change  the 
rates  of  Title  IV  of  the  Revenue  Act  of  1918,  supplants  all 
prior  acts  as  to  the  estates  of  decedents  dying  after  the  effec- 
tive date  thereof,  embodies  numerous  changes,  but  continues 
many  of  the  provisions  of  the  earlier  acts.  It  is  herein 
referred  to  as  "the  statute."  References  to  other  statutes 
are  specific. 

Art.  2.  Transfers  reached. — The  statute  subjects  to  tax 
transfers  by  will  and  under  intestate  laws,  and  also  transfers 
made  by  the  decedent  in  his  lifetime,  when  made  in  contempla- 
tion of  death  or  intended  to  take  effect  in  possession  or  enjoy- 
ment at  or  after  his  death,  excepting,  however,  bona  fide  sales 


596  INHERITANCE  TAXATION 

for  a  fair  consideration  in  money  or  money's  worth.  Trans- 
fers of  certain  other  property  interests  are  also  included. 

Art.  3.  Neither  a  property  nor  an  inheritance  tax. — The 
Federal  estate  tax  is  imposed  upon  the  transfer  of  the  net 
estate  of  every  person  dying  after  September  8,  1916,  deter- 
mined in  the  manner  prescribed  by  the  applicable  law.  (See 
Art.  1.)  The  tax  is  not  laid  upon  the  property,  but  upon  its 
transfer  from  the  decedent  to  others.  The  subject  of  tax  is 
the  transfer  of  the  entire  net  estate,  not  any  particular  legacy, 
devise,  or  distributive  share,  and  the  relationship  of  the  bene- 
ficiary to  the  decedent  has  no  bearing  upon  the  question  of 
liability,  or  the  extent  thereof.  The  transfer  of  property  is 
taxable,  although  it  escheats  to  the  State  for  lack  of  heirs. 

ESTATES  SUBJECT  TO  TAX. 

Art.  4.  Description  of  taxable  estates. — The  tax  is  imposed 
upon  the  transfer  of  the  net  estate.  The  term  "net  estate" 
has  a  distinct  meaning  in  the  statute,  signifying  the  differ- 
ence between  the  total  value  of  the  gross  estate  and  the  total 
of  the  authorized  deductions.  One  of  the  deductions  author- 
ized in  the  estate  of  a  resident  decedent  is  the  specific  sum  of 
$50,000,  and  consequently  there  is  no  net  estate  where  the 
gross  estate  does  not  exceed  that  amount.  No  such  deduction 
is  authorized  in  the  estate  of  a  nonresident  decedent.  (See 
Arts.  53  to  58,  inclusive.) 

Art.  5.  Definition  of  "resident"  and  "nonresident." — The 

statute  provides  (paragraph  (5)  of  section  2)  that  the  term 
"United  States,"  when  used  in  a  geographical  sense,  includes 
only  the  States,  the  Territories  of  Alaska  and  Hawaii,  and 
the  District  of  Columbia. 

A  resident  is  one  who,  at  the  time  of  his  death,  had  his 
domicile  in  the  United  States ;  or  one  who  was  a  citizen  of  the 
United  States  at  time  of  death  and  with  respect  to  whose 
property  any  probate  or  administration  proceedings  are  had 
in  the  United  States  Court  for  China.  (See  Sec.  411.)  A 
missionary  who,  at  the  time  of  death,  was  serving  as  such 
under  a  foreign  missionary  board  of  any  religious  denomina- 


REGULATIONS  597 

tion  in  the  United  States,  will  be  presumed  to  have  died  a 
resident  of  the  United  States,  if  domiciled  therein  at  the  time 
of  his  or  her  commission  and  departure  for  such  service,  and 
not  a  nonresident  merely  by  reason  of  his  or  her  intention 
to  permanently  remain  in  such  service.  (See  Sec.  403(b).) 
Subject  to  the  foregoing  exceptions,  and  the  presumption 
applying  in  the  case  of  such  missionaries,  all  other  persons 
are  nonresidents. 

Except  as  stated  above,  and  in  section  400  of  the  statute  in 
respect  to  the  exemption  accorded  on  account  of  military  or 
naval  service  in  the  late  war,  the  statute  takes  no  account  of 
the  citizenship  of  the  decedent,  but  prescribes  different  rules 
for  the  estates  of  residents  and  nonresidents. 

A  citizen  of  the  United  States  is  a  nonresident  if  his  domi- 
cile is  in  Porto  Rico,  the  Philippine  Islands,  or  other  foreign 
country,  whereas  a  citizen  of  a  foreign  country  is  a  resident 
if  his  domicile  is  in  the  United  States.  A  person  acquires  a 
domicile  in  a  place  by  living  there,  for  even  a  brief  period  of 
time,  with  no  definite  present  intention  of  later  removing 
therefrom.  Residence  without  the  requisite  intention  to 
remain  will  not  suffice  to  constitute  domicile,  nor  will  inten- 
tion to  change  domicile  effect  such  a  change  unless  accom- 
panied by  actual  removal. 

DETERMINATION  OF  TAX  LIABILITY. 

Art.  6.  Manner  of  determining  liability, — The  first  step  in 
the  determination  of  tax  liability  is  to  ascertain  the  total 
value  of  the  decedent's  gross  estate.  (See  Arts.  11  to  31, 
inclusive;  also  Art.  53.)  The  second  step  is  to  subtract  from 
this  value  the  total  deductions  authorized  in  order  to  arrive 
at  the  value  of  the  net  estate.  (See  Arts.  32  to  52,  inclusive, 
as  to  estates  of  residents ;  and  Arts.  54  to  58,  inclusive,  as  to 
estates  of  nonresidents.)  The  third  step  is  to  obtain  the  sum 
of  certain  percentages  of  successive  portions  of  the  net  estate, 
as  provided  by  the  applicable  taxing  act.  (See  Arts.  7  and  8.) 

Art.  7.  Rates  of  tax. — The  Revenue  Act  of  1916,  the  amend- 
ment thereto  of  March  3,  1917,  the  Revenue  Act  of  1917,  and 
the  Revenue  Act  of  1918,  each  imposed  different  rates  of  tax. 


598 


INHERITANCE  TAXATION 


The  rates  imposed  by  the  Kevenue  Act  of  1921  are  the  same 
as  those  prescribed  in  the  Revenue  Act  of  1918.  In  each  act 
the  rates  contained  therein  are  applicable  to  the  estates  of 
decedents  dying  on  or  after  the  effective  date  thereof,  and 
prior  to  the  effective  date  of  the  next  succeeding  act.  A  table 
of  the  several  rates  is  given  below : 

Bates  of  estate  tax. 


Blocks  of  net  estate. 

1 

2 

3 

4 

Act  of 

Amend- 
ment of 

Act  of 

Acts  of 
1918 

1916 

Mar.  3, 

1917 

and  1921. 

Exceeding 

Not  exceeding- 

Amount  of 

(effective 

1917 

(effective 

(For 

ing. 

block. 

Sept,    9, 

(effective 

Oct.  4, 

effective 

1916). 

Mar.  3, 

1917). 

dates,  see 

1917). 

below). 

Per  cent. 

Per  cent. 

Per  cent. 

Per   cent. 

$50,000 

$50,000 

1 

11 

2 

I 

$50,000 

150,000 

100,000 

2 

3 

4 

2 

150,000 

250,000 

100,000 

3 

41 

6 

3 

250,000 

450,000 

200,000 

4 

6 

8 

4 

450,000 

750,000 

300,000 

5 

71 

10 

6 

750,000 

1.000,000 

250,000 

5 

10 

8 

1,000,000 

1,500,000 

500,000 

6 

9 

12 

10 

1,500,000 

2,000,000 

500,000 

6 

9 

12 

12 

2,000,000 

3,000,000 

1,000,000 

7 

101 

14 

14 

3,000,000 

4,000,000 

1,000,000 

8 

12 

16 

16 

4,000,000 

5,000,000 

1,000,000 

9 

131 

18 

18 

5,000,000 

6,000,000 

1,000,000 

10 

15 

20 

20 

6,000,000 

7,000,000 

1,000,000 

10 

15 

20 

20 

7,000,000 

8,000,000 

1,000,000 

10 

15 

20 

20 

8,000,000 

9,000,000 

1,000,000 

10 

15 

22 

22 

9,000,000 

10,000,000 

1,000,000 

10 

15 

22 

22 

10,000,000 

10 

15 

25 

25 

The  rates  prescribed  by  the  different  acts,  as  set  forth 
above,  apply  to  the  estates  of  decedents  dying  within  the 
following  dates : 

Column  1,  Revenue  Act  of  1916,  effective  Sept.  9,  1916,  to  Mar.  2,  1917, 
inclusive. 

Column  2,  amendment  of  Mar.  3,  1917.  effective  Mar.  3,  1917,  to  Oct.  3,  1917, 
inclusive. 

Column  3,  Revenue  Act  of  1917,  effective  Oct.  4,  1917,  to  6.55  p.  m.,  Wash- 
ington, D.  C.,  time,  Feb.  24,  1919,  inclusive. 

Column  4,  Revenue  Act  of  1918,  effective  6.55  p.  m.,  Feb.  24,  1919,  to  3.55 
p.  m.,  Nov.  23,  1921  (Washington.  D.  0.,  time),  on  which  last  named  hour  and 
date  the  Revenue  Act  of  1921  became  effective. 


Art.  8.  Computation  of  tax. — For  the  purpose  of  computing 
the  tax,  the  net  estate  is  divisible  into  blocks,  each  block  being 
taxed  at  a  different  and  increasing  rate.  The  preceding 
table  gives  the  amount  of  the  various  blocks  and  the  applic- 


REGULATIONS  599 

able  rate  of  tax  under  each  of  the  taxing  acts.  For  example, 
the  tax  upon  the  net  estate  of  $1,240,000  of  a  decedent  dying 
on  March  1,  1919,  is  computed  as  follows : 

Amount   of   first   block $50,000  at  1  per  cent  $500 

Amount  of  second  block 100,000  at  2  per  cent  2,000 

Amount  of  third  block 100,000  at  3  per  cent  3,000 

Amount  of   fourth   block 200,000  at  4  per  cent  8,000 

Amount   of   fifth   block 300,000  at  6  per  cent  18,000 

Amount   of   sixth    block 250',000  at  8  per  cent  20,000 

Remainder   240,000  at  10  per  cent  24,000 


Total    net   estate $1,240,000    Total  tax..     $75,500 

There  is  subjoined  a  table  for  ascertaining  the  tax  without 
the  detailed  computation  given  above.  An  illustration  of  its 
use  is  as  follows :  The  iiet  estate  of  a  decedent  dying  March  1, 
1919,  amounts  to  $1,240,000.  By  reference  to  the  table  it  will 
be  seen  that  the  last  complete  block  preceding  this  amount  is 
$1,000,000,  and  that  the  total  tax  computed  on  a  million  dol- 
lars under  the  rates  in  force  amounts  to  $51,500.  Upon  the 
remainder  of  the  net  estate,  $240,000,  the  tax  is  computed  at 
the  rate  set  out  in  the  next  following  line,  or  at  10  per  cent. 
The  tax  on  this  amount  is  consequently  $24,000.  The 
following  result  is  thus  obtained : 

Total    tax   on $1,000,000=$5 1,500 

Tax    on     240,000=  24,000 


Totals     $1,240,000     $75,500 


600 


INHERITANCE  TAXATION 


i 


2s 

_-oe 


II 


°2« 
.«<! 

t~-H 

-H    .a> 


2*0 


•8>  iR^? 


*ll 


ioooooeQ o  o  o  o  o  o  o 

Sooooooooooooooo 
ooooooooooocooo 

f— (C^'~IT}<^OC^CO*O1O»O1OO 
INi^CCOO'-ijH'-i'-i^ 

rHi-IC<|CV5^HffOt~OOO5O 

>"o  o"o  o  o  o  o  o  o  p  o  o  ( 


- 


REGULATIONS  601 

EXEMPT  ESTATES — SERVICE  IN  WORLD  WAR. 

Art.  9.  Exempt  estates. — The  first  exemption  from  estate 
tax,  on  account  of  military  or  naval  service  in  the  war  against 
Germany,  was  contained  in  the  Revenue  Act  of  1917,  and 
applied  to  the  estate  "of  any  decedent  dying  while  serving 
in  the  military  or  naval  forces  of  the  United  States,  during 
the  continuance  of  the  war  in  which  the  United  States  is  now 
engaged,  or  if  death  results  from  injuries  received  or  disease 
contracted  in  such  service,  within  one  year  after  the  termina- 
tion of  such  war,"  and  was  limited  to  the  increased  rates  of 
tax  imposed  thereby,  and  to  the  estates  of  decedents  dying 
after  its  passage. 

In  the  Revenue  Act  of  1918  the  exemption  was  extended  to 
include  the  estate  "of  any  decedent  who  has  died  or  may  die 
while  serving  in  the  military  or  naval  forces  of  the  United 
States  in  the  present  war  or  from  injuries  received  or  disease 
contracted  while  in  such  service,"  and  embodied  a  retroactive 
provision  rendering  the  exemption  available  under  the  former 
Acts,  and  authorized  the  refund  of  taxes  collected  under  the 
provisions  thereof  from  estates  to  which  the  exemption 
applied.  Where  such  taxes  have  been  paid  or  collected,  a 
claim  for  refund  on  Form  843  should  be  filed  accompanied 
by  such  of  the  proofs  prescribed  in  Article  10  as  may  be 
applicable  to  the  particular  case.  (See  Arts.  63  and  96.) 

The  Revenue  Act  of  1921  exempts  from  tax  the  estates  of 
two  classes  of  decedents,  namely:  (1)  Where  the  decedent 
died  from  injuries  received  or  disease  contracted  in  line  of 
duty  while  serving  in  the  military  or  naval  forces  of  the 
United  States  in  the  war  against  the  German  Government. 
The  term  "military  or  naval  forces  of  the  United  States" 
includes,  among  other  units,  the  Marine  Corps,  the  Coast 
Guard,  the  Army  Nurse  Corps,  Female,  and  the  Navy  Nurse 
Corps,  Female ;  but  does  not  include  personnel  of  the  Public 
Health  Service.  (2)  Where  the  decedent,  a  citizen  of  the 
United  States,  enlisted  in  the  military  or  naval  forces  of  any 
country  associated  with  the  United  States  in  the  prosecution 
of  such  war,  and  whose  death  resulted  from  injuries  received 
or  disease  contracted  in  line  of  duty  while  serving  in  such 
forces,  either  prior  to  the  entrance  of  the  United  States  into 


602  INHERITANCE  TAXATION 

such  war,  or  during  the  time  such  country  was  associated  witn 
the  United  States  in  the  prosecution  thereof.  The  estate  of 
such  a  decedent  is  not  deprived  of  the  benefit  of  this  exemp- 
tion by  reason  of  the  fact  that,  as  a  condition  precedent  to  his 
enlistment  in  the  military  or  naval  forces  of  any  such  coun- 
try, the  decedent  was  required  to  take  an  oath  of  allegiance 
to  such  country  or  to  the  reigning  sovereign  thereof.  Under 
the  retroactive  provision  of  this  Act  the  exemption,  as  will  be 
noted,  is  made  available  to  the  estates  of  those  whose  deaths 
resulted  from  injuries  received  or  disease  contracted  "in  line 
of  duty"  while  serving,  as  above  set  out,  in  the  military  or 
naval  forces  of  such  a  foreign  country.  The  exemption  is 
conditioned,  both  with  respect  to  service  in  the  military  or 
naval  forces  of  the  United  States  and  such  a  foreign  country, 
upon  death  resulting  from  injuries  received  or  disease  con- 
tracted "in  line  of  duty";  a  condition  which,  in  all  cases, 
operates  wherever  the  death  occurred  subsequent  to  the  effec- 
tive date  of  this  Act.  (See  Art.  1.)  The  Act  contains  a 
refundment  clause  similar  to  that  in  the  Revenue  Act  of  1918. 
(See  Arts.  63  and  96.) 

As  to  the  United  States,  and  so  far  as  concerns  the  pro- 
visions of  the  various  Eevenue  Acts  imposing  an  estate  tax, 
such  war  terminated  March  3,  1921,  by  virtue  of  the  joint 
resolution  of  Congress  approved  on  that  date. 

Art.  10.  Exemption  must  be  proved. — In  every  case  where 
the  exemption  is  claimed  the  right  must  be  proved  by  the 
estate.  Formal  claim  for  exemption  on  Form  793,  accom- 
panied by  supporting  evidence,  should  be  filed  with  the  notice 
required  by  section  404  (see  Art.  63),  or  as  soon  thereafter  as 
the  necessary  evidence  may  be  secured,  and  in  any  case  not 
later  than  one  year  after  the  decedent's  death.  Where 
decedent  died  before  his  discharge  from  the  military  or  naval 
forces  of  the  United  States,  and  it  is  claimed  that  his  death 
resulted  from  injuries  received  or  disease  contracted  in  line 
of  duty  during  the  war  with  Germany,  there  should  be 
submitted : 

'(1)  In  the  case  of  a  soldier,  a  certificate  of  the  Adjutant 
General  of  the  Army ;  in  the  case  of  a  sailor,  a  certificate  of 
the  Surgeon  General  of  the  Navy ;  in  the  case  of  a  Marine,  a 


REGULATIONS  603 

certificate  of  the  Commandant  of  the  Marine  Corps;  and  in 
the  case  of  a  person  who  served  in  any  auxiliary  force  com- 
prehended within  the  term  "military  or  naval  forces  of  the 
United  States,"  a  certificate  of  the  proper  authority,  showing 
the  occurrence  of  death  while  in  the  service,  and  whether,  by 
the  official  records,  it  resulted  from  injuries  received  or 
disease  contracted  in  line  of  duty  during  such  war. 

(2)  In  the  event  that  the  official  records  do  not  disclose  all 
the  pertinent  facts,  then  affidavits  of  officers  or  enlisted  men 
will  be  considered  in  connection  with  such  records  as  to  the 
incurrence  of  injury  or  disease  in  line  of  duty  during  such 
war. 

Where  the  decedent  dies  after  discharge  from  the  military 
or  naval  forces  of  the  United  States,  there  should  be 
submitted : 

(1)  Certificate  of  discharge  from  the  service,  or  a  duly 
verified  copy  of  such  certificate. 

(2)  Certified  copy  of  public  record  of  death,  showing  cause 
of  death. 

(3)  Affidavit  or  affidavits  of  the  attending  physician  or 
physicians,   setting  forth  decedent's  medical  history  while 
under  the  treatment  of  such  physician  or  physicians. 

(4)  Affidavits  of  officers  or  enlisted  men  or  other  evidence 
bearing   upon    the    question   whether   death    resulted    from 
injuries  received  or  disease  contracted  in  line  of  duty  while 
serving  in  the  military  or  naval  forces  of  the  United  States 
during  such  war. 

Where  it  is  claimed  that  the  decedent,  a  citizen'  of  the 
United  States  who  enlisted  in  the  military  or  naval  forces  of 
any  country  associated  with  the  United  States  in  the  prosecu- 
tion of  such  war,  died  from  injuries  received  or  disease  con- 
tracted in  line  of  duty  while  in  such  foreign  service,  as  more 
fully  explained  in  the  third  paragraph  of  this  article,  there 
shall  be  submitted : 

(1)  Evidence  showing  his  citizenship  at  the  time  of  such 
enlistment. 

(2)  A  complete  copy  of  the  official  records  of  his  service 
in  the  forces  of  the  foreign  country,  certified  by  the  custodian 
thereof. 


604  INHERITANCE  TAXATION 

Where,  in  any  case,  it  is  determined  by  the  Commissioner 
that  the  estate  is  entitled  to  the  exemption,  the  executor  will 
be  notified  to  that  effect,  and  his  duties  with  respect  to  the 
tax  will  cease.  If  the  evidence  submitted  in  support  of  the 
claim  is  found  not  to  be  satisfactory,  such  further  evidence 
will  be  called  for,  or  such  investigation  instituted,  as  the  Com- 
missioner may  direct.  If  it  is  determined  that  the  estate  is 
not  entitled  to  the  exemption,  the  executor  will  be  required  to 
file  return  and  pay  tax  in  the  same  manner  as  executors  of 
other  taxable  estates. 

GROSS  ESTATE — GENERAL. 

SEC.  402.  That  the  value  of  the  gross  estate  of  the  decedent  shall  be  deter- 
mined by  including  the  value  at  the  time  of  his  death  of  all  property,  real  or 
personal,  tangible  or  intangible,  wherever  situated — 

(a)  To  the  extent  of  the  interest  therein  of  the  decedent  at  the  time  of  his 
death  which  after  his  death  is  subject  to  the  payment  of  the  charges  against  his 
estate  and  the  expenses  of  its  administration  and  is  subject  to  distribution  as 
part  of  his  estate; 

Art.  11.  Character  of  interests  included. — It  is  designed  by 
the  foregoing  provision  of  the  statute  that  there  shall  be 
included  in  the  gross  estate  the  value  of  all  property  of  the 
decedent  whether  real  or  personal,  tangible  or  intangible,  the 
beneficial  ownership  of  which  was  in  the  decedent  in  his 
lifetime,  and  which,  upon  his  death,  formed  his  estate. 

The  test  which  determines  whether  the  value  of  a  given 
interest  is  to  be  so  included,  pursuant  to  the  foregoing  pro- 
vision of  the  statute,  is  that  stated  therein  which  requires 
that  the  property,  after  death,  shall  be  subject  to:  (1)  pay- 
ment of  the  charges  against  the  estate,  (2)  payment  of  the 
expenses  of  administration,  and  (3)  distribution  as  a  part  of 
the  estate. 

The  value  of  a  vested  remainder  should  be  included  in  the 
gross  estate.  Nothing  should  be  included,  however,  on 
account  of  a  contingent  remainder  where  the  contingency 
does  not  happen  in  the  lifetime  of  the  decedent,  and  the  inter- 
est consequently  lapses  at  his  death.  Nor  should  anything 
be  included  on  account  of  an  interest  or  an  estate  limited  for 
the  life  of  the  decedent.  There  should  be  included,  how- 
ever, the  value  of  an  annuity  payable  to,  or  an  interest  or  an 


REGULATIONS  605 

estate  vested  in,  the  decedent  for  the  life  of  another  person 
who  survives  him.  For  rules  in  valuing  such  remainders, 
annuities,  and  interests  or  estates  per  autre  vie,  see 
Article  15. 

Art.  12.  Specific  property  to  be  included. — The  value  of  all 
real  property  situated  in  the  United  States,  and  owned  by 
the  decedent  at  the  date  of  his  death,  should  be  included  in 
the  gross  estate,  whether  the  decedent  was  a  resident  or  a 
nonresident,  and  whether  the  property  came  into  the  posses- 
sion and  control  of  the  executor  or  administrator  or  passed 
directly  to  heirs  or  devisees.  The  value  of  real  property 
situated  outside  the  United  States  should  not  be  included, 
except  as  otherwise  provided  in  Articles  55,  56,  and  57,  where 
deductions  from  gross  estate  are  claimed  and  the  decedent 
was  a  nonresident.  Where  the  decedent  was  a  resident,  the 
value  of  all  personal  property  owned  by  him  should  be 
included,  wherever  situated.  Where  decedent  was  a  nonresi- 
dent, the  value  of  so  much  of  his  personal  property  as  had 
its  situs  in  the  United  States  at  the  time  of  his  death  should 
be  included,  and  the  value  of  his  entire  gross  estate,  wherever 
situated,  if  deductions  are  claimed.  (See  Arts.  55,  56,  and 
57.)  As  to  the  situs  of  the  personal  property  of  nonresident 
decedents,  see  Article  53. 

A  cemetery  lot  owned  by  the  decedent  is  part  of  his  gross 
estate,  but  its  value  is  limited  to  the  salable  value  of  such 
part  of  it  as  is  not  designed  for  the  interment  of  the  decedent 
or  members  of  his  family.  Bents  and  interest  which  had 
accrued  at  the  time  of  the  decedent's  death,  whether  then 
payable  or  not,  and  unpaid  matured  coupons,  should  be 
included.  The  value  of  notes  or  other  claims  held  by  the 
decedent  should  be  included,  though  they  are  canceled  by  his 
will.  As  to  the  valuation  of  notes  and  claims,  see  Article  14, 
paragraphs  3  and  7.  All  bonds,  whether  federal,  state,  or 
municipal,  and  whether  or  not  containing  a  tax-free  covenant, 
should  be  included. 

Dividends  on  either  common  or  preferred  stock  should  be 
included  only  where  declared  prior  to  the  decedent's  death 
and  not  reflected  in  the  market  value  of  the  stock  on  the  day 


6CK3  INHERITANCE  TAXATION 

of  death.  Thus  dividends,  both  declared  and  payable  to 
holders  of  record  on  a  date  prior  to  the  decedent's  death, 
should  be  included,  provided  the  stock  was  selling  "ex  divi- 
dend ' '  on  the  date  of  death. 

Example:  A  5  per  cent  dividend  upon  stock  is  declared 
March  1,  payable  on  April  1  to  stockholders  of  record  on 
March  15.  If  the  death  occurred  on  March  10  and  the  market 
value  on  that  day  was  90,  the  value  to  be  returned  for  both 
stock  and  dividend  is  90,  the  dividend  being  reflected  in  the 
market  value  of  the  stock.  If  the  death  occurred  on  March 
20,  the  dividend  is  not  reflected  in  the  market  value,  and 
must  be  returned  in  addition  to  the  market  value  of  the  stock 
on  March  20. 

Art.  13.  Value. — Property  of  the  decedent  should  be  re- 
turned at  its  market  or  sale  value  at  the  time  of  the  decedent's 
death.  The  criterion  of  such  value  is  the  price  which  a  will- 
ing buyer  will  pay  to  a  willing  seller  for  the  property  in  ques- 
tion under  the  circumstances  existing  at  the  date  of  the 
decedent's  death  or  within  such  reasonable  period  thereafter 
as  would  afford  proper  opportunity  for  an  examination  and 
sale  thereof.  Neither  depreciation  nor  appreciation  in  value 
subsequent  to  the  date  of  decedent's  death  is  considered. 

Art.  14.  Rules  for  the  valuation  of  property. — (1)  Real 
estate. — Where  real  property  has  been  sold,  the  amount 
received  will  be  taken  as  its  value  provided  the  sale  met  the 
conditions  laid  down  in  Article  13.  Where  no  sale  has  been 
made,  the  criterion  of  value  is  the  best  price  which  could  have 
been  obtained  within  a  reasonable  period  of  the  decedent's 
death.  The  property  should  not  be  returned  at  the  local 
assessed  value  thereof  unless  such  value  represents  the  true 
market  value  at  the  date  of  decedent's  death.  All  relevant 
facts  and  all  elements  of  value  should  be  considered  in  every 
case. 

Art.  14  (2). — Stocks  and  bonds. — The  value  of  stocks  and 
bonds  listed  upon  a  stock  exchange  should  be  determined  by 
taking  the  mean  between  the  highest  and  lowest  quoted  sell- 
ing price  upon  the  date  of  death.  If  there  were  no  sales  on 


REGULATIONS  607 

the  date  of  death  the  value  should  be  determined  by  taking 
the  mean  between  the  highest  and  lowest  sales  upon  the  near- 
est date  either  before  or  after  the  date  of  death  if  within  a 
reasonable  period.  If  the  decedent  died  on  a  Sunday  or  holi- 
day, the  transactions  of  the  next  previous  business  day  will 
govern.  If  the  security  is  listed  upon  more  than  one 
exchange,  the  records  of  the  principal  exchange  should  be 
employed.  In  general,  in  valuing  listed  stocks  and  bonds  the 
executor  should  observe  care  to  consult  accurate  records  to 
obtain  value  as  of  the  date  of  death. 

If  the  securities  are  not  listed  upon  an  exchange  but  are 
dealt  in  actively  by  brokers  or  have  an  active  market,  the 
value  should  be  determined  by  taking  the  sale  price  as  of  the 
date  of  death  or  of  the  nearest  date  thereto  if  within  a  reason- 
able period.  Securities  which  are  not  dealt  in  actively 
enough  to  establish  market  value  clearly  but  in  which  there 
are  occasional  transactions  should  be  valued  upon  the  basis 
of  the  nearest  sales  to  the  date  of  death,  provided  such  sales 
were  in  the  normal  course  of  business,  between  a  willing 
buyer  and  a  willing  seller  who  were  trying  to  make  the  best 
bargain  possible.  Where  quotations  are  obtained  from 
brokers  or  where  evidence  as  to  the  sale  of  securities  is 
obtained  from  the  officers  of  the  issuing  companies,  the  execu- 
tor is  requested  to  preserve  in  his  files  the  letters  furnishing 
quotations  for  inspection  when  the  return  is  verified  by  an 
investigating  officer. 

Where  securities  are  actively  quoted  on  a  bid  and  asked 
basis  and  actual  sales  are  not  available,  the  bid  price  as  of 
the  date  of  death  will  be  accepted  as  the  value.  In  the  case 
of  corporate  and  other  bonds  where  there  is  no  active  market, 
the  value  is  to  be  determined  by  giving  consideration  to  the 
soundness  of  the  security,  the  interest  yield,  the  date  of 
maturity,  and  any  other  relevant  factors. 

Where  there  is  no  active  market  for  the  stock  or  securities 
(whether  listed  or  unlisted)  owned  by  the  estate,  or  where 
the  sales  thereof  made  from  time  to  time  are  seriously  dispro- 
portionate in  number  of  shares  sold  to  the  holdings  of  the 
decedent,  and  the  executor  proceeds  in  good  faith  promptly 
and  within  a  reasonable  time  to  make  a  bona  fide  sale  or  sales 


608  INHERITANCE  TAXATION 

of  any  of  such  stocks  or  securities,  the  amount  so  realized 
will  be  accepted  as  the  value.  Sales,  however,  of  only  a  few 
shares  out  of  a  large  holding,  or  sales  made  without  a  real 
effort  to  secure  the  widest  market  possible,  or  sales  made 
merely  for  the  purpose  of  fixing  value  will  not  be  considered 
as  conclusive. 

If  in  connection  with  the  value  of  any  particular  security 
conditions  of  sale  or  ownership  are  such  that  the  market  value 
determined  as  indicated  above  would  not  afford  a  proper 
basis  for  the  valuation  of  the  decedent's  securities  the  com- 
missioner on  final  audit  will  establish  the  value  by  consider- 
ing all  other  factors  relating  to  the  case.  In  any  case  where 
the  estate  contends  that  the  value  as  established  by  the  gen- 
eral rules  stated  above  it  not  the  fair  market  value  for  the 
security  owned  by  the  decedent  on  the  date  of  his  death,  the 
evidence  upon  which  it  bases  its  contention  should  be  filed 
with  the  return. 

Stock  in  corporations  where  there  have  been  no  bona  fide 
sales  within  a  reasonable  period  of  a  number  of  shares  fairly 
comparable  to  the  decedent's  holdings  should  be  valued  at 
what  a  willing  buyer  would  pay  to  a  willing  seller,  both  being 
fully  informed  of  the  financial  condition  of  the  company  at 
the  date  of  death. 

Where  the  decedent's  holdings  are  relatively  small,  a  copy 
of  the  balance  sheet  of  the  corporation  nearest  to  the  date  of 
the  decedent's  death  and  a  statement  of  the  earnings  and 
dividends  for  the  five  years  preceding  death  should  be  sub- 
mitted in  duplicate  with  the  return  wherever  practicable. 
Where  the  decedent's  holdings  are  relatively  large  and  it  is 
practicable  to  do  so,  the  fullest  financial  data  should  be  sub- 
mitted in  duplicate  with  the  return,  including  in  particular 
balance  sheets  of  the  corporation  for  the  five  years  preceding 
death,  a  statement  of  the  net  earnings  and  dividends  paid  by 
the  company  over  this  period  or  over  a  sufficient  number 
(either  greater  or  less)  of  years  prior  to  the  decedent's  death 
to  demonstrate  the  normal  earning  capacity  of  the  corpora- 
tion, and  a  summary  of  the  market  conditions  and  future 
prospects  of  the  company  at  the  date  of  the  decedent's  death, 
together  with  a  statement  showing  the  relation,  if  any,  of  the 


REGULATIONS  609 

decedent  to  the  actual  operation  of  the  company,  the  effect 
of  his  death  thereon,  and  any  and  all  other  factors  which  may 
have  a  bearing  upon  the  value  of  the  stock.  Where  examina- 
tions of  a  company  have  been  made  by  accountants,  engineers, 
or  other  technical  experts  as  of  or  about  the  date  of  death, 
copies  of  their  reports  should  be  filed  with  the  return  where 
they  can  be  obtained  without  undue  trouble  or  expense  to  the 
estate.  In  general,  the  estate  should  show  the  basis  of  its 
return  and  submit  any  financial  data  that  will  enable  the 
commissioner  accurately  and  intelligently  to  review  the  case. 

The  full  market  value  of  securities  pledged  to  secure  a  loan 
should  be  included  in  the  gross  estate.  If  the  decedent  had 
a  trading  account  with  a  broker,  all  securities  belonging  to 
the  decedent  and  held  by  the  broker  at  the  date  of  death  must 
be  included  at  their  market  value  on  that  date.  Securities 
purchased  on  margin  for  the  decedent's  account  and  held  by 
the  broker  should  also  be  returned  at  their  market  value  on 
the  date  of  death.  The  amount  of  the  decedent's  indebted- 
ness to  the  broker,  or  other  person  with  whom  the  securities 
were  pledged,  will  be  allowed  as  a  deduction  from  the  gross 
estate.  (See  Art.  39.) 

(3)  Interest  in  business. — Care  should  be  taken  to  arrive 
at  any  accurate  valuation  of  any  business  in  which  the  dece- 
dent was  interested,  whether  as  partner  or  proprietor.  A 
fair  appraisal  as  of  the  date  of  death  should  be  made  of  all 
the  assets  of  the  business,  tangible  and  intangible,  and  the 
business  should  be  given  a  net  worth  equal  to  the  amount 
which  a  purchaser,  whether  an  individual  or  corporation, 
would  be  willing  to  pay  therefor  at  a  normal  sale  in  view  of 
the  net  value  of  the  assets  and  the  demonstrated  earning 
capacity.  Special  attention  should  be  given  to  fixing  an 
adequate  figure  for  the  value  of  the  good  will  of  the  business 
in  all  cases  where  the  decedent  has  not,  for  a  fair  considera- 
tion in  money  or  money's  worth,  agreed  that  his  interest 
therein  shall  pass  at  his  death  to  his  surviving  partner  or 
partners. 

In  general,  the  rules  stated  above  relative  to  the  valuation 
of  other  property  are  applicable  to  the  valuation  of  an  inter- 
est as  proprietor  or  partner  in  a  business,  and  all  evidence 
39 


610  INHERITANCE  TAXATION 

bearing  upon  such  valuation  should  be  submitted  with  the 
return,  including  copies  of  reports  in  any  case  where  exam- 
inations of  a  business  have  been  made  by  accountants, 
engineers,  or  other  technical  experts  as  of  or  about  the  date  of 
decedent's  death. 

(4)  Notes,  secured  and  unsecured. — The  value  of  notes, 
whether  secured  or  unsecured,  will  be  presumed  to  be  the 
amount  of  unpaid  principal,  plus  accrued  interest  to  the  date 
of  decedent's  death,  unless  the  executor  establishes  the  right 
to  return  them  at  a  lower  value,  or  as  worthless.     To  estab- 
lish such  a  right  it  must  be  shown  by  satisfactory  evidence 
that  the  note,  either  in  whole  or  in  part,  is  uncollectible  by 
reason  of  the  insolvency  of  the  party  or  parties  liable,  or  for 
other    cause,    and    that   the    property,    if   any,    pledged    or 
mortgaged  as  security  is  insufficient  to  satisfy  it. 

(5)  Cash  on  hand  or  on  deposit. — The  amount  of  cash 
belonging  to  the  decedent,  either  in  his  possession  at  the  date 
of  death  or  in  the  possession  of  another,  should  be  included. 
Bank  accounts  should  be  returned  in  the  amount  on  deposit 
to  the  credit  of  the  decedent  at  the  date  of  death.     If  checks 
then  outstanding,  given  in  discharge  of  bona  fide,  legal  obli- 
gations of  the  decedent,  and  not  as  transfers  coming  within 
the  provisions  of  section  402  (c),  are  subsequently  honored 
by  the  bank  and  charged  to  the  account,  the  balance  remain- 
ing may  be  returned,  provided  the  payments  effected  thereby 
are  not  claimed  as  deductions  from  the  gross  estate.    Interest 
which  the  bank  agreed  to  pay  upon  condition  that  the  money 
remain    on    deposit    for    a   period    of    time    which    expired 
subsequent  to  the  decedent's  death,  should  not  be  included. 

(6)  Patents,  trade-marks,  and  copyrights. — The  basis  for 
valuation   of  an  intangible   asset   of  this   character  is   the 
present  worth  of  the  estimated  future  earnings  of  the  exclu- 
sive  right   during  the   rest   of  its   existence.      The   return 
received  by  the  decedent  should  be  considered  in  estimating 
future  earnings. 

(7)  Accounts  receivable,  claims,  judgments,  etc. — A  fair 
valuation  for  assets  of  this  character  at  the  time  of  death 
should  be  fixed  by  the  executor  according  to  the  best  infor- 
mation available  to  him  at  the  time  of  making  return.      A 


EEGULATIONS  611 

right   of   action   which   terminated   with   the    death   of   the 
decedent  should  not  be  included  in  the  gross  estate. 

(8)  Other  property. — With  respect  to  all  other  property, 
excepting  household  and  personal  effects,  concerning  which 
see  paragraph  (9)  of  this  article,  the  executor  should  ascer- 
tain and  return  the  fair  market  value  thereof  as  of  the  day  of 
decedent's  death.    As  to  property  sold  subsequent  to  death,, 
see  Article  13.     Live  stock,  farm  machinery,  harvested  and 
growing  crops,  where  of  an  aggregate  value  of  $2,000  or  more,, 
should  be  valued,  as  of  the  date  of  decedent's  death,  by  one 
or  more  competent  and  disinterested  appraisers,  and  their 
itemized  appraisal  thereof  in  writing,  verified  by  the  oath  of 
each,  should  be  filed  in  duplicate  with  the  return  on  Form 
706.      The  executor  should  also  file  in  duplicate  with  the 
return  his  affidavit  as  to  the  completeness  of  the  itemized 
lists  of  such  property  and  of  the  disinterested  character  and 
qualifications  of  the  appraiser  or  appraisers. 

(9)  Household  and  personal  effects — General  provisions. — 
Executors  and  administrators  are  required  to  have  careful 
appraisal  made  of  all  household  and  personal  effects  of  the 
decedent    by    one    or    more    competent    and    disinterested 
appraisers,  except  as  otherwise  provided  in  subdivision  (a} 
of  this  paragraph,  and  the  appraisal  thereof,  reduced  to  writ- 
ing and  verified  by  the  oath  or  oaths  of  the  appraiser  or 
appraisers,  should  be  filed  in  duplicate  with  the  return  on 
Form  706,  accompanied  by  the  affidavit  in  duplicate  of  the 
executor  as  to  the  completeness  of  the  itemized  lists  of  such 
property  and  of  the  disinterested  character  and  qualifications 
of  the  appraiser  or  appraisers.     Where  it  is  desired  to  effect 
distribution   or   sale   of   any   portion   of   such   property   in 
advance  of  an  investigation  by  a  special  officer  of  the  Bureau 
of  Internal  Revenue,  as  provided  in  Article  72,  notice  thereof 
should  be  given  to  the  Internal  Eevenue  Agent  in  Charge  for 
the  Division  wherein  the  decedent  was  domiciled  at  the  date 
of  his  death,  or,  if  such  household  and  personal  effects  be  not 
located  in  such  Division,  then  to  the  Commissioner.     If  the 
return  has  not  been  filed,  the  notice  should  be  accompanied 
by  a  verified  appraisal  of  such  property,  and  an  affidavit  of 
the  executor  as  provided  above.     If  personal  inspection  by  a 


612  INHERITANCE  TAXATION 

special  officer  of  the  Bureau  is  not  deemed  necessary,  the 
executor  will  be  so  advised.  This  procedure  is  designed  to 
facilitate  disposition  of  such  property  and  to  obviate  future 
expense  and  inconvenience  to  the  estate  by  affording  the 
Commissioner  an  opportunity  to  make  an  investigation, 
should  one  be  deemed  necessary,  prior  to  the  sale  or  distribu- 
tion. (For  location  of  the  offices  of  the  several  Internal 
Revenue  Agents  in  Charge,  and  the  territory  embraced  in 
their  Divisions,  respectively,  see  Appendix.) 

(a)  When  value  is  less  than  $2,000. — When  the  value  of  the 
personalty  involved  is  less  than  $2,000,  the  detailed  lists  may 
be  prepared  by  the  executor  personally.     A  room  by  room 
appraisal  is  desirable;  and  all  the  articles  should  be  named 
specifically,  except  those  of  small  value,  such  as  common  bric- 
a-brac  or  cheap  books.     A  separate  value  should  be  given  for 
each  article  named,  except  that  the  values  of  a  number  of 
articles  contained  in  the  same  room  may  be  grouped.     The 
value  of  an  article  worth  more  than  $50  should  be  stated 
separately.       Such    an    entry    as    the    following    would    be 
acceptable : 

Dining  room:  Table,  six  chairs,  three  pictures  (common 
prints),  value  $75;  sideboard,  $60;  total,  $135. 

If  there  should  be  included  in  the  lot,  however,  jewelry  or 
silverware  of  more  than  ordinary  value,  or  articles  having  a 
marked  artistic  value,  the  executor  must  furnish  an  appraisal 
by  a  person  or  persons  thoroughly  qualified  by  training  and 
experience  to  judge  of  the  value  of  such  articles. 

In  the  case  of  effects  having  a  total  value  of  less  than 
$2,000,  the  executor  may  furnish,  as  an  alternative  require- 
ment, a  sworn  statement  in  duplicate  of  the  aggregate  total 
value  of  the  property  by  a  professional  appraiser  or 
appraisers  of  recognized  standing  and  ability,  or  by  a  dealer 
or  dealers  in  the  class  of  personalty  involved. 

(b)  When  value  is  more  than  $2,000. — When  the  value  of 
the  effects  is  more  than  $2,000,  detailed  lists  must  be  fur- 
nished, prepared  by  an  appraiser  or  appraisers  of  recognized 
competence,  or  by  a  dealer  or  dealers  in  the  particular  classes 
of  personalty  involved.      The  lists  must  be  prepared  in  the 
same  detail  as  that  indicated  above  for  the  executor's  list. 


KEGULATIONS  613 

Where  the  personalty  includes  jewelry,  silverware,  or  like 
articles,  except  in  cases  where  the  value  of  these  items  is 
insignificant,  the  appraisal  of  a  reputable  dealer  or  appraiser 
of  jewelry  must  be  furnished. 

In  the  case  of  articles  having  marked  artistic  value,  such 
as  paintings,  engravings,  etchings,  statuary,  vases,  oriental 
rugs,  or  antiques,  the  appraisal  of  an  expert  or  experts  will 
be  required.  A  description  of  such  articles  should  be  fully 
given.  Where  paintings  having  artistic  value  are  listed,  the 
size,  subject,  and  artist's  name  should  be  stated.  In  the  case 
of  oriental  rugs,  the  size,  make,  and  general  condition  should 
be  given.  The  weight  in  ounces  of  silverware  should  be 
stated. 

(c)  Appraisers  and  basis  of  appraisals. — Where  expert 
appraisers  are  to  be  employed,  care  should  be  taken  to  see 
that  they  are  men  of  recognized  competence  with  respect  to 
the  particular  class  of  property  involved.  In  order  to  facili- 
tate the  acceptance  of  the  appraisal,  appraisers  should  be 
employed  whose  competence  is  well  established. 

The  value  to  be  arrived  at  in  appraising  articles  of  this 
character  is  the  fair  market  value  on  date  of  decedent's  death. 
Where  property  is  valued  by  legatees  for  purposes  of  distri- 
bution, such  value  will  not  necessarily  be  accepted.  The 
original  cost  of  the  articles  is  not  necessarily  a  proper  basis, 
on  account  of  depreciation  or  appreciation  in  value. 

Art.  15.  Valuation  of  annuities,  and  of  life  and  remainder 
interests. — Where  the  decedent  was  entitled  to  receive  an 
annuity  of  a  definite  amount  during  the  lifetime  of  another 
person,  its  present  worth  at  the  time  of  the  decedent's  death 
must  be  computed  upon  the  basis  of  the  expectancy  of  life  of 
the  other  person.  The  table  marked  "A,"  a  part  of  this 
article,  should  be  used  for  this  computation.  The  amount  pay- 
able annually  should  be  multiplied  by  the  figure  in  column  2 
of  the  table  opposite  the  number  of  years  in  column  1  nearest 
to  the  actual  age  of  the  other  person. 

Example:  The  decedent  received  under  the  terms  of  his 
father's  will  an  annuity  of  $10,000  for  the  life  of  his  elder 
brother.  The  brother  at  the  decedent's  death  was  40  years  8 


INHERITANCE  TAXATION 

months  old.  By  reference  to  the  table  the  figure  in  column  2 
opposite  41  years,  the  number  nearest  to  the  brother's  age, 
is  found  to  be  14.86102.  The  present  worth  of  the  annuity  is 
therefore  $148,610.20. 

Where  the  decedent  was  entitled  to  receive  the  annuity 
during  a  specified  number  of  years,  the  table  marked  "B,"  a 
part  of  this  article,  should  be  used. 

Example:  The  decedent  received  under  the  terms  of  his 
father's  will  an  annuity  of  $10,000  for  a  period  of  20  years, 
15  of  which  had  expired  at  the  decedent's  death.  By  refer- 
ence to  the  table  it  is  found  that  the  figure  in  column  2  opposite 
5  years,  the  unexpired  portion  of  the  20-year  period,  is  4.45182. 
The  present  worth  of  the  annuity  is,  therefore,  $44,,518.20 
(4.45182  multiplied  by  10,000). 

Where  the  decedent  was  entitled  to  receive  the  entire  in- 
come of  certain  property  during  the  life  of  another  person, 
or  for  a  term  of  years,  and  the  annual  rate  of  income  for  a 
period  equal  to  or  exceeding  the  life  expectancy  of  such  other 
person  or  such  term  of  years,  is  fixed  or  definitely  deter- 
minable  at  the  time  of  the  decedent's  death,  then  the  present 
worth  of  decedent's  right  to  such  income  should  be  computed 
as  explained  above  in  the  case  of  an  annuity. 

Example:  The  decedent's  father  placed  $100,000  in  trust, 
with  directions  that  it  be  invested  in  state  and  municipal  bonds 
and  the  entire  income  paid  to  the  decedent  during  the  life  of 
his  elder  brother,  who  was  41  years  old  at  the  decedent's 
death.  Before  the  decedent's  death  the  money  was  invested 
in  state  and  municipal  bonds  maturing  at  dates  beyond  such 
elder  brother's  life  expectancy,  and  yielding  annually  an  in- 
come of  $5,000.  In  this  case  the  rate  of  income  is  definitely 
determinable.  By  reference  to  the  table,  it  is  found  that  the 
present  worth  of  an  income  of  $5,000,  dependent  upon  the  life 
of  a  person  41  years  of  age,  is  $74,305.10  (14.86102  multiplied 
by  5,000). 

Where  the  rate  of  annual  income  is  not  determinable,  or 
where  the  decedent  was  entitled  merely  to  the  personal  use  of 
nonincome-bearing  property,  a  hypothetical  annuity  at  a  rate 
of  4  per  cent  of  the  value  of  the  property  should  be  made  the 
basis  of  the  calculation. 


BEGULATIONS  615 

Example :  The  decedent  died  before  a  fund  of  $100,000,  of 
which  he  was  entitled  to  receive  the  income  during  the  life  of 
a  person  41  years  old,  had  been  invested  by  the  trustees.  The 
value  of  a  hypothetical  annuity  of  $4,000,  dependent  upon  the 
life  of  such  a  person,  is  indicated  by  the  table-  to  be  $59,444.08 
(14.86102  multiplied  by  4,000). 

Where  the  decedent  had  a  remainder  interest  in  property 
subject  to  the  life  estate  of  another,  and  such  interest  con- 
stituted an  asset  of  his  estate,  the  present  worth  of  the  re- 
mainder interest  at  the  time  of  death  should  be  obtained  by 
multiplying  the  value  of  the  property  at  the  time  of  death  by 
the  figure  in  column  3  of  Table  A  opposite  the  number  of 
years  nearest  to  the  age  of  the  life  tenant.  Where  the  re- 
mainder interest  is  subject  to  an  estate  for  a  term  of  years 
Table  B  should  be  used. 

Example:  The  decedent  was  entitled  to  receive  property 
worth  $50,000  upon  the  death  of  his  elder  brother,  to  whom 
the  income  for  life  had  been  bequeathed.  The  brother  at  the 
time  of  the  decedent's  death  was  31  years  old.  By  reference 
to  the  table  it  is  found  that  the  figure  in  column  3  opposite  31 
years  is  0.31262.  The  present  worth  of  the  remainder  interest 
is,  therefore,  $15,631. 


616 


INHERITANCE  TAXATION 


TABLE  A. 

Table,  single  life,  4  per  cent,  showing  the  present  worth  of  an  annuity,  or  life 
interest,  and  of  a  reversionary  interest. 


1 

2 

3 

1 

2 

3 

Annuity,  or 

Reversion,  or 

Annuity,  or 

Reversion,  or 

present  value 
of  $  1  due  at 

present  value 
of  $1  due  at 

present  value 
of  $1  due  at 

present  value 
of  $1  due  at 

Age. 

the  end  of  each 

the  end  of  the 

Age. 

the  end  of  each 

the  end  of  the 

year  during  the 

year  of  death  of 

year  during  the 

year  of  death  of 

life  of  a  person 
of  specified  age. 

a  person  of  spec- 
ified age. 

life  of  a  person 
of  specified  age. 

a  person  of  spec- 
ified age. 

Annuity. 

Re  version. 

Annuity. 

Reversion. 

0 

$14.72829 

SO  .  39507 

51 

$12.17919 

$0.49311 

1 

17.30771 

.  29586 

52 

11.88408 

.  50446 

2 

18.69578 

.24247 

53 

11.58531 

.  51595 

3 

19.15901 

.22465 

54 

11.28325 

.52757 

4 

19.41226 

.21491 

55 

10.97789 

.53931 

5 

19.55301 

.20950 

56 

10  .  60982 

.55116 

6 

19,61731 

.20703 

57 

10.35931 

.56310 

7 

19,62502 

.20673 

58 

10,04630 

.57514 

8 

19,61097 

.20727 

59 

9.73131 

.58726 

9 

19.53413 

.21022 

60 

9.41474 

.59943 

10 

19.45350 

.21332 

61 

9.09765 

.61163 

11 

19.36943 

.21656 

62 

8.78052 

.62383 

12 

19.28184 

.21993 

63 

8.46412 

.63600 

13 

19.19065 

.22344 

64 

8.14888 

.64812 

14 

19.09590 

.22708 

65 

7.83552 

.66017 

15 

18.99764 

.23086 

66 

7.52476 

.67212 

16 

18.89569 

.23478 

67 

7.21699 

.68397 

17 

18.79010 

.23884 

68 

6.91298 

.  69565 

18 

18.68070 

.24305 

69 

6.61301 

.  70719 

19 

18.56751 

.24740 

70 

6.31716 

.71857 

20 

18.54038 

.25191 

71 

6.02612 

.72976 

21 

18.32932 

.25656 

72 

5.74003 

.74077 

22 

18.20416 

.26138 

73 

5.45928 

.75157 

23 

18.07471 

.26636 

74 

5.18402 

.76215 

24 

17.94097 

.27150 

75 

4.91463 

.77251 

25 

17.80274 

.27682 

76 

4.65125 

.  78264 

26 

17.65984 

.28231 

77 

4.39383 

.79254 

27 

17.51224 

.28799 

78 

4.14286 

.  80220 

28 

17.35968 

.29386 

79 

3.89858 

.81159 

29 

17.20225 

.29991 

80 

3.66071 

.82074 

30 

17.03961 

.30617 

81 

3.42900 

.  82965 

31 

16.87176 

.31262 

82 

3.20258 

.  83836 

32 

16.69846 

.31929 

83 

2.98024 

.84691 

33 

16.51964 

.32617 

84 

2.76106 

.85534 

34 

16.33503 

.33327 

85 

2.54366 

.86371 

35 

16.14437 

.  34060 

86 

2.32795 

.87200 

36 

15.94755 

.34817 

87 

2.11384 

.88024 

37 

15.74127 

.35599 

88 

1.90115 

.88842 

38 

15.53421 

.36407 

89 

1.69107 

.  89650 

39 

15.31722 

.37241 

90 

1.48540 

.90441 

40 

15.09295 

.38104 

91 

1.28432 

.91214 

41 

14.86102 

.38996 

92 

1.09024 

.91961 

42 

14.62122 

.39918 

93 

.90647 

.92667 

43 

14.37356 

.40871 

94 

.  73687 

.  93320 

44 

14.11860 

.41852 

95 

.58435 

.93906 

45 

13.85713 

.42857 

96 

.46182 

.94378 

46 

13.58958 

.43886 

97 

.  36698 

.94742 

47 

13.31698 

.44935 

98 

.24038 

.95229 

48 

13.03942 

.46002 

99 

.00000 

.96154 

49 

12.75716 

.47088 

50 

12.47032 

.48191 

REGULATIONS 


617 


TABLE  B. 


Table,  single  life,  4  per  cent,  showing  the  present  worth  of  an  annuity,  or  life 
interest,  and  of  a  reversionary  interest — Continued. 


1 

2 

3 

1 

2 

3 

Present  worth  of 

Present  worth  of 

an  annuity  of  $1, 

Present  worth  of 

an  annuity  of  SI, 

Present  worth  of 

Number  of 
years 

payable  at  the 
end  of  each  year, 

$1,  payable  at  the 
end  of  a  certain 

Number  of 
years. 

payable  at  the 
end  of  each  year, 

$1,  payable  at  the 
end  of  a  certain 

for  a  certain 

number  of  years. 

for  a  certain 

number  of  years. 

number  of  years. 

number  of  years. 

Annuity. 

Reversion. 

Annuity. 

Reversion. 

1 

$0.96154 

$0.961538 

16 

$11.65229 

$0.533908 

2 

1.88609 

.924556 

17 

12.16567 

.  513373 

3 

2.77509 

.888996 

18 

12.65929 

.493628 

4 

3.62989 

.854804 

19 

13.13394 

.474642 

5 

4.45182 

.821927 

20 

13.59032 

.456387 

6 

5.24214 

.790314 

21 

14.02916 

.438834 

7 

6.00205 

.  759918 

22 

14.45111 

.421955 

8 

6.73274 

.730690 

23 

14.85684 

.405726 

9 

7.43533 

702587 

24 

15.24696 

.390121 

10 

8.11089 

.  675564 

25 

15.62208 

.375117 

11 

8.76047 

.649581 

26 

15.98277 

.  360689 

12 

9.38507 

.624597 

27 

16.32858 

.346816 

13 

9.98565 

.600574 

28 

16.66306 

.333477 

14 

10.56312 

.577475 

29 

16.98371 

.320651 

15 

11.11839 

.555265 

30 

17.29203 

.308319 

GROSS  ESTATE — DOWER  AND  CURTESY. 

(SEC.  402.  That  the  value  of  the  gross  estate  of  the  decedent  shall  be  deter- 
mined by  including  the  value  at  the  time  of  his  death  of  all  property,  real  or 
personal,  tangible  or  intangible,  wherever  situated — ) 

(b)  To  the  extent  of  any  interest  therein  of  the  surviving  spouse,  existing 
at  the  time  of  the  decedent's  death  as  dower,  custesy,  or  by  virtue  of  a  statute 
creating  an  estate  in  lieu  of  dower  or  curtesy; 

Art.  16.  Dower  and  curtesy. — This  provision  includes 
dower  and  curtesy  and  all  interests  created  by  statute  in  lieu 
thereof,  although  the  estate  or  interest  so  created  is  different 
in  character.  The  effect  of  the  provision  is  to  require  the 
inclusion  of  the  full  value  of  the  property,  without  deduction 
of  the  value  of  the  interest  of  the  surviving  husband  or  wife. 
This  rule  does  not  apply  to  the  estate  of  any  decedent  dying 
after  September  8, 1916,  and  prior  to  6.55  p.  m.,  February  24, 
1919  (the  effective  date  of  Title  IV  of  the  Revenue  Act  of 
1918),  unless  the  property  has  its  situs  in  a  jurisdiction 
wherein  dower,  curtesy,  or  the  statutory  interest  in  lieu 
thereof  is  subject  to  the  payment  of  charges  against  the  estate, 
the  expenses  of  its  administration,  and  is  subject  to  distribu- 
tion as  part  of  the  estate,  or  unless  there  has  been  an  election 
to  take  property  devised  or  bequeathed  in  lieu  of  dower, 


618  INHERITANCE  TAXATION 

curtesy,  or  such  statutory  interest,  and  the  property  so  taken 
has  its  situs  in  a  jurisdiction  by  the  laws  of  which  it  is  subject 
to  the  payment  of  such  charges  and  expenses,  and  to  distribu- 
tion as  a  part  of  the  estate. 

GEOSS  ESTATE — TRANSFERS  BY  DECEDENT  IN  His  LIFETIME. 

(SEC.  402.  That  the  value  of  the  gross  estate  of  the  decedent  shall  be  deter- 
mined by  including  the  value  at  the  time  of  his  death  of  all  property,  real  or 
personal,  tangible  or  intangible,  wherever  situated — ) 

(c)  To  the  extent  of  any  interest  therein  of  which  the  decedent  has  at  any 
time  made  a  transfer,  or  with  respect  to  which  he  has  at  any  time  created  a  trust, 
in  contemplation  of  or  intended  to  take  effect  in  possession  or  enjoyment  at  or 
after  his  death  (whether  such  transfer  or  trust  is  made  or  created  before  or  after 
the  passage  of  this  act),  except  in  case  of  a  bona  fide  sale  for  a  fair  consideration 
in  money  or  money's  worth.  Any  transfer  of  a  material  part  of  his  property  in 
the  nature  of  a  final  disposition  or  distribution  thereof,  made  by  the  decedent 
within  two  years  prior  to  his  death  without  such  a  consideration,  shall,  unless 
shown  to  the  contrary,  be  deemed  to  have  been  made  in  contemplation  of  death 
within  the  meaning  of  this  title; 

Art.  17.  Nature  and  time  of  transfer. — A  transfer  made  by 
the  decedent  at  any  time,  and  in  any  manner,  is  taxable  when 
made  in  contemplation  of  or  intended  to  take  effect  in  posses- 
sion or  enjoyment  at  or  after  his  death,  provided  it  was  not  a 
bona  fide  sale  for  a  fair  consideration  in  money  or  money's 
worth.  To  constitute  such  a  sale  it  must  have  been  made  in 
good  faith,  and  the  price  must  have  been  a  fair  equivalent, 
and  reducible  to  a  money  value.  The  value  of  property,  where 
title  was  so  transferred  by  the  decedent  before  September  9, 
1916,  is  to  be  included  in  his  gross  estate  if  his  death  occurred 
after  the  effective  date  of  the  Revenue  Act  of  1918,  but  is  not 
to  be  included  if  he  died  prior  thereto. 

TRANSFERS   IN   CONTEMPLATION   OF   DEATH. 

Art.  18.  Nature  of  transfer. — The  words  "in  contemplation 
of  death"  do  not  mean,  on  the  one  hand,  a  general  expectation 
of  death  such  as  all  persons  entertain,  nor,  on  the  other,  is 
the  meaning  limited  to  an  expectation  of  immediate  death.  A 
transfer,  however,  is  made  in  contemplation  of  death  wher- 
ever the  person  making  it  is  influenced  to  do  so  by  such  an 
expectation  of  death,  arising  from  bodily  or  mental  condi- 
tions, as  prompts  persons  to  dispose  of  their  property  to 


REGULATIONS  619 

those  whom  they  deem  proper  objects  of  their  bounty.  Such 
a  transfer  is  taxable,  although  the  decedent  parts  absolutely 
and  immediately  with  his  title  to  and  possession  and  enjoy- 
ment of  the  property.  Any  transfer  made  by  a  decedent 
within  two  years  prior  to  his  death,  without  a  fair  considera- 
tion in  money  or  money's  worth,  is  presumed  to  be  taxable  if 
of  a  material  part  of  his  property  and  in  the  nature  of  a  final 
disposition  or  distribution  thereof.  The  executor  must  return 
the  value,  as  of  the  date  of  decedent's  death,  of  all  property 
transferred  by  the  decedent  at  any  time  in  contemplation  of 
death,  where  the  transfer  was  not  a  bona  fide  sale  for  a  fair 
consideration  in  money  or  money's  worth,  and  must  disclose 
in  the  return  all  transfers  of  a  material  part  of  decedent's 
property  made  at  any  time  without  such  consideration,  but 
need  not  include  in  the  gross  estate  the  value  of  such  thereof 
as  he  contends  were  not  made  in  contemplation  of  death,  in 
which  event  he  may  submit  with  the  return  evidence  of  all 
material  facts  tending  to  disclose  the  decedent's  motive  at 
the  time,  his  then  anticipation  of  death,  and  mental  and 
physical  condition. 

The  presumption  of  taxability  of  a  transfer  made  within  the 
two-year  period  may  be  rebutted  by  proof  that  it  was  not  made, 
under  the  conditions  stated  in  the  statute,  and  such  proof 
must  be  filed  with  the  return.  Unless  proof  is  submitted  which 
is  sufficient  to  rebut  the  presumption  the  transfer  will  be 
included  in  the  gross  estate  in  computing  the  tax. 

The  fact  that  a  gift  was  made  as  an  advancement,  to  be 
taken  into  account  upon  the  final  distribution  of  the  dece- 
dent's estate,  is  not  enough,  standing  alone,  to  establish 
taxability. 

TRANSFERS  INTENDED  TO  TAKE  EFFECT  AT  OR  AFTER  DEATH. 

Art.  19.  General. — All  transfers  at  any  time  made  by  the 
decedent,  other  than  bona  fide  sales  for  a  fair  consideration 
in  money  or  money's  worth,  which  were  intended  to  take  effect 
in  possession  or  enjoyment  at  or  after  his  death,  are  taxable, 
and  the  value  of  the  property  so  transferred,  as  of  the  date 
of  the  decedent's  death,  must  be  returned  as  a  part  of  the 
gross  estate. 


620  INHERITANCE  TAXATION 

Art.  20.  Reservation  of  income. — A  transfer,  not  amount- 
ing to  a  bona  fide  sale  for  a  fair  consideration  in  money  or 
money's  worth,  is  taxable  where  the  decedent  reserved  to 
himself  during  life  the  income  of  the  property  transferred. 
In  such  a  case  the  transfer  of  the  principal  takes  effect  in 
possession  and  enjoyment  at  the  death  of  the  decedent,  and 
the  value  of  the  entire  property  should  be  included  in  the 
gross  estate.  Where  the  decedent  reserved  a  proportionate 
part  of  the  income,  only  a  corresponding  proportion  of  the 
value  of  the  property  should  be  included  in  the  gross  estate. 
If,  for  example,  he  reserved  one-half  of  the  income,  the  value 
of  one-half  of  the  property  transferred  should  be  included  in 
the  gross  estate.  If  he  reserved  an  annuity,  so  much  of  the 
property  as  is  necessary  to  produce  the  annuity  should  be 
included  in  the  gross  estate.  A  transfer  is  taxable  in  accord- 
ance with  these  principles  whether  the  decedent  reserved  the 
annuity  out  of  the  property  conveyed,  or  payment  thereof  to 
him  was  made  by  the  grantee  upon  an  express  or  an  implied 
agreement  to  that  effect.  Where,  however,  the  transfer  was 
made  in  contemplation  of  death,  the  full  value  of  the  trans- 
ferred property,  as  of  the  date  of  the  decedent's  death,  should 
be  included  in  the  gross  estate  irrespective  of  the  amount  of 
income  or  of  the  annuity  payable  to  the  decedent. 

A  gift  of  the  principal  intended  to  take  effect  either  in  pos- 
session or  enjoyment  at  or  after  the  decedent's  death  is  tax- 
able, although  the  income  during  the  decedent's  life  was  pay- 
able to  some  one  other  than  himself.  Example :  The  decedent 
transferred  property  to  his  son,  the  latter  agreeing  to  pay 
the  income  to  his  mother  during  the  decedent's  life.  The 
transfer  to  the  son  is  taxable. 

Art.  21.  Power  of  revocation  or  control. — Property  held  in 
trust  under  any  instrument  in  which  the  decedent  reserved  a 
power  of  revocation,  or  any  power  which  has  that  effect,  con- 
stitutes a  part  of  the  gross  estate.  For  example,  where  a 
decedent  placed  property  in  trust  for  the  present  benefit  of 
his  son,  but  reserved  the  power  to  revoke  the  trust  at  any 
time  during  his  life,  the  value  of  the  entire  property  trans- 
ferred should  be  included  in  the  gross  estate. 


REGULATIONS  621 

Art.  22.  Valuation  of  property  transferred. — The  property 
to  be  valued  is  the  interest  owned  and  transferred  by  the  dece- 
dent; but  the  value  of  such  property  must  be  ascertained  as 
of  the  date  of  the  decedent's  death.  Where  the  transferee 
makes  additions  to  the  property,  or  betterments,  the  enhanced 
value  of  the  property  at  that  date,  due  to  such  additions  or 
betterments,  is  not  to  be  included. 

GROSS  ESTATE — PROPERTY  HELD  JOINTLY. 

(SEC.  402.  That  the  value  of  the  gross  estate  of  the  decedent  shall  be  deter- 
mined by  including  the  value  at  the  time  of  his  death  of  all  property,  real  or 
personal,  tangible  or  intangible,  wherever  situated — ) 

(d)  To  the  extent  of  the  interest  therein  held  jointly  or  as  tenants  in  the 
entirety  by  the  decedent  and  any  other  person,  or  deposited  in  banks  or  other 
institutions  in  their  joint  names  and  payable  to  either  or  the  survivor,  except 
such  part  thereof  as  may  be  shown  to  have  originally  belonged  to  such  other 
person  and  never  to  have  been  received  or  acquired  by  the  latter  from  the 
decedent  for  less  than  a  fair  consideration  in  money  or  money's  worth :  Provided, 
That  where  such  property  or  any  part  thereof,  or  part  of  the  consideration  with 
which  such  property  was  acquired,  is  shown  to  have  been  at  any  time  acquired 
by  such  other  person  from  the  decedent  for  less  than  a  fair  consideration  in 
money  or  money's  worth,  there  shall  be  excepted  only  such  part  of  the  value 
of  such  property  as  is  proportionate  to  the  consideration  furnished  by  such  other 
person:  Provided  further,  That  where  any  property  has  been  acquired  by  gift, 
bequest,  devise,  or  inheritance,  as  a  tenancy  in  the  entirety  by  the  decedent  and 
spouse,  or  where  so  acquired  by  the  decedent  and  any  other  person  as  joint  tenants 
and  their  interests  are  not  otherwise  specified  or  fixed  by  law,  then  to  the  extent 
of  one-half  of  the  value  thereof; 

Art.  23.  Property  held  jointly  or  as  tenants  by  the  entirety. 

The  statute  provides  for  the  inclusion  in  the  gross  estate  of 
interests  held  jointly  by  the  decedent  and  any  other  person 
or  persons,  and  of  estates  by  the  entirety.  This  class  of  prop- 
erty includes  all  interests,  whether  in  real  or  personal  prop- 
erty, where  the  survivor  takes  the  entire  property  by  right 
of  survivorship,  and  consequently  the  decedent's  interest 
therein  forms  no  part  of  his  estate  for  purposes  of  adminis- 
tration. It  does  not  include  interests  held  as  tenants  in  com- 
mon, where  the  interest  of  each  tenant  passes  free  from  any 
right  of  survivorship. 

The  following  are  examples  of  this  class:  Real  estate  held 
by  joint  tenants ;  real  estate  held  by  husband  and  wife  (known 
as  an  estate  by  the  entirety) ;  money  deposited  in  a  bank  or 
trust  company  in  the  joint  names  of  the  decedent  and  another 


622  INHERITANCE  TAXATION 

and  payable  to  either  or  the  survivor;  and,  in  general,  all 
securities  and  other  personal  property,  where  the  title  thereto 
was  vested  in  the  decedent  and  one  or  more  other  persons, 
subject  to  the  right  or  survivorship. 

Art.  24.  Taxable  portion. — The  entire  value  of  such  prop- 
erty is  prima  facie  a  part  of  the  decedent's  gross  estate,  but 
as  it  is  not  the  intent  of  the  statute  that  there  should  be  so 
included  a  greater  part  or  proportion  thereof  than  is  repre- 
sented by  an  outlay  of  funds,  which,  in  the  first  instance,  were 
decedent's  own,  or  more  than  a  fractional  part  equal  to  that 
of  the  other  joint  owner  where  neither  had  parted  with  any 
consideration  in  its  acquirement,  facts,  which  in  a  given  case 
bring  it  within  any  one  of  the  exceptions  enumerated  in  the 
statute,  may  be  submitted  by  the  executor. 

Whether  the  value  of  the  entire  property,  or  only  a  part,  or 
none  of  it,  enters  into  the  make-up  of  the  gross  estate,  de- 
pends upon  the  following  considerations:  (1)  So  much  of  the 
property  (whether  the  whole,  or  a  part  thereof)  as  originally 
belonged  to  the  other  joint  owner,  and  which  at  no  time  in 
the  past  had  been  received  or  acquired  by  the  latter  from  the 
decedent  for  less  than  a  fair  consideration  in  money  or 
money's  worth,  forms  no  part  of  the  decedent's  gross  estate. 
(2)  Where  the  facts  are  otherwise  the  same  as  in  (1),  but  the 
decedent  paid  to  such  other  joint  owner  a  consideration  for 
the  interest  by  him  (the  decedent)  acquired  in  the  property, 
then  such  portion  of  the  value  of  the  property,  proportionate 
to  the  consideration  so  paid,  constitutes  a  part  of  the  gross 
estate.  (3)  Where  the  property,  or  a  part  thereof,  or  a  part 
of  the  consideration  wherewith  it  was  acquired,  had  at  any 
time  been  acquired  by  the  other  joint  owner  from  the  decedent 
as  a  gift,  or  for  less  than  a  fair  consideration  in  money  or 
money's  worth,  then  such  portion  of  the  value  of  the  entire 
property,  proportionate  to  the  consideration,  if  any,  which 
in  the  first  instance  was  paid  from  such  other  joint  owner's 
own  funds,  forms  no  part  of  the  gross  estate.  (4)  Where  the 
property  was  acquired  by  the  decedent  and  his  or  her  sur- 
viving spouse  as  tenants  in  the  entirety  by  gift,  will,  or  in- 
heritance, then  but  one-half  of  the  value  of  the  property  be- 
comes a  part  of  the  gross  estate.  (5)  Where  acquired  by  the 


REGULATIONS  623 

decedent  and  the  other  joint  owner  as  joint  tenants  by  gift, 
will,  or  inheritance,  and  their  interests  are  not  otherwise 
specified,  or  fixed  by  law,  then  one-half  only  of  the  value  of 
the  property  is  a  part  of  the  gross  estate;  or,  where  so  ac- 
quired by  the  decedent  and  two  or  more  persons,  and  the  in- 
terests of  the  several  joint  tenants  are  not  otherwise  deter- 
minable,  then  the  decedent  and  the  other  joint  tenants 
surviving  him  shall  each  be  deemed  the  owner  of  an  equal 
fractional  part,  and  the  value  of  one  only  of  such  fractional 
parts  is  to  be  included  in  the  gross  estate. 

The  following  are  given  as  illustrative:  (a)  The  decedent 
may  have  furnished  the  entire  purchase  price,  in  which  case 
the  value  of  the  entire  property  should  be  included  in  his  gross 
estate;  (fc)  the  decedent  may  have  furnished  a  part  only  of 
the  purchase  price,  in  which  case  only  the  value  of  a  corre- 
sponding portion  of  the  property  should  be  so  included;  (c) 
the  decedent,  prior  to  acquisition  of  the  property  by  himself 
and  the  other  joint  owner,  may  have  given  to  the  latter  a  sum 
of  money  which  later  constituted  such  other  joint  owner's 
entire  contribution  to  the  purchase  price  of  the  property,  in 
which  case  the  entire  value  of  the  property  should  be  included ; 
(d)  the  other  joint  owner,  at  a  date  prior  to  the  acquirement 
of  the  property,  may  have  acquired  from  the  decedent,  for 
less  than  a  fair  consideration  in  money  or  money's  worth, 
property  which  thereafter  became  as  such,  or  in  a  converted 
form,  part  of  the  purchase  price  of  the  property.  In  such  a 
case,  the  value  of  the  property  to  be  included  is  to  be  reduced 
proportionately  to  the  consideration  furnished  by  the  other 
joint  owner  in  the  original  transaction;  (e)  the  decedent  may 
have  furnished  no  part  of  the  purchase  price,  in  which  case 
no  part  of  the  property  should  be  included ;  (/)  the  decedent 
and  spouse  may  have  acquired  the  property  by  will  as  tenants 
by  the  entirety,  in -which  case  one-half  of  the  value  of  the  prop- 
erty should  be  included. 

GROSS  ESTATE — PROPERTY  PASSING  UNDER  POWER  OF 
APPOINTMENT. 

(SECX  402.  That  the  value  of  the  gross  estate  of  the  decedent  shall  be  deter- 
mined by  including  the  value  at  the  time  of  his  death  of  all  property,  real  or 
personal,  tangible  or  intangible,  wherever  situated — ) 


624  INHERITANCE  TAXATION 

(e)  To  the  extent  of  any  property  passing  under  a  general  power  of  appoint- 
ment exercised  by  the  decedent  (1)  by  will,  or  (2)  by  deed  executed  in  con- 
templation of,  or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after, 
his  death,  except  in  case  of  a  bona  fide  sale  for  a  fair  consideration  in  money 
or  money's  worth;  and 

Art.  25.  General  rules. — The  value  of  all  property  passing 
under  a  general  power  of  appointment  must  be  included  in 
the  gross  estate  of  the  person  exercising  the  power  (known  as 
the  donee,  or  appointor)  where  the  power  is  exercised  by  will. 
It  should  also  be  so  included  when  the  power  is  exercised  by 
deed  or  other  instrument  executed  in  contemplation  of,  or  in- 
tended to  take  effect  in  possession  or  enjoyment  at  or  after, 
the  death  of  the  donee  of  the  power.  The  statute,  however, 
does  not  require  inclusion  within  the  gross  estate  of  the  value 
of  the  appointed  property  in  the  case  of  a  bona  fide  sale 
thereof  by  the  donee  of  the  power  for  a  fair  consideration  in 
money  or  money's  worth. 

Only  property  passing  under  a  general  power  should  be 
included.  A  general  power  is  one  to  appoint  to  any  person 
or  persons  in  the  discretion  of  the  donee  of  the  power.  Where 
the  donee  is  required  to  appoint  to  a  specified  person  or  class 
of  persons,  the  property  should  not  be  included  in  his  gross 
estate.  Property  appointed  under  a  general  power  should  be 
so  included,  although  the  persons  to  whom  the  appointment 
was  made  would  have  taken  the  property  had  the  power  not 
been  exercised.  A  copy  of  the  instrument  granting  the  power 
should  be  filed  with  Form  706  in  all  cases  in  order  that  the 
Commissioner  may  determine  whether  the  power  is  general 
or  special. 

Example:  The  income  of  property  is  left  to  a  person  for 
life,  with  the  right  to  name  in  his  will  the  person  who  shall 
receive  the  property  upon  his  death.  He  exercises  this  power 
in  his  will.  Upon  his  death,  the  value  of  the  property  so 
appointed  should  be  included  in  his  gross  estate. 

Art.  26.  Powers  exercised  before  and  after  February  24, 
1919. — The  provisions  of  the  Eevenue  Act  of  1918,  and  those 
of  the  present  statute,  respecting  transfers  effected  through 
the  exercise  of  a  general  power  of  appointment  are  identical, 
hence,  subject  to  the  exception  stated  in  the  preceding  article, 


EEGULATIONS  625 

namely,  where  the  appointment  was  made  for  a  fair  con- 
sideration in  money  or  money's  worth,  the  value  of  all  prop- 
erty so  transferred  by  the  decedent  in  the  exercise  of  such  a 
power  must  be  included  in  the  gross  estate,  if  his  death  oc- 
curred subsequent  to  6.55  p.  m.,  February  24,  1919  (the  effec- 
tive date  of  the  Kevenue  Act  of  1918).  Where,  however,  the 
decedent  died  prior  to  the  effective  date  of  the  Revenue  Act 
of  1918,  the  value  of  the  appointed  property  is  not  to  be  so 
included. 

GROSS  ESTATE — INSUHANCE. 

(SEC.  402.  That  the  value  of  the  gross  estate  of  the  decedent  shall  be  deter- 
mined by  including  the  value  at  the  time  of  his  death  of  all  property,  real  or 
personal,  tangible  or  intangible,  wherever  situated — ) 

(f)  To  the  extent  of  the  amount  receivable  by  the  executor  as  insurance  under 
policies  taken  out  by  the  decedent  upon  his  own  life;  and  to  the  extent  of  the 
excess  over  $40,000  of  the  amount  receivable  by  all  other  beneficiaries  as  insur- 
ance under  policies  taken  out  by  the  decedent  upon  his  own  life. 

Art.  27.  Taxable  insurance. — The  statute  provides  for  the 
inclusion  in  the  gross  estate  of  certain  forms  of  insurance 
taken  out  by  the  decedent  upon  his  own  life.  Two  kinds  of 
insurance  are  taxable:  (a)  all  insurance  receivable  by,  or  for 
the  benefit  of,  the  estate;  (b)  all  other  insurance  to  the  extent 
that  it  exceeds  in  the  aggregate  $40,000.  The  term  "insur- 
ance" refers  to  life  insurance  of  every  description,  including 
death  benefits  paid  by  fraternal  beneficial  societies,  operating 
under  the  lodge  sj^stem.  Insurance  is  deemed  to  be  taken  out 
by  the  decedent  in  all  cases  where  he  pays  the  premiums,  either 
directly  or  indirectly,  whether  or  not  he  makes  the  applica- 
tion. On  the  other  hand,  the  insurance  is  not  deemed  to  be 
taken  out  by  the  decedent,  even  though  the  application  is  made 
by  him,  where  the  premiums  are  actually  paid  by  the  bene- 
ficiary, who  may  be  either  a  person  or  a  corporation.  Where 
the  decedent  takes  out  insurance  in  favor  of  another  person 
or  corporation,  as  collateral  security  for  a  loan  or  other  ac- 
commodation, and  either  directly  or  indirectly,  pays  the  pre- 
miums thereon,  the  insurance  must  be  considered  in  deter- 
mining whether  there  is  an  excess  over  $40,000.  The  amount 
of  the  loan  outstanding  at  decedent's  death,  with  interest 
accrued  thereon  to  that  date,  will  be  deductible  in  determining 
40 


g26  INHERITANCE  TAXATION 

the  net  estate.  (See  Art.  39.)  Where  the  decedent  assigns  a 
policy,  and  retains  no  interest  therein,  and  thereafter  pays  no 
part  of  the  premiums,  the  insurance  will  not  be  considered  in 
determining  whether  there  is  such  an  excess. 

Art.  28.  Insurance  in  favor  of  the  estate. — The  provision 
requiring  the  inclusion  in  the  gross  estate  of  all  insurance 
receivable  by  the  executor,  without  any  deduction,  applies  to 
policies  made  payable  to  the  decedent's  estate  or  his  executor 
or  administrator,  and  all  insurance  which  is  in  fact  receiv- 
able by,  or  for  the  benefit  of,  the  estate.  It  includes  insur- 
ance taken  out  to  provide  funds  to  meet  the  estate  tax,  and 
any  other  taxes  or  charges  which  are  enforceable  against  the 
estate.  The  manner  in  which  the  policy  is  drawn  is  imma- 
terial so  long  as  there  is  an  obligation,  legally  binding  upon 
the  beneficiary,  to  use  the  proceeds  in  payment  of  such  taxes 
or  charges. 

Art.  29.  Insurance  receivable  by  other  beneficiaries. — The 
estate  is  entitled  to  only  one  exemption  of  $40,000  upon  in- 
surance receivable  by  beneficiaries  other  than  the  estate.  For 
example,  if  the  decedent  left  life  insurance  payable  to  three 
such  beneficiaries  in  amounts  of  $10,000,  $40,000,  and  $50,000 
(total,  $100,000),  the  amount  of  $60,000  should  be  returned 
for  taxation,  which  is  the  excess  of  the  sum  of  the  three 
policies  over  the  exempted  amount.  The  word  "  bene- 
ficiaries," as  used  in  reference  to  the  $40,000  exemption,  means 
persons  entitled  to  the  actual  enjoyment  of  the  insurance 
money. 

Art.  30.  Effective  date  of  insurance  provisions. — Insurance 
receivable  by  the  estate  must  be  included  in  the  gross  estate 
of  all  decedents  who  died  after  September  8,  1916.  Insurance 
payable  to  beneficiaries  other  than  the  estate,  however,  need 
not  be  included  in  the  gross  estate  of  decedents  who  died  be- 
fore the  effective  date  of  Title  IV  of  the  Revenue  Act  of  1918, 
unless  the  insurance  was  originally  payable  to  the  estate,  and 
the  policy  was  thereafter  assigned,  or  made  payable,  to  a 
specific  beneficiary  in  contemplation  of,  or  intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  the  decedent's 


REGULATIONS  627 

death;  such  assignment  or  change  in  beneficiary  not  being  for 
a  fair  consideration  in  money  or  money's  worth. 

Art.  31.  Valuation  of  insurance. — The  amount  to  be  re- 
turned in  the  case  of  any  policy  is  the  amount  receivable  by 
the  estate  or  other  beneficiary.  In  cases  where  the  proceeds 
of  a  policy  are  made  payable  to  the  beneficiary  in  the  form  of 
an  annuity  for  life  or  for  a  term  of  years,  the  present  worth 
of  the  annuity  at  the  time  of  death  should  be  included  in  the 
gross  estate.  For  the  method  of  computing  the  value  of  such 
an  annuity,  see  Article  15.  Where  the  insurance  contract 
gives  an  option  to  receive  a  fixed  sum  of  money  in  lieu  of  an 
annuity,  this  sum,  if  accepted,  represents  the  value  of  the 
insurance  for  the  purpose  of  the  tax.  If  such  sum  is  not 
accepted  the  value  of  the  annuity  is  to  be  included  in  the  gross 
estate.  Where  there  is  more  than  one  option,  and  none  of 
them  is  convertible,  the  value  of  the  insurance  should  be  deter- 
mined in  accordance  with  the  option  actually  exercised. 

DEDUCTIONS — ESTATES  OF  RESIDENTS. 

SEC.  403.  That  for  the  purpose  of  the  tax  the  value  of  the  net  estate  shall  be 
determined — 

(a)  In  the  case  of  a  resident,  by  deducting  from  the  value  of  the  gross  estate — 
( 1 )  Such  amounts  for  funeral  expenses,  administration  expenses,  claims  against 
the  estate,  unpaid  mortgages  upon,  or  any  indebtedness  in  respect  to,  property 
(except,  in  the  case  of  a  resident  decedent,  where  such  property  is  not  situated 
in  the  United  States ) .  losses  incurred  during  the  settlement  of  the  estate  arising 
from  fires,  storms,  shipwreck,  or  other  casualty,  or  from  theft,  when  such  losses 
are  not  compensated  for  by  insurance  or  otherwise,  and  such  amounts  reasonably 
required  and  actually  expended  for  the  support  during  the  settlement  of  the 
estate  of  those  dependent  upon  the  decedent,  as  are  allowed  by  the  laws  of  the 
jurisdiction,  whether  within  or  without  the  United  States,  under  which  the 
estate  is  being  administered,  but  not  including  any  income  taxes  upon  income 
received  after  the  death  of  the  decedent,  or  any  estate,  succession,  legacy,  or 
inheritance  taxes;  *  *  * 

Art.  32.  Deduction  of  claims,  expenses,  etc. — In  order  to 
be  deductible  under  the  foregoing  provision  of  the  statute,  the 
item  must  fall  within  one  of  the  several  classes  of  deductions 
specifically  enumerated  therein,  and  must  also,  except  in  the 
case  of  deductible  losses  during  the  administration  of  the 
estate,  be  one  the  payment  of  which  out  of  the  estate  is  au- 
thorized by  the  laws  of  the  jurisdiction  under  which  the  estate 


628  INHERITANCE  TAXATION 

is  being  administered.  Unless  both  of  these  conditions  exist, 
the  item  is  not  deductible.  Where  the  item  is  not  one  of  those 
described,  it  is  not  deductible  merely  because  payment  is 
allowed  by  the  local  law.  Where  the  amount  which  may  be 
expended  for  the  particular  purpose  is  limited  by  the  local 
law,  no  deduction  in  excess  of  such  limitation  is  permissible. 
An  item  may  be  entered  on  the  return  for  deduction  though 
the  exact  amount  thereof  is  not  then  known,  provided  it  is 
ascertainable  with  reasonable  certainty,  and  will  be  paid.  No 
deduction  may  be  taken  upon  the  basis  of  a  vague  or  uncer- 
tain estimate.  When  an  uncertain  or  contingent  liability  was 
undetermined  at  the  time  of  audit  of  the  return  by  the  Com- 
missioner, and,  as  a  consequence,  deduction  was  not  allowed 
therefor  in  such  audit,  the  remedy  is  by  a  claim  for  abate- 
ment or  refund  when  the  liability  and  the  amount  thereof 
becomes  fixed  and  determined.  (See  Arts.  93  to  97,  inclusive.) 

Art.  33.  Effect  of  court  decree. — The  decision  of  a  local 
court  as  to  the  amount  of  a  claim  or  administration  expense 
will  ordinarily  be  accepted  where  the  court  passes  upon  the 
facts  upon  which  deductibility  depends.  Where  the  court 
does  not  pass  upon  such  facts  its  decree  will,  of  course,  not 
be  followed.  For  example,  where  the  question  before  the 
court  is  whether  a  claim  should  be  allowed,  the  decree  allow- 
ing it  will  ordinarily  be  accepted  as  establishing  that  the  claim 
is  valid  and  the  amount  of  it.  Where,  however,  a  legacy  is 
left  to  an  executor  in  lieu  of  commissions,  the  allowance  of 
the  legacy  does  not  establish  that  the  executor's  claim  for 
commissions  is  equal  to  the  amount  bequeathed,  and  that  this 
amount  is  consequently  deductible.  (See  Art.  36.)  Nor  will 
the  decree  necessarily  be  accepted  even  where  it  purports  to 
decide  the  facts  upon  which  deductibility  depends.  It  must 
appear  that  the  court  actually  passed  upon  the  merits  of  the 
case.  This  will  be  presumed  in  all  cases  where  there  is  an 
active  and  genuine  contest.  Where  the  result  reached  appears 
to  be  unreasonable,  this  is  some  evidence  that  there  was  not 
such  a  contest,  but  it  may  be  rebutted  by  proof  to  the  contrary. 
Where  the  decree  was  rendered  by  consent,  it  will  be  accepted, 
provided  the  consent  was  a  bona  fide  recognition  of  the 


REGULATIONS  629 

validity  of  the  claim — not  a  mere  cloak  for  a  gift — and  was 
accepted  by  the  court  as  satisfactory  evidence  upon  the  merits. 
It  will  be  presumed  that  the  consent  was  of  this  character, 
and  was  so  accepted,  where  it  is  made  by  all  parties  having 
an  interest  adverse  to  the  claim,  when  all  aspects  of  the  mat- 
ter, including  its  effect  upon  taxation,  are  considered.  The 
decree  will  not  be  accepted  where  it  appears  to  be  at  variance 
with  the  law  of  the  state ;  as,  for  example,  if  an  allowance  is 
made  to  an  executor  in  excess  of  the  rate  prescribed  by 
statute. 

Art.  34.  Funeral  expenses. — An  executor  may  deduct  such 
amounts  for  funeral  expenses  as  are  actually  expended  by 
him,  provided  expenditures  of  this  nature  are  a  liability  of 
the  estate  under  the  laws  of  the  local  jurisdiction.  A  reason- 
able expenditure  by  the  executor  for  a  tombstone,  monument, 
mausoleum,  or  for  a  burial  lot,  either  for  the  decedent  or  his 
family,  may  be  deducted  under  this  heading,  provided  such 
an  expenditure  is  made  a  charge  upon  the  estate  by  the  local 
law.  Included  in  funeral  expenses  is  the  cost  of  transporta- 
tion of  the  person  bringing  the  body  to  the  place  of  burial. 

Art.  35.  Administration  expenses. — The  amounts  deduct- 
ible from  the  gross  estate  as  "administration  expenses"  are 
such  expenses  as  are  actually  and  necessarily  incurred  in  the 
administration  of  the  estate ;  that  is,  in  the  collection  of  assets, 
payment  of  debts,  and  distribution  among  the  persons  en- 
titled. The  expenses  contemplated  in  the  law  are  such  only 
as  attend  the  settlement  of  an  estate  by  the  legal  representa- 
tive preliminary  to  the  transfer  of  the  property  to  individual 
beneficiaries  or  to  a  trustee,  whether  such  trustee  is  the  execu- 
tor or  some  other  person.  Expenditures  not  essential  to  the 
proper  settlement  of  the  estate,  but  incurred  for  the  indi- 
vidual benefit  of  the  heirs,  legatees,  or  devisees,  may  not  be 
taken  as  deductions.  Administration  expenses  include  (1) 
executor's  commissions;  (2)  attorney's  fees;  (3)  miscel- 
laneous expenses.  Each  of  these  classes  is  considered  sepa- 
rately. (See  Arts.  36  to  38,  inclusive.) 


630  INHERITANCE  TAXATION 

Art.  36.  Executor's  commissions. — The  amount  deductible 
as  executor's  or  administrator's  commissions  is  such  amount 
as  has  actually  been  paid  or  which  at  the  time  the  return  is 
filed  it  is  reasonably  expected  will  be  paid,  but  no  deduction 
will  be  allowed  if  no  commissions  are  to  be  collected.  Where 
the  amount  of  the  commissions  has  not  been  fixed  by  decree  of 
the  proper  court,  the  deduction  will  be  allowed  on  the  final 
audit  of  the  return  provided:  (1)  That  the  commissioner  is 
reasonably  satisfied  that  the  commissions  claimed  will  be 
paid;  (2)  that  the  amount  entered  as  a  deduction  is  within 
the  amount  allowable  by  the  laws  of  the  jurisdiction  wherein 
the  estate  is  being  administered;  and  (3)  that  it  is  in  accord- 
ance with  the  usually  accepted  practice  in  said  jurisdiction  in 
estates  of  similar  size  and  character.  Where  the  commis- 
sions claimed  have  not  been  awarded  by  the  proper  court  the 
commissioner  on  final  audit  may  disallow  the  deduction  in 
part  or  in  whole,  as  the  circumstances  in  his  judgment  justify, 
subject  to  such  future  adjustment  as  the  facts  may  later  re- 
quire. If  the  deduction  is  allowed  in  advance  of  payment  and 
payment  is  thereafter  waived,  it  shall  be  the  duty  of  the 
executor  to  notify  the  commissioner.  Executors  should  note 
that  the  amounts  received  in  payment  of  the  commissions  con- 
stitute taxable  income  and  that  amounts  allowed  on  final  audit 
are  cross-referenced  for  income-tax  purposes. 

A  bequest  to  an  executor  in  lieu  of  commissions  is  deduct- 
ible as  an  administration  expense  in  the  amount  that  it  does 
not  exceed  commissions  allowable  under  local  law  and 
practice. 

Amounts  paid  as  trustees'  commissions  do  not  constitute 
expenses  of  administration  and  are  not  deductible,  whether 
received  by  the  executor  acting  in  the  capacity  of  a  trustee  or 
by  a  separate  trustee  as  such. 

Art.  37.  Attorney's  fees. — The  amount  deductible  as  attor- 
ney's fee  is  the  amount  actually  paid  as  such  or  which  at  the 
time  the  return  is  filed  it  is  reasonably  expected  will  be  paid. 
If  on  the  final  audit  of  a  return,  the  fees  claimed  have  not 
been  awarded  by  the  proper  court  and  paid,  the  deduction  will 
be  allowed,  provided  that  the  commissioner  is  reasonably 


KEGULATIONS  631 

satisfied  that  the  amount  claimed  will  be  paid  and  that  it  does 
not  exceed  a  reasonable  remuneration  for  the  services  ren- 
dered, taking  into  full  account  the  size  and  character  of  the 
estate  and  local  law  and  practice.  Where  the  attorney's  fees 
have  not  been  paid  at  the  time  of  the  final  audit  of  the  return, 
the  commissioner  may  disallow  the  deduction  in  part  or  in 
whole  as  the  circumstances  may  warrant,  subject  to  such 
future  adjustment  as  the  facts  may  require. 

Attorney's  fees  incident  to  litigation  instituted  by  the  bene- 
ficiaries as  to  their  respective  interests  do  not  constitute  a 
proper  deduction,  inasmuch  as  expenses  of  this  character  are 
properly  charges  against  the  beneficiaries  personally  and  are 
not  administration  expenses  as  contemplated  by  the  statute. 

Art.  38.  Miscellaneous  administration  expenses. — This 
item  includes  expenses  incident  to  court  proceedings,  or  the 
administration  of  the  estate,  such  as  court  costs,  surrogates' 
fees,  accountants'  fees,  appraisers'  fees,  clerk  hire,  etc.  Ex- 
penses necessarily  incurred  in  distributing  the  estate  are 
deductible.  This  includes  the  cost  of  storing  or  maintaining 
property  of  the  estate,  where  it  is  impossible  to  effect  imme- 
diate distribution  to  the  beneficiaries.  Expenses  for  preserv- 
ing and  caring  for  the  property  may  be  deducted,  but  do  not 
include  additions  or  improvements ;  nor  will  such  expenses  be 
allowed  for  a  longer  period  than  the  executor  is  required  to 
retain  the  property.  A  brokerage  fee  for  selling  property  of 
the  estate  is  deductible  where  the  sale  is  necessary  in  order  to 
pay  the  decedent's  debts,  or  the  expenses  of  administration, 
or  to  effect  distribution.  Other  expenses  attending  the  sale 
are  deductible,  such  as  the  fees  of  an  auctioneer,  where  it  is 
reasonably  necessary  to  employ  one. 

Art.  39.  Claims  against  the  estate. — The  amounts  that  may 
be  deducted  under  this  heading  are  such  only  as  represent 
personal  obligations  of  the  decedent  existing  at  the  time  of 
his  death,  whether  then  matured  or  not.  Only  such  claims  as 
are  enforceable  against  the  estate  may  be  deducted. 

Art.  40.  Taxes. — Taxes  upon  real  property  should  be 
accrued  to  the  date  of  death  in  order  to  reflect  in  the  gross 


632  INHERITANCE  TAXATION 

estate  the  value  of  the  property  upon  which  they  were  im- 
posed. This  is  done  by  ascertaining  the  time  between  the  first 
day  of  the  taxable  period  wherein  the  death  occurs  and  the 
date  of  death,  and  computing  the  proportion  of  the  entire  tax 
upon  the  basis  which  this  period  bears  to  the  entire  taxable 
period.  Such  proportion  of  the  tax  had  accrued  upon  the  date 
of  death,  and  is  deductible. 

Taxes  upon  personal  property  are  either  wholly  deductible, 
or  are  not  deductible  at  all,  depending  upon  whether  the  tax 
did,  or  did  not,  become  the  personal  obligation  of  the  tax- 
payer in  his  lifetime.  If  the  tax  became  his  personal  obliga- 
tion during  his  life,  the  whole  amount  is  deductible  as  a  claim 
against  his  estate.  If  it  did  not  become  such  personal  obliga- 
tion in  his  lifetime,  no  part  of  it  is  deductible.  The  question 
when  the  tax  became  the  personal  obligation  of  the  taxpayer 
depends  upon  the  law  of  the  jurisdiction  imposing  the  tax. 
Prima  facie,  the  date  when  the  tax  became  the  personal 
obligation  of  the  taxpayer  is  the  date  when  the  assessment 
was  laid. 

Federal  taxes  upon  income  received  or  accrued  during  the 
decedent's  lifetime  constitute  a  personal  obligation  of  the 
decedent,  and  are  deductible.  Taxes  upon  income  received 
after  the  decedent's  death  are  not  deductible.  No  estate,  suc- 
cession, legacy,  or  inheritance  tax  is  deductible. 

Art.  41.  Unpaid  mortgages. — The  full  amount  of  unpaid 
mortgages  on  property  included  in  the  gross  estate  should  be 
deducted  under  this  heading,  including  interest  which  had 
accrued  at  the  time  of  death,  whether  payable  at  that  time  or 
not.  The  full  value  of  the  real  estate,  without  any  deduction 
for  mortgages,  must  be  returned  as  part  of  the  gross  estate. 
Real  property  situated  outside  the  United  States  is  not  a  part 
of  the  gross  estate  of  a  resident  decedent,  nor  may  deduction 
be  taken  of  any  mortgage  upon,  or  any  indebtedness  in  respect 
to,  such  property  when  owned  by  a  resident  decedent. 

Art.  42.  Losses  from  casualty  or  theft. — There  may  be 
deducted  under  this  heading  losses  incurred  during  the  settle- 
ment of  the  estate  arising  from  fires,  storms,  shipwreck,  or 
other  casualty,  or  from  theft,  when  such  losses  are  riot  com- 


REGULATIONS  633 

pensated  for  by  insurance  or  otherwise.  If  the  loss  is  partly 
compensated,  the  excess  of  the  loss  over  such  compensation 
may  be  deducted.  Losses  not  of  the  nature  described  are  not 
deductible.  Losses  sustained  by  reason  of  depreciation  or 
otherwise  in  the  value  of  assets  of  the  estate  subsequent  to 
the  decedent's  death,  when  not  arising  from  any  of  the  causes 
named,  are  not  deductible.  In  order  to  be  deductible  a  loss 
must  occur  during  the  settlement  of  the  estate.  Where  prop- 
erty has  been  delivered  to  the  beneficiary,  settlement  has  been 
effected,  and  no  deduction  may  be  had  for  loss  of  the  property. 

Art.  43.  Support  of  dependents. — The  support  during  the 
settlement  of  the  estate  of  dependents  of  the  decedent  should 
be  deducted,  but  pursuant  to  the  following  rules : 

(1)  In  order  to  be  deductible,  the  allowance  must  be  au- 
thorized by  the  laws  of  the  jurisdiction  in  which  the  estate  is 
being  administered,  and  not  in  excess  of  what  is  reasonably 
required. 

(2)  The  allowance  for  which  deduction  may  be  made  is 
limited  to  support  during  the  settlement  of  the  estate.    Any 
allowance  for  a  more  extended  period  is  not  deductible. 

(3)  There  must  be  an  actual  disbursement  from  the  estate 
to  the  dependents,  but  after  payment  has  been  made  the  right 
of  deduction  is  not  affected  by  the  fact  that  the  dependents  do 
not  expend  the  entire  amount  for  their  support  during  the 
settlement  of  the  estate. 

DEDUCTIONS — PROPERTY  PREVIOUSLY  TAXED. 

SEO.  403.  That  for  the  purpose  of  the  tax  the  value  of  the  net  estate  shall  be 
determined — 

(a)  In  the  case  of  a  resident,  by  deducting  from  the  value  of  the  gross  estate — 
(2)  An  amount  equal  to  the  value  of  any  property  forming  a  part  of  the 
gross  estate  situated  in  the  United  States  of  any  person  who  died  within  five 
years  prior  to  the  death  of  the  decedent  where  such  property  can  be  identified  as 
having  been  received  by  the  decedent  from  such  prior  decedent  by  gift,  bequest, 
devise,  or  inheritance,  or  which  can  be  identified  as  having  been  acquired  in 
exchange  for  property  so  received:  Provided,  That  this  deduction  shall  be 
allowed  only  where  an  estate  tax  under  this  or  any  prior  Act  of  Congress  waa 
paid  by  or  on  behalf  of  the  estate  of  such  prior  decedent,  and  only  in  the 
amount  of  the  value  placed  by  the  Commissioner  on  such  property  in  determining 
the  value  of  the  gross  estate  of  such  prior  decedent,  and  only  to  the  extent  that 
the  value  of  such  property  is  included  in  the  decedent's  gross  estate  and  not 


634  INHERITANCE  TAXATION 

deducted  under  paragraphs  (1)  or  (3)  of  subdivision  (a)  of  this  section.  This 
deduction  shall  be  made  in  case  of  the  estates  of  all  decedents  who  have  died 
since  September  8,  1916; 

Art.  44.  Deduction  of  the  value  of  transfers  taxed  within 
five  years. — Where  there  is  included  in  the  decedent's  gross 
estate  property  received  by  him  by  gift,  will,  or  inheritance 
from  any  person  who  died  within  five  years  prior  to  his  death, 
or  property  acquired  in  exchange  for  property  so  received, 
the  statute  authorizes  a  deduction  in  behalf  thereof,  subject  to 
the  following  conditions  and  limitations,  namely : 

(1)  The  two  deaths  must  have  occurred  within  five  years 
of  each  other. 

(2)  The  property  must  be  identified  either  as  the  same 
which  the  decedent  so  received,  or  subsequently  acquired  in 
exchange  therefor. 

(3)  The  property  must  have  formed  a  part  of  the  gross 
estate,  situated  in  the  United  States,  of  such  prior  decedent. 

(4)  An  estate  tax  must  have  actually  been  paid  by  or  on 
behalf  of  the  estate  of  such  prior  decedent  (the  mere  filing  of 
a  return  for  such  estate  not  being  sufficient). 

(5)  The  property,  or  that  acquired  in  exchange  therefor,  in 
so  far  as  it  constitutes  a  part  of  the  decedent's  gross  estate, 
is,  for  the  purpose  of  inclusion  therein,  to  be  valued  as  of  the 
date  of  the  decedent's  death. 

(6)  The  deduction,  however,  is  limited  to  the  value  which 
the  Commissioner  placed  on  the  property  in  determining  the 
value  of  the  gross  estate  of  the  prior  decedent. 

(7)  The  deduction  is  also  limited  to  the  extent  that  the 
value  of  the  property,  or  that  acquired  in  exchange  therefor, 
is  included  in  the  decedent's  gross  estate.    (See  example  fol- 
lowing the  next  paragraph.) 

(8)  The  deduction  is  further  limited  to  the  extent  that  the 
value  of  the  property,  or  of  that  so  acquired  in  exchange,  is 
not  deducted  under  paragraphs  (1)  or  (3)  of  subdivision  (a) 
of  section  403. 

Example:  The  decedent's  father  died  January  1,  1917.  In- 
cluded in  his  gross  estate  was  a  tract  of  land  comprising  200 
acres  upon  which  the  Commissioner  placed  a  value  for  estate 
tax  purposes  of  $20,000.  The  tax  on  the  father's  estate  was 


EEGULATIONS  635 

paid.  The  son,  having  inherited  the  tract  from  his  father, 
sold  100  acres  thereof  on  January  1,  1920,  for  $20,000,  and 
commingled  the  proceeds  with  his  other  funds.  On  the  son's 
death,  which  occurred  January  1,  1921,  the  remaining  one- 
half  of  the  land  was  returned  as  a  part  of  his  gross  estate  at 
$20,000,  which  was  the  fair  market  value  thereof  as  of  the 
date  of  his  death.  Since  only  one-half  of  the  tract  was  in- 
cluded in  the  son's  gross  estate,  the  deduction  is  limited  to 
one-half  of  the  value  placed  by  the  Commissioner  upon  the 
whole  tract  when  determining  the  value  of  the  father's  gross 
estate,  or  $10,000. 

Under  the  provisions  of  the  Kevenue  Act  of  1918  the  deduc- 
tion was  available  only  where  the  prior  decedent  died  after 
October  3,  1917,  the  date  of  the  passage  of  the  Eevenue  Act 
of  1917,  and  the  decedent's  death  occurred  subsequent  to  the 
effective  date  of  the  Revenue  Act  of  1918.  But  under  the  pro- 
visions of  the  Revenue  Act  of  1921  the  right  to  such  deduction 
is  made  available  to  the  estates  of  all  decedents  dying  since 
September  8,  1916.  Where,  under  the  provisions  of  the 
Revenue  Act  of  1918,  or  any  prior  act  of  Congress  imposing 
an  estate  tax,  the  deduction  was  not  available,  the  right  thereto 
is  to  be  determined  in  accordance  with  the  provisions  of  para- 
graph (2)  of  subdivision  (a)  of  section  403  of  the  Revenue 
Act  of  1921,  but  where  available  under  the  Revenue  Act  of 
1918,  it  is  governed  by  paragraph  (2)  of  subdivision  (a)  of 
section  403  of  that  act.  Where  the  tax  has  been  paid  without 
taking  the  deduction,  a  claim  for  refund  may  be  made,  as 
provided  by  Article  96. 

The  burden  of  proving  that  the  estate  is  entitled  to  the 
deduction  rests  upon  the  executor. 

Art.  45.  Property  originally  received. — If  the  property 
originally  received  from  the  prior  decedent  is  included  in  the 
decedent's  gross  estate,  the  executor  must  describe  it  fully, 
and  prove  its  identity. 

Art.  46.  Property  acquired  in  exchange. — The  deduction 
for  substituted  property  is  limited  to  property  acquired  in 
exchange  for  the  identical  property  received  from  the  prior 


636  INHERITANCE  TAXATION 

decedent.    Where  there  is  a  subsequent  exchange,  the  right 
to  deduction  is  lost. 

In  the  case  of  an  exchange  the  executor  must  describe  and 
identify  fully  both  the  property  originally  received  from  the 
prior  decedent  and  the  property  acquired  in  exchange  therefor. 
He  must  also  state  the  date  of  the  transaction  by  which  the 
exchange  was  effected  and  the  name  and  address  of  the  trans- 
feree. If  the  exchange  was  made  by  written  instrument  of 
public  record,  a  precise  reference  must  be  made  to  the  record 
containing  a  transcript  of  the  instrument,  and,  if  by  instru- 
ment not  of  record,  a  copy  of  the  instrument  itself  must  be 
supplied.  If  there  was  no  written  instrument,  an  affidavit  as 
to  the  facts  of  the  exchange  by  one  or  more  persons  having 
personal  knowledge  of  the  matter  must  be  furnished. 

DEDUCTIONS — TRANSFEKS  FOR  PUBLIC,  CHARITABLE,  ETC.,  USES. 

SEC.  403.  That  for  the  purpose  of  the  tax  the  value  of  the  net  estate  shall  be 
determined — 

(a)   In  the  case  of  a  resident,  by  deducting  from  the  value  of  the  gross  estate — • 

(3)  The  amount  of  all  bequests,  legacies,  devises,  or  transfers,  except  bona 
fide  sales  for  a  fair  consideration  in  money  or  money's  worth,  in  contemplation 
of  or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  the  decedent's 
death,  to  or  for  the  use  of  the  United  States,  any  State,  Territory,  any  political 
subdivision  thereof,  or  the  District  of  Columbia,  for  exclusively  public  purposes, 
or  to  or  for  the  use  of  any  corporation  organized  and  operated  exclusively  for 
religious,  charitable,  scientific,  literary,  or  educational  purposes,  including  the 
encouragement  of  art  and  the  prevention  of  cruelty  to  children  or  animals,  no 
part  of  the  net  earnings  of  which  inures  to  the  benefit  of  any  private  stockholder 
or  individual,  or  to  a  trustee  or  trustees  exclusively  for  such  religious,  char- 
itable, scientific,  literary,  or  educational  purposes.  This  deduction  shall  be 
made  in  case  of  the  estates  of  all  decedents  who  have  died  since  December  31, 
1917;  *  *  * 

In  the  case  of  any  estate  in  respect  to  which  the  tax  has  been  paid,  if  necessary 
to  allow  the  benefit  of  the  deduction  under  paragraphs  (2)  and  (3)  of  sub- 
division (a)  or  (b)  the  tax  shall  be  redetermined  and  any  excess  of  tax  paid 
shall  be  refunded  to  the  executor. 

Art.  47.  Transfers  for  public,  charitable,  religious,  etc., 
uses. — In  the  estate  of  decedents  dying  after  December  31, 
1917,  deduction  may  be  taken  of  the  value  of  all  property 
transferred  by  will,  or  by  the  decedent  in  his  lifetime  in  con- 
templation of  or  intended  to  take  effect  in  possession  or  en- 
joyment at  or  after  his  death  (not  including,  however,  the 
value  of  property  sold  for  a  fair  consideration  in  money  or 


KEGULATIONS  637 

money's  worth),  where,  in  either  case,  the  property  is,  or  has 
been,  transferred  (1)  to  or  for  the  use  of  the  United  States, 
any  State,  Territory,  any  political  subdivision  thereof,  or  the 
District  of  Columbia,  for  exclusively  public  purposes;  or  (2) 
to  or  for  the  use  of  any  corporation  or  association  organized 
and  operated  exclusively  for  religious,  charitable,  scientific, 
literary,  or  educational  purposes  (including  the  encourage- 
ment of  art  and  the  prevention  of  cruelty  to  children  or  ani- 
mals), where  no  part  of  the  net  earnings  of  the  corporation 
or  association  inures  to  the  benefit  of  any  private  stockholder 
or  individual;  or  (3)  to  a  trustee  or  trustees  exclusively  for 
one  or  more  of  the  purposes  enumerated  in  (2). 

Where  a  trust  is  created  for  both  a  charitable  and  a  private 
purpose,  deduction  may  be  taken  of  the  value  of  the  beneficial 
interest  in  favor  of  the  former  only  in  so  far  as  such  interest 
is  presently  ascertainable,  and  hence  severable  from  the  in- 
terest in  favor  of  the  private  use.  Thus,  when  money  or  prop- 
erty is  placed  in  trust  to  pay  the  income  to  an  individual  dur- 
ing his  life,  and  then  to  pay  or  deliver  the  principal  to  a 
charitable  corporation,  or  to  apply  it  to  a  charitable  purpose, 
the  present  value  of  the  principal  is  deductible.  For  the 
manner  of  determining  such  value,  see  Article  15. 

The  deduction  is  not  limited,  in  the  estates  of  resident  dece- 
dents, to  transfers  to  domestic  corporations  or  associations, 
or  to  trustees  for  use  within  the  United  States. 

Art.  48.  Religious,  charitable,  scientific,  and  educational 
corporations. — A  corporation  or  association  to  which  such  a 
transfer  was  made  must  meet  three  tests:  (1)  it  must  be 
organized  and  operated  for  one  or  more  of  the  specified  pur- 
poses; (2)  it  must  be  organized  and  operated  exclusively  for 
such  purpose  or  purposes;  and  (3)  no  part  of  its  net  earnings 
shall  inure  to  the  benefit  of  private  stockholders  or  indi- 
viduals. 

The  estate  is  not  deprived  of  the  right  to  deduct  the  value 
of  property  so  transferred  by  reason  of  the  fact  that  private 
individuals  are  the  recipients  of  the  benefits  which  the  cor- 
poration or  association  dispenses.  Such  right  is,  however, 
lost  wherever  any  part  of  the  net  earnings  of  the  corporation 
or  association  inures  to  the  benefit  of  a  private  stockholder 


638  INHERITANCE  TAXATION 

or  individual.  Thus,  if  the  shareholders  or  members  of  the 
corporation  or  association  are  entitled,  upon  a  dissolution 
thereof,  to  receive  the  proceeds  of  its  property,  including 
accumulated  net  earnings,  no  right  of  deduction  exists,  even 
though  the  by-laws  provide  that  the  shareholders  or  members 
shall  not  receive  dividends  or  other  return  upon  their  shares 
or  interests. 

Art.  49.  Proof  required. — In  order  to  prove  the  right  of 
the  estate  to  this  deduction  the  executor  must  submit : 

(1)  Duplicate  copies  of  the  will  of  the  decedent  or  the  in- 
strument, if  any,  in  the  case  of  a  transfer  of  property  in  con- 
templation of  or  intended  to  take  effect  in  possession  or 
enjoyment  at  or  after  death,  as  required  by  article  69.    Where 
copies  of  the  will  are  submitted  it  will  be  sufficient  if  one  of 
these  copies  is  certified,  but  in  such  cases  the  collector  should 
forward  the  certified  copy  to  the  commissioner. 

(2)  An  affidavit  by  the  executor  stating  whether  any  action 
has  been  instituted  to  contest  the  will  and  whether,  according 
to  his  information  and  belief,  any  such  action  is  contemplated. 

(3)  Such  other  documents  or  evidence  as  may  be  requested 
by  the  commissioner  on  review.    A  return  will  not  be  con- 
sidered as  complete  within  the  meaning  of  section  407  of  the 
act  until  all  such  evidence  has  been  submitted. 

Art.  50.  Conditional  bequests. — Where  the  transfer  is  de- 
pendent upon  the  performance  of  some  act  or  the  happening 
of  some  event  in  order  to  become  effective,  it  is  necessary  that 
the  performance  of  the  act  or  the  occurrence  of  the  event  shall 
have  taken  place  before  the  deduction  can  be  allowed. 

Where  the  legatee,  devisee,  donee,  or  trustee  is  empowered 
to  divert  the  property  or  fund,  in  whole  or  in  part,  to  a  use  or 
purpose  which  would  have  rendered  it,  to  the  extent  that  it 
is  subject  to  such  power,  not  deductible  had  it  been  directly 
so  bequeathed,  devised,  or  given  by  the  decedent,  deduction 
will  be  limited  to  that  portion,  if  any,  of  the  property  or  fund 
which  is  exempt  from  an  exercise  of  such  power. 

Art.  51.  Effective  date. — The  deduction  may  be  claimed  by 
the  estates  of  all  decedents  dying  after  December  31,  1917. 


EEGULATIONS  639 

Where  the  tax  has  been  paid  without  taking  the  deduction,  a 
claim  for  refund  may  be  made,  as  provided  by  Article  96. 

SPECIFIC  EXEMPTION. 

(SEC.  403.  That  for  the  purpose  of  the  tax  the  value  of  the  net  estate  shall  be 
determined — 

(a)  In  the  case  of  a  resident,  by  deducting  from  the  value  of  the  gross  estate — ) 
(4)   An  exemption   of  $50,000;     *     *     * 

Art.  52.  Specific  exemption. — There  may  be  deducted  from 
the  gross  estate  of  all  resident  decedents  a  specific  exemption 
of  $50,000.  No  such  exemption  is  allowed  in  the  estates  of 
nonresident  decedents.  If  more  than  one  return  is  made  for 
purposes  of  the  tax,  the  exemption  may  be  taken  but  once. 

ESTATES  OF  NONRESIDENTS. 

SEC.  403.  (b)  *  *  *  For  the  purpose  of  this  title  stock  in  a  domestic 
corporation  owned  and  held  by  a  nonresident  decedent  shall  be  deemed  property 
within  the  United  States,  and  any  property  of  which  the  decedent  has  made  a 
transfer  or  with  respect  to  which  he  has  created  a  trust,  within  the  meaning  of 
subdivision  (c)  of  section  402,  shall  be  deemed  to  be  situated  in  the  United 
States,  if  so  situated  either  at  the  time  of  the  transfer  or  the  creation  of  the 
trust,  or  at  the  time  of  the  decedent's  death. 

The  amount  receivable  as  insurance  upon  the  life  of  a  nonresident  decedent, 
and  any  moneys  deposited  with  any  person  carrying  on  the  banking  business,  by 
or  for  a  nonresident  decedent  who  was  not  engaged  in  business  in  the  United 
States  at  the  time  of  his  death,  shall  not,  for  the  purpose  of  this  title,  be  deemed 
property  within  the  United  States. 

Missionaries  duly  commissioned  and  serving  under  boards  of  foreign  missions 
of  the  various  religious  denominations  in  the  United  States,  dying  while  in  the 
foreign  missionary  service  of  such  boards,  shall  not,  by  reason  merely  of  their 
intention  to  permanently  remain  in  such  foreign  service,  be  deemed  nonresidents 
of  the  United  States,  but  shall  be  presumed  to  be  residents  of  the  State,  the 
District  of  Columbia,  or  the  Territories  of  Alaska  or  Hawaii  wherein  they 
respectively  resided  at  the  time  of  their  commission  and  their  departure  for 
such  foreign  service.  *  *  * 

Art.  53.  Situs   of   property   of   nonresident   decedents. — 

Bonds  actually  within  the  United  States,  moneys  due  on  open 
accounts  by  domestic  debtors,  and  stock  of  a  corporation  or 
association  created  or  organized  in  the  United  States,  con- 
stitute property  having  its  situs  in  the  United  States.  On  the 
other  hand,  insurance  upon  the  life  of  a  nonresident,  and 
moneys  deposited  with  any  person  or  corporation  carrying 
on  the  banking  business  in  the  United  States  by  or  for  a  non- 


640  INHERITANCE  TAXATION 

resident  not  engaged  in  business  in  the  United  States  at  the 
time  of  his  death,  are  not  to  be  regarded  as  property  situated 
therein. 

Property  of  which  the  decedent  has  made  a  transfer,  or 
with  respect  to  which  he  has  created  a  trust,  in  contemplation 
of,  or  intended  to  take  effect  in  possession  or  enjoyment  at  or 
after,  death,  is  deemed  to  be  situated  in  the  United  States  if 
so  situated  either  at  the  time  of  the  transfer  or  the  creation 
of  the  trust,  or  at  the  time  of  the  decedent's  death. 

DEDUCTIONS — ESTATES  OF  NONRESIDENTS. 

(SEC.  403.  That  for  the  purpose  of  the  tax  the  value  of  the  net  estate  shall 
be  determined —  *  *  *) 

(b)  In  the  case  of  a  nonresident,  by  deducting  from  the  value  of  that  part  of 
his  gross  estate  which  at  the  time  of  his  death  is  situated  in  the  United  States — 

( 1 )  That  proportion  of  the  deuctions  specified  in  paragraph  ( 1 )  of  subdivision 
(a)  of  this  section  which  the  value  of  such  part  bears  to  the  value  of  his  entire 
gross  estate,  wherever  situated,  but  in  no  case  shall  the  amount  so  deducted 
exceed  10  per  centum  of  the  value  of  that  part  of  his  gross  estate  which  at  the 
time  of  his  death  is  situated  in  the  United  States; 

(2)  An  amount  equal  to  the  value  of  any  property  forming  a  part  of  the  gross 
estate  situated  in  the  United  States  of  any  person  who  died  within  five  years 
prior  to  the  death  of  the  decedent  where  such  property  can  be  identified  as  having 
been  received  by  the  decedent  from  such  prior  decedent  by  gift,  bequest,  devise, 
or  inheritance,  or  which  can  be  identified  as  having  been  acquired  in  exchange 
for  property  so  received:     Provided,  That  this  deduction  shall  be  allowed  only 
where  an  estate  tax  under  this  or  any  prior  Act  of  Congress  was  paid  by  or  on 
behalf  of  the  estate  of  such  prior  decedent,  and  only  in  the  amount  of  the  value 
placed  by  the  Commissionr  on  such  property  in  determining  the   value  of  the 
gross  estate  of  such  prior  decedent,  and  only  to  the  extent  that  the  value  of 
such  property  is  included  in  that  part  of  the  decedent's  gross  estate  which  at  the 
time   of  his  death   is   situated   in   the   United    States   and   not  deducted   under 
paragraphs   (1)  or   (3)   of  subdivision   (b)   of  this  section.     This  deduction  shall 
be  made  in  case  of  the  estates  of  all  decedents  who  have  died  since  September  8. 
1916;   and 

(3)  The  amount  of  all  bequests,  legacies,  devises,  or  transfers,  except  bona 
fide  sales  for  a  fair  consideration,  in  money,  or  money's  worth,  in  contemplation 
of  or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  the  decedent's 
death,  to  or  for  the  use  of  the  United  States,  any  State,  Territory,  any  political 
sively    for    religious,    charitable,    scientific,    literary,    or    educational    purposes, 
or  to  or  for  the  use  of  any  domestic  corporation  organized  and  operated  exclu- 
sively   for    religious,    charitable,    scientific,    literary,    or    educational    purposes,, 
including  the  encouragement  of  art  and  the  prevention  of  cruelty  to  children  or 
animals,  no  part  of  the  net  earnings  of  which  inures  to  the  benefit  of  any  private 
stockholder    or    individual,    or   to    a    trustee    or    trustees    exclusively    for    such 
religious,    charitable,    scientific,    literary,    or    educational    purposes    within    the 
United   States.      This    deduction   shall   be   made   in   case   of   the   estates    of   all 
decedents  who  have  died  since  December  31,  1917. 


REGULATIONS  641 

No  deduction  shall  be  allowed  in  the  case  of  a  nonresident  unless  the  executor 
includes  in  the  return  required  to  be  filed  under  section  404  the  value  at  the 
time  of  his  death  of  that  part  of  the  gross  estate  of  the  nonresident  not  situated 
in  the  United  States.  *  *  * 

In  the  case  of  any  estate  in  respect  to  which  the  tax  has  been  paid,  if  necessary 
to  allow  the  benefit  of  the  deduction  under  paragraphs  (2)  and  (3)  of  subdivision 
(a)  or  (b)  the  tax  shall  be  redetermined  and  any  excess  of  tax  paid  shall  be 
refunded  to  the  executor. 

Art.  54.  Net  estate. — The  gross  estate  of  a  resident  and  of 
a  nonresident  are  made  up  in  the  same  way.  In  ascertaining 
the  net  estate,  however,  the  transfer  of  which  is  subject  to 
tax,  there  is  a  radical  difference  between  the  two  cases.  The 
net  estate  in  the  case  of  a  resident  is  determined  by  making 
specified  deductions  from  the  entire  gross  estate,  whereas  the 
net  estate  in  the  case  of  a  nonresident  is  determined  by  mak- 
ing the  deductions  from  the  value  of  so  much  of  the  gross 
estate  as  is  situated  in  the  United  States.  Thus,  in  substance, 
the  statute  imposes  the  tax  only  upon  the  transfer  of  so  much 
of  the  estate  of  a  nonresident  as,  under  the  terms  of  the 
statute,  had  its  situs  in  the  United  States.  On  the  other  hand, 
the  estates  of  nonresidents  are  not  entitled  to  the  specific 
exemption  of  $50,000.  (See  Art.  58.) 

Art.  55.  Deduction  of  claims,  expenses,  etc. — In  estates  of 
nonresidents,  deduction  from  gross  estate  may  be  taken,  sub- 
ject to  the  limitations  herein  subsequently  to  be  referred  to, 
of  disbursements  for  funeral  expenses,  administration  ex- 
penses, claims  against  the  estate,  unpaid  mortgages,  losses 
incurred  during  the  settlement  of  the  estate  arising  from  fires, 
storms,  shipwreck,  or  other  casualty,  or  from  theft,  when  such 
losses  are  not  compensated  for  by  insurance  or  otherwise, 
amounts  reasonably  required  and  actually  expended  for  the 
support  during  settlement  of  the  estate  of  those  dependent 
upon  the  decedent,  as  are  allowed  by  the  laws  of  the  juris- 
diction under  which  the  estate  is  being  administered.  Treat- 
ment of  the  several  deductions  enumerated  above  will  be  found 
in  Articles  32  to  43,  inclusive.  No  deduction  may  be  taken  of 
any  income  taxes  upon  income  received  after  the  death  of  the 
decedent,  or  of  any  estate,  succession,  legacy,  or  inheritance 
taxes.  It  is  immaterial  whether  the  amounts  to  be  deducted 
were  incurred  or  expended  within  or  without  the  United 
41 


642  INHERITANCE  TAXATION 

States,  but  certain  limitations  are  imposed  which  do  not  apply 
to  estates  of  resident  decedents,  namely:  (1)  Only  that  pro- 
portion of  the  aggregate  thereof  is  deductible  which  the  value 
of  that  part  of  the  gross  estate,  which  at  the  time  of  dece- 
dent's death  was  situated  in  the  United  States,  bears  to  the 
value  of  the  entire  gross  estate,  wherever  situated ;  and  in  no 
event  may  a  sum  be  deducted  in  excess  of  10  per  centum  of 
the  value  of  that  part  of  the  gross  estate  which  at  the  time  of 
death  was  situated  in  the  United  States.  (See  Art.  58.)  Such 
10  per  centum  limitation  does  not  apply  to  the  deductions 
subsequently  considered  in  Articles  56  and  57.  (2)  No  deduc- 
tion whatever  may  be  taken  unless  the  executor  includes  in 
the  return  the  value  at  the  date  of  the  nonresident's  death  of 
that  part  of  the  gross  estate  not  situated  in  the  United  States. 
In  order  that  the  Commissioner  may  properly  pass  upon 
the  items  claimed  as  deductions,  the  executor  should  submit 
a  certified  copy  of  the  schedule  of  liabilities,  claims  against 
the  estate  and  expenses  of  administration  filed  under  the  for- 
eign estate,  succession,  or  death-duty  act;  or,  if  no  such 
schedule  was  filed,  a  certified  copy  of  the  schedule  of  such 
liabilities,  claims  and  expenses  filed  with  the  foreign  court  in 
which  administration  was  had ;  or,  if  items  of  deduction  allow- 
able under  section  403  (b)  (1)  were  not  included  in  either 
such  schedule,  or,  if  no  such  schedules  were  filed,  then  the 
affidavit  of  the  foreign  executor  setting  forth  the  facts  relied 
upon  as  entitling  the  estate  to  the  benefit  of  the  particular 
deduction  or  deductions. 

Art.  56.  Deduction  of  value  of  transfers  taxed  within  five 
years. — The  right  to  deduct  the  value  of  property  received 
by  a  nonresident  decedent  from  any  person  dying  within  five 
years  prior  to  his  death,  or  of  the  value  of  property  acquired 
in  exchange  for  property  so  received,  is  governed  by  the  same 
rules  as  those  which  apply  to  estates  of  resident  decedents, 
subject  to  the  two  following  exceptions:  (1)  That  such  right 
is  limited  to  the  extent  that  the  value  of  the  property,  or  of 
that  acquired  in  exchange  therefor,  is  not  deducted  under 
paragraphs  (1)  or  (3)  of  subdivision  (b)  of  section  403;  (2) 
That  such  right  is  not  available  to  any  extent  unless  the 


REGULATIONS  643 

executor  includes  in  the  return  the  value  at  the  time  of  the 
decedent's  death  of  that  part  of  the  gross  estate  not  situated 
in  the  United  States.  (See  Arts.  44  to  46,  inclusive.) 

Art.  57.  Deduction  of  value  of  transfers  for  public,  chari- 
table, religious,  etc.,  uses. — The  right  to  deduct  the  value  of 
property  transferred  by  nonresidents  for  public,  religious,, 
charitable,  scientific,  literary,  or  educational  purposes  is 
governed  by  the  same  rules  as  those  applying  to  estates  of 
resident  decedents  (Arts.  47  to  51,  inclusive),  subject,  how- 
ever, to  the  two  following  exceptions,  namely:  (1)  That  the 
right  is  limited  to  transfers  to  corporations  and  associations 
created  or  organized  in  the  United  States,  or  to  trustees  for 
use  within  the  United  States,  and  (2)  is  then  available  only 
where  the  executor  includes  in  the  return  the  value  at  the  time 
of  the  nonresident  decedent's  death  of  that  part  of  the  gross 
estate  not  situated  in  the  United  States. 

Art.  58.  Determination  of  net  estate. — The  following  ex- 
ample will  show  the  manner  of  determining  the  net  estate  of 
a  nonresident  decedent.  The  gross  estate,  wherever  situated, 
amounts  to  $1,000,000,  of  which  $200,000  represents  the  value 
of  the  property  having  its  situs  within  the  United  States  (the 
term  "United  States"  including  not  only  the  several  States, 
but  also  the  Territories  of  Alaska  and  Hawaii,  and  the  Dis- 
trict of  Columbia).  The  funeral  expenses,  administration  ex- 
penses, and  claims  against  the  estate  aggregate  $75,000,  and 
there  are  charitable  bequests,  for  use  within  the  United  States 
amounting  to  $25,000.  Hence  the  property  situated  within 
the  United  States  constitutes  20  per  cent  of  the  entire  gross 
estate  wherever  situated,  and  a  like  percentage  of  the  $75,000 
is  $15,000.  As  the  last  named  amount  does  not  exceed  10  per 
cent  of  the  value  of  the  property  situated  in  the  United  States, 
the  whole  thereof  is  deductible.  The  following  result  is 
accordingly  obtained: 

Gross  estate  within  the  United  States $200,000 

20  per  cent  of  $75,000 $15,000 

Charitable  bequests  for  use  within  the  United  States 25,000 

$40,000 

Net  estate    $160,000 


644  INHERITANCE  TAXATION 

For  the  manner  of  computing  the  tax  on  the  net  estate,  see 
Article  8. 

In  the  example  given,  had  the  funeral  expenses,  adminis- 
tration expenses  and  claims  against  the  estate  aggregated 
$150,000,  20  per  cent  thereof,  or  $30,000,  would  not  have  been 
deductible  for  the  reason  that  it  would  have  exceeded  10  per 
cent  of  the  value  of  the  property  situated  in  the  United  States ; 
such  10  per  cent  being  the  maximum  permitted  by  the  statute. 
The  deduction  would  accordingly  have  been  limited  to  10  per 
cent  of  $200,000,  plus  the  charitable  bequests,  or  a  total  of 
$45,000,  and  the  resultant  net  estate  would  have  been  $155,000, 
instead  of  the  amount  given  in  the  example. 

Art.  59.  Payment  of  tax. — The  provisions  relating  to  rates 
and  payment  of  the  tax  are  the  same  in  estates  of  nonresidents 
and  of  residents.  The  statute  provides  that  the  executor  shall 
pay  the  tax.  If  no  executor  or  administrator  has  been  ap- 
pointed, every  person  in  either  the  actual  or  constructive  pos- 
session of  any  property  of  the  decedent  is  constituted  by  the 
statute  an  executor  for  the  purpose  of  tax  payment,  and  is 
liable  for  the  tax  to  the  extent  of  the  property  so  in  his  pos- 
session. All  checks,  drafts,  or  money  orders  should  be  made 
payable  to  the  order  of  Collector  of  Internal  Revenue.  (See 
Arts.  79  to  83,  inclusive.) 

PRELIMINARY  NOTICE — ESTATES  OF  RESIDENTS. 

SEC.  404.  That  the  executor,  within  two  months  after  the  decedent's  death, 
or  within  a  like  period  after  qualifying  as  such,  shall  give  written  notice  thereof 
to  the  collector.  *  *  * 

Art.  60.  When  notice  required. — A  preliminary  notice  is 
required  to  be  filed  in  the  case  of  every  resident  decedent 
whose  gross  estate  exceeded  $50,000  in  value  at  date  of  death. 
This  notice  must  be  filed  in  duplicate  with  the  collector  in 
whose  district  the  decedent  had  his  domicile  at  the  time  of 
death.  Where  there  is  doubt  as  to  whether  the  gross  estate 
exceeds  $50,000,  the  notice  should  be  filed,  as  a  matter  of 
precaution,  in  order  to  avoid  penalties. 

Art.  61.  Notice  by  executor  or  administrator. — The  duly 
qualified  executor  or  administrator  is  required  to  file  such 


REGULATIONS  645 

preliminary  notice  on  Form  704,  copies  of  which  may  be  ob- 
tained from  the  collector,  within  two  months  after  qualifying 
as  such,  if  notice  has  not  already  been  filed.  The  primary 
purpose  of  the  notice  is  to  advise  the  Government  of  the 
existence  of  taxable  estates,  and  filing  should  not  be  delayed 
beyond  the  two-months  period  because  of  uncertainty  as  to 
the  exact  value  of  the  assets.  Since  the  filing  of  the  notice 
within  the  prescribed  period  is  mandatory,  the  estimate  of 
the  gross  estate  called  for  by  the  notice  is  merely  the  best 
approximation  of  value  which  can  be  made  within  the  time 
allowed.  The  instructions  upon  the  back  of  the  form  should 
be  read  carefully  before  executing  the  notice.  The  signature 
of  one  executor  or  administrator  upon  Form  704  is  sufficient. 
For  penalties  for  delinquency  in  filing  notice,  or  for  filing  a 
false  or  fraudulent  notice,  see  Articles  88  to  90,  inclusive. 

Art.  62.  Notice  by  others  than  duly  qualified  executor  or 
administrator. — The  term  "executor"  embraces  any  person 
in  actual  or  constructive  possession  of  any  property  of  the 
decedent  at  the  time  of  the  latter 's  death,  where  there  is  no 
duly  qualified  executor  or  administrator.  The  notice  on  Form 
704  must  be  filed  by  such  persons  in  every  case  where  an 
executor  or  administrator  has  not  duly  qualified  as  such 
within  two  months  next  following  the  decedent's  death. 
Where,  however,  an  executor  or  administrator  qualifies  within 
such  period,  the  duty  of  filing  the  notice  devolves  upon  him, 
and  all  other  persons  are  relieved  therefrom. 

Art.  63.  Exemption  claimed  on  account  of  military  service; 
notice  required. — The  executors  of  estates  claiming  the  right 
to  exemption  from  the  tax  under  the  provisions  of  section  401 
(see  Art.  9),  are  required  to  file  the  two-months  notice  with 
the  proper  collector  in  the  same  manner  as  the  executors  of 
taxable  estates.  The  executor  should,  in  addition,  write 
across  the  face  of  the  form  the  words  "Exemption  claimed 
on  account  of  military  service." 

NOTICE — ESTATES  OF  NONRESIDENTS. 

Art.  64.  Estates  of  nonresidents;  preliminary  notice. — In 
estates  of  nonresidents,  notice  on  Form  705  should  be  filed 


646  INHERITANCE  TAXATION 

with  the  Commissioner  of  Internal  Revenue,  Washington, 
D.  C.,  by  every  duly  qualified  executor  or  administrator.  The 
notice  is  necessary  if  any  part  of  the  decedent's  gross  estate 
was  situated  in  the  United  States  at  the  time  of  death,  regard- 
less of  the  value  of  that  part  or  of  the  entire  gross  estate.  If 
no  executor  or  administrator  has  been  appointed,  notice  must 
be  filed  within  two  months  after  the  date  of  death  by  every 
person  in  either  the  actual  or  constructive  possession  of  any 
property  of  the  decedent  within  the  United  States  at  the  time 
of  his  death.  If  such  person  has  no  knowledge  of  the  dece- 
dent's death  within  two  months  following  its  occurrence,  he 
should  file  the  notice  immediately  upon  obtaining  such  knowl- 
edge. If  there  is  a  delay  of  more  than  two  months  after  the 
death  in  the  appointment  of  an  executor  or  administrator, 
persons  so  in  possession  should  file  notice.  The  term  "per- 
son in  actual  or  constructive  possession  of  any  property  of 
the  decedent"  (Section  400)  includes,  among  others,  the  dece- 
dent 's  agents  and  similar  custodians  of  property  in  this  coun- 
try of  a  nonresident  decedent;  brokers  holding  as  collateral 
securities  belonging  to  the  decedent  or  investment  funds 
owned  by  the  decedent,  and  debtors  of  the  decedent  in  this 
country,  but  does  not  include  any  person,  corporation,  or 
association  carrying  on  the  banking  business  with  whom  or 
with  which  money  was  deposited  by  or  for  the  decedent,  un- 
less, however,  the  decedent  was  engaged  in  business  in  the 
United  States  at  the  time  of  his  death. 

Art.  65.  Transfer  agents'  notice. — A  notice  on  Form  714  is 
required  to  be  filed  whenever  a  corporation,  its  transfer 
agent,  registrar,  or  paying  agent,  is  called  upon  to  make  a 
transfer  of  stock  or  bonds,  or  to  pay  dividends  or  interest, 
to  any  successor  in  interest  of  a  nonresident  stockholder  or 
bondholder  who  died  after  September  8,  1916,  unless  the 
transfer  is  made  upon  the  order  of  an  executor  or  adminis- 
trator appointed  in  the  United  States.  The  notice  is  required 
for  dividends  declared,  and  for  interest  which  had  accrued 
on  bonds,  prior  to  the  death  of  the  decedent,  although  payable 
thereafter.  Notice  should  be  filed  with  the  Commissioner  of 
Internal  Revenue  at  Washington,  D.  C.,  within  two  months 


REGULATIONS  647 

following  the  date  of  death,  or  immediately  upon  receipt  of 
the  request  for  transfer  or  payment.  A  transfer  agent  should 
be  vigilant  to  report  all  cases  in  which  the  fact  of  the  death 
of  a  nonresident  appears.  Where  the  securities  are  received 
without  the  personal  assignment  of  the  decedent,  but  with  the 
transfer  order  of  the  foreign  executor,  it  is  clear  that  the  case 
should  be  reported.  Where  the  securities  bear  the  personal 
assignment  of  the  decedent,  the  transfer  should  be  reported 
if  made  upon  the  order  of  a  foreign  executor,  or  if  informa- 
tion is  received  in  any  other  manner  that  the  record  owner 
has  died  a  nonresident  of  the  United  States. 

In  order  to  prevent  loss  of  the  tax  upon  nonresident  estates, 
it  is  essential  that  transfer  agents  exercise  great  care  in  re 
porting  all  transfers  of  the  kind  described.  Their  records 
will  be  examined  from  time  to  time  by  internal  revenue  officers 
to  determine  whether  this  regulation  is  being  strictly  com- 
plied with.  Failure  to  file  notice  in  the  manner  prescribed 
will  render  the  transfer  agent  liable  to  a  fine. 

Art.  66.  Transfer  of  stocks  and  bonds  of  nonresident  dece- 
dents; how  made. — Wherever  a  transfer  agent  is  required  to 
file  the  notice  as  provided  in  Article  65,  he  shall  not  make 
transfer  of  any  stocks  or  bonds  standing  in  the  name  of  a 
nonresident  decedent  until  there  has  been  delivered  to  such 
collector  of  internal  revenue  as  may  be  designated  by  the 
Commissioner  the  bond  of  the  party  to  whom  the  stocks  or 
bonds  are  to  be  transferred  with  corporate  surety  in  an 
amount  to  be  fixed  by  the  Commissioner,  not  exceeding  in 
amount  the  value  of  the  stocks  or  bonds  to  be  transferred, 
conditioned  for  the  payment  of  the  tax  upon  the  transfer  of 
the  decedent's  net  estate.  Upon  receipt  of  such  notice  the 
Commissioner  will  at  once,  upon  request,  fix  the  amount  for 
which  the  bond  is  to  be  given.  In  lieu  of  such  bond  a  deposit, 
either  of  money  or  of  bonds  of  the  United  States,  of  the 
amount  so  fixed  may  be  made  with  such  collector  of  internal 
revenue  as  the  Commissioner  may  designate. 

Where  bonds  of  the  United  States  or  moneys  are  deposited 
in  lieu  of  the  delivery  of  such  corporate  bond,  return  will  be 
made  thereof  to  the  depositor  after  payment  in  full  of  the 
tax  on  the  transfer  of  the  decedent's  net  estate.  If,  however, 


648  INHEEITANCE  TAXATION 

the  tax  be  not  paid  in  full  on  or  before  the  due  date  thereof, 
or  within  such  period  as  payment  may  have  been  extended  by 
the  Commissioner,  the  collateral  will  be  subjected  to  payment 
of  the  tax,  or  the  then  unpaid  balance  thereof,  and  the  excess 
of  the  deposit,  or  of  the  proceeds  thereof  remaining,  if  any, 
will  be  returned  to  the  depositor.  In  lieu  of  the  provisions 
and  restrictions  hereinbefore  set  forth,  transfer  agents  are 
authorized  to  make  transfer  of  stocks  and  bonds  standing  in 
the  name  of  a  nonresident  decedent  to  the  duly  qualified  an- 
cillary executor  or  administrator  within  the  United  States, 
provided  that  such  transfer  agent  at  the  time  of  making  such 
transfer  gives  notice  thereof  in  writing  to  the  Commissioner 
of  Internal  Revenue. 

THE  RETURN — ESTATES  OF  RESIDENTS. 

SEC.  404.  *  *  *  The  executor  shall  also,  at  such  times  and  in  such  manner 
as  may  be  required  by  regulations  made  pursuant  to  law,  file  with  the  collector 
a  return  under  oath  in  duplicate,  setting  forth  (a)  the  value  of  the  gross  estate 
of  the  decedent  at  the  time  of  his  death,  or.  in  case  of  a  nonresident,  of  that 
part  of  his  gross  estate  situated  in  the  United  States;  (b)  the  deductions 
allowed  under  section  403;  (c)  the  value  of  the  net  estate  of  the  decedent  as 
defined  in  section  403;  and  (d)  the  tax  paid  or  payable  thereon;  or  such  part 
of  such  information  as  may  at  the  time  be  ascertained  and  such  supplemental 
data  as  may  be  necessary  to  establish  the  correct  tax. 

Return  shall  be  made  in  all  cases  where  the  gross  estate  at  the  death  of  the 
decedent  exceeds  $50,000,  and  in  the  case  of  the  estate  of  every  nonresident  any 
part  of  whose  gross  estate  is  situated  in  the  United  States.  If  the  executor  is 
unable  to  make  a  complete  return  as  to  any  part  of  the  gross  estate  of  the 
decedent,  he  shall  include  in  his  return  a  description  of  such  part  and  the  name 
of  every  person  holding  a  legal  or  beneficial  interest  therein,  and  upon  notice 
from  the  collector  such  person  shall  in  like  manner  make  a  return  as  to  such 
part  of  the  gross  estate.  The  Commissioner  shall  make  all  assessments  of  the 
tax  under  the  authority  of  existing  administrative  special  and  general  provisions 
of  law  relating  to  the  assessment  and  collection  of  taxes. 

Art.  67.  When  return  required. — Date  of  filing. — A  return 
on  Form  706  is  required  in  the  case  of  every  resident  dece- 
dent whose  gross  estate,  as  defined  in  the  statute,  exceeded 
$50,000  in  value.  This  return  must  be  filed  with  the  collector 
for  the  district  in  which  the  decedent  was  domiciled  at  the 
time  of  his  death.  It  must  be  filed  in  duplicate  within  one 
year  after  the  date  of  death.  When  the  due  date  for  filing 
the  return,  Form  706,  falls  on  a  Sunday  or  on  a  legal  holiday, 


REGULATIONS  649 

the  due  date  for  filing  will  be  the  day  following  such  Sunday 
or  legal  holiday. 

If  it  is  impossible  for  the  executor  to  file  a  reasonably  com- 
plete return  within  one  year  from  the  date  of  death,  the  com- 
missioner may,  upon  application  from  the  executor  showing 
good  and  sufficient  cause,  grant  extensions  of  time  not  to  ex- 
ceed a  total  of  180  days  from  the  due  date,  and  no  single 
extension  to  exceed  60  days.  At  the  expiration  of  the  last 
extension  period  granted,  a  return  as  complete  as  possible 
must  be  filed,  and  the  executor  may  thereafter  file  an  amended 
return  when  the  condition  of  the  estate  permits.  An  exten- 
sion of  time  for  filing  the  return  does  not  operate  to  extend 
the  time  for  the  payment  of  the  tax,  which  is  due  one  year 
after  the  decedent's  death  unless  an  extension  of  time  in  which 
to  make  payment  has  been  obtained  as  provided  in  Article  82. 

Art.  68.  Persons  liable  for  return. — The  statute  provides 
that  the  duly  qualified  executor  or  administrator  shall  file  the 
return.  If  there  is  more  than  one  executor  or  administrator, 
the  return  must  be  made  jointly  by  all.  Where  no  executor  or 
administrator  has  been  appointed,  every  person  in  actual  or 
constructive  possession  of  any  property  of  the  decedent  is 
constituted  by  the  statute  an  executor  for  the  purposes  of  the 
tax,  and  is  required  to  make  and  file  a  return  as  provided  by 
Section  404.  Where,  in  any  case,  the  executor  is  unable  to 
make  a  complete  return  as  to  any  part  of  the  gross  estate,  he 
is  required  to  give  all  the  information  he  has  as  to  such  prop- 
erty, including  a  full  description,  and  the  name  of  every  per- 
son holding  a  legal  or  beneficial  interest  in  the  property. 
Where  the  executor  is  unable  to  make  a  return  as  to  any  prop- 
erty, the  statute  requires  every  person  holding  a  legal  or 
beneficial  interest  therein,  upon  notice  from  the  collector,  to 
make  return  as  to  such  part  of  the  gross  estate.  For  penal- 
ties for  delinquency  in  filing  return,  or  for  filing  a  false  or 
fraudulent  return,  see  Articles  88  to  90,  inclusive. 

Art.  69.  Preparation  of  return. — The  return  must  be  made 
on  Form  706,  copies  of  which  will  be  supplied  by  the  collector. 
It  must  contain  an  itemized  inventory,  by  schedule,  of  the 
property  constituting  the  gross  estate,  and  of  the  deductions. 


650  INHERITANCE  TAXATION 

The  instructions  printed  on  the  form  should  be  carefully  fol- 
lowed. All  documents  and  vouchers  used  in  preparing  the 
return  should  be  retained  by  the  executor,  so  as  to  be  avail- 
able for  inspection  whenever  required.  Duplicate  certified 
copies  of  the  will,  if  any,  must  be  submitted  with  the  return, 
together  with  duplicate  copies  of  the  other  documents  re- 
quired by  the  instructions  printed  on  the  form,  or  any  docu- 
ment which  the  executor  may  desire  to  submit  with  the  return 
in  explanation  thereof. 

Art.  70.  Supplemental  data. — The  statute  provides  that  the 
executor,  in  addition  to  filing  notice  and  return,  shall  furnish 
such  supplemental  data  as  may  be  necessary  to  establish  the 
correct  tax.  It  is  therefore  the  duty  of  the  executor  to  fur- 
nish upon  request  copies  of  any  documents  in  his  possession 
relating  to  the  estate,  or  on  file  in  any  court  having  jurisdic- 
tion over  the  estate,  appraisal  lists  of  any  items  included  in 
the  gross  estate,  copies  of  balance  sheets  or  other  financial 
statements  relating  to  the  value  of  stock,  and  any  other  in- 
formation obtainable  by  him  that  may  be  found  necessary  in 
the  determination  of  the  tax.  Failure  to  comply  with  such  a 
request  will  render  the  executor  liable  to  a  fine  not  to  exceed 
$500,  and  proceedings  may  be  instituted  in  the  proper  United 
States  court  to  secure  compliance  therewith.  (See  Sections 
404  and  410.) 

Art.  71.  Procedure  where  no  return  has  been  made. — Sec- 
tion 405  of  the  statute  provides  that  if  no  return  is  filed  for 
the  estate  of  a  decedent,  or  if  a  return  contains  a  false  or 
incorrect  statement  of  a  material  fact,  the  collector  or  deputy 
collector  shall  make  a  return.  The  Commissioner  may  amend 
this  return  from  such  knowledge  or  information  as  he  can 
obtain,  through  testimony  or  otherwise.  A  return  so  made 
by  the  Commissioner,  or  made  by  the  collector  or  deputy  col- 
lector, is  a  sufficient  basis  for  assessing  the  tax.  Where  a  tax 
is  found  to  be  due  upon  such  a  return,  both  the  estate  and  the 
executor  will  be  liable  for  penalties  as  well  as  for  the  tax. 

Art.  72.  Investigation  of  returns. — An  investigation  of 
every  return  for  estate  tax  will  be  conducted  to  verify  its 
accuracy.  The  investigation  will  be  made  by  special  officers 


REGULATIONS  651 

of  the  Bureau.  The  fact  that  an  investigation  is  made  does 
not  reflect  upon  the  competence  or  good  faith  of  the  executor, 
since  investigations  are  required  in  all  cases.  The  executor 
should  cooperate  with  the  examining  officer  in  order  that  the 
tax  liability  may  be  correctly  determined  and  the  case  closed. 
During  the  course  of  the  investigation  the  examining  officer 
will  inspect  the  books  and  records  of  the  estate,  interview  the 
executor  and  other  persons  having  knowledge  of  the  dece- 
dent's affairs,  verify  the  value  of  the  assets  and  the  deduc- 
tions, and  take  such  other  steps  as  may  be  necessary  in  order 
that  the  correct  amount  of  tax  may  be  determined. 

Upon  completion  of  the  investigation  the  executor  will  be 
apprised  by  the  examining  officer  of  his  findings,  and  will  be 
given  an  opportunity  to  discuss  the  case  and  present  such 
data  as  he  may  desure  the  Commissioner  to  consider  in  con- 
nection with  the  examining  officer's  report.  Upon  the  com- 
pletion of  a  review  and  audit  by  the  Commissioner,  the 
executor  will  be  informed  by  letter  of  the  result  thereof.  If 
the  letter  contains  notification  of  an  amount  of  unpaid  tax, 
such  unpaid  amount  should  be  remitted  promptly  to  the  col- 
lector, and  if  not  paid  within  the  time  specified  by  the  appli- 
cable provisions  of  section  406  or  section  407,  interest  will  be 
added  as  required  thereby.  (See  Art.  83.) 

It  is  the  purpose  of  the  Commissioner  to  make  these  in- 
vestigations as  soon  as  practicable  after  the  filing  of  the 
return.  Where  the  executor  files  a  complete  return,  and  makes 
written  application  to  the  Commissioner  for  a  determination 
of  the  tax  and  discharge  from  personal  liability  therefor,  the 
Commissioner  will,  within  one  year  after  receipt  of  such 
application,  notify  the  executor  of  the  amount  of  the  tax,  and, 
upon  payment  thereof,  the  executor  will  be  discharged  from 
personal  liability  for  any  additional  estate  tax  thereafter 
found  to  be  due.  (See  Sec.  407.)  Attention  is  here  directed 
to  Section  250  (d)  of  the  statute  which  embodies  a  provision, 
"That  in  the  case  of  income  received  during  the  lifetime  of  a 
decedent,  all  taxes  due  thereon  shall  be  determined  and 
assessed  by  the  Commissioner  within  one  year  after  written 
request  therefor  by  the  executor,  administrator,  or  other 
fiduciary  representing  the  estate  of  such  decedent:  *  *  *." 


652  INHERITANCE  TAXATION 

THE  RETURN — ESTATES  OF  NONRESIDENTS. 

Art.  73.  Return  of  estate  of  nonresidents. — A  return  on 
Form  706  must  be  filed  in  duplicate  with  the  Commissioner 
of  Internal  Revenue,  Washington,  D.  C.,  or  with  such  collector 
of  internal  revenue  as  the  Commissioner  may  designate, 
within  one  year  after  the  date  of  death  of  every  nonresident 
decedent,  if  any  part  of  the  gross  estate  of  such  decedent 
was  situated  in  the  United  States  at  the  time  of  his  death. 
It  is  the  duty  of  the  duly  qualified  executor  or  administrator 
to  file  a  return  for  the  whole  of  that  part  of  the  gross  estate 
situated  in  the  United  States,  whatever  its  value.  If  the  duly 
qualified  executor  or  administrator  is  unable  to  make  a  com- 
plete return  as  to  any  part  of  the  gross  estate,  he  is  required 
to  give  all  the  information  available  to  him  as  to  such  part, 
including  a  description  thereof  and  the  name  of  every  person 
holding  a  legal  or  beneficial  interest  therein.  If  deductions 
are  claimed,  see  Articles  55,  56  and  57.  If  no  executor  or 
administrator  has  been  appointed,  all  persons  in  actual  or 
constructive  possession  of  any  property  of  the  decedent 
situated  in  the  United  States  are  required  to  file  a  return  for 
such  portion  of  the  gross  estate  as  had  its  situs  therein.  (See 
Art.  53.) 

Art.  74.  Supplemental  data. — Pursuant  to  the  provisions 
of  Section  404,  with  respect  to  furnishing  supplemental  data, 
the  duly  qualified  executor  or  administrator  of  a  nonresident 
decedent  is  required  to  file  with  the  return : 

(1)  Certified  copy  of  will,  or,  if  the  decedent  left  several 
wills,  to  govern  in  different  jurisdictions,  certified  copy  of 
each  will. 

(2)  Certified  copy  of  inventory  of  property  filed  under  a 
foreign  estate,  succession,  or  death-duty  act;  or,  if  no  such 
inventory  was  filed,  a  certified  copy  of  inventory  filed  with 
the  foreign  court  of  probate  jurisdiction. 

The  specified  information  is  required  whether  or  not  the 
executor  wishes  to  claim  the  deductions  authorized  in  section 
403  (b). 


REGULATIONS  653 

PRIVILEGED  CHARACTER  OF  RETURNS. 

Art.  75.  Returns  confidential. — All  estate  tax  returns  and 
notices  are  treated  as  privileged  communications  and  may 
not  be  exhibited  to  any  person  other  than  the  executor  or  his 
duly  authorized  agent,  except  as  stated  in  Article  76.  This 
requirement  of  secrecy  will  be  rigidly  enforced,  and  extends 
to  information  of  a  private  nature  submitted  or  obtained  in 
connection  with  a  return  or  notice.  The  requirement  does  not 
operate  to  prevent  internal  revenue  officers  from  disclosing 
the  returned  value  of  any  item  or  the  amount  of  any  specific 
deduction,  where  such  disclosure  is  necessary  in  order  to 
arrive  at  a  correct  determination  of  the  tax.  This  right  of 
disclosure,  however,  does  not  extend  to  such  information  as 
the  amount  of  the  estate,  the  amount  of  tax,  or  other  general 
data.  Nor  are  the  records  in  possession  of  the  Bureau, 
whether  on  file  with  the  Commissioner  or  the  collector,  open 
to  inspection,  except  as  provided  in  Article  76. 

Art.  76.  Disclosure  to  persons  having  material  interest. — 
Where  any  person  other  than  the  executor  has  a  material  in- 
terest in  ascertaining  any  fact  disclosed  by  the  return,  or  in 
obtaining  information  as  to  the  payment  of  the  tax,  he  shall 
make  a  written  application  to  the  Commissioner  of  Internal 
Kevenue  for  such  information,  setting  forth  the  nature  of  his 
interest  and  the  purpose  of  the  application.  The  Commis- 
sioner will  review  the  application,  and,  if  it  is  approved,  the 
collector  will  be  directed  to  exhibit  the  return  to  the  applicant, 
or  give  him  such  information  as  is  specified,  or  iihe  Commis- 
sioner may  permit  an  inspection  of  the  return  on  file  in  the 
Bureau,  or  furnish  such  information  as  he  deems  advisable. 
Under  no  circumstances  shall  the  collector  give  information 
to  persons  other  than  the  executor  except  upon  the  written 
order  of  the  Commissioner,  and  then  only  to  the  extent 
authorized  by  such  order. 

Art.  77.  Attorneys  must  have  authorization. — In  all  cases 
where  information  is  sought  regarding  an  estate,  or  an  inter- 
view asked,  by  an  attorney  whose  name  does  not  appear  on 
Form  706  as  the  attorney  for  the  estate,  or  by  any  agent  of 


654  INHERITANCE  TAXATION 

the  executor  or  administrator,  the  information  or  interview 
will  be  denied  unless  the  attorney  or  agent  presents  a  signed 
statement  from  the  executor  or  administrator  authorizing 
him  to  act  in  his  behalf.  Where  his  name  as  attorney  for  the 
estate  appears  on  Form  706,  his  identity  must  be  established. 
If  an  attorney  or  other  person  asks  a  ruling  on  a  question  of 
law  arising  in  a  specific  estate,  the  Commissioner  may  require 
satisfactory  evidence  of  the  right  to  obtain  such  ruling. 

For  regulations  governing  the  recognition  of  attorneys, 
agents  and  other  persons  representing  claimants  and  execu- 
tors before  the  Treasury  Department,  reference  should  be 
made  to  Treasury  Department  Circular  No.  230,  dated  April 
25,  1922,  copies  of  which  may  be  obtained  on  application  to 
the  Chief  Clerk  of  the  Treasury  Department. 

BETURJST  BY  COLLECTOR. 

SEC.  405.  That  if  no  administration  is  granted  upon  the  estate  of  a  decedent, 
or  if  no  return  is  filed  as  provided  in  section  404,  or  if  a  return  contains  a  false 
or  incorrect  statement  of  a  material  fact,  the  collector  or  deputy  collector  shall 
make  a  return  and  the  Commissioner  shall  assess  the  tax  thereon, 

Revised  Statutes,  Sec.  3176  (Comp.  Sts.,  1916,  Sec.  5899;  Sec.  1311,  Revenue 
Act,  1921).  If  any  person,  corporation,  company,  or  association  fails  to  make 
and  file  a  return  or  list  at  the  time  prescribed  by  law  or  by  regulation  made 
under  authority  of  law,  or  makes,  willfully  or  otherwise,  a  false  or  fraudulent 
return  or  list,  the  collector  or  deputy  collector  shall  make  the  return  or  list 
from  his  own  knowledge  and  from  such  information  as  he  can  obtain  through 
testimony  or  otherwise.  In  any  such  case  the  Commissioner  may,  from  his  own 
knowledge  and  from  such  information  as  he  can  obtain  through  testimony  or 
otherwise,  make  a  return  or  amend  any  return  made  by  a  collector  or  deputy 
collector.  Any  return  or  list  so  made  and  subscribed  by  the  Commissioner,  or 
by  a  collector  or  deputy  collector,  and  approved  by  the  Commissioner,  shall  be 
prima  facie  good  and  sufficient  for  all  legal  purposes.  *  *  * 

Art.  78.  Return  by  collector  or  Commissioner. — Where 
there  is  no  duly  qualified  executor  or  administrator,  or  no 
return  is  filed  within  one  year  after  the  decedent's  death,  or 
if  a  filed  return  contains  a  false  or  incorrect  statement  of  a 
material  fact,  the  collector  or  deputy  collector  may  make  a 
return  from  such  information  as  he  possesses  or  is  able  to 
obtain.  The  Commissioner  may  also  make  a  return  in  such 
cases,  or  amend  any  return  made  by  a  collector  or  deputy 
collector,  and  any  return  so  made  or  amended,  or  made  by  a 
collector  or  deputy  collector  and  approved  by  the  Commis- 


REGULATIONS  655 

sioner,  shall  be  prima  facie  good  and  sufficient  for  all  legal 
purposes,  and  the  Commissioner  will  assess  the  tax  in  the 
same  manner  as  though  the  return  had  been  filed  by  the  person 
on  whom  the  duty  to  make  the  return  rested. 

PAYMENT  OF  TAX  AND  INTEREST. 

SEO.  406.  That  the  tax  shall  be  due  and  payable  one  year  after  the  decedent's 
death;  but  in  any  case  where  the  Commissioner  finds  that  payment  of  the  tax 
within  such  period  would  impose  undue  hardship  upon  the  estate,  he  may  grant 
an  extension  or  extensions  of  time  for  payment  not  to  exceed  three  years  from 
the  due  date. 

The  executor  shall  pay  the  tax  to  the  collector  or  deputy  collector,  and  to  such 
portion  of  the  tax,  not  paid  within  one  year  and  six  months  after  the  decedent's 
death,  interest  at  the  rate  of  6  per  centum  per  annum  from  the  expiration  of 
one  year  after  such  death  shall  be  added  as  part  of  the  tax  irrespective  of  any 
extension  or  extensions  of  time  that  may  have  been  granted  for  the  payment 
of  the  tax,  or  any  portion  thereof. 

SEC.  407.  That  where  the  amount  of  tax  shown  upon  a  return  made  in  good 
faith  has  been  fully  paid,  or  time  for  payment  has  been  extended,  as  provided  in 
section  406,  beyond  one  year  and  six  months  after  the  decedent's  death,  and  an 
additional  amount  of  tax  is,  after  the  expiration  of  such  period  of  one  year  and 
six  months,  found  to  be  due,  then  such  additional  amount  shall  be  paid  upon 
notice  and  demand  by  the  collector,  and  if  it  remains  unpaid  for  one  month  after 
such  notice  and  demand  there  shall  be  added  as  part  of  the  tax  interest  on  such 
additional  amount  at  the  rate  of  10  per  centum  per  annum  from  the  expiration 
of  such  period  until  paid,  and  such  additional  tax  and  interest  shall,  until  paid, 
be  and  remain  a  lien  upon  the  entire  gross  estate. 

The  collector  shall  grant  to  the  person  paying  the  tax  duplicate  receipts, 
either  of  which  shall  be  sufficient  evidence  of  such  payment,  and  shall  entitle 
the  executor  to  be  credited  and  allowed  the  amount  thereof  by  any  court  having 
jurisdiction  to  audit  or  settle  his  accounts. 

Art.  79.  Payment  of  tax;  general.— While  no  interest  may 
be  added  to  the  tax  unless  payment  thereof  has  not  been  made 
within  one  year  and  six  months  after  decedent's  death,  the 
tax  itself  is  due  and  must  be  paid  within  one  year  after  the 
decedent's  death  unless  an  extension  of  time  for  the  payment 
thereof  has  been  granted  by  the  Commissioner.  No  discount 
will  be  allowed  for  payment  in  advance  of  the  due  date.  The 
collector  will  grant  to  the  person  paying  the  tax  duplicate 
receipts,  either  of  which  will  be  sufficient  evidence  of  such 
payment,  and  entitle  the  executor  to  be  credited  with  the 
amount  by  any  court  having  jurisdiction  to  audit  or  settle  his 
accounts. 

Payment  of  the  amount  of  tax  shown  to  be  due  by  a  return 


656  INHERITANCE  TAXATION 

made  in  good  faith  will  be  considered  payment  of  the  tax  in 
full,  subject,  however,  to  adjustment  resulting  from  an  in- 
vestigation of  the  estate.  If  the  return  is  not  made  in  good 
faith,  the  payment  of  the  amount  of  tax  shown  to  be  due 
thereby  will  not  be  deemed  to  be  payment  in  full  of  the  tax, 
but  interest  will  attach,  and  penalties  will  be  imposed,  as  set 
forth  in  articles  83  and  89. 

Following  an  investigation  of  the  estate  the  tax  liability 
will  be  finally  determined  by  the  Commissioner  upon  the  basis 
of  such  investigation.  If  at  the  time  the  Commissioner's 
determination  is  made  the  tax  has  been  paid  upon  the  basis  of 
the  return,  an  adjustment  will  be  made  of  the  amount  of  tax. 
If  the  amount  of  tax  already  paid  exceeds  the  amount  of  tax 
as  finally  determined,  the  Commissioner  will  refund  such 
excess.  If  the  amount  of  tax  as  finally  determined  exceeds  the 
amount  of  tax  already  paid,  the  collector  will  notify  the  execu- 
tor of  the  amount  of  the  unpaid  balance  of  the  tax  and  demand 
payment  thereof.  Payment  should  be  made  by  the  executor 
immediately  upon  the  receipt  of  such  notification.  Where  the 
investigation  of  the  return  shows  that  no  further  tax  is  due, 
the  executor  will  be  notified  to  that  effect.  Until  the  receipt 
of  such  notification,  he  should  reserve  a  sufficient  portion  of 
the  estate  to  satisfy  any  additional  tax. 

Art.  80.  Payment  by  bonds  or  uncertified  check. — Pay- 
ment of  the  estate  tax  may  be  made  with  bonds  or  notes  (in- 
cluding Victory  Notes  and  Treasury  Notes)  of  the  United 
States  bearing  interest  at  a  higher  rate  than  4  per  centum  per 
annum,  provided  they  were  owned  by  the  decedent  continu- 
ously for  at  least  six  months  prior  to  the  date  of  his  death, 
and  constituted  a  part  of  his  estate  at  death.  Such  bonds  and 
notes  are  receivable  at  par  and  interest  accrued  at  the  time  of 
the  payment.  When  such  bonds  or  notes  are  to  be  tendered 
in  payment  of  estate  taxes,  a  copy  of  Department  Circular  No. 
225,  as  heretofore  or  hereafter  amended  or  supplemented, 
should  be  procured  and  the  requirements  thereof  carefully 
noted. 

Collectors  may  accept  uncertified  checks  in  payment  of 
estate  taxes,  provided  such  checks  are  collectible  at  par,  that 


REGULATIONS  657 

is,  for  the  full  amount,  without  any  deduction  for  exchange  or 
other  charges.  The  collector  will  stamp  upon  the  face  of  each 
check  before  deposit  thereof  the  words  * '  This  check  is  in  pay- 
ment of  an  obligation  to  the  United  States  and  must  be  paid 
at  par.  No  protest,"  with  his  name  and  title.  The  day  on 
which  the  collector  receives  the  check  will  be  considered  the 
date  of  payment  so  far  as  the  taxpayer  is  concerned,  unless 
the  check  is  returned  dishonored.  If  the  bank  on  which  any 
such  check  is  drawn  should  refuse  to  pay  it  at  par,  the  check 
should  be  returned  through  the  depositary  bank  and  be  treated 
in  the  same  manner  as  a  bad  check.  All  expenses  incident  to 
the  attempt  to  collect  such  a  check  and  the  return  of  it  through 
the  depositary  bank  must  be  paid  by  the  drawer  of  the  check 
to  the  bank  on  which  it  is  drawn,  since  no  deduction  can  be 
made  from  amounts  received  in  payments  of  taxes.  See  Sec- 
tion 3210  of  the  Kevised  Statutes.  If  any  taxpayer  whose 
check  has  been  returned  uncollected  by  the  depositary  bank 
should  fail  at  once  to  make  the  check  good,  the  collector  should 
proceed  to  collect  the  tax  as  though  no  check  had  been  given. 
A  taxpayer  who  tenders  a  certified  check  in  payment  of  taxes 
is  also  not  released  from  his  obligation  until  the  check  has 
been  paid.  See  chapter  191  of  the  .Act  of  March  2,  1911. 

Treasury  Department  Circular  No.  176,  as  amended,  pre- 
scribes detailed  regulations  governing  the  deposit  and  collec- 
tion of  checks.  Collectors  are  referred  to  paragraphs  14-16 
and  paragraph  26  thereof  as  to  the  deposit  of  taxpayers' 
checks  and  the  handling  of  uncollected  or  lost  items. 

Art.  81.  The  executor  shall  pay  the  tax. — The  statute  pro- 
vides that  the  executor  or  administrator  shall  pay  the  tax. 
This  duty  applies  to  the  entire  tax,  regardless  of  the  fact  that 
the  gross  estate  consists  in  part  of  property  which  will  not 
come  into  his  possession.  Where  there  is  no  duly  qualified 
executor  or  administrator,  all  persons  in  actual  or  construc- 
tive possession  of  any  property  of  the  decedent  are  liable  for 
and  required  to  pay  the  tax  to  the  extent  of  the  value  of  such 
property.  See  also,  Article  86.  As  to  the  personal  liability 
of  the  executor,  see  Article  99. 
42 


658  INHERITANCE  TAXATION 

Art.  82.  Extension  of  time  for  payment. — In  any  case 
where  the  Commissioner  finds  that  payment  of  the  tax  within 
one  year  after  the  decedent's  death  would  impose  undue  hard- 
ship upon  the  estate,  an  extension  or  extensions  of  time  will 
be  granted  by  him  for  the  payment  of  the  tax  for  a  period  not 
to  exceed  in  all  three  years  from  the  due  date.  Extensions 
of  time  for  tax  payment  will  be  granted  only  in  exceptional 
cases,  where  it  is  evident  that  the  payment  of  the  tax  within 
the  statutory  period  would  cause  the  estate  serious  financial 
loss.  No  single  extension  for  more  than  one  year  will  be 
granted.  Application  for  extension  of  time  for  payment 
should  be  filed  with  the  collector,  and  should  contain  a  full 
statement  of  the  facts  upon  which  the  application  is  based. 
The  collector  will  refer  the  application  to  the  Commissioner, 
with  suitable  recommendations. 

An  extension  of  time  to  pay  the  tax  does  not  relieve  from 
the  duty  of  filing  the  return  within  one  year  from  the  date  of 
death,  nor  will  it  operate  to  prevent  interest  from  accruing 
as  provided  in  the  statute. 

Art.  83.  Interest  on  tax. — Sections  406  and  407  contain  the 
only  provisions  relating  to  interest  on  estate  tax  and  conse- 
quently all  questions  of  this  character  must  be  determined  in 
accordance  therewith.  Section  407  deals  with  interest  upon 
additional  tax,  and  applies  only  to  cases  where  the  amount  of 
tax  shown  upon  a  return  made  in  good  faith  is  fully  paid 
within  one  year  and  six  months  after  decedent's  death,  or 
time  for  payment  of  any  portion  thereof  is  extended  beyond 
such  period,  and  where  after  the  lapse  of  such  year  and  six 
months,  the  Commissioner  determines  that  the  correct  amount 
of  tax  is  in  excess  of  that  indicated  by  such  return.  The  addi- 
tional tax  so  determined,  if  not  paid  within  one  month  after 
notice  and  demand  by  the  collector,  bears  interest  at  the  rate 
of  10  per  centum  per  annum  from  the  expiration  of  such  time 
until  payment  is  received  by  the  collector. 

All  other  cases  fall  within,  and  are  governed  by,  the  pro- 
visions of  Section  406.  Thus,  where  any  portion  of  the  tax 
shown  upon  a  return  made  in  good  faith  is  not  paid  within 
one  year  and  six  months  following  decedent's  death,  interest 


REGULATIONS  659 

accrues  thereon,  though  an  extension  of  time  for  payment  may 
have  been  granted,  at  the  rate  of  6  per  centum  per  annum 
from  the  due  date  (one  year  after  decedent's  death)  until  pay- 
ment is  received  by  the  collector.  Likewise,  in  the  case  of  a 
return  so  made  and  where  no  extension  of  time  for  payment 
is  granted,  so  much  of  the  entire  tax  (that  is,  the  amount  of 
tax  as  finally  determined  by  the  Commissioner,  whether  deter- 
mined by  him  before  or  after  the  expiration  of  such  period  of 
one  year  and  six  months  following  the  decedent's  death,  and 
whether  the  amount  so  determined  be  greater  or  less  than  that 
shown  upon  the  return)  as  is  not  paid  within  such  period 
bears  interest  at  the  rate  of  6  per  centum  per  annum  from 
the  due  date  until  payment  is  received  by  the  collector. 

Where  the  return  is  not  made  in  good  faith,  Section  407  has 
no  application,  even  though  an  extension  of  time  may  have 
been  procured,  and  hence  in  all  such  cases  any  portion  of  the 
entire  tax  not  paid  within  such  period  of  one  year  and  six 
months  following  decedent's  death  bears  interest  at  the  rate 
of  6  per  centum  per  annum  from  the  due  date  of  the  tax  (one 
year  after  decedent's  death)  until  payment  thereof  is  received 
by  the  collector. 

COLLECTION  OF  TAX. 

SEC.  408.  That  if  the  tax  herein  imposed  is  not  paid  on  or  before  the  due 
date  thereof  the  collector  shall,  upon  instruction  from  the  Commissioner,  pro- 
ceed to  collect  the  tax  under  the  provisions  of  general  law,  or  commence  appro- 
priate proceedings  in  any  court  of  the  United  States,  in  the  name  of  the  United 
States,  to  subject  the  property  of  the  decedent  to  be  sold  under  the  judgment 
or  decree  of  the  court.  From  the  proceeds  of  such  sale  the  amount  of  the  tax, 
together  with  the  costs  and  expenses  of  every  description  to  be  allowed  by  the 
court,  shall  be  first  paid,  and  the  balance  shall  be  deposited  according  to  the  order 
of  the  court,  to  be  paid  under  its  direction  to  the  person  entitled  thereto.  *  *  * 

Art.  84.  Remedy  not  exclusive. — The  remedy  by  action, 
here  provided,  is  not  exclusive.  For  other  available  remedies 
for  the  collection  of  the  tax,  see  Article  102. 

REIMBURSEMENT. 

SEC.  408.  *  *  *  If  the  tax  or  any  part  thereof  is  paid  by,  or  collected  out 
of  that  part  of  the  estate  passing  to  or  in  the  possession  of,  any  person  other 
than  the  executor  in  his  capacity  as  such,  such  person  shall  be  entitled  to 
reimbursement  out  of  any  part  of  the  estate  still  undistributed  or  by  a  just 
and  equitable  contribution  by  the  persons  whose  interest  in  the  estate  of  the 


660  INHERITANCE  TAXATION 

decedent  would  have  been  reduced  if  the  tax  had  been  paid  before  the  distribu- 
tion of  the  estate  or  whose  interest  is  subject  to  equal  or  prior  liability  for  the 
payment  of  taxes,  debts,  or  other  charges  against  the  estate,  it  being  the  purpose 
and  intent  of  this  title  that  so  far  as  is  practicable  and  unless  otherwise  directed 
by  the  will  of  the  decedent  the  tax  shall  be  paid  out  of  the  estate  before  its 
distribution.  If  any  part  of  the  gross  estate  consists  of  proceeds  of  policies  of 
insurance  upon  the  life  of  the  decedent  receivable  by  a  beneficiary  other  than  the 
executor,  the  executor  shall  be  entitled  to  recover  from  such  beneficiary  such 
portion  of  the  total  tax  paid  as  the  proceeds,  in  excess  of  $40,000,  of  such  policies 
bear  to  the  net  estate.  If  there  is  more  than  one  such  beneficiary  the  executor 
shall  be  entitled  to  recover  from  such  beneficiaries  in  the  same  ratio. 

Art.  85.  Right  to  reimbursement  not  enforcible  by  Com- 
missioner.— Where  any  portion  of  the  tax  is  paid  by,  or  col- 
lected out  of  that  part  of  the  estate  passing  to,  or  in  the  pos- 
session of,  any  person  other  than  the  duly  qualified  executor 
or  administrator,  such  person  may  be  entitled  to  reimburse- 
ment, either  out  of  the  undistributed  estate  or  by  contribution 
from  other  beneficiaries  whose  shares  or  interests  in  the  estate 
would  have  been  reduced  had  the  tax  been  paid  before  dis- 
tribution of  the  estate,  or  whose  shares  or  interests  are  sub- 
ject either  to  an  equal  or  prior  liability  for  the  payment  of 
taxes,  debts,  or  other  charges  against  the  estate.  The  executor 
is  also  entitled  to  require  beneficiaries  under  insurance  poli- 
cies to  bear  their  proportion  of  the  tax.  These  provisions, 
however,  are  not  designed  to  curtail  the  right  of  the  Commis- 
sioner to  collect  the  tax  from  any  person,  or  out  of  any  prop- 
erty, liable  therefor.  The  Commissioner  cannot  be  required 
to  apportion  the  tax  among  the  persons  liable,  nor  to  enforce 
any  right  to  reimbursement  or  contribution.  For  example, 
where  a  transfer  has  been  made  in  contemplation  of  death, 
the  Commissioner  may  hold  both  the  executor  and  the  trans- 
feree liable  for  the  tax  with  respect  to  the  property  trans- 
ferred. In  such  case,  if  the  tax  is  paid  by  the  executor,  he 
may  not  look  to  the  Commissioner  for  relief  by  refund  of 
part  of  the  tax. 

LIEN. 

SEC.  409.  That  unless  the  tax  is  sooner  paid  in  full,  it  shall  be  a  lien  for  ten 
years  upon  the  gross  estate  of  the  decedent,  except  that  such  part  of  the  gross 
estate  as  is  used  for  the  payment  of  charges  against  the  estate  and  expenses  of 
its  administration,  allowed  by  any  court  having  jurisdiction  thereof,  shall  be 
divested  of  such  lien.  If  the  Commissioner  is  satisfied  that  the  tax  liability 


REGULATIONS  661 

of  an  estate  has  been  fully  discharged  or  provided  for,  he  may,  under  regulations 
prescribed  by  him  with  the  approval  of  the  Secretary,  issue  his  certificate,  re- 
leasing any  or  all  property  of  such  estate  from  the  lien  herein  imposed. 

If  (a)  the  decedent  makes  a  transfer  of,  or  creates  a  trust  with  respect  to, 
any  property  in  contemplation  of  or  intended  to  take  effect  in  possession  or  en- 
joyment at  or  after  his  death  (except  in  the  case  of  a  bona  fide  sale  for  a  fair 
consideration  in  money  or  money's  worth)  or  (6)  if  insurance  passes  under  a 
contract  executed  by  the  decedent  in  favor  of  a  specific  beneficiary,  and  if  in 
either  case  the  tax  in  respect  thereto  is  not  paid  when  due,  then  the  transferee, 
trustee,  or  beneficiary  shall  be  personally  liable  for  such  tax,  and  such  property, 
to  the  extent  of  the  decedent's  interest  therein  at  the  time  of  such  transfer,  or 
to  the  extent  of  such  beneficiary's  interest  under  such  contract  of  insurance 
shall  be  subject  to  a  like  lien  equal  to  the  amount  of  such  tax.  Any  part  of 
such  property  sold  by  such  transferee  or  trustee  to  a  bona  fide  purchaser  for  a 
fair  consideration  in  money  or  money's  worth  shall  be  divested  of  the  lien  and 
a  like  lien  shall  then  attach  to  all  the  property  of  such  transferee  or  trustee, 
except  any  part  sold  to  a  bona  fide  purchaser  for  a  fair  consideration  in  money 
or  money's  worth. 

SEC.  407.  *  *  *  If  the  executor  files  a  complete  return  and  makes  written 
application  to  the  commissioner  for  determination  of  the  amount  of  the  tax 
and  discharge  from  personal  liability  therefor,  the  Commissioner,  as  soon  as 
possible  and  in  any  event  within  one  year  after  receipt  of  such  application,,  shall 
notify  the  executor  of  the  amount  of  the  tax,  and  upon  payment  thereof  the 
executor  shall  be  discharged  from  personal  liability  for  additional  tax  thereafter 
found  to  be  due,  and  shall  be  entitled  to  receive  a  receipt  or  writing  showing 
such  discharge:  Provided,  however,  That  such  discharge  shall  not  operate  to 
release  the  gross  estate  from  the  lien  of  any  additional  tax  that  may  thereafter 
be  found  to  be  due  while  the  title  to  such  gross  estate  remains  in  the  he&rs, 
devisees,  or  distributees  thereof;  but  no  part  of  such  gross  estate  shall  be  subject 
to  such  lien  or  to  any  claim  or  demand  for  any  such  tax  if  the  title  thereto  has 
passed  to  a  bona  fide  purchaser  for  value. 

Art.  86.  Property  subject  to  lien. — This  lien  attaches  to 
every  part  of  the  gross  estate,  whether  or  not  the  property 
comes  into  the  possession  of  the  duly  qualified  executor  or 
administrator.  It  attaches  to  the  extent  of  the  tax  shown  to 
be  due  by  the  return  and  of  any  additional  tax  found  to  be 
due  upon  investigation. 

Where  the  decedent  transferred  or  placed  in  trust  prop- 
erty in  contemplation  of  or  intended  to  take  effect  in  posses- 
sion or  enjoyment  at  or  after  his  death  (except  in  the  case  of 
a  bona  fide  sale  for  a  fair  consideration  in  money  or  money's 
worth),  and  where  proceeds  of  insurance  on  his  life  passed 
to  a  specific  beneficiary  other  than  the  duly  qualified  executor 
or  administrator,  a  lien  attaches  thereto  to  the  amount  of  the 
tax  in  respect  to  the  particular  property  or  money  received 


662  INHERITANCE  TAXATION 

by  such  transferee,  trustee,  or  insurance  beneficiary,  and  such 
transferee,  trustee,  or  insurance  beneficiary  is  personally 
liable  for  such  tax. 

Where  the  transferee  or  trustee  sells  the  property  to  a 
bona  fide  purchaser  for  a  fair  consideration  in  money  or 
money's  worth  the  lien  upon  the  property  is  divested;  but 
there  is  substituted  a  like  lien  upon  all  the  property  of  such 
transferee  or  in  case  of  such  transfer  by  a  trustee  upon  all 
the  assets  of  the  trust  estate,  except  such  part  as  may  be  sold 
to  a  bona  fide  purchaser  for  such  a  consideration. 

The  lien  upon  the  entire  property  constituting  the  gross 
estate  continues  for  a  period  of  10  years  after  the  decedent's 
death,  except — 

(1)  Where  the  tax  is  paid  in  full  before  the  expiration  of 
such  period ; 

(2)  Such  portion  of  the  gross  estate  as  is  used  for  the  pay- 
ment  of   charges    against   the    estate    and   expenses   of   its 
administration    allowed   by    any    court   having    jurisdiction 
thereof ; 

(3)  Such  portion  of  the  gross  estate  as  has  passed  to  a 
bona  fide  purchaser  for  value  after  payment  of  the  full  amount 
of  tax  determined  by  the  Commissioner  pursuant  to  a  request 
of  the  executor,  as  authorized  by  Section  407,  for  discharge 
from  personal  liability  (see  Art.  72) ; 

(4)  Such  property  as  has  been  sold  by  any  transferee  or 
trustee  to  a  bona  fide  purchaser  for  a  fair  consideration  in 
money  or  money's  worth,  where  such  property  was  received 
from  the  decedent  as  a  transfer  in  contemplation  of,  or  in- 
tended to  take  effect  in  possession  or  enjoyment  at  or  after, 
his  death  (except  in  the  case  of  a  bona  fide  sale  for  a  fair 
consideration  in  money  or  money's  worth) ; 

(5)  Where  the  Commissioner  issues  his  certificate  releasing 
such  lien  (see  Art.  87). 

Art.  87.  Release  of  lien. — The  statute  provides  that,  if  the 

Commissioner  is  satisfied  that  the  tax  liability  of  an  estate 

has  been  fully  discharged  or  provided  for,  he  may  issue  his 

certificate  releasing  any  or  all  property  of  the  estate  from 

'  the  lien.    The  issuance  of  certificates  is  a  matter  resting  within 


EEGULATIONS  663 

the  discretion  of  the  Commissioner,  and  certificates  will  be 
issued  only  in  case  there  is  actual  need  therefor.  In  most 
cases  the  receipts  issued  by  the  collector  constitute  sufficient 
acquittance. 

The  tax  will  be  considered  fully  discharged  for  the  purpose 
of  the  issuance  of  a  certificate  only  when  investigation  has 
been  completed,  and  payment  of  the  tax,  as  determined  by  the 
Commissioner,  has  been  made.  A  certificate  of  release  of 
lien  may  be  issued  by  the  Commissioner  under  these  circum- 
stances as  to  any  or  all  property  of  the  estate,  upon  the  filing 
by  the  executor  of  an  application  in  duplicate  on  Form  791. 
The  form  must  contain  all  the  information  called  for. 

Where  the  tax  liability  has  not  been  fully  discharged,  as 
provided  above,  no  general  certificate  of  release  will  be 
granted,  but  releases  of  lien  upon  particular  items  of  prop- 
erty will  be  issued  upon  the  filing  with  the  Commissioner  of 
such  security,  if  any,  as  he  may  require.  Where  security  is 
required,  a  corporate  indemnity  bond  must  be  furnished,  or 
Liberty  Bonds,  or  other  bonds  or  notes  of  the  United  States, 
must  be  deposited  with  the  collector.  In  lieu  of  such  security, 
the  Commissioner  may  in  any  case  issue  the  release  upon  pay- 
ment of  the  estimated  tax  upon  the  transfer  of  the  property 
released,  computed  at  the  highest  rate  applicable  to  the  estate. 
If,  upon  consideration  of  the  application,  the  Commissioner 
finds  the  issuance  of  the  certificate  to  be  warranted,  the  col- 
lector will  notify  the  executor  of  the  amount  of  the  bond,  as 
fixed  by  the  Commissioner. 

PENALTIES. 

SEC.  410.  That  whoever  knowingly  makes  any  false  statement  in  any  notice 
or  return  required  to  be  filed  under  this  title  shall  be  liable  to  a  penalty  of  not 
exceeding  $5,000,  or  imprisonment  not  exceeding  one  year,  or  both. 

Whoever  fails  to  comply  with  any  duty  imposed  upon  him  by  section  404,  or, 
having  in  his  possession  or  control  any  record,  file,  or  paper,  containing  or 
supposed  to  contain  any  information  concerning  the  estate  of  the  decedent,  or, 
having  in  his  possession  or  control  any  property  comprised  in  the  gross  estate 
of  the  decedent,  fails  to  exhibit  the  same  upon  request  to  the  Commissioner  or 
any  collector  or  law  officer  of  the  United  States,  or  his  duly  authorized  deputy 
or  agent,  who  desires  to  examine  the  same  in  the  performance  of  his  duties  under 
this  title,  shall  be  liable  to  a  penalty  of  not  exceeding  $500.  to  be  recovered,  with 
costs  of  suit,  in  a  civil  action  in  the  name  of  the  United  States. 

Revised  Statutes,  Sec.  3176  (Comp.  Sts.,  1916,  Sec.  5899;  Sec.  1311,  Revenue 
Act,  1921 ) .  *  *  *  In  case  of  any  failure  to  make  and  file  a  return  or  list 


654  INHERITANCE  TAXATION 

within  the  time  prescribed  by  law,  or  prescribed  by  the  Commissioner  of  Internal 
Revenue  or  the  collector  in  pursuance  of  law,  the  Commissioner  of  Internal 
Revenue  shall  add  to  the  tax  25  per  centum  of  its  amount,  except  that  when  a 
return  is  filed  after  such  time  and  it  is  shown  that  the  failure  to  file  it  was  due 
to  a  reasonable  cause  and  not  to  willful  neglect,  no  such  addition  shall  be  made 
to  the  tax.  In  case  a  false  or  fraudulent  return  or  list  is  willfully  made,  the 
Commissioner  of  Internal  Revenue  shall  add  to  the  tax  50  per  centum  of  its 
amount. 

The  amount  so  added  to  any  tax  shall  be  collected  at  the  same  time  and  in 
the  same  manner  and  as  part  of  the  tax  unless  the  tax  has  been  paid  before  the 
discovery  of  the  neglect,  falsity,  or  fraud,  in  which  case  the  amount  so  added 
shall  be  collected  in  the  same  manner  as  the  tax. 

Art.  88.  Nature  of  penalties. — Two  kinds  of  penalties  are 
provided  for  delinquency  with  respect  to  the  duties  imposed 
by  the  estate  tax  law: 

(1)  A  specific  penalty,  to  be  recovered  by  suit,  unless  paid 
on  demand,  or  adjusted  by  an  acceptance  of  an  offer  in  com- 
promise; and 

(2)  A  penalty  of  a  certain  percentage  of  the  tax,  to  be 
added  to  the  tax  and  collected  in  the  same  manner  as  the  tax. 

In  any  case  where  more  than  one  penalty  is  provided,  the 
Government  may  impose  any  one  or  more  thereof. 

Art.  89.  Penalties  for  false  or  fraudulent  notice  or  return. 
—Where  statements  in  the  notice  required  by  Section  404,  or 
in  the  return,  are  knowingly  and  wilfully  false,  the  person 
making  them  is  subject  to  a  penalty  not  exceeding  $5,000,  or 
imprisonment  for  not  exceeding  one  year,  or  both ;  and,  for  a 
false  or  fraudulent  return,  50  per  centum  may  be  added  to 
the  amount  of  the  tax. 

Art.  90.  Penalty  for  failure  to  file  notice  or  return. — For 
failure  to  file  the  notice  or  the  return  within  the  time  pre- 
scribed, the  person  in  default  is  subject  to  a  penalty  not  to 
exceed  $500;  and,  for  the  failure  to  file  the  return  within  the 
time  prescribed,  25  per  centum  may  be  added  to  the  amount 
of  the  tax,  unless  the  failure  so  to  file  the  return  was  due  to  a 
reasonable  cause  and  not  to  wilful  neglect. 

Art.  91.  Penalty  for  failure  to  exhibit  records  or  property. 

—Where  a  person  in  possession  or  control  of  any  record,  file, 
or  paper,  supposed  to  contain  information  relating  to  the 


REGULATIONS  665 

estate,  or  having  in  his  possession  or  control  property  com- 
prised in  the  gross  estate  of  the  decedent,  fails  to  exhibit  the 
same,  upon  the  request  of  the  Commissioner  or  any  collector 
or  law  officer  of  the  United  States,  or  his  duly  authorized 
deputy  or  agent,  in  the  performance  of  his  duties,  he  is  liable 
to  a  penalty  not  to  exceed  $500,  to  be  recovered  by  civil  action. 
He  must  comply  with  such  a  request  whether  or  not  he  be- 
lieves that  the  documents  contain  information  relating  to  the 
estate. 

CLAIMS  FOB  ABATEMENT  AND  REFUND. 

Revised  Statutes,  Sec.  3220  (Comp.  Sts.,  916,  Sec.  5944;  Sec.  1315,  Revenue 
Act.  1921 ) .  The  Commissioner  of  Internal  Revenue,  subject  to  regulations  pre- 
scribed by  the  Secretary  of  the  Treasury,  is  authorized  to  remit,  refund,  and 
pay  back  all  taxes  erroneously  or  illegally  assessed  or  collected,  all  penalties 
colected  without  authority,  and  all  taxes  that  appear  to  be  unjustly  assessed  or 
excessive  in  amount,  or  in  any  manner  wrongfully  collected;  also  to  repay  to 
any  collector  or  deputy  collector  the  full  amount  of  such  sums  of  money  as 
may  be  recovered  against  him  in  any  court,  for  any  internal  revenue  taxes  col- 
lected by  him,  with  the  cost  and  expenses  of  suit;  also  all  damages  and  costs 
recovered  against  any  assessor,  assistant  assessor,  collector,  deputy  collector, 
agent,  or  inspector,  in  any  suit  brought  against  him  by  reason  of  anything  done 
in  the  due  performance  of  his  official  duty,  and  shall  make  report  to  Congress 
at  the  beginning  of  each  regular  session  of  Congress  of  all  transactions  under 
this  section. 

Revised  Statutes,  Sec.  3225  (Comp.  Sts.,  1916,  Sec.  5948;  Sec.  1323,  Revenue 
Act,  1921).  When  a  second  assessment  is  made  in  case  of  any  list,  statement, 
or  return,  which  in  the  opinion  of  the  collector  or  deputy  collector  was  false 
or  fraudulent,  or  contained  any  understatement  or  undervaluation,  such  assess- 
ment shall  not  be  remitted,  nor  shall  taxes  collected  under  such  assessment  be 
refunded,  or  paid  back,  or  recovered  by  any  suit,  unless  it  is  proved  that  such 
list,  statement,  or  return  was  not  willfully  false  or  fraudulent  and  did  not 
contain  any  willful  understatement  or  undervaluation. 

SEC.  1316.  That  section  3228  of  the  Revised  Statutes  is  amended  to  read  as 
follows : 

"  SEC.  3228.  All  claims  for  the  refunding  or  crediting  of  any  internal  revenue 
tax  alleged  to  have  been  erroneously  or  illegally  assessed  or  collected,  or  of  any 
penalty  alleged  to  have  been  collected  without  authority,  or  of  any  sum  alleged 
to  have  been  excessive  or  in  any  manner  wrongfully  collected,  must  be  presented 
to  the  Commissioner  of  Internal  Revenue  within  four  years  next  after  payment 
of  such  tax,  penalty,  or  sum." 

This  section,  except  as  modified  by  section  252,  shall  apply  retroactively  to 
claims  for  refund  under  the  Revenue  Act  of  1916,  the  Revenue  Act  of  1917,  and 
the  Revenue  Act  of  1918.  (Revenue  Act  of  1921.) 

Art.  92.  Kinds  of  relief.— Two  forms  of  relief  are  afforded 
the  executor  in  cases  where  he  believes  that  an  excessive 
amount  of  tax  or  an  illegal  penalty  has  been  assessed  or  paid 


666  INHERITANCE  TAXATION 

either  upon  the  basis  of  the  return  or  of  the  investigation 
conducted  by  the  Bureau.    The  two  forms  of  relief  are : 

(1)  Claim  for  abatement,  where  the  alleged  excessive  tax 
or  illegal  penalty  has  been  assessed  but  not  paid. 

(2)  Claim  for  refund,  where  such  tax  or  penalty  has  been 
paid. 

Art.  93.  Claim  for  abatement. — Claims  for  the  abatement 
of  taxes  or  penalties  illegally  assessed  must  be  made  upon 
Form  843,  and  must  be  sustained  by  the  affidavit  of  the  execu- 
tor or  other  parties  cognizant  of  the  facts.  When  a  tax  or 
penalty  has  been  assessed,  the  presumption  is  that  the  assess- 
ment is  correct;  and  the  burden  of  showing  that  it  was  im- 
properly or  illegally  assessed  rests  upon  the  applicant  for 
abatement.  The  affidavit  must  therefore  contain  a  full  and 
explicit  statement  of  all  the  material  facts  relating  to  the 
claim  in  support  of  which  it  is  offered  in  order  that  the  claim 
may  receive  proper  consideration.  Nothing  should  be  left  to 
inference,  but  all  the  facts  relied  upon  should  appear  in  the 
papers  themselves.  The  filing  of  a  claim  for  the  abatement 
of  a  tax  or  penalty  alleged  to  have  been  erroneously  or 
illegally  assessed  does  not  necessarily  operate  as  a  suspension 
of  the  collection  thereof.  The  collector  may  proceed  to  collect 
if  he  thinks  it  necessary,  and  leave  the  taxpayer  to  his  remedy 
by  a  claim  for  refund. 

Art.  94.  Accrual  of  interest  as  affected  by  abatement  claim. 
—Where  a  claim  for  abatement  is  rejected,  the  making  of  the 
application  does  not  affect  the  running  of  interest.  The  allow- 
ance of  the  claim,  however,  in  whole  or  part,  discharges  all 
liability  for  interest  upon  the  portion  of  the  claim  allowed. 
The  same  rules  apply  where,  upon  the  request  of  the  executor, 
a  reinvestigation  is  made. 

Art.  95.  Limitation  of  time  to  file  claim  for  abatement  of 
additional  tax. — If  it  is  desired  to  file  claim  for  abatement 
of  the  additional  amount  of  tax  disclosed  upon  an  investiga- 
tion, such  claim  must  be  filed  with  the  collector  within  one 
month  after  receipt  by  the  executor  of  the  Commissioner's 
letter  of  notification.  After  that  period  the  claim  will  not  be 


REGULATIONS  667 

considered,  but  the  tax  must  be  paid,  and  adjustment  sought 
by  claim  for  refund. 

Art.  96.  Claim  for  refund. — Claims  for  the  refunding  of 
estate  taxes  imposed  by  any  of  the  several  Revenue  Acts,  and 
of  penalties  in  respect  thereto,  which  are  alleged  to  have  been 
collected  without  legal  authority,  must  be  presented  to  the 
Commissioner  within  four  years  next  after  payment  thereof. 
Such  claims  must  be  made  on  Form  843.  As  in  the  case  of 
claims  for  abatement,  the  burden  of  proof  rests  upon  the 
claimant.  All  the  facts  relied  upon  in  support  of  the  claim 
should  be  clearly  set  forth  under  oath.  With  the  claim  should 
be  presented,  in  addition  to  the  evidence: 

(1)  Where  the  claim  is  made  by  an  executor  or  adminis- 
trator, a  certificate  of  the  court  showing  that  the  appointment 
remains  in  full  force  and  effect. 

(2)  Where  the  executor  or  administrator  has  been  dis- 
charged and  no  administrator  de  bonis  non  has  been  appointed 
and  qualified,  there  should  be  submitted,  in  lieu  of  the  cer- 
tificate above  mentioned,  (a)  a  certified  copy  of  the  court  order 
granting  the  discharge,  and,  (b)  a  certified  copy  of  the  order 
of  distribution,  or,  if  such  order  does  not  fully  disclose  the 
identity  of  the  person  or  persons  entitled  to   receive   any 
amount  that  may  be  refunded  and  the  percentage  or  propor- 
tion thereof  to  which  each,  if  more  than  one,  is  entitled,  there 
should  be  submitted  a  certified  copy  of  the  decedent's  will,  if 
any,  and  such  further  proof  as  may  be  requisite  to  establish 
both  the  identity  of  such  person  or  persons  and  the  percentage 
or  proportion  of  the  amount  sought  to  be  refunded  to  which 
each,  where  there  are  more  than  one,  is  entitled. 

(3)  Where  a  claim  is  filed  after  the  administration  of  the 
estate  has  been  closed,  and  is  signed  by  one  only,  or  by  less 
than  all,  of  a  number  of  beneficiaries  entitled  to  share  in  the 
refund,  or  is  signed  by  a  person  acting  as  attorney  or  agent 
for  the  interested  parties,  there  must  accompany  the  claim, 
in  addition  to  the  proof  required  in  paragraph  (2)  above,  a 
power  of  attorney,  duly  executed  by  all  beneficiaries  entitled 
to  any  portion  of  the  repayment,  authorizing  the  claimant  or 
claimants  to  present  the  matter  before  the  Bureau. 


6(38  INHERITANCE  TAXATION 

Art.  97.  Payment  of  claims  and  interest. — Warrants  in  pay- 
ment of  claims  allowed  "will  be  drawn  to  the  order  of  the  per- 
son or  persons  entitled  to  the  proceeds,  and  will  be  forwarded 
directly  to  such  person  or  persons  by  the  Treasurer  of  the 
United  States,  except  where  delivery  to  an  attorney  or  agent 
has  been  authorized  in  accordance  with  the  regulations  con- 
tained in  Treasury  Department  Circular  No.  230,  dated  April 
25, 1922,  as  heretofore  or  hereafter  amended  or  supplemented. 
If  the  claimants  are  indebted  to  the  United  States  for  taxes, 
such  taxes  must  be  paid  before  the  warrants  are  delivered. 
(Act  of  Mar.  3,  1875  (18  Stats.  481).) 

On  the  allowance  of  a  claim  for  refund  of  taxes  paid  Sec- 
tion 1324  of  the  statute  provides  for  the  payment  of  interest 
upon  the  total  amount  of  such  refund  at  the  rate  of  one-half 
of  1  per  centum  per  month  to  the  date  of  such  allowance,  as 
follows:  (1)  If  such  amount  was  paid  under  a  specific  protest 
setting  forth  in  detail  the  basis  of  and  reasons  for  such  pro- 
test, from  the  time  when  such  tax  was  paid,  or  (2)  if  such 
amount  was  not  paid  under  protest  but  pursuant  to  an  addi- 
tional assessment,  from  the  time  such  additional  assessment 
was  paid,  or  (3)  if  no  protest  was  made  and  the  tax  was  not 
paid  pursuant  to  an  additional  assessment,  from  six  months 
after  the  date  of  filing  of  such  claim  for  refund. 

POWER  TO  COMPROMISE  OR  EEMIT  PENALTIES. 

Revised  Statutes,  Sec.  3229  (Comp.  Sts..  1916,  Sec.  5952).  The  Commissioner 
of  Internal  Revenue,  with  the  advice  and  consent  of  the  Secretary  of  the  Treasury 
may  compromise  any  civil  or  criminal  case  arising  under  the  internal-revenue 
laws  instead  of  commencing  suit  thereon;  and,  with  the  advice  and  consent  of 
the  said  Secretary  and  the  recommendation  of  the  Attorney-General,  he  may 
compromise  any  such  case  after  a  suit  thereon  has  been  commenced.  Whenever 
a  compromise  is  made  in  any  case  there  shall  be  placed  on  file  in  the  office  of 
the  Commissioner  the  opinion  of  the  Solicitor  of  Internal  Revenue,  or  of  the 
officer  acting  as  such,  with  his  reasons  therefor,  with  a  statement  of  the  amount 
of  tax  assessed,  the  amount  of  additional  tax  or  penalty  imposed  by  law  in 
consequence  of  the  neglect  or  delinquency  of  the  person  against  whom  the  tax 
is  assessed,  and  the  amount  actually  paid  in  accordance  with  the  terms  of  the 
compromise. 

Revised  Statutes,  Sec.  5292  (Comp.  Sts.,  1916,  Sec.  10,130).  Whenever  any 
person  who  shall  have  incurred  any  fine,  penalty,  or  forfeiture,  or  disability 
*  *  *  shall  prefer  his  petition  to  the  judge  of  the  district  in  which  such 
fine,  penalty,  or  forfeiture,  or  disability  has  accrued,  truly  and  particularly 
setting  forth  the  circumstances  of  his  case,  and  shall  pray  that  the  same  may 
be  mitigated  or  remitted,  the  judge  shall  inquire,  in  a  summary  manner,  into 


REGULATIONS  669 

the  circumstances  of  the  case;  first  causing  reasonable  notice  to  be  given  to  the 
person  claiming  such  fine,  penalty,  or  forfeiture,  and  to  the  attorney  of  the 
United  States  for  such  district,  that  each  may  have  an  opportunity  of  showing 
cause  against  the  mitigation  or  remission  thereof;  and  shall  cause  the  facts  ap- 
pearing upon  such  inquiry  to  be  stated  and  annexed  to  the  petition,  and  direct 
their  transmission  to  the  Secretary  of  the  Treasury.  The  Secretary  shall  there- 
upon have  power  to  mitigate  or  remit  such  fine,  forfeiture,  or  penalty,  or  remove 
such  disability,  or  any  part  thereof,  if,  in  his  opinion,  the  same  was  incurred 
without  willful  negligence,  or  any  intention  of  fraud  in  the  person  incurring 
the  same;  and  to  direct  the  prosecution  if  any  has  been  instituted  for  the  re- 
covery thereof,  to  cease  and  be  discontinued,  upon  such  terms  or  conditions  as 
he  may  deem  reasonable  and  just. 

Revised  Statutes,  Sec.  5293  (Cbmp.  Sts.,  1916,  Sec.  10,131).  The  Secretary 
of  the  Treasury  is  authorized  to  prescribe  such  rules  and  modes  of  proceeding 
to  ascertain  the  facts  upon  which  an  application  for  remission  of  a  fine,  penalty, 
or  forfeiture,  is  founded,  as  he  deems  proper,  and,  upon  ascertaining  them,  to 
remit  the  fine,  penalty,  or  forfeiture,  if  in  his  opinion  it  was  incurred  without 
willful  negligence  or  fraud,  in  either  of  the  following  cases: 

First.  If  the  fine,  penalty,  or  forfeiture  was  imposed  under  authority  of  any 
revenue  law,  and  the  amount  does  not  exceed  $1,000. 

Art.  98.  Power  to  compromise  or  remit. — The  Commis- 
sioner, with  the  advice  and  consent  of  the  Secretary  of  the 
Treasury,  may  compromise  any  civil  or  criminal  case  arising 
under  the  internal  revenue  laws  instead  of  commencing  suit 
thereon,  and  with  the  advice  and  consent  of  the  Secretary, 
and  upon  the  recommendation  of  the  Attorney-General,  may 
compromise  any  such  case  after  suit  thereon  has  been  com- 
menced by  the  United  States.  Accordingly,  the  power  to  com- 
promise extends  to  (a)  both  civil  and  criminal  cases;  (&) 
cases  whether  before  or  after  suit;  and  (c)  both  taxes  and 
penalties,  except  that  taxes  legally  due  from  a  solvent  tax- 
payer may  not  be  compromised.  Refunds  cannot  be  made  of 
accepted  offers  in  compromise  in  cases  where  it  is  subse- 
quently ascertained  that  no  violation  of  law  was  involved. 
Where  a  fine,  penalty,  or  forfeiture,  not  exceeding  $1,000,  is 
incurred  without  wilful  negligence  or  fraud,  it  may  be  re- 
mitted by  the  Secretary  of  the  Treasury;  and  he  may  mitigate 
or  remit  other  fines,  penalties,  forfeitures,  and  disabilities 
where  the  court  has  inquired  into  the  matter  and  made 
findings. 

PERSONAL  LIABILITY  OF  EXECUTOR. 

Revised  Statutes,  Sec.  3467  (Comp.  Sts.,  1916,  Sec.  6373).  Every  executor, 
administrator,  or  assignee,  or  other  person,  who  pays  any  debts  due  by  the  person 


INHERITANCE  TAXATION 

or  estate  from  [for]  whom  or  for  which  he  acts,  before  he  satisfies  and  pays 
the  debts  due  to  the  United  States  from  such  person  or  estate,  shall  became 
answerable  in  his  own  person  and  estate  for  the  debts  so  due  to  the  United 
States,  or  for  so  much  thereof  as  may  remain  due  and  unpaid. 

Art.  99.  Extent  of  liability. — The  executor  is  personally 
liable  for  the  payment  of  the  estate  tax  to  the  amount  of  the 
full  value  of  the  assets  of  the  estate  which  have  at  any  time 
come  into  his  hands.  Where  no  executor  or  administrator 
has  been  appointed,  every  person  in  actual  or  constructive 
possession  of  any  property  of  the  decedent  is  liable  "for  the 
tax  as  an  executor  to  the  value  of  such  property,  except  as 
limited  by  Article  86  in  the  case  of  transferees,  trustees  and 
insurance  beneficiaries. 

EXAMINATION  OF  RECORDS  AND  TAKING  OF  TESTIMONY. 

SEC.  1308.  That  the  Commissioner,  for  the  purpose  of  ascertaining  the  correct- 
ness of  any  return  or  for  the  purpose  of  making  a  return  where  none  has  been 
made,  is  hereby  authorized,  by  any  revenue  agent  or  inspector  designated  by 
him  for  that  purpose,  to  examine  any  books,  papers,  records,  or  memoranda  bear- 
ing upon  the  matter  required  to  be  included  in  the  return,  and  may  require  the 
attendance  of  the  person  rendering  the  return  or  of  any  officer  or  employee  of 
such  person,  or  the  attendance  of  any  other  person  having  knowledge  in  the 
premises,  and  may  take  his  testimony  with  reference  to  the  matter  required  by 
law  to  be  included  in  such  return,  with  power  to  administer  oaths  to  such 
person  or  persons. 

SEC.  1310 (a).  That  if  any  person  is  summoned  under  this  Act  to  appear,  to 
testify,  or  to  produce  books,  papers  or  other  data,  the  district  court  of  the 
United  States  for  the  district  in  which  such  person  resides  shall  have  jurisdic- 
tion by  appropriate  process  to  compel  such  attendance,  testimony,  or  production 
of  books,  papers,  or  other  data. 

(b)  The  district  courts  of  the  United  States  at  the  instance  of  the  United 
States  are  hereby  invested  with  such  jurisdiction  to  make  and  issue,  both  in 
actions  at  law  and  suits  in  equity,  writs  and  orders  of  injunction,  and  on 
ne  exeat  republica,  orders  appointing  receivers,  and  such  other  orders  and 
process,  and  to  render  such  judgments  and  decrees,  granting  in  proper  cases  both 
legal  and  equitable  relief  together,  as  may  be  necessary  or  appropriate  for  the 
enforcement  of  the  provisions  of  this  Act.  The  remedies  hereby  provided  are 
in  addition  to  and  not  exclusive  of  any  and  all  other  remedies  of  the  United 
States  in  such  courts  or  otherwise  to  enforce  such  provisions. 

Art.  100.  Securing  evidence — Taking  testimony. — In  order 
to  ascertain  the  correctness  of  a  return,  or  to  make  a  return 
where  none  has  been  made,  the  Commissioner  has  power  to 
require  the  attendance,  and  to  take  the  testimony,  of  the  per- 
son rendering  the  return,  or  any  officer  or  employee  of  such 
person,  or  any  other  person  having  knowledge  in  the  premises. 


REGULATIONS  671 

Such  persons  may  be  required  to  produce  any  relevant  book, 
paper,  or  other  record.  This  power  may  be  exercised  by  any 
revenue  agent  or  inspector  designated  for  the  purpose. 

Art.  101.  Power  to  compel  compliance. — Where  any  person 
is  summoned  to  appear  and  testify,  or  to  produce  books, 
papers,  or  other  data,  the  District  Court  of  the  United  States 
for  the  district  in  which  such  person  resides  has  power  to 
compel  the  giving  of  the  testimony,  or  the  production  of  the 
books,  papers,  or  data,  and  to  issue  any  appropriate  process, 
writ,  or  order. 

.  REMEDIES  FOR  COLLECTION. 

SEC.  1300.  That  all  administrative,  special,  or  stamp  provisions  of  law,  in- 
cluding the  law  relating  to  the  assessment  of  taxes,  so  far  as  applicable,  are 
hereby  extended  to  and  made  a  part  of  this  Act,  and  every  person  liable  to  any 
tax  imposed  by  this  Act,  or  for  the  collection  thereof,  shall  keep  such  records 
and  render,  under  oath,  such  statements  and  returns,  and  shall  comply  with 
such  regulations  as  the  Commissioner,  with  the  approval  of  the  Secretary,  may 
from  time  to  time  prescribe. 

SEC.  1307.  That  whenever  in  the  judgment  of  the  Commissioner  necessary  he 
may  require  any  person,  by  notice  served  upon  him,  to  make  a  return  or  such 
statements  as  he  deems  sufficient  to  show  whether  or  not  such  person  is  liable 
to  tax. 

Art.  102.  Remedies  for  collection  of  tax. — The  provisions 
of  the  statute  quoted  above  apply  to  the  estate  tax  law;  and 
three  remedies  are  thus  provided  for  the  collection  of  the  tax : 

(1)  Collection  by  distraint, — The  collector  may  issue  war- 
rant of  distraint  authorizing  the  seizure  and  sale  of  any  or 
all  of  the  assets  of  the  estate.    (See  E.  S.,  Sees.  3187  et  seq. ; 
Comp.  Sts.,  1916,  Sec.  5909  et  seq.) 

(2)  Collection  by  suit  to  subject  the  property  to  sale. — The 
collector  may  commence  in  any  court  of  the  United  States 
appropriate  proceedings,  in  the  name  of  the  United  States, 
to  subject  the  property  of  the  decedent  to  sale  under  the  judg- 
ment or  decree  of  the  court. 

(3)  Collection  by  suit  for  personal  liability. — The  personal 
liability  of  the  executor,  of  the  transferee  or  trustee  of  prop- 
erty transferred  in  contemplation  of  or  intended  to  take  effect 
in  possession  or  enjoyment  at  or  after  decedent's  death,  and 
of  the  beneficiary  of  life  insurance,  may  be  enforced  by  any 
appropriate  action. 


572  INHERITANCE  TAXATION 

Art.  103.  Executor's  duty  to  keep  records. — It  is  the  duty 
of  the  executor  to  keep  such  records  as  the  Commissioner  may 
require.  Executors  are  required  to  keep  such  complete  and 
detailed  records  of  the  affairs  of  the  estate  as  will  enable  the 
Commissioner  to  determine  accurately  the  amount  of  the  tax 
liability. 

Art.  104.  Executor's  duty  to  render  statements. — It  is  the 
duty  of  the  executor  not  only  to  make  the  formal  return,  but 
also  to  render  any  other  sworn  statement  which  the  Commis- 
sioner may  require  for  the  purpose  of  determining  whether 
a  tax  liability  exists. 

ESTATES  ADMINISTERED  IN  THE  UNITED  STATES  COURT  FOR 

CHINA. 

SEC.  411.  (a)  That  the  term  ''  resident  "  as  used  in  this  title  includes  a 
citizen  of  the  United  States  with  respect  to  whose  property  any  probate  or 
administration  proceedings  are  had  in  the  United  States  Court  for  China.  Where 
no  part  of  the  gross  estate  of  such  decedent  is  situated  in  the  United  States  at 
the  time  of  his  death,  the  total  amount  of  tax  due  under  this  title  shall  be  paid 
to  or  collected  by  the  clerk  of  such  court,  but  where  any  part  of  the  gross  estate 
of  such  decedent  is  situated  in  the  United  States  at  the  time  of  his  death,  the 
tax  due  under  this  title  shall  be  paid  to  or  collected  by  the  collector  of  the 
district  in  which  is  situated  the  part  of  the  gross  estate  in  the  United  States,  or, 
if  such  part  is  situated  in  more  than  one  district,  then  the  collector  of  such 
district  as  may  be  designated  by  the  Commissioner. 

(b)  For  the  purpose  of  this  section  the  clerk  of  the  United  States  Court  for 
China   shall   be  a   collector   for   the   territorial   jurisdiction   of   such   court,   and 
taxes  shall  be  collected  by  and  paid  to  him  in  the  same  manner  and  subject  to 
the  same  provisions  of  law,  including  penalties,  as  the  taxes  collected  by  and 
paid  to  a  collector  in  the  United  States. 

(c)  The  proviso   in  the  Act  entitled  "  An   Act  making  appropriation   for  the 
Diplomatic  and  Consular  Service  for  the  fiscal  year  ending  June  30,  1921,"  ap- 
proved June  4,  1920,  which  reads  as  follows:     "Provided.  That  in  probate  and 
administration  proceedings  there  shall  be  collected  by  said  clerk,  before  entering 
the  order  of  final  distribution,  to  be  paid  into  the  Treasury  of  the  United  States, 
the  same  inheritance  taxes  from  time  to  time  collected  under  the  laws  enacted 
by  the  Congress  of  the  United  States  from  the  estates  of  decedents  residing  within 
the  territorial  jurisdiction  of  the  United  States,"  is  hereby  repealed. 

SCOPE  OF  KEPEAL. 

SEO.  1400.  (a)  That  the  following  parts  of  the  Revenue  Act  of  1918  are 
repealed,  to  take  effect  (except  as  otherwise  provided  in  this  Act)  on  January 
1.  1922,  subject  to  the  limitations  provided  in  subdivision  (b)  : 

«*******»»»» 

Title  IV  (called  "  Estate  Tax  ")  on  the  passage  of  this  Act; 


REGULATIONS  673 

Sections  1314,  1315,  1316,  1317,  1319,  and  1320  of  Title  XIII  (being  certain 
administrative  provisions)  on  the  passage  of  this  Act. 

(b)  The  parts  of  the  Revenue  Act  of  1918  which  are  repealed  by  this  Act 
shall  (unless  otherwise  specifically  provided  in  this  Act)  remain  in  force  for  the 
assessment  and  collection  of  all  taxes  which  have  accrued  under  the  Revenue 
Act  of  1918  at  the  time  such  parts  cease  to  be  in  effect,  and  for  the  imposition 
and  collection  of  all  penalties  or  forfeitures  which  have  accrued  or  may  accrue 
in  relation  to  any  such  taxes.  In  the  case  of  any  tax  imposed  by  any  part  of  the 
Revenue  Act  of  1918  repealed  by  this  Act,  if  there  is  a  tax  imposed  by  this  Act 
in  lieu  thereof,  the  provision  imposing  such  tax  shall  remain  in  force  until  the 
corresponding  tax  under  this  Act  takes  effect  under  the  provisions  of  this  Act. 
The  unexpended  balance  of  any  appropriation  heretofore  made  and  now  available 
for  the  administration  of  any  such  part  of  the  Revenue  Act  of  1918  shall  be 
available  for  the  administration  of  this  Act  or  the  corresponding  provision 
thereof. 

Art.  105.  Scope  of  repeal. — The  Revenue  Act  of  1921  re- 
tains in  force  the  provisions  of  Title  IV  of  the  Revenue  Act 
of  1918  for  the  assessment  and  collection  of  all  taxes  accruing 
thereunder,  and  for  the  imposition  and  collection  of  all 
penalties  which  have  accrued  or  may  accrue  in  relation  to  any 
such  taxes. 

Art.  106.  Promulgation  of  regulations. — In  pursuance  of 
the  statute,  the  foregoing  regulations  are  hereby  made  and 
promulgated,  and  all  rulings  inconsistent  herewith  are  hereby 
revoked.  These  regulations  apply  to  all  pending  estate  tax 
cases  except  where  a  particular  question  is  governed  by  a 
specific  provision  of  the  earlier  statutes  differing  from  the 
Revenue  Act  of  1921,  in  which  cases  the  provisions  of  the 
applicable  statute  control  and  Regulations  37  (revised  Jan- 
uary, 1921)  remain  in  full  force  and  effect,  subject  to  the 
following  changes : 

Article  47  is  amended  to  read  as  follows : 

The  unpaid  principal  of  mortgages  on  property  of  the  decedent,  whether  the 
property  be  situated  within  or  without  the  United  States,  including  interest 
accrued  to  the  date  of  death,  is  deductible. 

Articles  29,  71,  and  76-A  are  revoked. 

D.  H.  BLAIR, 

Commissioner  of  Internal  Revenue, 
Approved  July  27,  1922. 
A.  W.  MELLON, 

Secretary  of  the  Treasury. 
43 


(574  INHERITANCE  TAXATION 


APPENDIX. 

Revenue  Act  of  1921. 

TITLE  IV.— ESTATE  TAX. 

SEC.  400.  That  when  used  in  this  title — 

The  term  ''executor"  means  the  executor  or  administrator 
of  the  decedent,  or,  if  there  is  no  executor  or  administrator, 
any  person  in  actual  or  constructive  possession  of  any  prop- 
erty of  the  decedent; 

The  term  "net  estate"  means  the  net  estate  as  determined 
under  the  provisions  of  section  403 ; 

The  term  ' '  month ' '  means  calendar  month ;  and 

The  term  "collector"  means  the  collector  of  internal 
revenue  of  the  district  in  which  was  the  domicile  of  the  dece- 
dent at  the  time  of  his  death,  or,  if  there  was  no  such  domicile 
in  the  United  States,  then  the  collector  of  the  district  in  which 
is  situated  the  part  of  the  gross  estate  of  the  decedent  in  the 
United  States,  or,  if  such  part  of  the  gross  estate  is  situated 
in  more  than  one  district,  then  the  collector  of  internal 
revenue  of  such  district  as  may  be  designated  by  the  Com- 
missioner. 

SEC.  401.  That,  in  lieu  of  the  tax  imposed  by  Title  IV  of  the 
Revenue  Act  of  1918,  a  tax  equal  to  the  sum  of  the  following 
percentages  of  the  value  of  the  net  estate  (determined  as  pro- 
vided in  section  403)  is  hereby  imposed  upon  the  transfer  of 
the  net  estate  of  every  decedent  dying  after  the  passage  of 
this  Act,  whether  a  resident  or  nonresident  of  the  United 
States : 

1  per  centum  of  the  amount  of  the  net  estate  not  in  excess 
of  $50,000; 

2  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$50,000  and  does  not  exceed  $150,000; 

3  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$150,000  and  does  not  exceed  $250,000; 

4  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$250,000  and  does  not  exceed  $450,000; 


REGULATIONS  675 

6  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$450,000  and  does  not  exceed  $750,000; 

8  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$750,000  and  does  not  exceed  $1,000,000; 

10  per  centum  of  the  amount  by  which  the  net  estate  ex- 
ceeds $1,000,000  and  does  not  exceed  $1,500,000 ; 

12  per  centum  of  the  amount  by  which  the  net  estate  ex- 
ceeds $1,500,000  and  does  not  exceed  $2,000,000; 

14  per  centum  of  the  amount  by  which  the  net  estate  ex- 
ceeds $2,000,000  and  does  not  exceed  $3,000,000 ; 

16  per  centum  of  the  amount  by  which  the  net  estate  ex- 
ceeds $3,000,000  and  does  not  exceed  $4,000,000 ; 

18  per  centum  of  the  amount  by  which  the  net  estate  ex- 
ceeds $4,000,000  and  does  not  exceed  $5,000,000; 

20  per  centum  of  the  amount  by  which  the  net  estate  ex- 
ceeds $5,000,000  and  does  not  exceed  $8,000,000; 

22  per  centum  of  the  amount  by  which  the  net  estate  ex- 
ceeds $8,000,000  and  does  not  exceed  $10,000,000;  and 

25  per  centum  of  the  amount  by  which  the  net  estate  ex- 
ceeds $10,000,000. 

The  taxes  imposed  by  this  title  or  by  Title  II  of  the  Revenue 
Act  of  1916  (as  amended  by  the  Act  entitled  "An  Act  to  pro- 
vide increased  revenue  to  defray  the  expenses  of  the  increased 
appropriations  for  the  Army  and  Navy  and  the  extensions  of 
fortifications,  and  for  other  purposes,"  approved  March  3, 
1917)  or  by  Title  IX  of  the  Kevenue  Act  of  1917,  or  by  Title 
IV  of  the  Revenue  Act  of  1918,  shall  not  apply  to  the  transfer 
of  the  net  estate  of  any  decedent  who  has  died  or  may  die 
from  injuries  received  or  disease  contracted  in  line  of  duty 
while  serving  in  the  military  or  naval  forces  of  the  United 
States  in  the  war  against  the  German  Government,  or  to  the 
transfer  of  the  net  estate  of  any  citizen  of  the  United  States 
who  has  died  or  may  die  from  injuries  received  or  disease 
contracted  in  line  of  duty  while  serving  in  the  military  or 
naval  forces  of  any  country  while  associated  with  the  United 
States  in  the  prosecution  of  such  war,  or  prior  to  the  entrance 
therein  of  the  United  States,  and  any  tax  collected  upon  such 
transfer  shall  be  refunded  to  the  estate  of  such  decedent. 

SEC.  402.  That  that  value  of  the  gross  estate  of  the  dece- 


(576  INHERITANCE  TAXATION 

dent  shall  be  determined  by  including  the  value  at  the  time  of 
his  death  of  all  property,  real  or  personal,  tangible  or 
intangible,  wherever  situated — 

(a)  To  the  extent  of  the  interest  therein  of  the  decedent 
at  the  time  of  his  death  which  after  his  death  is  subject  to  the 
payment  of  the  charges  against  his  estate  and  the  expenses 
of  its  administration  and  is  subject  to  distribution  as  part  of 
his  estate; 

(b)  To  the  extent  of  any  interest  therein  of  the  surviving 
spouse,  existing  at  the  time  of  the  decedent's  death  as  dower, 
curtesy,  or  by  virtue  of  a  statute  creating  an  estate  in  lieu  of 
dower  or  curtesy; 

(c)  To  the  extent  of  any  interest  therein  of  which  the  dece- 
dent has  at  any  time  made  a  transfer,  or  with  respect  to 
which  he  has  at  any  time  created  a  trust,  in  contemplation  of 
or  intended  to  take  effect  in  possession  or  enjoyment  at  or 
after  his  death  (whether  such  transfer  or  trust  is  made  or 
created  before  or  after  the  passage  of  this  Act),  except  in 
case  of  a  bona  fide  sale  for  a  fair  consideration  in  money  or 
money's  worth.    Any  transfer  of  a  material  part  of  his  prop- 
erty in  the  nature  of  a  final  disposition  or  distribution  thereof, 
made  by  the  decedent  within  two  years  prior  to  his  death 
without  such  a  consideration,  shall,  unless  shown  to  the  con- 
trary, be  deemed  to  have  been  made  in  contemplation  of  death 
within  the  meaning  of  this  title; 

(d)  To  the  extent  of  the  interest  therein  held  jointly  or  as 
tenants  in  the  entirety  by  the  decedent  and  any  other  person, 
or  deposited  in  banks  or  other  institutions  in  their  joint  names 
and  payable  to  either  or  the  survivor,  except  such  part  thereof 
as  may  be  shown  to  have  originally  belonged  to  such  other 
person  and  never  to  have  been  received  or  acquired  by  the 
latter  from  the  decedent  for  less  than  a  fair  consideration  in 
money  or  money's  worth:  Provided,  That  where  such  prop- 
erty or  any  part  thereof,  or  part  of  the  consideration  with 
which  such  property  was  acquired,  is  shown  to  have  been  at 
any  time  acquired  by  such  other  person  from  the  decedent  for 
less  than  a  fair  consideration  in  money  or  money's  worth, 
there  shall  be  excepted  only  such  part  of  the  value  of  such 
property  as  is  proportionate  to  the  consideration  furnished 


BEGULATIONS  677 

by  such  other  person :  Provided  further,  That  where  any  prop- 
erty has  been  acquired  by  gift,  bequest,  devise,  or  inheritance, 
as  a  tenancy  in  the  entirety  by  the  decedent  and  spouse,  or 
where  so  acquired  by  the  decedent  and  any  other  person  as 
joint  tenants  and  their  interests  are  not  otherwise  specified 
or  fixed  by  law,  then  to  the  extent  of  one-half  of  the  value 
thereof; 

(e)  To  the  extent  of  any  property  passing  under  a  general 
power  of  appointment  exercised  by  the  decedent  (1)  by  will, 
or  (2)  by  deed  executed  in  contemplation  of,  or  intended  to 
take  effect  in  possession  or  enjoyment  at  or  after,  his  death, 
except  in  case  of  a  bona  fide  sale  for  a  fair  consideration  in 
money  or  money 's  worth ;  and 

(f)  To  the  extent  of  the  amount  receivable  by  the  executor 
as  insurance  under  policies  taken  out  by  the  decedent  upon 
his  own  life;  and  to  the  extent  of  the  excess  over  $40,000  of 
the  amount  receivable  by  all  other  beneficiaries  as  insurance 
under  policies  taken  out  by  the  decedent  upon  his  own  life. 

SEC.  403.  That  for  the  purpose  of  the  tax  the  value  of  the 
net  estate  shall  be  determined — 

(a)  In  the  case  o'f  a  resident,  by  deducting  from  the  value 
of  the  gross  estate — 

(1)  Such  amounts  for  funeral  expenses,  administration  ex- 
penses, claims  against  the  estate,  unpaid  mortgages  upon,  or 
any  indebtedness  in  respect  to,  property  (except,  in  the  case 
of  a  resident  decedent,  where  such  property  is  not  situated  in 
the  United  States),  losses  incurred  during  the  settlement  of 
the  estate  arising  from  fires,  storms,  shipwreck,  or  other 
casualty,  or  from  theft,  when  such  losses  are  not  compensated 
for  by  insurance  or  otherwise,  and  such  amounts  reasonably 
required  and  actually  expended  for  the  support  during  the 
settlement  of  the  estate  of  those  dependent  upon  the  decedent, 
as  are  allowed  by  the  laws  of  the  jurisdiction,  whether  within 
or  without  the  United  States,  under  which  the  estate  is  being 
administered,  but  not  including  any  income  taxes  upon  in- 
come received  after  the  death  of  the  decedent,  or  any  estate, 
succession,  legacy,  or  inheritance  taxes ; 

(2)  An  amount  equal  to  the  value  of  any  property  forming 
a  part  of  the  gross  estate  situated  in  the  United  States  of  any 


678  INHERITANCE  TAXATION 

person  who  died  within  five  years  prior  to  the  death  of  the 
decedent  where  such  property  can  be  identified  as  having  been 
received  by  the  decedent  from  such  prior  decedent  by  gift, 
bequest,  devise,  or  inheritance,  or  which  can  be  identified  as 
having  been  acquired  in  exchange  for  property  so  received: 
Provided,  That  this  deduction  shall  be  allowed  only  where  an 
estate  tax  under  this  or  any  prior  Act  of  Congress  was  paid 
by  or  on  behalf  of  the  estate  of  such  prior  decedent,  and  only 
in  the  amount  of  the  value  placed  by  the  Commissioner  on 
such  property  in  determining  the  value  of  the  gross  estate  of 
such  prior  decedent,  and  only  to  the  extent  that  the  value  of 
such  property  is  included  in  the  decedent's  gross  estate  and 
not  deducted  under  paragraphs  (1)  or  (3)  of  subdivision  (a) 
of  this  section.  This  deduction  shall  be  made  in  case  of  the 
estates  of  all  decedents  who  have  died  since  September  8, 
1916; 

(3)  The  amount  of  all  bequests,  legacies,  devises,  or  trans- 
fers, except  bona  fide  sales  for  a  fair  consideration  in  money 
or  money's  worth,  in  contemplation  of  or  intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  the  decedent's 
death,  to  or  for  the  use  of  the  United  States,  any  State,  Terri- 
tory, any  political  subdivision  thereof,  or  the  District  of 
Columbia,  for  exclusively  public  purposes,  or  to  or  for  the  use 
of  any  corporation  organized  and  operated  exclusively  for 
religious,  charitable,  scientific,  literary,  or  educational  pur- 
poses, including  the  encouragement  of  art  and  the  prevention 
of  cruelty  to  children  or  animals,  no  part  of  the  net  earnings 
of  which  inures  to  the  benefit  of  any  private  stockholder  or 
individual,  or  to  a  trustee  or  trustees  exclusively  for  such 
religious,  charitable,  scientific,  literary,  or  educational  pur- 
poses.   This  deduction  shall  be  made  in  case  of  the  estates 
of  all  decedents  who  have  died  since  December  31,  1917 ;  and 

(4)  An  exemption  of  $50,000; 

(b)  In  the  case  of  a  nonresident,  by  deducting  from  the 
value  of  that  part  of  his  gross  estate  which  at  the  time  of  his 
death  is  situated  in  the  United  States— 

(1)  That  proportion  of  the  deductions  specified  in  para- 
graph (1)  of  subdivision  (a)  of  this  section  which  the  value 


REGULATIONS  679 

of  such  part  bears  to  the  value  of  his  entire  gross  estate,  wher- 
ever situated,  but  in  no  case  shall  the  amount  so  deducted 
exceed  10  per  centum  of  the  value  of  that  part  of  his  gross 
estate  which  at  the  time  of  his  death  is  situated  in  the  United 
States ; 

(2)  An  amount  equal  to  the  value  of  any  property  forming 
a  part  of  the  gross  estate  situated  in  the  United  States  of  any 
person  who  died  within  five  years  prior  to  the  death  of  the 
decedent  where  such  property  can  be  identified  as  having  been 
received  by  the  decedent  from  such  prior  decedent  by  gift, 
bequest,  devise,  or  inheritance,  or  which  can  be  identified  as 
having  been  acquired  in  exchange  for  property  so  received: 
Provided,  That  this  deduction  shall  be  allowed  only  where  an 
estate  tax  under  this  or  any  prior  Act  of  Congress  was  paid 
by  or  on  behalf  of  the  estate  of  such  prior  decedent,  and  only 
in  the  amount  of  the  value  placed  by  the  Commissioner  on 
such  propertyy  in  determining  the  value  of  the  gross  estate 
of  such  prior  decedent,  and  only  to  the  extent  that  the  value 
of  such  property  is  included  in  that  part  of  the  decedent's 
gross  estate  which  at  the  time  of  his  death  is  situated  in  the 
United  States  and  not  deducted  under  paragraphs  (1)  or  (3) 
of  subdivision  (b)  of  this  section.     This  deduction  shall  be 
made  in  case  of  the  estates  of  all  decedents  who  have  died 
since  September  8,  1916 ;  and 

(3)  The  amount  of  all  bequests,  legacies,  devises,  or  trans- 
fers, except  bona  fide  sales  for  a  fair  consideration,  in  money 
or  money's  worth,  in  contemplation  of  or  intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  the  decedent's 
death,  to  or  for  the  use  of  the  United  States,  any  State,  Terri- 
tory, any  political   subdivision  thereof,  or   the   Dsitrict   of 
Columbia,  for  exclusively  public  purposes,  or  to  or  for  the 
use  of  any  domestic  corporation  organized  and  operated  ex- 
clusively for  religious,  charitable,  scientific,  literary,  or  educa- 
tional purposes,  including  the  encouragement  of  art  and  the 
prevention  of  cruelty  to  children  or  animals,  no  part  of  the 
net  earnings  of  which  inures  to  the  benefit  of  any  private 
stockholder  or  individual,  or  to  a  trustee  or   trustees   ex- 
clusively for  such  religious,  charitable,  scientific,  literary,  or 
educational  purposes  within  the  United  States.    This  deduc- 


680 

tion  shall  be  made  in  case  of  the  estates  of  all  decedents  who 
have  died  since  December  31,  1917. 

No  deduction  shall  be  allowed  in  the  case  of  a  nonresident 
unless  the  executor  includes  in  the  return  required  to  be  filed 
under  section  404  the  value  at  the  time  of  his  death  of  that 
part  of  the  gross  estate  of  the  nonresident  not  situated  in  the 
United  States. 

For  the  purpose  of  this  title  stock  in  a  domestic  corporation 
owned  and  held  by  a  nonresident  decedent  shall  be  deemed 
property  within  the  United  States,  and  any  property  of  which 
the  decedent  has  made  a  transfer  or  with  respect  to  which  he 
has  created  a  trust,  within  the  meaning  of  subdivision  (c)  of 
section  402,  shall  be  deemed  to  be  situated  in  the  United 
States,  if  so  situated  either  at  the  time  of  the  transfer  or  the 
creation  of  the  trust,  or  at  the  time  of  the  decedent's  death. 

The  amount  receivable  as  insurance  upon  the  life  of  a  non- 
resident decedent,  and  any  moneys  deposited  with  any  person 
carrying  on  the  banking  business,  by  or  for  a  nonresident  dece- 
dent who  was  not  engaged  in  business  in  the  United  States  at 
the  time  of  his  death,  shall  not,  for  the  purpose  of  this  title, 
be  deemed  property  within  the  United  States. 

Missionaries  duly  commissioned  and  serving  under  boards 
of  foreign  missions  of  the  various  religious  denominations  in 
the  United  States,  dying  while  in  the  foreign  missionary  ser- 
vice of  such  boards,  shall  not,  by  reason  merely  of  their  inten- 
tion to  permanently  remain  in  such  foreign  service,  be  deemed 
nonresidents  of  the  United  States,  but  shall  be  presumed  to 
be  residents  of  the  State,  the  District  of  Columbia,  or  the 
Territories  of  Alaska  or  Hawaii  wherein  they  respectively 
resided  at  the  time  of  their  commission  and  their  departure 
for  such  foreign  service. 

In  the  case  of  any  estate  in  respect  to  which  the  tax  has 
been  paid,  if  necessary  to  allow  the  benefit  of  the  deduction 
under  paragraphs  (2)  and  (3)  of  subdivision  (a)  or  (b)  the 
tax  shall  be  redetermined  and  any  excess  of  tax  paid  shall  be 
refunded  to  the  executor. 

SEC.  404.  That  the  executor,  within  two  months  after  the 
decedent's  death,  or  within  a  like  period  after  qualifying  as 
such,  shall  give  written  notice  thereof  to  the  collector.  The 


REGULATIONS  681 

executor  shall  also,  at  such  times  and  in  such  manner  as  may 
be  required  by  regulations  made  pursuant  to  law,  file  with  the 
collector  a  return  under  oath  in  duplicate,  setting  forth  (a)  the 
value  of  the  gross  estate  of  the  decedent  at  the  time  of  his 
death,  or,  in  case  of  a  nonresident,  of  that  part  of  his  gross 
estate  situated  in  the  United  States;  (b)  the  deductions 
allowed  under  section  403;  (c)  the  value  of  the  net  estate  of 
the  decedent  as  defined  in  section  403 ;  and  (d)  the  tax  paid  or 
payable  thereon;  or  such  part  of  such  information  as  may  at 
the  time  be  ascertainable  and  such  supplemental  data  as  may 
be  necessary  to  establish  the  correct  tax. 

Return  shall  be  made  in  all  cases  where  the  gross  estate  at 
the  death  of  the  decedent  exceeds  $50,000,  and  in  the  case  of 
the  estate  of  every  nonresident  any  part  of  whose  gross  estate 
is  situated  in  the  United  States.  If  the  executor  is  unable  to 
make  a  complete  return  as  to  any  part  of  the  gross  estate  of 
the  decedent,  he  shall  include  in  his  return  a  description  of 
such  part  and  the  name  of  every  person  holding  a  legal  or 
beneficial  interest  therein,  and  upon  notice  from  the  collector 
such  person  shall  in  like  manner  make  a  return  as  to  such 
part  of  the  gross  estate.  The  Commissioner  shall  make  all 
assessments  of  the  tax  under  the  authority  of  existing  ad- 
ministrative special  and  general  provisions  of  law  relating  to 
the  assessment  and  collection  of  taxes. 

SEC.  405.  That  if  no  administration  is  granted  upon  the 
estate  of  a  decedent,  or  if  no  return  is  filed  as  provided  in 
Section  404,  or  if  a  return  contains  a  false  or  incorrect  state- 
ment of  a  material  fact,  the  collector  or  deputy  collector  shall 
make  a  return  and  the  Commissioner  shall  assess  the  tax 
thereon. 

SEC.  406.  That  the  tax  shall  be  due  and  payable  one  year 
after  the  decedent's  death;  but  in  any  case  where  the  Com- 
missioner finds  that  payment  of  the  tax  within  such  period 
would  impose  undue  hardship  upon  the  estate,  he  may  grant 
an  extension  or  extensions  of  time  for  payment  not  to  exceed 
three  years  from  the  due  date. 

The  executor  shall  pay  the  tax  to  the  collector  or  deputy 
collector,  and  to  such  portion  of  the  tax,  not  paid  within  one 
year  and  six  months  after  the  decedent's  death,  interest  at 


682 

the  rate  of  6  per  centum  per  annum  from  the  expiration  of 
one  year  after  such  death  shall  be  added  as  part  of  the  tax 
irrespective  of  any  extension  or  extensions  of  time  that  may 
have  been  granted  for  the  payment  of  the  tax,  or  any  portion 
thereof. 

SEC.  407.  That  where  the  amount  of  tax  shown  upon  a  re- 
turn made  in  good  faith  has  been  fully  paid,  or  time  for  pay- 
ment has  been  extended,  as  provided  in  Section  406,  beyond 
one  year  and  six  months  after  the  decedent's  death,  and  an 
additional  amount  of  tax  is,  after  the  expiration  of  such  period 
of  one  year  and  six  months,  found  to  be  due,  then  such  addi- 
tional amount  shall  be  paid  upon  notice  and  demand  by  the 
collector,  and  if  it  remains  unpaid  for  one  month  after  such 
notice  and  demand  there  shall  be  added  as  part  of  the  tax 
interest  on  such  additional  amount  at  the  rate  of  10  per  cen- 
tum per  annum  from  the  expiration  of  such  period  until  paid, 
and  such  additional  tax  and  interest  shall,  until  paid,  be  and 
remain  a  lien  upon  the  entire  gross  estate. 

The  collector  shall  grant  to  the  person  paying  the  tax  dupli- 
cate receipts,  either  of  which  shall  be  sufficient  evidence  of 
such  payment,  and  shall  entitle  the  executor  to  be  credited 
and  allowed  the  amount  thereof  by  any  court  having  juris- 
diction to  audit  or  settle  his  accounts. 

If  the  executor  files  a  complete  return  and  makes  written 
application  to  the  Commissioner  for  determination  of  the 
amount  of  the  tax  and  discharge  from  personal  liability  there- 
for, the  Commissioner,  as  soon  as  possible  and  in  any  event 
within  one  year  after  receipt  of  such  application,  shall  notify 
the  executor  of  the  amount  of  the  tax,  and  upon  payment 
thereof  the  executor  shall  be  discharged  from  personal  lia- 
bility for  any  additional  tax  thereafter  found  to  be  due,  and 
shall  be  entitled  to  receive  a  receipt  or  writing  showing  such 
discharge :  Provided,  however,  That  such  discharge  shall  not 
operate  to  release  the  gross  estate  from  the  lien  of  any  addi- 
tional tax  that  may  thereafter  be  found  to  be  due  while  the 
title  to  such  gross  estate  remains  in  the  heirs,  devisees,  or 
distributees  thereof ;  but  no  part  of  such  gross  estate  shall  be 
subject  to  such  lien  or  to  any  claim  or  demand  for  any  such 


KEGULATIONS  683 

tax  if  the  title  thereto  has  passed  to  a  bona  fide  purchaser  for 
value. 

SEC.  408.  That  if  the  tax  herein  imposed  is  not  paid  on  or 
before  the  due  date  thereof  the  collector  shall,  upon  instruc- 
tion from  the  Commissioner,  proceed  to  collect  the  tax  under 
the  provisions  of  general  law,  or  commence  appropriate  pro- 
ceedings in  any  court  of  the  United  States,  in  the  name  of  the 
United  States,  to  subject  the  property  of  the  decedent  to  be 
sold  under  the  judgment  or  decree  of  the  court.  From  the 
proceeds  of  such  sale  the  amount  of  the  tax,  together  with 
the  costs  and  expenses  of  every  description  to  be  allowed  by 
the  court,  shall  be  first  paid,  and  the  balance  shall  be  deposited 
according  to  the  order  of  the  court,  to  be  paid  under  its 
direction  to  the  person  entitled  thereto. 

If  the  tax  or  any  part  thereof  is  paid  by,  or  collected  out  of 
that  part  of  the  estate  passing  to  or  in  the  possession  of,  any 
person  other  than  the  executor  in  his  capacity  as  such,  such 
person  shall  be  entitled  to  reimbursement  out  of  any  part  of 
the  estate  still  undistributed  or  by  a  just  and  equitable  con- 
tribution by  the  persons  whose  interest  in  the  estate  of  the 
decedent  would  have  been  reduced  if  the  tax  had  been  paid 
before  the  distribution  of  the  estate  or  whose  interest  is  sub- 
ject to  equal  or  prior  liability  for  the  payment  of  taxes,  debts, 
or  other  charges  against  the  estate,  it  being  the  purpose  and 
intent  of  this  title  that  so  far  as  is  practicable  and  unless 
otherwise  directed  by  the  will  of  the  decedent  the  tax  shall 
be  paid  out  of  the  estate  before  its  distribution.  If  any  part 
of  the  gross  estate  consists  of  proceeds  of  policies  of  insur- 
ance upon  the  life  of  the  decedent  receivable  by  a  beneficiary 
other  than  the  executor,  the  executor  shall  be  entitled  to  re- 
cover from  such  beneficiary  such  portion  of  the  total  tax  paid 
as  the  proceeds,  in  excess  of  $40,000,  of  such  policies  bear  to 
the  net  estate.  If  there  is  more  than  one  such  beneficiary  the 
executor  shall  be  entitled  to  recover  from  such  beneficiaries 
in  the  same  ratio. 

SEC.  409.  That  unless  the  tax  is  sooner  paid  in  full,  it  shall 
be  a  lien  for  ten  years  upon  the  gross  estate  of  the  decedent, 
except  that  such  part  of  the  gross  estate  as  is  used  for  the 
payment  of  charges  against  the  estate  and  expenses  of  its 


684  INHERITANCE  TAXATION 

administration,  allowed  by  any  court  having  jursidiction 
thereof,  shall  be  divested  of  such  lien.  If  the  Commissioner 
is  satisfied  that  the  tax  liability  of  an  estate  has  been  fully 
discharged  or  provided  for,  he  may,  under  regulations  pre- 
scribed by  him,  with  the  approval  of  the  Secretary,  issue  his 
certificate,  releasing  any  or  all  property  of  such  estate  from 
the  lien  herein  imposed. 

If  (a)  the  decedent  makes  a  transfer  of,  or  creates  a  trust 
with  respect  to,  any  property  in  contemplation  of  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  his  death 
(except  in  the  case  of  a  bona  fide  sale  for  a  fair  consideration 
in  money  or  money's  worth)  or  (b)  if  insurance  passes  under 
a  contract  executed  by  the  decedent  in  favor  of  a  specific 
beneficiary,  and  if  in  either  case  the  tax  in  respect  thereto  is 
not  paid  when  due,  then  the  transferee,  trustee,  or  beneficiary 
shall  be  personally  liable  for  such  tax,  and  such  property,  to 
the  extent  of  the  decedent's  interest  therein  at  the  time  of 
such  transfer,  or  to  the  extent  of  such  beneficiary's  interest 
Tinder  such  contract  of  insurance,  shall  be  subject  to  a  like 
lien  equal  to  the  amount  of  such  tax.  Any  part  of  such  prop- 
erty sold  by  such  transferee  or  trustee  to  a  bona  fide  pur- 
chaser for  a  fair  consideration  in  money  or  money's  worth 
shall  be  divested  of  the  lien  and  a  like  lien  shall  then  attach  to 
.all  the  property  of  such  transferee  or  trustee,  except  any  part 
sold  to  a  bona  fide  purchaser  for  a  fair  consideration  in 
money  or  money's  worth. 

SEC.  410.  That  whoever  knowingly  makes  any  false  state- 
ment in  any  notice  or  return  required  to  be  filed  under  this 
title  shall  be  liable  to  a  penalty  of  not  exceeding  $5,000,  or 
imprisonment  not  exceeding  one  year,  or  both. 

Whoever  fails  to  comply  with  any  duty  imposed  upon  him 
by  section  404,  or,  having  in  his  possession  or  control  any 
record,  file,  or  paper,  containing  or  supposed  to  contain  any 
information  concerning  the  estate  of  the  decedent,  or,  having 
in  his  possession  or  control  any  property  comprised  in  the 
gross  estate  of  the  decedent,  fails  to  exhibit  the  same  upon 
request  to  the  Commissioner  or  any  collector  or  law  officer 
of  the  United  States,  or  his  duly  authorized  deputy  or  agent, 
who  desires  to  examine  the  same  in  the  performance  of  his 


REGULATIONS  685 

duties  under  this  title,  shall  be  liable  to  a  penalty  of  not 
exceeding  $500,  to  be  recovered,  with  costs  of  suit,  in  a  civil 
action  in  the  name  of  the  United  States. 

SEC.  411. (a)  That  the  term  "resident"  as  used  in  this  title 
includes  a  citizen  of  the  United  States  with  respect  to  whose 
property  any  probate  or  administration  proceedings  are  had 
in  the  United  States  Court  for  China.  Where  no  part  of  the 
gross  estate  of  such  decedent  is  situated  in  the  United  States 
at  the  time  of  his  death,  the  total  amount  of  tax  due  under  this 
title  shall  be  paid  to  or  collected  by  the  clerk  of  such  court, 
but  where  any  part  of  the  gross  estate  of  such  decedent  is 
situated  in  the  United  States  at  the  time  of  his  death,  the  tax 
due  under  this  title  shall  be  paid  to  or  collected  by  the  col- 
lector of  the  district  in  which  is  situated  the  part  of  the  gross 
estate  in  the  United  States,  or,  if  such  part  is  situated  in  more 
than  one  district,  then  the  collector  of  such  district  as  may  be 
designated  by  the  Commissioner. 

(b)  For  the  purpose  of  this  section  the  clerk  of  the  United 
States  Court  for  China  shall  be  a  collector  for  the  territorial 
jurisdiction  of  such  court,  and  taxes  shall  be  collected  by  and 
paid  to  him  in  the  same  manner  and  subject  to  the  same  pro- 
visions of  law,  including  penalties,  as  the  taxes  collected  by 
and  paid  to  a  collector  in  the  United  States. 

(c)  The  proviso  in  the  Act  entitled  "An  Act  making  appro- 
priation for  the  Diplomatic  and  Consular  Service  for  the 
fiscal  year  ending  June  30,  1921,"  approved  June  4,  1920, 
which  reads  as  follows:     "Provided,  That  in  probate  and 
administration  proceedings  there  shall  be  collected  by  said 
clerk,  before  entering  the  order  of  final  distribution,  to  be 
paid  into  the  Treasury  of  the  United  States,  the  same  inherit- 
ance taxes  from  time  to  time  collected  under  the  laws  enacted 
by  the  Congress  of  the  United  States  from  the  estates  of 
decedents  residing  within  the  territorial  jurisdiction  of  the 
United  States,"  is  hereby  repealed. 


6S6  INHERITANCE  TAXATION 


Revenue  Act  of  1918. 
TITLE  IV.— ESTATE  TAX. 

SEC.  400.  That  when  used  in  this  title — 

The  term  " executor"  means  the  executor  or  administrator 
of  the  decedent,  or,  if  there  is  no  executor  or  administrator, 
any  person  who  takes  possession  of  any  property  of  the  dece- 
dent; and 

The  term  "collector"  means  the  collector  of  internal  reve- 
nue of  the  district  in  which  was  the  domicile  of  the  decedent 
at  the  time  of  his  death,  or,  if  there  was  no  such  domicile  in 
the  United  States,  then  the  collector  of  the  district  in  which 
is  situated  the  part  of  the  gross  estate  of  the  decedent  in  the 
United  States,  or,  if  such  part  of  the  gross  estate  is  situated 
in  more  than  one  district,  then  the  collector  of  internal 
revenue  of  such  district  as  may  be  designated  by  the  Com- 
missioner. 

SEC.  401.  That  (in  lieu  of  the  tax  imposed  by  Title  II  of 
the  Revenue  Act  of  1916,  as  amended,  and  in  lieu  of  the  tax 
imposed  by  Title  IX  of  the  Revenue  Act  of  1917)  a  tax  equal 
to  the  sum  of  the  following  percentages  of  the  value  of  the  net 
estate  (determined  as  provided  in  section  403)  is  hereby  im- 
posed upon  the  transfer  of  the  net  estate  of  every  decedent 
dying  after  the  passage  of  this  Act,  whether  a  resident  or 
nonresident  of  the  United  States : 

1  per  centum  of  the  amount  of  the  net  estate  not  in  excess 
of  $50,000; 

2  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$50,000  and  does  not  exceed  $150,000; 

3  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$150,000  and  does  not  exceed  $250,000; 

4  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$250,000  and  does  not  exceed  $450,000; 

6  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$450,000  and  does  not  exceed  $750,000; 

8  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$750,000  and  does  not  exceed  $1,000,000; 


REGULATIONS  687 

10  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$1,000,000  and  does  not  exceed  $1,500,000; 

12  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$1,500,000  and  does  not  exceed  $2,000,000. 

14  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$2,000,000  and  does  not  exceed  $3,000,000 ; 

16  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$3,000,000  and  does  not  exceed  $4,000,000; 

18  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$4,000,000  and  does  not  exceed  $5,000,000; 

20  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$5,000,000  and  does  not  exceed  $8,000,000; 

22  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$8,000,000  and  does  not  exceed  $10,000,000;  and 

25  per  centum  of  the  amount  by  which  the  net  estate  exceeds 
$10,000,000. 

The  taxes  imposed  by  this  title  or  by  Title  II  of  the  Revenue 
Act  of  1916  (as  amended  by  the  Act  entitled  "An  Act  to 
provide  increased  revenue  to  defray  the  expenses  of  the  in- 
creased appropriations  for  the  Army  and  Navy  and  the  ex- 
tensions of  fortifications,  and  for  other  purposes,"  approved 
March  3,  1917)  or  by  Title  IX  of  the  Revenue  Act  of  1917, 
shall  not  apply  to  the  transfer  of  the  net  estate  of  any  dece- 
dent who  has  died  or  may  die  while  serving  in  the  military 
or  naval  forces  of  the  United  States  in  the  present  war  or 
from  injuries  received  or  disease  contracted  while  in  such 
service,  and  any  such  tax  collected  upon  such  transfer  shall 
be  refunded  to  the  executor. 

SEC.  402.  That  the  value  of  the  gross  estate  of  the  decedent 
shall  be  determined  by  including  the  value  at  the  time  of  his 
death  of  all  property,  real  or  personal,  tangible  or  intangible, 
wherever  situated — 

(a)  To  the  extent  of  the  interest  therein  of  the  decedent  at 
the  time  of  his  death  which  after  his  death  is  subject  to  the 
payment  of  the  charges  against  his  estate  and  the  expenses  of 
its  administration  and  is  subject  to  distribution  as  part  of 
his  estate; 

(b)  To  the  extent  of  any  interest  therein  of  the  surviving 
spouse,  existing  at  the  time  of  the  decedent's  death  as-  dower, 


688  INHERITANCE  TAXATION 

eurtesy,  or  by  virtue  of  a  statute  creating  an  estate  in  lieu 
of  dower  or  eurtesy ; 

(c)  To  the  extent  of  any  interest  therein  of  which  the  dece- 
dent has  at  any  time  made  a  transfer,  or  with  respect  to  which 
he  has  at  any  time  created  a  trust,  in  contemplation  of  or 
intended  to  take  effect  in  possession  or  enjoyment  at  or  after 
his  death  (whether  such  transfer  or  trust  is  made  or  created 
before  or  after  the  passage  of  this  Act),  except  in  case  of  a 
bona  fide  sale  for  a  fair  consideration  in  money  or  money's 
worth.    Any  transfer  of  a  material  part  of  his  property  in 
the  nature  of  a  final  disposition  or  distribution  thereof,  made 
by  the  decedent  within  two  years  prior  to  his  death  without 
such  a  consideration,  shall,  unless  shown  to  the  contrary,  be 
deemed  to  have  been  made  in  contemplation  of  death  within 
the  meaning  of  this  title; 

(d)  To  the  extent  of  the  interest  therein  held  jointly  or  as 
tenants  in  the  entirety  by  the  decedent  and  any  other  person, 
or  deposited  in  banks  or  other  institutions  in  their  joint  names 
and  payable  to  either  or  the  survivor,  except  such  part  thereof 
as  may  be  shown  to  have  originally  belonged  to  such  other 
person  and  never  to  have  belonged  to  the  decedent; 

(e)  To  the  extent  of  any  property  passing  under  a  general 
power  of  appointment  exercised  by  the  decedent  (1)  by  will, 
or  (2)  by  deed  executed  in  contemplation  of,  or  intended  to 
take  effect  in  possession  or  enjoyment  at  or  after,  his  death, 
except  in  case  of  a  bona  fide  sale  for  a  fair  consideration  in 
money  or  money's  worth;  and 

(f)  To  the  extent  of  the  amount  receivable  by  the  executor 
as  insurance  under  policies  taken  out  by  the  decedent  upon 
his  own  life;  and  to  the  extent  of  the  excess  over  $40,000  of 
the  amount  receivable  by  all  other  beneficiaries  as  insurance 
under  policies  taken  out  by  the  decedent  upon  his  own  life. 

SEC.  403.  That  for  the  purpose  of  the  tax  the  value  of  the 
net  estate  shall  be  determined — 

(a)  In  the  case  of  a  resident,  by  deducting  from  the  value 
of  the  gross  estate — 

(1)  Such  amounts  for  funeral  expenses,  administration  ex- 
penses, claims  against  the  estate,  unpaid  mortgages,  losses 
incurred  during  the  settlement  of  the  estate  arising  from 


REGULATIONS  689 

fires,  storms,  shipwreck,  or  other  casualty,  or  from  theft,  when 
such  losses  are  not  compensated  for  by  insurance  or  other- 
wise, and  such  amounts  reasonably  required  and  actually 
expended  for  the  support  during  the  settlement  of  the  estate 
of  those  dependent  upon  the  decedent,  as  are  allowed  by  the 
laws  of  the  jurisdiction,  whether  within  or  without  the  United 
States,  under  which  the  estate  is  being  administered,  but  not 
including  any  income  taxes  upon  income  received  after  the 
death  of  the  decedent,  or  any  estate,  succession,  legacy,  or 
inheritance  taxes ; 

(2)  An  amount  equal  to  the  value  at  the  time  of  the  dece- 
dent's death  of  any  property,  real,  personal,  or  mixed,  which 
can  be  identified  as  having  been  received  by  the  decedent  as 
a  share  in  the  estate  of  any  person  wiio  died  within  five  years 
prior  to  the  death  of  the  decedent,  or  which  can  be  identified 
as  having  been  acquired  by  the  decedent  in  exchange  for  prop- 
erty so  received,  if  an  estate  tax  under  the  Revenue  Act  of 
1917  or  under  this  Act  was  collected  from  such  estate,  and  if 
such  property  is  included  in  the  decedent 's  gross  estate ; 

(3)  The  amount  of  all  bequests,  legacies,  devises,  or  gifts, 
to  or  for  the  use  of  the  United  States,  any  State,  Territory, 
any  political  subdivision  thereof,  or  the  District  of  Columbia, 
for  exclusively  public  purposes,  or  to  or  for  the  use  of  any 
corporation  organized  and  operated  exclusively  for  religious, 
charitable,   scientific,  literary,   or  educational  purposes,  in- 
cluding the  encouragement  of  art  and  the  prevention  of  cruelty 
to  children  or  animals,  no  part  of  the  net  earnings  of  which 
inures  to  the  benefit  of  any  private  stockholder  or  individual, 
or  to  a  trustee  or  trustees  exclusively  for  such  religious, 
charitable,  scientific,  literary,  or  educational  purposes.    This 
deduction  shall  be  made  in  case  of  the  estate  of  all  decedents 
who  have  died  since  December  31, 1917 ;  and 

(4)  An  exemption  of  $50,000; 

(b)  In  the  case  of  a  nonresident,  by  deducting  from  the 
value  of  that  part  of  his  gross  estate  which  at  the  time  of  his 
death  is  situated  in  the  United  States — 

(1)  That  proportion  of  the  deductions  specified  in  para- 
graph (1)  of  subdivision  (a)  of  this  section  which  the  value 
of  such  part  bears  to  the  value  of  his  entire  gross  estate, 
44 


690  INHERITANCE  TAXATION 

wherever  situated,  but  in  no  case  shall  the  amount  so  deducted 
exceed  10  per  centum  of  the  value  of  that  part  of  his  gross 
estate  which  at  the  time  of  his  death  is  situated  in  the  United 
States ; 

(2)  An  amount  equal  to  the  value  at  the  time  of  the  dece- 
dent's death  of  any  property,  real,  personal,  or  mixed,  which 
can  be  identified  as  having  been  received  by  the  decedent  as  a 
share  in  the  estate  of  any  person  who  died  within  five  years 
prior  to  the  death  of  the  decedent,  or  which  can  be  identified 
as  having  been  acquired  by  the  decedent  in  exchange  for 
property  so  received,  if  an  estate  tax  under  the  Revenue  Act 
of  1917  or  under  this  Act  was  collected  from  such  estate,  and 
if  such  property  is  included  in  that  part  of  the  decedent's 
gross  estate  which  at  the  time  of  his  death  is  situated  in  the 
United  States;  and 

(3)  The  amount  of  all  bequests,  legacies,  devises,  or  gifts, 
to  or  for  the  use  of  the  United  States,  any  State,  Territory, 
any  political  subdivision  thereof,  or  the  District  of  Columbia, 
for  exclusively  public  purposes,  or  to  or  for  the  use  of  any 
domestic  corporation  organized  and  operated  exclusively  for 
religious,  charitable,  scientific,  literary,  or  educational  pur- 
poses, including  the  encouragement  of  art  and  the  prevention 
of  cruelty  to  children  or  animals,  no  part  of  the  net  earnings 
of  which  inures  to  the  benefit  of  any  private  stockholder  or 
individual,  or  to  a  trustee  or  trustees  exclusively  for  such 
religious,  charitable,  scientific,  literary,  or  educational  pur- 
poses within  the  United  States.    This  deduction  shall  be  made 
in  case  of  the  estates  of  all  decedents  who  have  died  since 
December  31,  1917 ;  and 

No  deduction  shall  be  allowed  in  the  case  of  a  nonresident 
unless  the  executor  includes  in  the  return  required  to  be  filed 
under  section  404  the  value  at  the  time  of  his  death  of  that 
part  of  the  gross  estate  of  the  nonresident  not  situated  in  the 
United  States. 

For  the  purpose  of  this  title  stock  in  a  domestic  corporation 
owned  and  held  by  a  nonresident  decedent,  and  the  amount 
receivable  as  insurance  upon  the  life  of  a  nonresident  dece- 
dent where  the  insurer  is  a  domestic  corporation,  shall  be 
deemed  property  within  the  United  States,  and  any  property 


REGULATIONS  691 

of  which  the  decedent  has  made  a  transfer  or  with  respect  to 
which  he  has  created  a  trust,  within  the  meaning  of  subdivi- 
sion (c)  of  section  402,  shall  be  deemed  to  be  situated  in  the 
United  States,  if  so  situated  either  at  the  time  of  the  transfer 
or  the  creation  of  the  trust,  or  at  the  time  of  the  decedent's 
death. 

In  the  case  of  any  estate  in  respect  to  which  the  tax  under 
existing  law  has  been  paid,  if  necessary  to  allow  the  benefit 
of  the  deduction  under  paragraph  (3)  of  subdivision  (a)  or 
(b)  the  tax  shall  be  redetermined  and  any  excess  of  tax  paid 
shall  be  refunded  to  the  executor. 

SEC.  404.  That  the  executor,  within  sixty  days  after  qualify- 
ing as  such,  or  after  coming  into  possession  of  any  property 
of  the  decedent,  whichever  event  first  occurs,  shall  give  written 
notice  thereof  to  the  collector.  The  executor  shall  also,  at 
such  times  and  in  such  manner  as  may  be  required  by  regula- 
tions made  pursuant  to  law,  file  with  the  collector  a  return 
under  oath  in  duplicate,  setting  forth  (a)  the  value  of  the 
gross  estate  of  the  decedent  at  the  time  of  his  death,  or,  in 
case  of  a  nonresident,  of  that  part  of  his  gross  estate  situated 
in  the  United  States;  (b)  the  deductions  allowed  under  sec- 
tion 403;  (c)  the  value  of  the  net  estate  of  the  decedent  as 
defined  in  section  403;  and  (d)  the  tax  paid  or  payable 
thereon ;  or  such  part  of  such  information  as  may  at  the  time 
be  ascertainable  and  such  supplemental  data  as  may  be  neces- 
sary to  establish  the  correct  tax. 

Return  shall  be  made  in  all  cases  where  the  gross  estate  at 
the  death  of  the  decedent  exceeds  $50,000,  and  in  the  case  of 
the  estate  of  every  nonresident  any  part  of  whose  gross  estate 
is  situated  in  the  United  States.  If  the  executor  is  unable  to 
make  a  complete  return  as  to  any  part  of  the  gross  estate  of 
the  decedent,  he  shall  include  in  his  return  a  description  of 
such  part  and  the  name  of  every  person  holding  a  legal  or 
beneficial  interest  therein,  and  upon  notice  from  the  collector 
such  person  shall  in  like  manner  make  a  return  as  to  such  part 
of  the  gross  estate.  The  Commissioner  shall  make  all  assess- 
ments of  the  tax  under  the  authority  of  existing  administra- 
tive special  and  general  provisions  of  law  relating  to  the 
assessment  and  collection  of  taxes. 


(J92  INHERITANCE  TAXATION 

SEC.  405.  That  if  no  administration  is  granted  upon  the 
estate  of  a  decedent,  or  if  no  return  is  filed  as  provided  in 
section  404,  or  if  a  return  contains  a  false  or  incorrect  state- 
ment of  a  material  fact,  the  collector  or  deputy  collector  shall 
make  a  return  and  the  Commissioner  shall  assess  the  tax 
thereon. 

SEC.  406.  That  the  tax  shall  be  due  one  year  after  the 
decedent's  death;  but  in  any  case  where  the  Commissioner 
finds  that  payment  of  the  tax  within  one  year  after  the  dece- 
dent's death  would  impose  undue  hardship  upon  the  estate, 
he  may  grant  an  extension  of  time  for  the  payment  of  the 
tax  for  a  period  not  to  exceed  three  years  from  the  due  date. 
If  the  tax  is  not  paid  within  one  year  and  180  days  after  the 
decedent's  death,  interest  at  the  rate  of  6  per  centum  per 
annum  from  the  expiration  of  one  year  after  the  decedent's 
death  shall  be  added  as  part  of  the  tax. 

SEC.  407.  That  the  executor  shall  pay  the  tax  to  the  collector 
or  deputy  collector.  If  the  amount  of  the  tax  cannot  be 
determined,  the  payment  of  a  sum  of  money  sufficient,  in  the 
opinion  of  the  collector,  to  discharge  the  tax  shall  be  deemed 
payment  in  full  of  the  tax,  except  as  in  this  section  otherwise 
provided.  If  the  amount  so  paid  exceeds  the  amount  of  the 
tax  as  finally  determined,  the  Commissioner  shall  refund 
such  excess  to  the  executor.  If  the  amount  of  the  tax  as  finally 
determined  exceeds  the  amount  so  paid,  the  collector  shall 
notify  the  executor  of  the  amount  of  such  excess  and  demand 
payment  thereof.  If  such  excess  part  of  the  tax  is  not  paid 
within  thirty  days  after  such  notification,  interest  shall  be 
added  thereto  at  the  rate  of  10  per  centum  per  annum  from 
the  expiration  of  such  thirty  days'  period  until  paid,  and  the 
amount  of  such  excess  shall  be  a  lien  upon  the  entire  gross 
estate,  except  such  part  thereof  as  may  have  been  sold  to  a 
bona  fide  purchaser  for  a  fair  consideration  in  money  or 
money's  worth. 

The  collector  shall  grant  to  the  person  paying  the  tax  dupli- 
cate receipts,  either  of  which  shall  be  sufficient  evidence  of 
such  payment,  and  shall  entitle  the  executor  to  be  credited 
and  allowed  the  amount  thereof  by  any  court  having  jurisdic- 
tion to  audit  or  settle  his  accounts. 


REGULATIONS  693 

SEC.  408.  That  if  the  tax  herein  imposed  is  not  paid  within 
180  days  after  it  is  due,  the  collector  shall,  unless  there  is 
reasonable  cause  for  further  delay,  proceed  to  collect  the  tax 
under  the  provisions  of  general  law,  or  commence  appropriate 
proceedings  in  any  court  of  the  United  States,  in  the  name  of 
the  United  States,  to  subject  the  property  of  the  decedent  to 
be  sold  under  the  judgment  or  decree  of  the  court.  From  the 
proceeds  of  such  sale  the  amount  of  the  tax,  together  with  the 
costs  and  expenses  of  every  description  to  be  allowed  by  the 
court,  shall  be  first  paid,  and  the  balance  shall  be  deposited 
acpording  to  the  order  of  the  court,  to  be  paid  under  its  direc- 
tion to  the  person  entitled  thereto. 

If  the  tax  or  any  part  thereof  is  paid  by,  or  collected  out  of 
that  part  of  the  estate  passing  to  or  in  the  possession  of,  any 
person  other  than  the  executor  in  his  capacity  as  such,  such 
person  shall  be  entitled  to  reimbursement  out  of  any  part  of 
the  estate  still  undistributed  or  by  a  just  and  equitable  con- 
tribution by  the  persons  whose  interest  in  the  estate  of  the 
decedent  would  have  been  reduced  if  the  tax  had  been  paid 
before  the  distribution  of  the  estate  or  whose  interest  is 
subject  to  equal  or  prior  liability  for  the  payment  of  taxes, 
debts,  or  other  charges  against  the  estate,  it  being  the  pur- 
pose and  intent  of  this  title  that  so  far  as  is  practicable  and 
unless  otherwise  directed  by  the  will  of  the  decedent  the  tax 
shall  be  paid  out  of  the  estate  before  its  distribution.  If  any 
part  of  the  gross  estate  consists  of  proceeds  of  policies  of 
insurance  upon  the  life  of  the  decedent  receivable  by  a  bene- 
ficiary other  than  the  executor,  the  executor  shall  be  entitled 
to  recover  from  such  beneficiary  such  portion  of  the  total  tax 
paid  as  the  proceeds,  in  excess  of  $40,000,  of  such  policies 
bear  to  the  net  estate.  If  there  is  more  than  one  such  bene- 
ficiary the  executor  shall  be  entitled  to  recover  from  such 
beneficiaries  in  the  same  ratio. 

SEC.  409.  That  unless  the  tax  is  sooner  paid  in  full,  it  shall 
be  a  lien  for  ten  years  upon  the  gross  estate  of  the  decedent, 
except  that  such  part  of  the  gross  estate  as  is  used  for  the 
payment  of  charges  against  the  estate  and  expenses  of  its 
administration,  allowed  by  any  court  having  jurisdiction 
thereof,  shall  be  divested  of  such  lien.  If  the  Commissioner 


694  INHERITANCE  TAXATION 

is  satisfied  that  the  tax  liability  of  an  estate  has  been  fully 
discharged  or  provided  for,  he  may,  under  regulations  pre- 
scribed by  him  with  the  approval  of  the  Secretary,  issue  his 
certificate  releasing  any  or  all  property  of  such  estate  from 
the  lien  herein  imposed. 

If  (a)  the  decedent  makes  a  transfer  of,  or  creates  a  trust 
with  respect  to,  any  property  in  contemplation  of  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  his  death 
(except  in  the  case  of  a  bona  fide  sale  for  a  fair  consideration 
in  money  or  money's  worth)  or  (b)  if  insurance  passes  under 
a  contract  executed  by  the  decedent  in  favor  of  a  specific 
beneficiary,  and  if  in  either  case  the  tax  in  respect  thereto  is 
not  paid  when  due,  then  the  transferee,  trustee,  or  beneficiary 
shall  be  personally  liable  for  such  tax,  and  such  property,  to 
the  extent  of  the  decedent's  interest  therein  at  the  time  of 
such  transfer,  or  to  the  extent  of  such  beneficiary's  interest 
under  such  contract  of  insurance,  shall  be  subject  to  a  like 
lien  equal  to  the  amount  of  such  tax.  Any  part  of  such  prop- 
erty sold  by  such  transferee  or  trustee  to  a  bona  fide  pur- 
chaser for  a  fair  consideration  in  money  or  money's  worth 
shall  be  divested  of  the  lien  and  a  like  lien  shall  then  attach 
to  all  the  property  of  such  transferee  or  trustee,  except  any 
part  sold  to  a  bona  fide  purchaser  for  a  fair  consideration  in 
money  or  money's  worth. 

SEC.  410.  That  whoever  knowingly  makes  any  false  state- 
ment in  any  notice  or  return  required  to  be  filed  under  this 
title  shall  be  liable  to  a  penalty  of  not  exceeding  $5,000,  or 
imprisonment  not  exceeding  one  year,  or  both. 

Whoever  fails  to  comply  with  any  duty  imposed  upon  him 
by  section  404,  or,  having  in  his  possession  or  control  any 
record,  file,  or  paper,  containing  or  supposed  to  contain  any 
information  concerning  the  estate  of  the  decedent,  or,  having 
in  his  possession  or  control  any  property  comprised  in  the 
gross  estate  of  the  decedent,  fails  to  exhibit  the  same  upon 
request  of  the  Commissioner  or  any  collector  or  law  officer  of 
the  United  States,  or  his  duly  uathorized  deputy  or  agent, 
who  desires  to  examine  the  same  in  the  performance  of  his 
duties  under  this  title,  shall  be  liable  to  a  penalty  of  not 
exceeding  $500,  to  be  recovered,  with  costs  of  suit,  in  a  civil 
action  in  the  name  of  the  United  States. 


THE    NEW    YORK    STATUTE  695 


C.— THE  NEW  YORK  STATUTE. 

1.  History  and  Development. 

The  State  of  New  York  collects  from  a  half  to  a  third  of 
all  the  inheritance  taxes  and  at  least  one-half  of  all  the  litiga- 
tions arising  from  the  imposition  of  those  taxes  have  been 
decided  by  her  courts.  Her  various  statutes  with  all  their 
experiments  and  changes  of  policy  have  been  copied  along 
with  the  construction  placed  upon  them  by  her  courts  by 
nearly  every  State  in  the  Union. 

a.  FREQUENT  CHANGES. 

In  the  course  of  the  last  forty  years  the  New  York  statute 
has  been  altered  or  amended  more  than  a  hundred  times.  She 
has  taxed  all  the  personal  property  of  collaterals  and  strangers 
and  exempted  direct  heirs.  She  has  added  real  estate  and 
taxed  transfers  to  near  relations.  She  has  taxed  all  personal 
property  within  the  State  of  nonresidents  and  has  exempted 
such  property  except  in  the  case  of  tangibles.  She  began 
drifting  away  from  that  policy  before  the  other  States  could 
follow  her,  and  by  the  statute  of  May  14, 1919,  finally  abolished 
the  distinction.  She  has  experimented  with  all  sorts  of  graded 
rates  and  exemptions  and  radically  changed  them  again  in 
1916.  The  original  statutes  were  poorly  drafted  and  ingenious 
attorneys  found  many  loopholes  for  avoiding  the  tax  on  behalf 
of  their  clients.  As  fast  as  these  flaws  were  pointed  out  by 
the  courts  there  has  been  a  constant  effort  to  patch  the  statute 
and  stop  the  leaks.  In  spite  of  all  this  the  present  act  is  fairly 
consistent  and  intelligible  and  the  practice  under  it  well  estab- 
lished and  defined.  Most  of  its  essential  details  have  been 
preserved  and  perfected  throughout  the  legislation  and  litiga- 
tion of  nearly  half  a  century. 

b.  LIST  OF  THE  STATUTES. 

Following  is  a  full  list  of  all  the  inheritance  tax  statutes 
passed  by  the  New  York  Legislature  since  the  first  tax  was 
imposed  in  1885 : 


696  INHERITANCE  TAXATION 

Year  Chapter 

1885 483. 

1887 713. 

1889 307^79. 

1890 553. 

1891 34-215. 

1892 167, 168, 169,  399, 443. 

1893 199-704. 

1894 767. 

1895 191,  378,  515,  556,  861. 

1896 160,  908,  952,  953. 

1897 284,375. 

1898 88,  289. 

1899 76,  269,  270,  389,  406,  672,  737. 

1900 379,  382,  658,  723. 

1901 173,  288,  458,  493,  609. 

1902 101,  283,  496. 

1903 41. 

1904 758,62. 

1905 368. 

1906 Ill,  567,  699. 

1907 204,323,  709. 

1908 310,312,321. 

1909 62,596. 

1910 70,600,706. 

1911 308,  732,  800,  803. 

1912 206,214. 

1913 356,  366,  639,  795. 

1915 383,664. 

1916 80,  323,  548,  549,  550,  551,  562,  582. 

1917 53, 128, 194,  481, 482,  700. 

1918 111,183,  631. 

1919 444,626. 

1920 644. 

1921 476. 

1922 430,432,433. 

Most  of  these  are  merely  amendments  and  many  of  them 
are  trivial  but  seven  times  has  the  Legislature  enacted  an 
entire  statute. 


THE    NEW    YOEK    STATUTE  ($7 

These  statutes  are : 

Laws  1885,  Chapter  483.    In  Effect  June  30. 

Laws  1887,  Chapter  713.    In  Effect  June  25. 

Laws  1892,  Chapter  399.    In  Effect  May  1. 

Laws  1896,  Chapter  908.    In  Effect  June  15. 

Laws  1905,  Chapter  368.    In  Effect  June  1. 

Laws  1909,  Chapter  62,  Article  10.    In  Effect  Feb.  17. 

Laws  1921,  Chapter  476,  effective  July  1, 1921. 

c.  THE  FIRST  STATUTES  TAXING  ONLY  COLLATERALS. 

The  first  inheritance  tax  in  the  State  of  New  York  was 
imposed  by  Chapter  483,  L.  1885,  which  became  a  law  June  10 
of  that  year,  was  upon  the  entire  estate  of  the  decedent  if 
valued  at  more  than  $500,  and  included  all  property  of  non- 
residents within  the  State.  It  exempted  from  any  tax  the 
father,  mother,  husband,  wife,  children,  brother,  sister,  lawful 
lineal  descendants,  son-in-law,  daughter-in-law  and  all  cor- 
porations or  institutions  exempted  by  law  from  general  taxa- 
tion. Upon  all  others  it  imposed  the  flat  rate  of  5%.  It  took 
effect  twenty  days  after  its  passage. 

Matter  of  Howe,  112  N.  Y.  100. 

It  taxed  transfers  by  will  and  intestate  laws  and  transfers 
by  "deed,  grant,  sale,  or  gift  made  or  intended  to  take  effect 
in  possession  or  enjoyment  after  the  death  of  the  grantor  or 
bargainer." 

The  only  material  changes  made  by  the  second  statute,  Laws 
of  1887,  Chapter  713,  was  to  add  an  adopted  or  mutually 
acknowledged  child  to  the  exempt  class  and  make  provision 
for  the  computation  of  the  value  of  life  estates  and  remainders 
by  the  Superintendent  of  Insurance  on  the  5%  basis. 

d.  THE  ACT  OF  1892,  TAXING  DIRECT  INHERITANCES. 
Chapter  399,  L.  1892,  took  effect  May  1,  1892. 

Matter  of  Milne,  76  Hun,  328. 

By  the  first  section  the  description  of  transfers  in  avoid- 
ance of  the  tax  was  strengthened  and  made  to  read:  "by  deed, 
grant,  bargain,  sale  or  gift  made  in  contemplation  of  the  death 


698  INHERITANCE  TAXATION 

of  the  grantor,  vendor  or  donor  or  intended  to  take  effect  in 
possession  or  enjoyment  at  or  after  such  death." 

The  tax  was  also  made  retroactive  as  to  any  such  transfers 
by  providing  "such  tax  shall  also  be  imposed  when  any  such 
person  or  corporation  becomes  beneficially  entitled  in  posses- 
sion or  expectancy  to  any  property  or  the  income  thereof  by 
any  such  transfer  whether  made  before  or  after  the  passage  of 
this  act. 

A  tax  of  \%  on  all  estates  in  personal  property  valued  at 
more  than  $10,000  was  imposed  when  the  beneficial  interest 
passed  to  the  persons  exempted  by  the  former  statutes  except- 
ing bishops  and  religious  corporations.  The  tax  at  5%  when 
the  property  passed  to  others  remained  unchanged. 

When  the  aggregate  amount  transferred  or  passing  to  both 
classes  of  taxable  persons  was  over  $500,  but  less  than 
$100,000,  the  portion  passing  to  the  5%  class  was  taxable. 

Matter  of  Ros«ndahl,  40  Misc.  542;  82  Supp.  992. 
Matter  of  Garland,  88  App.  Div.  380;  84  Supp.  630. 
Matter  of  Mock,  113  App.  Div.  913;  49  Misc.  283. 
Matter  of  Corbett,  171  N.  Y.  516;  64  N.  E.  209. 

A  section  of  definitions  was  added  in  which  it  was  provided : 
"The  words  ' estate'  and  'property'  as  used  in  this  act  shall 
be  taken  to  mean  the  property  or  interest  therein  of  the  testa- 
tor, intestate,  grantor,  bargainer  or  vendor  passing  or  trans- 
ferred to  those  not  specifically  exempted  by  the  provisions  of 
this  act  and  not  as  the  property  or  interest  therein  passing 
or  transferred  to  individual  legatees,  etc." 

This  provision  made  it  clear  that  the  tax  was  imposed  as 
an  excise  on  the  right  to  transfer  and  not  as  an  impost  upon 
the  right  to  receive. 

Matter  of  Hoffman,  143  N.  Y.  327;  38  N.  E.  311. 

e.  THE  ACT  or  1896 — POWERS  OF  APPOINTMENT. 

In  1896  the  act  of  1892  was  incorporated  as  Article  10  of  the 
Tax  Law  by  Ch.  908,  L.  1896  in  effect  June  15  of  that  year; 
but  no  material  change  was  made,  excepting  that  banks  and 
safe  deposit  companies  holding  securities  of  a  decedent  were 
for  the  first  time  required  to  notify  the  Comptroller  before  de- 
livering them.  The  following  year,  however,  by  Ch.  284,  L. 


THE    NEW    YORK    STATUTE  ,  699 

1897,  a  provision  was  added  which  has  been  the  subject  of 
much  litigation. 

It  was  found  that  valuable  estates  were  passing  under 
powers  of  appointment  created  in  wills  of  decedents  who  had 
died  before  the  inheritance  tax  laws  were  enacted.  The  courts 
were  inclined  to  the  view,  and  the  Court  of  Appeals  subse- 
quently decided,  that  the  exercise  of  such  power  was  not  tax- 
able under  the  statute.  (Matter  of  Harbeck,  161  N.  Y.  211 ;  55 
N.  E.  850.) 

The  amendment  of  1897  added  the  following  as  a  fifth  sub- 
division to  section  220 : 

"Whenever  any  person  or  corporation  shall  exercise  a 
power  of  appointment  derived  from  any  disposition  of  prop- 
erty made  either  before  or  after  the  passage  of  this  act,  such 
appointment  when  made  shall  be  deemed  a  transfer  taxable 
under  the  provisions  of  this  act  in  the  same  manner  as  though 
the  property  to  which  such  appointment  relates  belonged  abso- 
lutely to  the  donee  of  such  power  and  had  been  bequeathed  or 
devised  by  such  donee  by  will;  and  whenever  any  person  or 
corporation  possessing  such  power  of  appointment  so  derived 
shall  omit  or  fail  to  exercise  the  same  within  the  time  pro- 
vided therefor,  the  whole  or  in  part,  a  transfer  taxable  under 
the  provisions  of  this  act  shall  be  deemed  to  take  place  to  the 
extent  of  such  omission  or  failure,  in  the  same  manner  as 
though  the  persons  or  corporations  thereby  becoming  entitled 
to  the  possession  or  enjoyment  of  the  property  to  which  such 
power  related  had  succeeded  thereto  by  a  will  of  the  donee  of 
the  power  failing  to  exercise  such  power,  taking  effect  at  the 
time  of  such  omission  or  failure." 

In  1899  by  Chapter  76,  Section  230  was  amended  to  this 
effect :  *  *  All  estates  upon  remainder  or  reversion  which  vested 
prior  to  June  30,  1885,  but  which  will  not  come  into  actual 
possession  or  enjoyment  until  after  the  passage  of  this  act 
shall  be  assessed,  when  those  beneficially  entitled  enter  into 
possession." 

This  amendment  and  the  provisions  taxing  successions  even 
though  there  was  a  failure  to  exercise  the  power  of  appoint- 
ment were  held  unconstitutional. 

Matter  of  Pell,  171  N.  Y.  48;  63  N.  E.  789. 
Matter  of  Lansing,  182  N.  Y.  238;  74  N.  E.  882. 


700  INHEEITANCE  TAXATION 

These  cases  proved  a  stumbling  block  in  the  development  of 
the  Transfer  Tax  Law  in  New  York.  The  latter  provision  was 
copied  by  Massachusetts  and  several  other  States  and  has 
there  been  upheld. 

Minot  v.  Treasurer,  207  Mass.  588;  93  N.  E.  973. 
Burnham  v.  Treasurer,  212  Mass.  165;  98  N.  E.  603. 

The  tax  upon  the  succession  under  the  exercise  of  a  power 
when  the  creator  of  the  power  died  before  the  statute  was 
sustained. 

Matter  of  Dows,  167  N.  Y.  227;  60  N.  E.  439;   aff.  Orr  v.  Oilman,  182 
U.  S.  278;  22  S.  Ct.  Bep.  213. 

It  is  where  there  is  a  failure  to  exercise  that  the  New  York 
rule  diverges. 

f.  AMENDMENT  OF  1899 — HIGHEST  RATE. 

Chapter  76,  Laws  of  1899  amended  the  rules  as  to  the  taxa- 
tion of  contingent  remainders  which  amendment  still  obtains 
in  this  State  and  has  been  followed  in  several  others.  It  has 
been  fruitful  of  litigation  and  though  it  has  stood  for  nearly 
twenty  years  it  was  again  before  the  Court  of  Appeals  for 
construction  in  1917. 

Matter  of  Button,  176  App.  Div.  217;  160  Supp.  223;  aff.  220  N.  Y.  210. 

The  statute  refers  to  present  conditions  and  not  to  remotely 
possible  contingencies. 

Matter  of  Upjohn,  108  Misc.  495;  178  Supp.  686. 

g.  ACT  OF  1905 — REAL  ESTATE  ADDED. 

The  transfer  of  real  estate  was  first  taxed  by  Ch.  41,  L.  1903. 
The  re-enactment  of  1905,  Chapter  368,  included  real  estate  in 
the  property  passing  to  direct  heirs  and  near  relatives  subject 
to  the  tax  of  \%  when  the  estate  exceeded  $10,000  and  extended 
the  exemptions  to  practically  all  religious,  charitable  or 
benevolent  corporations,  including  societies  for  the  prevention 
of  cruelty  to  animals,  and  these  provisions  are  substantially 
incorporated  in  the  present  statute. 

Under  section  227  the  Comptroller  or  his  representative  was 


THE    NEW   YORK    STATUTE  701 

authorized  to  examine  the  securities  of  a  decedent  in  the  pos- 
session of  a  bank  or  trust  company.  This  provision  is  retained 
in  the  present  law  and  has  been  widely  copied  by  other  States. 

Laws  of  1908,  Chapter  310,  added  the  following,  which  is 
retained  in  the  present  statute,  as  to  tangible  property  of 
nonresidents. 

"Whenever  the  property  of  a  resident  decedent,  or  the  prop- 
erty of  a  nonresident  decedent  within  the  State,  transferred  by 
will,  is  not  specifically  bequeathed  or  devised,  such  property 
shall,  for  all  the  purposes  of  this  act,  be  deemed  to  be  trans- 
ferred proportionately  to,  and  divided  pro  rata  among  all  the 
general  legatees  and  devisees  named  in  said  decedent's  will, 
including  all  transfers  under  a  residuary  clause  of  such  will." 

2.  The  Present  Law  and  its  Amendments. 

a.  THE  ORIGINAL  STATUTE  OF  1909. 

Nominally  the  present  inheritance  tax  law  of  the  State  of 
New  York  is  Chapter  62  of  the  Laws  of  1909,  being  Article  X 
of  the  Tax  Law.  But  it  has  several  times  been  radically 
changed  by  amendment  though  chiefly  as  to  the  theory  of  the 
tax  and  the  graded  rates  and  exemptions.  The  statute  was  a 
substantial  re-enactment  of  the  act  of  1905  and  a  codification 
of  its  numerous  amendments. 

b.  THE  "REIGN  OF  TERROR  ACT"  OF  1910. 

The  amendment  of  1910,  Chapter  706,  is  popularly  known 
among  estate  attorneys  as  the  "reign  of  terror"  statute  on 
account  of  the  high  rate  of  taxation  it  imposed.  It  became  a 
law  July  11,  1910,  and  remained  in  force  until  it  was  repealed 
and  replaced  by  the  act  of  1911,  Chapter  732,  which  took  effect 
July  21,  1911. 

It  imposed  the  rates  and  prescribed  the  exemptions  shown 
by  the  following  table : 


702 


INHERITANCE  TAXATION 


1910 

TABLE  OF  RATES  AND  EXEMPTIONS  UNDER  CHAPTEE  706, 

L.  1910. 

In  Effect  From  July  11,  1910  to  July  21,  1911. 


CLASS  OR  RELATIONSHIP 

Exemp- 
tion 

Above  Exemption  Where  Allowed 

Up  to 
26,000 

25,000 
to 
125,000 

125,000 
to 
625,000 

625,000 
to 
1,625,000 

In  exceB 
of 
1,625,000 

Father,  mother,  widow,  minor 
child  

$5,000 
Not  taxed 
if     leas 
than 
$500, 

Not  taxed 
if      less 
than 
$100. 

per  cent 
1 
1 

5 

per  cent 
2 
2 

10 

per  cent 
3 
3 

15 

per  cent 
i 
4 

20 

per  cent 
6 

H 

Husband,  adult  child,  "brother, 
sister,       daughter  -  in  -  law, 
adopted  or  mutually  acknowl- 
edged  child,   lineal   descend- 
ants. 
All  others,  except  exempt,  char- 
itable, etc.,  corporations. 

Section  221,  Chapter  706,  L.  1910,  fixing  the  above  rates  was 
construed  in  the  following  cases : 

Matter  of  Jourdan,  151  App.  Div.  8;  135  Supp.  878;  reversed  on  dissenting 

opinion,  206  N.  Y.  653. 
Matter  of  Schwarz,  156  App.  Div.  931;   141  Supp.   349;   aff.  209  N.  Y. 

(mem.). 

Matter  of  Eaton,  79  Misc.  69;  140  Supp.  601. 
Matter  of  Kip,  N.  Y.  L.  J.,  March  28,  1912. 

These  authorities  overrule 

Matter  of  Elletson,  75  Misc.  582 ;  136  Supp.  455. 

It  will  be  noticed  that  these  rates,  while  they  created  a  panic 
among  large  property  owners  in  New  York  are  identical  with 
those  now  imposed  by  several  of  the  western  States.  As  to 
direct  heirs  it  was  not  as  severe  as  the  present  statute. 


c.  A  RADICAL  CHANGE  IN  THEORY  AS  TO  TRANSFER  TAXED. 

Heretofore  all  estates  above  $10,000  had  been  subject  to  tax 
on  the  entire  amount.  Under  the  act  of  1910  an  exemption 
was  made  to  each  beneficiary  and  the  theory  of  the  tax  was  also 
changed.  Instead  of  being  imposed  upon  the  right  to  transfer 
it  was  imposed  on  the  right  to  receive. 

This  change  was  accomplished  by  the  amendment  of  the 
definition  section,  243: 


THE    NEW    YORK    STATUTE  703 

§  243.  Definitions.  The  words  "estate"  and  "property," 
as  used  in  this  article,  shall  be  taken  to  mean  the  property  or 
interest  therein  passing  or  transferred  to  individual  or  cor- 
porate legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees 
or  vendees,  and  not  the  property  or  interest  therein  of  the 
decedent,  grantor,  donor,  or  vendor  passing  or  transferred, 
and  shall  include  all  property  or  interest  therein,  whether 
situated  within  or  without  this  State.  The  word  "transfer," 
as  used  in  this  article,  shall  be  taken  to  include  the  passing  of 
property  or  any  interest  therein  in  possession  or  enjoyment, 
present  or  future,  by  inheritance,  descent,  devise,  bequest, 
grant,  deed,  bargain,  sale  or  gift  in  the  manner  herein  pre- 
scribed. The  words  "County  Treasurer"  and  "District 
Attorney,"  as  used  in  this  article,  shall  be  taken  to  mean  the 
Treasurer  or  the  District  Attorney  of  the  County  of  the  Surro- 
gate having  jurisdiction  as  provided  in  section  two  hundred 
and  twenty-eight  of  this  article. 

d.  THE  AMENDMENTS  OF  1911.    TANGIBLES  AND  INTANGIBLES. 

Another  radical  change  was  made  by  the  amendment  of  1911, 
Chapter  732.  It  reduced  the  graded  rates,  preserved  the 
altered  theory  of  the  tax  and  the  exemptions  to  each  bene- 
ficiary but  it  exempted  all  but  the  ' '  tangible ' '  property  of  non- 
resident decedents.  As  has  been  pointed  out  this  statute 
resulted  ultimately  in  the  falling  off  of  receipts  from  $13,- 
000,000  to  $7,000,000. 

The  statute  eliminated  the  provision  taxing  the  succession 
upon  the  failure  to  exercise  a  power  of  appointment  in  the 
estate  of  the  donee  of  the  power.  This  leaves  property  sub- 
ject to  a  power  which  is  not  disposed  of  in  either  will  to  pass 
intestacy  and  has  left  open  a  question  which  has  been  fruitful 
of  litigation. 

The  rates  and  exemptions  prescribed  by  the  1911  amend- 
ments were  as  follows: 


704 


INHERITANCE  TAXATION 


TABLE  OF  BATES  AND  EXEMPTIONS  AS  ESTABLISHED  BY 

CHAPTEB  732,  L.  1911. 
.      In  Force  From  July  21,  1911  to  May  15,  1916. 


CLASS  OR  RELATIONSHIP 

i 
Exemption 

Above  Exemption 

Up  to 

60,  000 

60.000 
to 
300,000 

300,000 
to 
1,300,000 

percent 

8 

7 

All  in 
excectof 
1,300,000 

Father,  mother,  huiband,  wife,  child, 
brother,  water,  daughter-in-law, 
•on-in-law,  adopted  child  or  mutu- 
ally acknowledged  child,  lineal 

15,000 
1,000 

percent 

1 
6 

percent 

2 

6 

per  cent 

f 

8 

All  others,  excepting  charitable,  etc., 
corporation*  

This  amendment  was  not  retroactive. 

Matter  of  Holt,  N.  Y.  L.  J.,  March  16,  1912. 
Matter  of  Niles,  N.  Y.  L.  J.,  January  5,  1912. 

e.  TAX  EXTENDED  TO  CURTESY. 

The  courts  having  held  that  a  husband's  right  of  curtesy 
and  his  right  to  succeed  to  the  personalty  of  his  intestate  wife 
were  exempt  this  provision  was  added  to  the  definitions  of 
Section  243 : 

"The  words  'the  intestate  laws  of  this  State,'  as  used  in 
this  article,  shall  be  taken  to  refer  to  all  transfers  of  property, 
or  any  beneficial  interest  therein,  effected  by  the  statute  of 
descent  and  distribution  and  the  transfer  of  any  property,  or 
any  beneficial  interest  therein,  effected  by  operation  of  law 
upon  the  death  of  a  person  omitting  to  make  a  valid  disposi- 
tion thereof,  including  a  husband's  right  as  tenant  by  the 
curtesy  or  the  right  of  a  husband  to  succeed  to  the  personal 
property  of  his  wife  who  dies  intestate  leaving  no  descendants 
her  surviving." 

f.  MAXIMUM  AND  MINIMUM. 

By  Chapter  800,  Laws  of  1911  a  well-intentioned  provision 
was  added  to  Section  241,  which  has  proved  of  great  difficulty 
in  practical  application.  It  relates  to  the  taxation  of  con- 
tingent remainders  at  the  highest  rate  and  is  still  in  the  law. 
It  provides  that  the  difference  between  the  "highest  possible 
rate"  and  the  minimum  rate  to  which  a  contingent  remainder 


THE    NEW    YORK    STATUTE  705 

may  ultimately  be  subject  shall  be  deposited  by  the  State,  the 
interest  paid  to  the  executors  or  trustee,  and  the  principal  sum 
returned  in  case  the  highest  rate  is  not  ultimately  due;  or 
securities  may  be  deposited  in  lieu  of  cash. 

3.  The  Problem  as  to  the  Property  of  Nonresidents. 

a.  PREVIOUS  POLICY  or  THE  STATE. 

From  1885  until  1911  the  State  of  New  York  had  taxed  all 
personal  property  of  nonresidents  within  the  State.  Until 
1912  Massachusetts  did  the  same.  The  problems  arising  under 
such  taxation  were  solved  by  the  courts  of  these  two  States 
and  gradually  a  body  of  law  was  evolved  through  years  of 
litigation.  These  statutes  were  widely  copied  by  the  western 
States  where  the  decisions  construing  them  are  authoritative. 

But  as  the  western  States  began  to  impose  high  rates  upon 
nonresident  inheritances,  it  was  found  that  the  logical  result 
was  to  impose  double  taxation.  To  avoid  double  taxation  New 
York  adopted  the  plan  evolved  by  the  Pennsylvania  courts  of 
declaring  that  "tangible"  assets  such  as  goods,  wares  and 
merchandise  had  a  situs,  while  intangibles,  such  as  stocks  and 
bonds,  evidences  of  debt  and  money  on  deposit  in  banks,  fol- 
lowed the  domicile  of  the  owner.  It  was  expected  that  the 
other  States  would  all  fall  in  line.  Massachusetts  taxed  only 
real  estate  of  nonresidents  and  exempted  her  own  residents 
from  taxation  on  property  out  of  the  State  which  was  taxed 
elsewhere  by  amendments  adopted  in  1912. 

The  plan  offered  by  New  York  has  been  rejected  by  three- 
fourths  of  the  States  for  the  simple  reason  that  being  newer  in 
development  much  of  their  most  valuable  property  is  owned 
by  nonresidents,  and  the  New  York  act  of  May  14,  1919,  has 
abolished  the  distinction. 

b.  REAL  ESTATE  OF  CORPORATIONS. 

On  the  other  hand  it  was  soon  found  that  the  experimental 
distinction  between  tangible  and  intangible  property  of  non- 
residents was  full  of  loopholes  which  ingenious  attorneys  for 
estates  were  not  slow  to  discover.  Nonresidents  with  large 
real  estate  holdings  in  New  York  began  forming  corporations 
to  hold  the  real  estate.  The  stock  and  bonds  of  such  a  corpora- 
45 


706  INHERITANCE  TAXATION 

tion  obviously  were  intangible.  On  the  other  hand  to  declare 
all  stocks  and  bonds  in  New  York  corporations  ''tangible"  as 
is  done  in  New  Jersey  and  Oklahoma  was  practically  to  abolish 
the  distinction. 

In  Matter  of  Richards,  182  App.  Div.  572;  aff.  226  N.  Y. 
mem.,  it  was  held  that  bonds  of  corporations  secured  by  mort- 
gages upon  specific  real  property  within  the  State  were  not 
taxable  in  the  estate  of  a  nonresident,  distinguishing  between 
corporation  bonds  and  ordinary  mortgage  bonds  of  a  corpora- 
tion which  merely  secured  a  debt  of  that  corporation. 

The  language  of  this  section  has  been  much  clarified  by  the 
amendment  Chapter  430,  L.  1922.  The  following  cases  have 
arisen  under  the  statute  of  1919 : 

Mortgages  on  real  estate  are  specifically  excepted. 

Matter  of  Belden,  189  App.  Div.  417;  179  Supp.  406. 

Stock  in  domestic  manufacturing  corporations  holding  real 
estate  taxable  in  proportion  to  its  value  when  held  by  a  non- 
resident decedent. 

Matter  of  Lake,  112  Misc.  681;  183  Supp.  335;  aff.  194  App.  Div.  967; 
aff.  232  N.  Y.  (mem.)  ;  134  N.  E.  546. 

A  foreign  corporation  owning  real  estate  in  New  York, 
transfer  of  shares  not  taxable  as  the  court  has  no  jurisdiction 
of  parties  or  subject  matter. 

Matter  of  McMullen,  199  App.  Div.  393;  172"  Supp.  49. 

Bonds  and  promissory  notes  of  a  New  York  real  estate  cor- 
poration held  by  nonresident  not  taxable  when  not  a  lien  on 
the  real  estate. 

Matter  of  Meyer,  117  Misc.  511;  192  Supp.  717. 

c.  COPARTNERSHIP  ASSETS. 

It  also  became  apparent  that  the  large  proportion  of  the 
tangible  assets  owned  by  nonresidents  within  the  State  con- 
sisted of  goods,  wares  and  merchandise  of  copartnerships. 
Copartnerships  also  owned  real  estate  and  as  the  interest  of 
copartners  is  only  in  the  surplus  after  an  accounting  when  all 
debts  have  been  paid  that  interest  is  "intangible." 

Matter  of  Albert  D.  Smith,  N.  Y.  L.  J.,  March  4,  1914. 
Matter  of  Ludeke,  N.  Y.  L.  J.,  January  30,  1914. 


THE    NEW    YORK    STATUTE  707 

Here  was  a  second  loophole  and  the  statute  of  1911  obviously 
required  patching.  This  was  the  patch — being  an  amendment 
to  section  220  by  Chapter  664,  L.  1915. 

"When  the  transfer  is  by  will  or  intestate  law,  of  tangible 
property  within  the  State  or  of  any  intangible  property,  if 
evidenced  by  or  consisting  of  shares  of  stock,  bonds,  notes  or 
other  evidences  of  interest  in  any  corporation,  joint  stock  com- 
pany or  association  wherever  incorporated  or  organized,  ex- 
cept a  corporation,  foreign  or  domestic,  or  joint  stock  com- 
pany or  association  constituting,  being  or  in  the  nature  of  a 
moneyed  corporation,  a  railroad  or  transportation  corpora- 
tion or  a  public  service  or  manufacturing  corporation  as  de- 
fined and  classified  by  the  laws  of  this  State,  and  the  property 
represented  by  such  shares  of  stock,  bonds,  notes  or  other  evi- 
dences of  interest  consists  of  real  property  which  is  located, 
wholly  or  partly,  within  the  State  of  New  York,  or  of  an  in- 
terest in  any  partnership  business  conducted,  wholly  or  partly, 
within  the  State  of  New  York,  in  such  proportion  as  the  value 
of  the  real  property  of  such  corporation,  joint  stock  company 
or  association,  or  as  the  value  of  the  entire  property  of  such 
partnership  located  in  the  State  of  New  York  bears  to  the 
value  of  the  entire  property  of  such  corporation,  joint  stock 
company  or  association  or  partnership,  and  the  decedent  was 
a  nonresident  of  the  State  at  the  time  of  his  death. ' ' 

d.  CAPITAL  INVESTED  IN  BUSINESS. 

Still  another  effort  was  made  by  Chapter  323,  L.  1916,  to 
prevent  the  escape  of  tangible  personal  property  of  nonresi- 
dents which  ought  to  pay  a  tax  and  yet  preserve  the  new  policy 
of  the  State  against  taxation  of  securities  and  money  on  de- 
posit in  banks  and  trust  companies  by  nonresidents  and  the 
following  was  added  to  sub.  2,  Sec.  220. 

"Or  when  the  transfer  is  by  will  or  intestate  law  of  capital 
invested  in  business  in  the  State  by  a  nonresident  of  the  State 
doing  business  in  the  State  either  as  principal  or  partner." 

The  construction  of  this  amendment  has  involved  much 
litigation.  The  most  striking  case  is  that  of  Hettie  K.  Green. 

The  estate  had  escaped  the  payment  of  taxes  as  a  resident 
establishing  the  domicile  of  decedent  in  Vermont.  It  was 


708  INHERITANCE  TAXATION 

explained  that  her  constant  dwelling  in  New  York  was  merely 
for  business  reasons.  The  State  Comptroller  then  undertook 
to  tax  her  New  York  assets  as  capital  invested  in  business  by 
a  nonresident  "doing  business  either  as  principal  or  partner." 
Mrs.  Green  spent  most  of  her  time  in  New  York  looking  after 
the  investment  and  reinvestment  of  her  vast  fortune,  lending 
money  and  rolling  up  her  wealth ;  but  she  did  this  through  the 
instrumentality  of  corporations  in  which  she  held  the  con- 
trolling interest. 

The  Appellate  Division  held  (184  App.  Div.  376;  171  Supp. 
494),  that  this  continued  course  of  conduct  constituted  doing 
business  within  the  State,  and  upon  proof  before  the  appraiser 
of  the  details  of  the  transactions  that  this  portion  of  the  estate 
was  taxable  (192  App.  Div.  30),  but  the  Court  of  Appeals 
reversed  and  held  that  the  acts  of  Mrs.  Green  did  not  con- 
stitute doing  business  within  the  State  within  the  meaning  of 
the  statute. 

Matter  of  Green,  231  N.  Y.  237;  131  N.  E.  900. 

The  court  laid  down  these  propositions:  That  a  nonresi- 
dent decedent  must  not  only  have  capital  invested  within  the 
State,  but  must  have  been  doing  business  within  the  State  con- 
currently, or  no  tax  could  be  imposed;  that  the  business  car- 
ried on  by  a  corporation  cannot  be  held  to  be  that  of  its  indi- 
vidual stockholders;  that  the  facts  did  not  warrant  the  as- 
sumption that  the  corporation  was  merely  acting  as  Mrs. 
Green's  agent  and  turning  over  the  profits  to  her;  that  the 
deposit  of  money  in  a  savings  bank  or  trust  company  and  the 
allowance  of  interest  thereon  does  not  make  the  depositor  one 
doing  business  within  the  State  within  the  meaning  of  the 
statute. 

A  seat  in  the  Stock  Exchange  owned  by  a  nonresident  dece- 
dent is  not  capital  invested  in  business  within  the  State  under 
the  statute. 

Matter  of  Ogden,  170  Supp.  630. 

In  Matter  of  Tollman  the  deceased  nonresident  had  on  de- 
posit within  the  State  a  personal  investment  account  and  a 
chattel  mortgage  account.  It  was  held  that  the  funds  in  the 


THE    NEW    YOEK    STATUTE  709 

personal  investment  account  were  not  subject  to  the  transfer 
tax  but  that  the  funds  in  the  chattel  mortgage  account  were 
taxable. 

Matter  of  Tollman,  104  Mise.  696;  172  Supp.  294. 

Stocks  and  bonds  deposited  as  security  for  loan  and  the 
money  used  in  business  is  equivalent  to  capital  invested  in 
business  within  the  meaning  of  the  statute. 

Matter  of  Tyson,  113  Misc.  306 ;  184  Supp.  398. 

In  Matter  of  Voorhees,  165  Supp.  527,  Surrogate  Fowler, 
of  New  York  County  thus  construed  the  section : 

"This  is  an  appeal  by  the  executor  from  the  order  assess- 
ing a  tax  upon  the  decedent's  estate.  The  decedent,  who  was  a 
resident  of  South  Carolina,  died  on  the  23d  of  June,  1916.  He 
conducted  a  commission  business  in  this  city,  and  under  the 
amendment  effected  by  chapter  323  of  the  Laws  of  1916  the 
capital  invested  in  such  business  is  subject  to  a  tax.  The 
controversy  between  the  executor  and  the  State  Comptroller 
relates  to  the  value  or  amount  of  such  capital.  The  appraiser 
found  that  it  was  $73,758.59,  and  this  amount  included  $49,- 
138.91  on  deposit  in  the  Fidelity  Trust  Company  in  this  city. 
Besides  conducting  a  commission  business  in  this  city,  the 
decedent  was  engaged  in  farming  in  South  Carolina.  Each 
business  was  conducted  separately.  He  shipped  the  farm  pro- 
duce to  his  place  of  business  in  this  city,  and  it  was  disposed 
of  in  the  same  manner  as  consignments  of  goods  made  by  other 
farmers.  At  the  time  of  his  death  the  business  conducted  by 
him  as  commission  merchant  in  this  city  owed  the  business 
conducted  by  him  as  a  farmer  in  South  Carolina  the  sum  of 
$42,000  for  farm  produce  sold  and  not  accounted  for.  This 
sum  did  not  constitute  capital  invested  by  the  decedent  in  busi- 
ness in  this  State,  and  should  be  deducted  from  the  amount  on 
deposit  with  the  Fidelity  Trust  Company  in  ascertaining  the 
value  of  the  taxable  assets  in  this  State.  It  is  the  fact,  not 
appearances,  which  control  taxability.  The  order  fixing  tax 
will  be  reversed  and  the  appraiser's  report  remitted  to  him 


710  INHERITANCE  TAXATION 

for  the  purpose  of  making  the  deduction  indicated.     Settle 
order  on  notice." 

e.  ATTEMPT  TO  DEFINE  A  "RESIDENT." 

The  widest  loophole  in  the  act  of  1911  and  that  through 
which  millions  of  property  escaped  and  is  escaping  taxation 
is  found  in  the  facility  with  which  wealty  people  whose  busi- 
ness is  in  New  York  can  maintain  a  domicile  in  Vermont  where 
only  collateral  inheritances  were  taxed  or  in  Rhode  Island 
which  did  not  tax  them  at  all  until  1916  or  abroad  where  the 
flag  protects  them  from  heavy  foreign  taxation  while  they 
do  not  contribute  to  the  maintenance  of  its  glory  from  their 
investments  at  home.  Many  such  people  live  in  New  York 
hotels  throughout  the  winter  but  claim  domicile  at  country 
homes. 

To  meet  this  situation — or  attempt  to  meet  it,  the  following 
amendment  to  the  definition  section,  243,  was  added  by  L.  1916, 
chapter  551 : 

"For  any  and  all  purposes  of  this  article  and  for  the  just  imposition  of  the 
transfer  tax,  every  person  shall  be  deemed  to  have  died  a  resident,  and  not  a 
nonresident,  of  the  State  of  New  York,  if  and  when  such  person  shall  have  dwelt 
or  shall  have  lodged  in  this  State  during  and  for  the  greater  part  of  any  period 
of  twelve  consecutive  months  in  the  twenty-four  months  next  preceding  his  or 
her  death;  and  also  if  and  when  by  formal  written  instrument  executed  within 
one  year  prior  to  his  or  her  death  or  by  last  will  he  or  she  shall  have  declared 
himself  or  herself  to  be  a  resident  or  a  citizen  of  this  State,  notwithstanding 
that  from  time  to  time  during  such  twenty-four  months  such  person  may  have 
sojourned  outside  of  this  State  and  whether  or  not  such  person  may  or  may  not 
have  voted  or  have  been  entitled  to  vote  or  have  been  assessed  for  taxes  in  this 
State;  and  also  if  and  when  such  person  shall  have  been  a  citizen  of  New  York 
sojourning  outside  of  this  State.  The  burden  of  proof  in  a  transfer  tax  proceed- 
ing shall  be  upon  those  claiming  exemption  by  reason  of  the  alleged  nonresidence 
of  the  deceased.  The  wife  of  any  person  who  would  be  deemed  a  resident  under 
this  section  shall  also  be  deemed  a  resident  and  her  estate  subject  to  the  payment 
of  a  transfer  tax  as  herein  provided,  unless  said  wife  has  a  domicile  separate 
from  him. ' ' 

The  effect  of  this  statute  was  thought  to  be  far  reaching. 
It  was  believed  that  it  would  reach  the  "tax  dodger"  and  at 
the  same  time  make  it  unnecessary  to  tax  the  property  of  non- 
residents within  the  State.  Like  many  other  legislative 
devices  it  has  proved  ineffectual  in  practice. 

The  courts  have  held  it  a  mere  presumption  which  may  be 


THE    NEW    YORK    STATUTE  711 

overcome  by  proof  and  the  question  of  residence  remains  as 
before,  dependent  upon  the  facts  and  not  upon  statute. 

Matter  of  H.  R.  Green,  99  Misc.  582;  aff.  179  App.  Div.  890. 
Matter  of  Frick,  116  Misc.  488. 
Matter  of  Lyon,  117  Misc.  189. 

Matter  of  Barbour,  185  App.  Div.  445;   173  Supp.   276;   aff.   226   N.  Y. 
(mem.). 

The  last  mentioned  case  clearly  states  the  doctrine  that  the 
act  merely  created  a  presumption  which  could  be  overcome  by 
evidence.  In  the  course  of  its  opinion  the  court  discusses  the 
underlying  principles  of  inheritance  taxation  as  follows: 

''While  technically  the  tax  may  be  considered  as  resting 
upon  the  actual  passing  of  the  estate  by  death,  rather  than 
upon  the  right  to  regulate  the  same,  and  therefore,  in  Knowl- 
ton  v.  Moore,  it  was  held  that  the  Federal  Government  pos- 
sessed the  right  to  impose  such  transfer  tax,  nevertheless  as 
between  the  State  of  New  Jersey,  where  testator  had  resided 
and  been  domiciled  practically  all  of  his  lifetime,  and  the 
State  of  New  York,  where  he  was  temporarily  staying  at  the 
time  of  his  death,  it  cannot  be  said,  under  the  authorities 
hereinbefore  cited  disapproving  of  double  taxation  and  pro- 
viding for  taxation  of  transfers  exclusively  by  the  State  hav- 
ing dominion  over  the  property  transferred  and  regulating  the 
succession,  that  the  State  wherein  testator  was  temporarily 
staying  when  his  death  occurred  should  have  authority  to  im- 
pose the  tax.  At  common  law  there  was  no  right  of  succes- 
sion in  property.  When  a  person  died  his  property  reverted 
to  his  sovereign.  Except  for  statutory  enactments  of  the 
various  States  permitting  the  disposition  of  property  by  will 
or  in  case  of  intestacy  that  the  property  of  a  deceased  person 
shall  pass  to  the  persons  named  in  the  statute,  the  property  of 
a  person  dying  would  revert  to  the  State  in  which  he  resided. 
By  virtue  of  the  laws  of  the  State  of  New  Jersey,  the  prop- 
erty of  decedent  passed  under  the  provisions  of  his  will.  Not 
only  the  power  to  regulate  the  succession,  but  the  very  trans- 
mission and  receipt  itself  of  the  property  transferred  rested 
upon  the  laws  of  the  State  of  New  Jersey.  To  that  State 
belongs  the  exclusive  right  to  impose  the  tax  upon  such 
transfer. 

"With  reference  to  the  power  of  the  Legislature  to  enact 


712  INHERITANCE  TAXATION 

a  statute  of  the  force  which  the  Comptroller  seeks  to  give  to 
the  amendment  of  1916  to  the  Transfer  Tax  Law,  while  it  is 
not  open  to  serious  dispute  that  it  has  power  to  enact  that  one 
fact  shall  be  evidence  of  another,  it  is  a  self-evident  proposi- 
tion that  the  Legislature  cannot  make  so  that  which  is  not  so. 
When,  as  here,  the  statute  says  that  under  the  circumstances 
named  residence  shall  be  deemed  to  exist,  and  the  fact  is  that 
it  does  not  exist,  the  statute  does  not  make  the  fact  otherwise 
than  it  is.  At  most,  it  creates  a  presumption  which  may  be 
overcome  by  evidence  to  the  contrary. 

' '  No  question  can  be  raised  as  to  the  good  faith  of  decedent 
in  maintaining  his  residence  in  New  Jersey.  A  very  different 
situation  is  presented  from  that  of  the  tax-  or  jury-dodger. 
The  evil  corrected  and  the  jury  service  required  by  the  Code 
provisions  was  concerning  a  duty  of  citizenship  arising  dur- 
ing the  lifetime  of  the  citizen  when  he  was  in  the  enjoyment  of 
the  State's  protection  to  his  person  and  property.  The 
situation  with  which  we  are  dealing  is  much  different.  Here 
is  an  attempt  to  seize  upon  for  taxation,  not  only  decedent's 
property,  real  and  personal,  which  was  physically  present  and 
under  the  protection  of  the  State  at  the  time  of  death,  but  also 
all  other  personal  property  of  which  the  decedent  was  then 
possessed  and  which  passed  only  by  virtue  of  certain  laws  of 
another  State  permitting  the  beneficiaries  under  decedent's 
will  to  succeed  thereto. 

*  *  The  taxation  of  inheritance  is  of  long  standing.  In  Eng- 
land, death  duties  have  been  imposed  for  centuries.  Other 
European  countries  have  adopted  such  form  of  indirect  taxa- 
tion, under  such  various  names  as  death  duties,  legacy  taxes, 
succession  duties,  inheritance  taxes,  probate  duties,  estate 
taxes,  privilege  taxes,  etc.  In  1797  our  Federal  Government 
imposed  a  legacy  tax.  (1  U.  S.  Stat.  at  Large,  527,  chap.  11.) 
Since  then  several  acts  of  a  similar  character  have  been  passed 
by  Congress.  The  present  Federal  statute  providing  an  estate 
tax  upon  the  transfer  of  the  net  estate  of  a  decedent  was  en- 
acted in  1916.  (39  U.  S.  Stat.  at  Large,  777,  chap.  463,  tit.  2, 
as  amd.)  Under  former  statutes  the  right  of  the  Federal 
Government  to  impose  a  tax  of  this  character  has  been  ques- 
tioned, because  of  the  fact  that  such  a  tax  is  upon  the  right  of 


THE    NEW    YORK    STATUTE  713 

succession,  and  whieh  right  may  alone  be  regulated  by  a  State. 
But  in  Knowlton  v.  Moore,  178  U.  S.  41,  it  was  pointed  out 
that  such  a  tax  is  imposed  upon  the  transmission  or  receipt 
of  the  property,  rather  than  upon  the  right  to  regulate  such 
transmission  or  receipt  after  death,  and  the  court  there  held 
the  act  constitutional,  notwithstanding  the  devolution  of  the 
property  transferred  was  under  the  control  of  the  State  of 
New  York,  where  the  testator  in  that  case  was  domiciled. 

"I  think  the  most  that  can  be  said  of  this  statute  is  that  the 
facts  therein  mentioned  with  reference  to  a  person  dwelling 
and  lodging  within  the  State,  during  the  period  mentioned, 
create  a  mere  disputable  presumption  of  residence,  liable  to 
be  overcome  by  evidence  to  the  contrary.  The  evidence  pro- 
duced upon  the  hearing  by  the  executors  of  the  testator's  will 
destroyed  any  presumption  of  a  residence  in  the  State  of  New 
York  from  the  fact  of  the  testator  dwelling  and  lodging  here 
during  the  period  preceding  his  death." 

f.  DISTINCTION  BETWEEN  TANGIBLES  AND  INTANGIBLES  ABOL- 
ISHED. 

By  chapter  626,  L.  1919,  the  Legislature  has  abolished  the 
distinction  between  tangibles  and  intangibles  and  taxed  the 
transfer  of  stock  in  domestic  corporations  owned  by  nonresi- 
dent decedents.  Although  the  law  as  it  stood  prior  to  1911  is 
not  quite  restored  a  very  large  share  of  all  property  of  non- 
resident decedents  within  the  State  is  now  subject  to  the 
transfer  tax.  The  statute  is  not  wholly  clear  and  important 
questions  of  construction  will  doubtless  arise  under  it. 

4.  Recent  Amendments. 

Although  the  law  assumed  a  formative  stage  under  the  act 
of  1911,  important  defects  and  omissions  continued  to  develop, 
and  as  they  appeared  the  Legislature  endeavored  to  correct 
them. 

a.  EXEMPTIONS. 

Until  1911  there  had  been  but  one  exemption  to  the  entire 
estate,  or  rather,  estates  of  less  than  $10,000  were  not  taxed 
at  all  when  passing  to  near  relatives,  but  when  above  that 
amount  the  tax  was  levied  on  the  entire  estate.  It  was  dis- 


714  INHERITANCE  TAXATION 

covered  that  the  statute  of  1911  was  so  worded  in  giving  each 
beneficiary  an  exemption  of  $5,000  in  case  of  near  relatives 
that  one  exemption  might  be  allowed  on  property  given  in 
contemplation  of  death  and  a  second  exemption  of  a  like 
amount  on  property  passing  to  the  same  beneficiary  by  the 
will  of  the  same  decedent. 

Matter  of  Hodges,  215  N.  Y.  447. 

This  wras  not  the  intent  of  the  Legislature,  and  by  chapter 
664,  L.  1915,  the  language  of  section  221a  was  changed  to 
mend  the  flaw. 

b.  JOINT  ESTATES. 

Another  and  more  serious  loophole  was  discovered  in  the 
matter  of  joint  bank  deposits  and  joint  holdings  of  stock. 
Estate  attorneys  had  begun  advising  their  clients — particu- 
larly married  people,  that  by  putting  large  holdings  of  stock 
in  their  joint  names  taxation  would  be  avoided  on  the  death 
of  either  joint  tenant — and  this  was  the  result. 

Matter  of  Tilley,  166  App.  Div.  240;  151  Supp.  79;  aff.  215  N.  Y.  702. 
Matter  of  Thompson,  167  App.  Div.  354;  153  Supp.  166;  aff.  217  N.  Y.  609. 
Matter  of  Dalsimer,  167  App.  Div.  365;  153  Supp.  58;  aff.  217  N.  Y.  608. 

Once  again  the  statute  had  to  be  patched.  Chapter  664, 
L.  1915,  inserted  the  following  as  subd.  7,  §  220: 

"Whenever  intangible  property  is  held  in  the  joint  names 
of  two  or  more  persons,  or  as  tenants  by  the  entirety,  or  is 
deposited  in  banks  or  other  institutions  or  depositaries  in 
the  joint  names  of  two  or  more  persons  and  payable  to  either 
or  the  survivor,  upon  the  death  of  one  of  such  persons  the 
right  of  the  surviving  tenant  by  the  entirety,  joint  tenant  or 
joint  tenants,  person  or  persons,  to  the  immediate  ownership 
or  possession  and  enjoyment  of  such  property  shall  be  deemed 
a  transfer  taxable  under  the  provisions  of  this  chapter  in  the 
same  manner  as  though  the  whole  property  to  which  such 
transfer  relates  belonged  absolutely  to  the  deceased  tenant  by 
the  entirety,  joint  tenant  or  joint  depositor  and  had  been 
bequeathed  to  the  surviving  tenant  by  the  entirety,  joint  tenant 
or  joint  tenants,  person  or  persons  by  such  deceased  tenant  by 
the  entirety,  joint  tenant  or  joint  depositor  by  will." 


THE    NEW    YORK    STATUTE  715 

c.  TENANCY  BY  THE  ENTIRETY. 

Such  tenancies  have  universally  been  held  not  taxable  on 
the  death  of  one  of  the  tenants.  In  the  matter  of  joint  estates 
the  amendment  of  1915  had  used  the  word  "intangible"  and 
had  then  attempted  to  tax  the  devolution  on  the  death  of  one 
tenant  by  the  entirety.  This  was  nonsense,  as  there  is  no 
such  tenancy  of  personal  property,  and  yet  the  language  of  the 
act  excluded  real  estate.  The  word  "intangible"  was  stricken 
out  of  the  first  line  of  section  220,  subd.  7,  by  chapter  323, 
L.  1916. 

d.  COMPUTATIONS. 

In  ascertaining  the  value  of  life  estates  and  remainders  the 
statute  required  calculations  to  be  made  on  the  same  basis  that 
life  insurance  policies  are  valued.  But  these  calculations  are 
based  on  the  payment  of  the  premium  in  advance  and  the  pay- 
ment of  the  death  loss  at  the  end  of  the  policy  year. 

Although  an  estate  passes  to  the  remainderman  immediately 
upon  the  death  of  the  life  tenant  the  same  method  of  calcula- 
tion was  followed  on  the  theory  that  the  statute  so  provided. 
As  a  result  the  present  value  of  the  life  estate,  plus  the  present 
value  of  the  remainder,  did  not  equal  the  entire  estate  by 
exactly  5%  of  the  value  of  the  remainder. 

In  other  words,  about  5%  of  every  remainder,  where  there 
was  a  life  use  and  a  remainder  over,  escaped  taxation  through 
this  discrepancy,  and  this  had  continued  ever  since  the  statute 
was  enacted — resulting  in  a  large  aggregate  loss.  Through 
the  influence  of  Comptroller  Travis  this  discrepancy  was 
abolished  by  chapter  550,  L.  1916,  amending  sections  230  and 
231  in  regard  to  the  calculation  of  life  estates  and  remainders. 
Hereafter  the  whole  must  equal  the  sum  of  all  its  parts  in 
calculations  of  the  inheritance  tax. 

e.  THE  NEW  RATES  AND  EXEMPTIONS. 

This  brings  us  to  an  important  amendment  of  the  present 
statute.  Chapter  548,  Laws  of  1916,  in  effect  May  15,  1916, 
amended  sections  221  and  221a,  radically  changing  the  graded 
rates  and  exemptions,  as  will  appear  from  the  following 
table : 


716 


INHERITANCE  TAXATION 


TABLE  OF  GRADED  BATES  AND  EXEMPTIONS  AS  ESTABLISHED 
BY  CHAP.  548,  L.  1916. 
In  Effect  May  15,  1916. 


Above  Exemption  Where  Allowed 

CLASS  OR  RELATIONSHIP 

Amount 

25,000 

100,000 

In  exceM 

Up  to 

to 

to 

of 

25,000 

100,000 

200,000 

200,000 

Father,  mother,  husband,  wife,  child. 

$5,003 

per  cent 
1 

per  cent 
2 

per  cent 
S 

per  cent 

4 

adopted  child. 

Lineal  descendants   1 

1 

2 

s 

4 

Brother,  sister,  son-in-law,  daugh- 

2 

3 

4 

a 

ter-in-law,     mutually     acknowl- 

Not  taxed  if 

jdged  child. 

less    than 

All  others,   except  charitable  and 

$500. 

5 

6 

7 

a 

other  corporations  specifically  ex- 

empt p<1. 

NOTE. — By  chap.  432,  L.  1922,  the  exceptions  as  to  nonresidents  are  made  pro- 
portional to  the  amount  of  property  transferred  within  the  State. 

Two  important  litigations  have  arisen  over  the  construc- 
tion of  the  new  rates  under  the  act  of  1916.  It  was  held  by 
the  Comptroller  that  "child"  in  the  act  did  not  include 
"adopted  child,"  and  that  the  latter  was  not  entitled  to  any 
exemption  if  the  bequest  or  distributive  share  was  in  excess 
of  $5,000 ;  but  the  courts  have  held  that  an  adopted  child  takes 
rank  with  a  natural  child  and  is  entitled  to  an  absolute 
exemption. 

Matter  of  Barnaby,  104  Misc.  362;  171  Supp.  989. 

The  lower  courts  held  that  the  exemption  of  $500  where  the 
bequest  was  in  excess  of  $500  was  absolute.  The  Comptroller 
contended  that,  except  in  the  case  of  a  father,  mother,  hus- 
band, wife  or  child,  the  tax  was  to  be  assessed  upon  the  entire 
estate,  if  it  exceeded  the  exemption. 

The  question  arose  before  Surrogate  Atwell  in  Matter  of 
Bunce,  100  Misc.  385,  who  held  against  the  Comptroller.  He 
was  affirmed  without  opinion  by  the  Appellate  Division, 
Fourth  Department  (178  App.  Div.  954;  165  Supp.  426).  The 
opinion  of  the  Surrogate  is  necessary  to  understand  the 
situation  and  is  as  follows: 

"The  decedent  died  subsequent  to  May  15,  1916,  so  that  the 
amendment  to  the  tax  law  of  that  year,  chapter  548,  which 
became  a  law  and  went  into  effect  on  that  date,  applies  to  this 


THE    NEW    YORK    STATUTE  717 

case.  Upon  transfer  tax  proceedings  it  appeared  that  the  net 
value  of  the  estate  was  $1,646.19 ;  that  the  legacy  given  to  one 
Loren  Van  Volkenburg,  amounting  to  $647.54,  is  the  only 
taxable  bequest.  The  order  of  the  Surrogate  assessing  the  tax 
allowed  an  exemption  of  $500,  assessing  only  the  excess  of 
$147.54  upon  which  a  tax  of  5%  was  levied  amounting  to 
$7.37. 

"From  this  order  the  Comptroller  has  appealed,  claiming 
that  no  exemption  should  have  been  allowed,  but  that  the  tax 
of  5%  should  have  been  levied  upon  the  whole  amount  of  the 
legacy. 

*  '  It  seems  to  me  that  appellant 's  position  is  untenable.  His 
contention  seems  to  be  based  upon  the  decision  construing  the 
amendment  of  1910  (chapter  706)  in  Matter  of  Mason,  69 
Misc.  280.  The  language  used  in  that  statute  is  very  different 
from  that  used  in  the  amendment  under  consideration;  there 
the  statute  reads:  'If  of  more  than  five  hundred 

dollars  it  shall  be  taxable  under  this  article,  etc. ' 

"In  the  amendment  of  1916  the  statute  speaks  only  of 
'excess';  section  221c,  subd.  3,  applies  to  this  case.  It  reads, 
'Upon  all  transfers  taxable  under  this  article  of  property  or 
any  beneficial  interest  therein  any  amount  in  excess  of  the 
value  of  five  hundred  dollars  to  any  person  or  corporation 
the  tax  on  such  transfers  shall  be  at  the  rate  of, 
&c.,  &c. ' 

"Excess  is  defined  by  Webster  to  mean  'the  degree  or 
amount  by  which  one  thing  or  number  exceeds  another;  re- 
mainder or  the  difference  between  two  numbers  is  the  excess 
of  one  over  the  other.'  So  in  this  statute  it  seems  to  be  the 
clear  intent  of  the  Legislature  that  only  the  excess  over  and 
above  five  hundred  dollars  shall  be  taxed. 

' '  This  language  is  not  new  to  the  statute ;  it  is  substantially 
the  same  language  that  was  employed  in  the  act  of  1911 
(chapter  732),  under  which  exemptions  of  $5,000  to  the  near 
relatives  and  $1,000  to  collaterals  and  strangers  have  been 
allowed  without  question,  and  I  cannot  see  or  find  any  au- 
thority or  justification  for  the  contention  now  taken  by 
the  appellant. 

"It  is  contended  that  putting  the  exemption  of  $5,000  in 


718  INHERITANCE  TAXATION 

certain  cases  in  section  221  shows  an  intent  on  the  part  of  the 
Legislature  not  to  exempt  a  legatee  enumerated  in  s.  d.  3  of 
section  221a ;  in  other  words,  that  there  is  no  exemption  given 
to  a  legatee  of  that  class  unless  his  legacy  does  not  exceed 
$500.  That  would  put  the  Legislature  in  the  light  of  saying 
that  a  legatee  who  receives  a  bequest  of  $500  or  less  is  exempt, 
but  the  legatee  who  receives  a  bequest  of  $501  must  pay  a 
tax  of  $25.00.  I  do  not  believe  such  was  the  intention;  but  it 
seems  to  me  the  intent  of  the  act  is  that  the  tax  should  be 
levied  only  upon  the  excess  over  and  above  the  sum  of  $500 
in  all  cases  except  those  enumerated  in  s.  d.  1  of  section  221, 
in  which  the  exemption  of  $5,000  is  allowed,  and  I  cannot  see 
how  the  placing  of  certain  cases  among  the  list  of  positive 
exemptions  in  section  221  changes  the  intent  to  be  gathered 
from  the  language  employed;  and  the  provision  of  law  im- 
posing these  transfer  taxes  (section  220)  is  subject  to  the  pro- 
visions of  section  221  and  section  221a  whether  they  are 
called  exemptions  or  limitations. 

' '  The  order  appealed  from  must  be  affirmed.  An  order  may 
be  entered  accordingly." 

In  support  of  his  contention  the  Comptroller  cited : 

Matter  of  Mason,  69  Misc.  280 ;  126  Supp.  998. 
Matter  of  Haley,  89  Misc.  22;  152  Supp.  432. 
Matter  of  Dehnhardt,  N.  Y.  L.  J.,  April  7,  1916. 

It  was  certainly  the  intention  of  those  who  advocated  the 
statute  to  restore  the  law  to  the  exemptions  of  1910  which  had 
not  only  been  construed  in  this  State,  but  had  been  adopted 
in  other  jurisdictions. 

Herriott  v.  Bacon,  110  la.  342;  81  N.  W.  701. 
Gilbertson  v.  McAuley,  117  la.  522;  91  N.  W.  788. 
Stelwagen  v.  Durfee,  130  Mich.  166;  89  N.  W.  728. 
Matter  of  Howell,  147  Pa.  St.  164 ;  23  A.  403. 
Dixon  v.  Bickerts,  26  Utah,  215 ;  72  Pac.  947. 

The  Court  of  Appeals  sustained  the  Comptroller  and  re- 
versed the  Surrogate,  following  the  weight  of  authority  in 
other  States.  It  said :  *  *  Paragraphs  2  and  3  of  section  221a 
fix  the  tax  upon  the  transfer  of  property  in  excess  of  the  value 
of  $500  to  a  brother  or  sister  of  the  decedent  or  any  person 
other  than  those  enumerated  in  paragraph  1.  Paragraphs  2 


THE    NEW    YORK    STATUTE  719 

and  3  contain  no  words  which  exclude  from  taxation  a  transfer 
of  property  less  than  $500  in  value.  The  legacy  to  the  nephew 
in  this  case  falls  within  the  provisions  of  paragraph  No.  3, 
and  the  whole  amount  thereof  is  taxable.  It  is  not  necessary 
to  inquire  as  to  what  moved  the  Legislature  in  the  one  case  to 
exempt  from  taxation  transfers  of  property  of  less  than 
$5,000  in  value  and  in  the  other  case  to  tax  the  whole  amount 
of  the  transfer  if  in  excess  of  the  value  of  $500.  It  is  suffi- 
cient to  say  that  such  is  the  plain  import  of  the  enactment." 

Matter  of  Bunce,  222  N.  Y.  31. 

f.  MINOR  AMENDMENTS  OF  1917,  1918,  1919  AND  1920. 

All  but  one  of  these  are  of  minor  importance  and  may  be 
briefly  summarized  as  follows : 

Chapter  53,  L.  1917,  adds  to  the  list  of  exemptions  real 
estate  devised  to  a  municipal  corporation  in  trust  for  a 
specified  purpose. 

Chapter  128,  L.  1917,  provides  for  the  remission  of  interest 
when  the  tax  has  been  paid  by  mistake  to  the  County  Treas- 
urer instead  of  the  State  Comptroller. 

Chapter  194,  L.  1917,  affects  the  salary  of  the  transfer  tax 
clerk  in  Onondaga  county. 

Chapter  481,  L.  1917,  raises  the  salary  of  the  transfer  tax 
clerk  in  Queens  county. 

Chapter  482,  L.  1917,  increases  the  salary  of  appraisers  in 
Erie  and  Suffolk  counties. 

Chapter  111,  L.  1918,  added  library  corporations  to  the 
exempt  class  in  section  221. 

Chapter  183,  L.  1918,  increases  the  salary  of  the  appraiser 
in  Chautauqua  county. 

Chapter  631,  L.  1918,  increases  the  salary  of  the  appraiser 
in  Nassau  county. 

Chapter  444,  L.  1919,  is  a  salary  amendment. 

Chapter  626,  L.  1919,  is  important  and  is  reviewed  else- 
where. It  taxes  the  transfer  of  stock  in  New  York  corpora- 
tions held  by  nonresidents. 

Chapter  644,  L.  1920,  repeals  additional  tax  imposed  by 
section  221b. 


720  INHERITANCE  TAXATION 

g.  AMENDMENTS  OF  1921  AND  1922. 

Chapter  476,  L.  1921,  re-enacts  the  entire  statute  with 
numerous  minor  amendments  effective  July  1, 1921.  The  most 
important  change  was  the  substitution  of  the  Tax  Commission 
for  the  State  Comptroller  in  all  matters  relating  to  the  collec- 
tion of  the  tax.  Section  221c  relating  to  certain  personal 
exemptions  is  repealed  and  a  gift  of  a  substantial  portion  of 
the  estate  without  adequate  consideration  within  two  years  of 
death  is  made  presumptive  evidence  that  the  gift  was  taxable 
as  made  in  contemplation  of  death. 

Chapter  430,  L.  1922,  includes  a  number  of  amendments  to 
section  220  of  the  Tax  Law  and  the  most  important  of  which 
are  as  follows : 

a.  A  provision  including  as  taxable  the  shares  of  joint  stock 
companies  or  associations  and  subscription  rights  to  corpora- 
tions, joint  stock  companies  and  banks. 

b.  A  change  in  the  form  of  the  provision  intended  to  reach 
the  securities  of  foreign  corporations  formed  for  the  purpose 
of  holding  New  York  real  estate. 

c.  A  provision  to  include  the  good  will  of  a  New  York  busi- 
ness of  a  nonresident  decedent. 

d.  A  provision  which  is  intended  to  reach  property  left  in 
trust  with  a  power  of  revocation  in  the  trustor,  and  which 
would  be  nontaxable  under  the  Bowers  decision  (195  App. 
Div.  548;aff.  231  N.  Y.  613). 

e.  A  provision  making  taxable  a  power  of  appointment  to  be 
exercised  by  a  nonresident  donee,  the  tax  to  be  due  at  the  time 
the  power  is  exercised  and  to  be  based  upon  the  value  of  the 
property  at  the  time  of  the  death  of  the  donor. 

There  are  other  amendments  to  the  wording  of  the  act 
intended  to  clarify  the  meaning  of  the  section. 

Chapter  432,  L.  1922,  adds  a  new  section  221c  whereby  a  rule 
is  provided  for  the  taxation  of  nonresident  estates  and  pro- 
portions the  exemption  to  the  amount  of  property  within  the 
State. 

Chapter  433,  L.  1922,  adds  section  221d  which  provides  for 
a  commutation  of  the  tax  on  nonresident  estates  by  the  State 
Tax  Commission  at  not  less  than  2%. 

The  new  section  221c  is  intended  to  obviate  two  difficulties. 
The  first  concerns  perplexing  questions  concerning  deductions 


THE    NEW    YORK    STATUTE  721 

for  New  York  indebtedness  and  another  set  of  deductions  for 
foreign  indebtedness.  This  amendment  directs  the  appraiser 
to  consider  the  estate  as  though  it  were  a  New  York  estate  in 
the  first  instance.  The  particular  transfer  to  an  individual  is 
determined  as  though  the  entire  estate  were  in  New  York. 
The  next  step  is  to  determine  the  amount  of  the  gross  estate, 
making  all  deductions  precisely  as  though  it  were  a  New  York 
estate  the  amount  of  the  net  estate  is  computed.  The  deduc- 
tions are  then  proportioned  to  the  amount  of  the  estate  in 
New  York.  The  result  is  to  proportion  the  exemption  as  to 
nonresidents  and  thus  the  nonresident  tax  is  increased. 

The  purpose  of  section  221d  is  to  facilitate  the  granting  of 
waivers  on  nonresident  estates.  In  the  case  of  small  estates, 
where,  after  a  long  proceeding  it  might  turn  out  there  was  no 
tax  the  executor  of  the  nonresident  estate  would  rather  pay  a 
small  tax  and  get  his  waiver  without  any  proceeding  at  all. 
New  Jersey  imposes  a  "commutation"  tax  of  5%  under 
similar  circumstances. 

5.  Additional  Tax  on  Investments. 

What  has  proved  one  of  the  most  perplexing  problems  in 
the  construction  and  application  of  inheritance  tax  statutes 
was  afforded  by  chapter  700,  L.  1917,  which  amended  the  tax 
law,  article  XV  of  the  tax  law  as  to  the  tax  on  investments, 
and  added  to  the  Transfer  Tax  Law,  article  X,  a  new  section, 
numbered  221b,  that  section  of  the  law  being  renumbered  221c. 

The  substance  of  this  new  section  was  to  impose  a  flat  tax 
of  5%  on  all  investment  securities  which  had  not  been  placed 
on  the  assessment  rolls  and  taxed  annually,  or  upon  which  the 
owner  failed  to  pay  the  stamp  tax  imposed  by  the  investment 
tax  law. 

To  understand  the  questions  arising  it  is  necessary  to  give 
the  substance  of  article  XV  as  amended  by  the  act,  as  well  as 
the  new  section  inserted  thereby  in  the  Transfer  Tax  Law. 

NOTE. —  This  statute  was  repealed  by  chapter  644,  Laws  of  1920,  and  is  now 
applicable  only  to  the  estates  of  persons  dying  prior  to  July  31,  1919,  or  on 
that  day. 

The  extended  discussion  hereto  appended  is  left  in  this  edition  of  the  book  for 
the  benefit  of  litigants  who  are  still  dealing  with  the  question  because  the  date 
of  death  brings  the  estate  within  its  provision. 

46 


722  INHERITANCE  TAXATION 

a.  THE  STATUTE. 

LAWS  OF  1917,  CHAP.  700. 
AN  ACT  to  amend  the  tax  law,  in  relation  to  the  tax  on  investments  and  transfers. 

Became  a  law  June  1,  1917,  with  the  approval  of  the  Governor.      Passed,  three- 
fifths  being  present. 

The  People  of  the  State  of  New  York,  represented  in  Senate  and  Assembly,  do 

enact  as  follows: 

Section  1.  Article  fifteen  of  chapter  sixty-two  of  the  laws  of  nineteen  hundred 
and  nine,  entitled  "An  act  in  relation  to  taxation,  constituting  chapter  sixty  of 
the  consolidated  laws,"  as  added  by  chapter  two  hundred  and  sixty-one  of  the 
laws  of  nineteen  hundred  and  sixteen,  is  hereby  amended  to  read  as  follows: 

§  330.  Definitions.  The  word  "investments,"  as  used  in  this  article  shall 
Include:  Any  bond,  note,  debt,  debenture,  equipment  bond  or  note,  or  written 
or  printed  obligation,  forming  part  of  a  series  of  similar  bonds,  notes,  debts, 
debentures,  written  or  printed  obligations,  which  by  their  terms  are  payable  one 
year  or  more  from  their  date  of  issue  and  which  are  either  secured  by  a  mortgage, 
pledge,  deposit,  or  deed  of  trust,  of  real  or  personal  property,  or  both,  or  which 
ftre  not  secured  at  all;  excepting  bonds  of  this  state  or  any  civil  division  thereof 
and  such  bonds,  notes,  debts,  debentures,  written  or  printed  obligations,  which 
are  secured  by  a  deed  of  trust  or  mortgage  recorded  in  the  state  of  New  York 
on  real  property  situated  wholly  within  the  state  of  New  York;  excepting  also 
such  bonds,  notes,  debts,  debentures,  written  or  printed  obligations  held  as 
collateral  to  secure  the  payment  of  investments  taxable  under  this  article  or  of 
bonds  taxable  under  article  eleven  of  this  chapter;  and  excepting  also  such  pro- 
portion of  a  bond,  note,  debt,  debenture  or  written  or  printed  obligation,  secured 
by  deed  of  trust  or  mortgage  recorded  in  the  state  of  New  York  of  property  or 
properties'  situated  partly  within  and  partly  without  the  state  of  New  York  as 
the  value  of  that  part  of  the  mortgaged  property  or  properties  situated  within 
the  state  of  New  York  shall  bear  to  the  value  of  the  entire  mortgaged  property 
or  properties. 

§  331.  Payment  of  tax  on  investments.  After  this  article  takes  effect,  any 
person  may  take  or  send  to  the  office  of  the  comptroller  of  this  state  any  invest- 
ment, and  may  pay  to  the  state  a  tax  at  the  rate  of  twenty  cents  per  year  on 
each  one  hundred  dollars  or  fraction  thereof  of  the  face  value  of  such  investment 
for  one  or  more  years  not  exceeding  five,  under  such  regulations  as  the  comptroller 
may  prescribe,  and  the  comptroller  shall  thereupon  affix  stamps  hereinafter  pro- 
vided for,  to  such  investment,  which  stamps  shall  be  duly  signed  by  the  comptroller 
or  his  duly  authorized  representative  and  dated  as  of  the  date  of  the  payment 
of  such  tax.  The  comptroller  shall  keep  a  record  of  such  investment  together 
with  the  name  and  address  of  the  person  presenting  the  same  and  the  date  of 
payment  of  the  tax. 

All  such  investments  shall  thereafter  be  exempt  from  all  taxation  in  the  state 
or  any  of  the  municipalities  or  local  divisions  of  the  state  except  as  provided  in 
section  twenty-four  to  twenty-four-g,  both  inclusive,  one  hundred  and  eighty- 
seven,  one  hundred  and  eighty-eight  and  one  hundred  and  eighty-nine  of  this 
chapter,  and  in  articles  ten  and  twelve  of  this  chapter  for  the  period  of  years 
from  the  payment  of  such  tax  for  which  such  tax  shall  have  been  paid  and  such 
stamps  affixed. 


THE    NEW    YORK    STATUTE  723 

§  332.     Stamps;  how  prepared  and  used. 

§  333.     No  exemption  unless  stamps  are  affixed  and  cancelled. 

§  334.     Contract  for  dies;  New  York  City  office;  expenses,  how  paid. 

§  335.     Illegal  use  of  stamps;  penalty. 

§  336.  No  deduction  of  debts  against  taxable  assessment.  The  owner  of  any 
investment,  on  which  the  tax  provided  for  in  this  article  has  not  been  paid,  shall 
be  assessed  upon  such  investment  in  the  taxing  district  in  which  he  resides,  upon 
the  fair  market  value  of  such  investment  and  no  deduction  for  the  just  debts 
owing  by  him  shall  be  allowed  against  the  assessed  value  of  such  investment,  as 
provided  in  section  six  of  this  chapter  or  elsewhere  in  this  chapter  or  in  any  other 
law  of  this  state  except  that  the  deduction  from  the  taxable  property  permitted 
by  section  six  of  this  chapter  shall  be  allowed  to  any  person,  in  respect  of  any 
investment  which  for  the  purpose  of  his  business  as  hereinafter  described  and 
not  for  or  as  an  investment,  shall  be  temporarily  owned  and  held  for  sale  by 
such  person  then  actually  engaged  in  the  bona  fide  purchase  and  sale  of  such 
investments  as  a  business,  and  who  then  shall  have  and  maintain  an  office  or 
place  of  business  in  this  state  for  the  carrying  on  of  the  actual  bona  fide  business 
of  purchasing  and  selling  such  investment  as  distinguished  from  the  purchase 
thereof  for  investment,  but  such  deduction  shall  not  be  allowed  in  respect  of 
investments  owned  and  held  for  a  longer  period  than  eight  months. 

§  337.     Application  of  taxes. 

§  338.  Exemption  where  tax  has  been  paid  on  secured  debts  before  May  first, 
nineteen  hundred  and  fifteen. 

§  339.  Exemption  where  tax  has  been  paid  on  secured  debts  between  May 
first,  nineteen  hundred  and  fifteen  and  December  thirty-first,  nineteen  hundred 
and  sixteen. 

§  340.  Apportionment  of  value  of  investment  secured  by  mortgage  of  property 
situated  partly  within  and  partly  without  the  state. 

§  2.  Section  two  hundred  and  twenty-one-b  of  such  chapter  as  added  by  chap- 
ter six  hundred  and  thirty-nine  of  the  laws  of  nineteen  hundred  and  thirteen,  is 
hereby  renumbered  section  two  hundred  and  tweuty-one-c,  and  a  new  section  two 
hundred  and  twenty-one-b  inserted  to  read  as  follows: 

"§  221-b.     Additional  tax  on  investments  in  certain  cases. 

"Upon  every  transfer  of  an  investment,  as  defined  in  article  fifteen  of  this 
chapter,  taxable  under  this  article,  a  tax  is  hereby  imposed,  in  addition  to  the 
tax  imposed  by  section  two  hundred  and  twenty-one-a,  of  five  per  centum  of  the 
appraised  inventory  value  of  such  investment  unless  the  tax  on  such  investment 
as  prescribed  by  article  fifteen  of  this  chapter  or  the  tax  on  a  secured  debt  as 
defined  by  former  article  fifteen  of  this  chapter  shall  have  been  paid  on  such 
investment  or  secured  debt  and  stamps  affixed  for  a  period  including  the  date  of 
the  death  of  the  decedent  or  unless  the  personal  representatives  of  decedent  are 
able  to  prove  that  a  personal  property  tax  was  assessed  and  paid  on  such  invest- 
ment or  secured  debt  during  the  period  it  was  held  by  decedent;  or  unless  the 
decedent  was  actually  engaged  in  the  bona  fide  purchase  and  sale  of  investments 
as  a  business,  and  at  the  time  of  his  death  had  maintained  an  office  or  place  of 
business  in  this  state  for  the  carrying  on  of  the  actual  bona  fide  business  of 
purchasing  and  selling  investments,  as  distinguished  from  the  purchase  thereof 
for  investment  purposes,  and  had  owned  and  held  such  investment  for  sale  for 
the  purpose  of  his  business  and  not  as  investment  for  a  period  of  not  more  than 
eight  months  prior  to  his  death." 


724  INHERITANCE  TAXATION 

§  3.  Section  one  of  this  act  shall  take  effect  immediately.  Section  two  of  this 
act  shall  take  effect  July  first,  nineteen  hundred  and  seventeen. 

b.  HELD  UNCONSTITUTIONAL  BY  LOWEK  COURTS. 

The  practical  application  of  this  statute  disclosed  the  fact 
that  there  were  billions  of  unstamped  bonds  in  the  possession 
of  estates  which  had  never  paid  any  taxes,  and  nearly  a  mil- 
lion dollars  was  collected  from  estates  under  the  additional 
transfer  tax  when  the  act  was  held  unconstitutional  by  Surro- 
gate Cohalan  of  New  York  county  in  Matter  of  Watson,  and 
his  decision  was  unanimously  affirmed  by  the  Appellate  Divi- 
sion, First  Department.  (186  App.  Div.  48;  174  Supp.  19.) 

The  statute  was  bitterly  attacked  as  being  harsh,  arbitrary 
and  discriminatory.  The  State  Comptroller  said  that  the  tax 
was  salutary  and  essential. 

The  just  taxation  of  investment  securities  has  long  been  a 
vexatious  problem.  They  yield  but  a  small  rate  of  interest, 
but  their  safety  and  stability  makes  them  attractive  to  the 
very  wealthy  and  to  the  fiduciaries  of  trust  estates.  To  require 
that  a  4%  bond  shall  be  assessed  annually  upon  the  tax  rolls 
means  that  the  owner  must  pay  an  average  annual  tax  of  2% 
or  upwards  and  amounts  to  the  confiscation  of  half  his  income. 
This  situation  furnishes  one  of  the  chief  arguments  for  an 
income  tax;  but  this  method  of  taxation  has  now  been  pre- 
empted by  the  Federal  Government  and  has  not  found  general 
favor,  as  yet,  with  the  State  Legislatures. 

In  practice  the  holders  of  such  investments  have  refused 
to  disclose  them  to  the  assessors  and  have  felt  justified  in 
evading  taxation  because  of  its  gross  injustice. 

To  meet  this  situation  the  Legislature  enacted  the  Secured 
Debt  Law  (ch.  802,  L.  1911),  which  enabled  the  holders  of  in- 
vestment bonds  to  secure  their  exemption  from  personal  prop- 
erty assessment  by  complying  with  its  provisions  and  paying 
a  nominal  tax.  This  went  to  the  other  extreme  and  proved  a 
failure  as  a  producer  of  revenue.  In  1912  only  $1,411,567.60 
was  received  by  the  State  under  this  law;  in  1913,  $1,167,- 
476.04,  and  in  1914  the  receipts  dropped  to  $828,619.27. 

The  State  Comptroller's  report  for  1916,  p.  18,  gives  the 
following  account  of  the  subsequent  progress  of  legislation: 

"Various  bills  were  introduced  at  the  1915  session  of  the 


THE    NEW    YORK    STATUTE  725 

Legislature  relating  to  the  Secured  Debt  Law.  Certain  pro- 
posals were  made  for  the  annual  listing  of  securities  and  the 
imposition  of  a  per  annum  tax  at  varying  rates,  all  of  which 
failed  to  pass;  but  the  Legislature,  by  formal  enactment, 
suspended  the  operation  of  the  then  Secured  Debt  Tax  Law 
from  April  1,  1915,  to  May  1,  1915,  and  enacted  a  law,  which 
became  operative  May  1,  repealing  the  old  act  and  providing 
for  the  registration  of  secured  debts  from  May  1,  1915,  to 
November  1,  1915.  Under  this  act  the  holder  of  any  bond  for 
which  other  provision  for  its  exemption  was  not  made  under 
the  General  Municipal  Law  or  the  Mortgage  Tax  Law,  could 
make  such  bond  exempt  for  a  period  of  five  years  by  the  pay- 
ment of  three-quarters  of  1%  of  the  face  value  of  the  debt 
(i.  e.,  $7.50  per  $1,000  bond)  to  the  State  Comptroller  at  his 
Albany  or  New  York  City  office." 

By  Chapter  700,  L.  1917,  the  Investment  Tax  Law  was 
amended  to  read  as  at  present. 

Section  221b  of  the  tax  law  was  enacted  and  it  immediately 
proved  very  effective.  Not  only  did  it  reveal  a  large  amount 
of  unstamped  securities  held  by  the  estates  of  decedents  and 
subject  to  the  additional  transfer  tax,  but  the  receipts  of  July, 
August  and  September,  1917,  which  are  always  the  big 
months  of  the  year  as  being  just  before  the  levy  of  personal 
taxes,  were,  respectively,  $230,402.02,  $151,288,  $742.824.60— 
a  total,  $1,224,514.80 — as  against  the  receipts  of  those  same 
three  months  in  1916  of  $41,040,  $508,455.75,  $14,368.25— a 
total  of  $563,854.10.  This  was  an  increase  for  those  three 
months  of  over  $600,000,  although  the  payments  in  1916  were 
for  a  five-year  period  at  the  rate  of  $7.50  for  a  thousand  dollar 
bond,  while  payments  in  1917  were  for  a  one-year  period  at  the 
rate  of  $2.00  per  thousand  dollar  bond. 

c.  ACT  SUSTAINED  BY  THE  COURT  OF  APPEALS. 

The  Watson  case  came  before  the  Court  of  Appeals  and 
was  argued  February  28, 1919,  by  Alexander  Otis  and  John  B. 
Gleason,  Lafayette  B.  Gleason  being  attorney  of  record  and 
the  brief  prepared  under  his  direction.  The  questions  in- 
volved went  to  the  root  of  all  inheritance  taxation.  No  less 
than  four  trust  companies  representing  large  estates  were 


726  INHERITANCE  TAXATION 

allowed  to  intervene,  the  Court  of  Appeals  departing  from  its 
usual  practice  and  listening  to  the  arguments  of  six  counsel. 
The  court  was  in  serious  doubt  and  reserved  decision  for  three 
months ;  but  it  finally  sustained  the  statute  and  reversed  the 
decision  of  the  lower  courts.  Chief  Justice  Hiscock  and  Jus- 
tices McLaughlin  and  Collin  dissented,  while  Judge  Chase 
concurred  in  the  result  only.  Judge  Crane  wrote  the  prevail- 
ing opinion,  in  which  Judges  Cuddeback  and  Hogan  concurred. 
None  the  less,  the  opinion  seems  to  settle  the  law  and  many 
of  the  difficulties  of  its  application.  After  reviewing  the  au- 
thorities and  stating  the  general  doctrines  applicable  in  all 
constitutional  questions,  Judge  Crane  says : 

"From  what  has  been  said  it  will  be  apparent  that  the 
discretion  given  to  the  Legislature  to  tax  property  passing 
by  will  or  inheritance  is  very  broad. 

"Assuming  without  deciding  that  the  discretion  to  classify 
personal  property  which  must  pay  an  inheritance  tax  before 
passing  by  will  or  inheritance  is  limited  to  a  classification 
which  is  based  upon  some  reason  and  not  the  mere  caprice 
of  the  Legislature,  this  present  law  under  discussion  comes 
within  such  a  rule. 

"Holding  up  the  section  under  discussion  for  comparison 
with  these  authorities  as  a  pattern,  does  it  fall  within  or  with- 
out the  line  of  constitutional  limitation?  In  the  first  place 
we  may  consider  this  tax  as  though  it  were  the  first  and  only 
tax  placed  upon  transfers.  The  fact  that  it  is  an  additional 
tax  does  not  change  the  principle  involved.  The  tax  is,  then, 
one  placed  upon  the  transfer  of  property  at  the  time  of  death 
which  has  not  theretofore  paid  any  tax,  local  or  State. 

"The  objection  cannot  be  pressed  that  the  beneficiary  under 
the  will  is  punished  for  the  misdeeds  of  the  ancestor  in  not 
paying  a  local  or  State  tax.  The  beneficiary  has  no  claim  to 
the  property  of  an  ancestor  except  as  given  by  law,  and,  if 
the  State  has  a  right  to  impose  a  tax  at  all  upon  the  passing 
of  property,  the  transferee  takes  only  what  is  left  after  the 
tax  is  paid.  The  State,  therefore,  having  the  power  to  place 
an  inheritance  tax  upon  property  which  has  escaped  taxation 
during  the  lifetime  of  the  testator,  it  is  no  valid  objection  that 
the  legatee  may  deem  himself  punished  by  the  circumstance. 


THE    NEW    YORK    STATUTE  727 

Neither  is  there  foundation  in  the  authorities  for  the  asser- 
tion or  implication  that  the  inheritance  tax  laws  must  look 
with  indifferent  eye  upon  the  kind  of  property  transferred 
and  cannot  single  out  personalty  as  distinguished  from  realty 
and  the  like.  Difficulties  in  practical  application  of  the  statute 
are  perhaps  more  imaginary  than  real,  but  if  they  do  exist, 
such  difficulties  are  a  matter  for  legislative  and  not  judicial 
consideration.  (Matter  of  McPherson,  104  N.  Y.  306,  324.) 
Slight  inequalities  or  injustice  which  may  follow  from  the 
application  of  this  law  as  it  is  applied  by  the  taxing  authori- 
ties are  not  in  and  of  themselves  constitutional  objections 
(Matter  of  White,  208  N.  Y.  64),  unless  they  become  so  great 
as  to  violate  the  principles  stated. 

"A  further  objection  has  been  urged  upon  us.  It  is  that  the 
act  illegally  exempts  dealers  in  investments  and  thus  makes 
this  law  unequal  in  operation. 

* '  By  section  336  of  the  tax  law,  as  amended  by  chapter  700 
of  the  Laws  of  1917,  the  owner  of  any  investment,  as  defined 
by  the  article  (article  XV)  shall  be  assessed  upon  such  an 
investment  in  the  tax  district  where  he  resides  upon  the  fair 
market  value  thereof  without  deduction  for  his  just  debts, 
except  that  such  deduction  may  be  allowed  to  any  person  in 
respect  to  any  investment  which,  for  the  purpose  of  his  busi- 
ness, shall  be  temporarily  owned  and  held  for  sale  by  him, 
then  actually  engaged  in  the  bona  fide  purchase  and  sale  of 
such  investments  as  a  business.  Such  deduction  shall  not  be 
allowed  in  respect  to  such  investments  held  for  a  longer 
period  than  eight  months. 

''Section  221b  also  contains  a  like  exception  from  the  in- 
heritance tax  upon  property  which  has  not  paid  a  local  or 
State  tax.  That  is,  the  section  does  not  apply  to  a  decedent 
who  was  actually  engaged  in  the  bona  fide  purchase  and  sale 
of  investments  as  a  business  at  the  time  of  his  death  and  had 
and  maintained  an  office  in  this  State  for  that  purpose.  The 
exception  does  not  apply  if  the  investments  are  held  for  eight 
months.  All  exemptions  do  not  render  tax  laws  unconstitu- 
tional. There  are  many  reasons  for  exempting  a  certain 
amount  of  property,  or  a  class  of  property,  or  institutions, 
such  as  charitable  organizations  and  persons  carrying  on 


728  INHERITANCE  TAXATION 

religious  work.  (American  Sugar  Refining  Co.  v.  La.,  179 
U.  S.  89;  Union  Sewer  Pipe  Co.,  184  U.  S.  540;  Northwestern 
Life  Ins.  Co.  v.  Wisconsin,  247  U.  S.  132,  140.) 

"Dealers  in  investments,  as  a  business,  disposing  of  their 
bonds  as  vendors  or  brokers  within  a  few  months  after  ac- 
quisition, cannot  be  considered  the  holders  of  such  property 
for  investment  purposes.  They  may  sell  indifferently  to  per- 
sons within  and  without  the  State;  they  may  hold  a  large 
amount  of  bonds  with  borrowed  capital  for  the  purpose  of 
organizing  or  developing  corporate  enterprise.  It  cannot 
reasonably  be  expected  that  a  dealer  would  pay  the  present 
State  tax  on  all  such  securities  passing  through  his  hands  in 
transfer  from  seller  to  purchaser,  or  held  by  him  solely  for 
sale  on  profit.  There  is  a  reason,  we  think,  for  such  an 
exemption  which  saves  this  law  from  being  a  violation  of  that 
equality  demanded  of  legislation. 

"Illustrations  of  how  this  tax  may  work  inequitably,  if  the 
exemptions  are  allowed  to  certain  relatives  under  section  221, 
have  been  conceived  by  the  courts  below.  Sufficient  to  say 
that  in  our  judgment  the  exemptions  do  not  apply  to  section 
221b.  It  is  a  flat  tax  of  5%  upon  the  transfer  of  property  not 
theretofore  taxed  as  specified.  Reference  to  the  investments 
taxable  under  this  article  means  the  investment  securities 
specified  by  article  XV  passing  by  inheritance  and  taxed  as 
stated  in  article  X.  The  exemptions  are  classified  by  section 
221  as  exceptions  and  limitations  and  are  not  continued  to 
fiover  the  additional  tax. 

"Again,  it  must  be  noted,  that  if  the  amount  of  an  estate  is 
eaten  up  by  debts  so  that  the  assets  consisting  of  these  invest- 
ments do  not  pass  to  anybody,  of  course  there  can  be  no  tax. 
Likewise,  the  investments  should  pay  their  proportionate  part 
of  the  debts  without  tax. 

4  *  One  of  the  intervenors  has  taken  the  position  that  the  said 
investment  tax,  article  XV  of  the  tax  law,  is  wholly  uncon- 
stitutional, in  that  it  withdraws  a  certain  portion  of  property 
from  personal  assessment  by  local  officials.  The  claim  is 
made  that  this  is  contrary  to  the  local  self-government  policy 
as  enacted  into  the  State  Constitution  by  section  2,  article  X, 
and  he  refers  to  People  v.  Pelham,  215  N.  Y.  374. 


THE    NEW    YORK    STATUTE  729 

"No  attempt  is  made  by  this  Investment  Tax  Law  to  give 
to  State  officials  the  right  to  tax  for  local  purposes,  or  the 
functions  of  local  representatives.  The  State  has  the  right 
to  tax  for  its  own  purposes.  A  case  might  arise  where  so 
much  property  was  withdrawn  from  local  assessment  as  to 
deprive  local  officials  substantially  of  all  their  power,  but  such 
is  not  this  case — far  from  it. 

"While  the  assessment  of  property  for  the  purposes  of 
taxation  in  this  State  has  always  been  a  function  of  local 
officers,  their  duties  may  be  modified  or  regulated  by  the  Legis- 
lature so  long  as  there  is  no  substantial  impairment  of  the 
right  of  home  rule  or  no  intent  or  attempt  to  evade  the  con- 
stitutional provisions.  (People  v.  Draper,  15  N.  Y.  541 ;  Astor 
v.  The  Mayor,  62  N.  Y.  567,  573;  Devery  v.  Coler,  173  N.  Y. 
103;  Mayer  v.  The  Tenth  National  Bank,  111  N.  Y.  446.) 

"By  the  Mortgage  Tax  Law  (Eisman  v.  Ronner,  185  N.  Y. 
285),  the  assessment  of  mortgages  was  taken  for  the  local 
authorities  and  a  flat  rate  fixed  by  the  State,  one-half  of  the 
moneys  going  to  the  State  and  one-half  to  the  locality.  The 
assessors  no  longer  had  any  judicial  discretion  in  the  assess- 
ment of  mortgages.  All  the  duties  and  powers,  however,  of 
the  assessors  were  left  intact  except  as  to  this  species  of  prop- 
erty. The  Legislature,  by  section  4  of  the  tax  law,  has  created 
a  list  of  exemptions  from  general  taxation  which,  so  far  as  I 
can  discover,  have  never  been  questioned  as  illegal  because 
in  violation  of  article  X,  section  2.  In  the  franchise  tax  case 
(People  ex  rel.  Met.  St.  Ry.  Co.  v.  Tax  Commissioners,  174 
N.  Y.  417),  it  is  recognized  by  this  court  that  certain  condi- 
tions or  nature  of  property  which  results  in  its  escape  from 
taxation  may  authorize  the  Legislature  to  provide  means  and 
methods  for  its  assessment. 

"In  this  case  of  the  bond  investment  tax,  a  large  amount  of 
property  could  not  be  reached  for  assessment  by  the  local 
authorities.  As  above  stated,  there  was  no  means  under  the 
law  to  determine  who  held  such  securities  and  to  what  amount. 
The  estates  passing  through  the  Surrogates'  Courts  bore  wit- 
ness to  the  inability  of  the  existing  tax  system  to  equalize  the 
burden  and  to  reach  all  property. 

"To  remedy  this  condition,  the  Legislature  passed  article 


730  INHERITANCE  TAXATION 

XV  of  the  Tax  Law  which  permitted  a  flat  rate  of  tax  upon 
such  investment  securities  as  might  otherwise  go  untaxed; 
and,  with  the  intent,  no  doubt,  of  inducing  bondholders  to 
make  known  their  holdings  and  to  submit  to  this  tax,  it 
exempted  such  property  from  the  inequality  and  irregulari- 
ties of  local  assessment.  This  was  an  attempt  to  reach  a  class 
of  property  which  wras  not  bearing  its  proportionate  part  of 
governmental  expenses,  to  make  just  the  tax  laws  and  to  meet 
a  situation  which  for  a  long  time  had  been  apparent  to  every- 
one familiar  with  the  subject  and  which  was  quite  difficult  to 
regulate.  The  nature  of  the  holdings  made  the  local  assess- 
ments many  times  unequal  and  unjust,  often  bearing  heavier 
upon  a  small  owner  than  upon  one  possessed  of  large  amounts 
unknown  to  the  assessors. 

"The  withdrawal  of  property  by  exemption  from  local 
assessment  may  be  so  arbitrary  or  so  extensive  as  to  interfere 
with  local  self-government  and  with  the  principles  of  home 
rule.  Such  instances  would  clearly  be  unconstitutional. 

"The  tax  on  investments,  however  (article  XV  of  the  Tax 
Law),  is  not,  in  our  opinion,  an  evasion  of  an  attempt  to 
evade  the  home  rule  provisions  of  the  Constitution,  was  not 
passed  with  the  intention  of  interfering  with  the  local  au- 
thorities in  their  taxing  powers  and  is  not  a  substantial  change 
in  the  duties  of  assessors. 

"As  I  stated  in  the  beginning,  the  facts  of  this  controversy 
are  very  simple  and  free  from  complication.  The  testator 
left  hardly  any  debts,  and  securities  within  the  Investment 
Tax  Law  which  had  not  been  subjected  to  any  tax  by  local 
or  State  authorities.  The  circumstances  were  easily  ascer- 
tainable  and  are  not  disputed.  No  difficulty  has  arisen  in 
ascertaining  and  fixing  the  amount  of  the  tax. 

"We  treat  this  case,  therefore,  as  it  is  presented  without 
trying  to  devise  instances  where  the  law  might  violate  funda- 
mental principles.  We  cannot  now  see  how  it  is  unconstitu- 
tional. Time  is  more  fecund  than  the  mind  and  instances  may 
arise  hereafter  which  may  present  other  and  further  ques- 
tions regarding  this  law.  Experience  in  application  may  fur- 
nish information  which  we  do  not  now  possess,  and  as  to  such 


THE    NEW    YORK    STATUTE  731 

questions  we  reserve  the  right  to  consider  them  as  and  when 
they  arise. 

''Every  presumption  is  in  favor  of  the  constitutionality  of 
an  act  of  the  Legislature,  and  if  the  Constitution  and  the  act 
can  be  reasonably  construed  so  as  to  enable  the  latter  to 
stand,  it  is  the  duty  of  the  courts  to  give  them  that  construc- 
tion. (Met.  St.  Ry.  Co.  v.  Tax  Commissioners,  174  N.  Y.  434, 
437.) 

"It  is  said  that  we  must  treat  the  Investment  Tax  Law  as 
though  it  were  a  compulsory  tax  upon  the  face  value  of  bonds 
or  the  actual  value  without  any  opportunity  to  be  heard  as 
to  the  amount  assessed.  The  tax  on  investments  is  not  com- 
pulsory but  optional.  An  owner  is  not  compelled  to  submit  to 
a  State  tax.  He  may  register  his  bonds  with  the  State  Comp- 
troller and  pay  a  certain  amount  according  to  face  value  and 
thus  free  the  securities  from  local  assessment.  If  he  does 
not  choose  to  do  this  he  can  submit  to  local  assessment  which 
is  according  to  actual  value  with  full  opportunity  to  be  heard. 
How  can  it  be  claimed  that  article  XV  of  the  Tax  Law  is  com- 
pulsory or  upon  what  theory  can  an  owner  say  that  he  was 
forced  to  pay  the  State  tax  when  he  does  so  voluntarily  in 
order  to  escape  a  greater  tax  according  to  actual  value?  We 
are  seeking  to  force  upon  an  owner  a  situation  which  he 
neither  welcomes  nor  has  requested.  The  tax  under  the  in- 
vestment law  has  been  in  operation  since  1911  and  millions  of 
dollars  have  been  paid  to  the  State  under  its  reasonable  regu- 
lations. It  has  never  yet  been  directly  attacked. 

"When  we  pass  upon  the  constitutionality  of  Article  XV, 
known  as  the  tax  on  investments,  we  cannot  read  into  it  any 
other  law,  nor  hold  it  unconstitutional  because  of  the  provi- 
sions of  Article  X,  providing  for  tax  on  transfers.  The  two 
laws  are  separate  and  distinct  and  governed  by  entirely  dif- 
ferent principles.  Leaving  out  of  consideration  entirely  sec- 
tion 221b,  let  us  determine  first  whether  or  not  the  tax  on 
investments  is  illegal.  We  must  construe  it  as  compulsory  in 
order  to  make  it  illegal.  There  is  nothing  whatever  in  the 
law  itself  that  compels  submission  to  a  State  tax.  It  is  en- 
tirely voluntary.  The  compulsion  is  said  to  be  in  section  221b 
providing  for  a  tax  upon  property  passing  at  death.  As 


732  INHERITANCE  TAXATION 

heretofore  stated  by  me  in  this  opinion  the  State  is  free  to 
place  an  inheritance  tax  upon  any  property  passing  by  death 
to  others.  Having  placed  such  a  tax  upon  the  actual  value  of 
bonds  which  have  paid  neither  a  local  assessment  or  a  State 
tax  (which  is  optional  and  therefore  legal),  there  is  no  ground 
for  holding  such  inheritance  tax  unconstitutional.  The  selec- 
tion of  such  property  for  inheritance  tax  is  within  the  powers 
of  the  Legislature. 

' '  To  say  that  a  man  is  compelled  to  pay  a  State  tax  in  order 
to  avoid  this  inheritance  tax  when  he  could  pay  the  ordinary 
local  assessment  upon  the  actual  value  of  his  holdings  and 
achieve  the  same  end  is  carrying  the  constitutional  protection 
to  an  unreasonable  extent. 

"What  is  said  about  the  violation  of  the  'Home  Rule'  pro- 
vision is  equally  applicable  to  the  Mortgage  Tax  Law  and 
would  render  Article  XI  (tax  on  mortgages)  also  unconsti- 
tutional in  spite  of  People  ex  rel.  Eisman  v.  Ronner,  185  N.  Y. 
285.  The  tax  here  provided  is  a  tax  of  fifty  cents  for  each  one 
hundred  dollars  on  the  principal  or  obligation  secured,  half 
of  which  goes  to  the  State.  Mortgages  are  not  otherwise 
taxable. 

"We,  therefore,  conclude  that  the  estate  of  Charles  W.  Wat- 
son, deceased,  must  be  assessed  under  section  221b,  of  the 
Tax  Law,  upon  that  amount  of  personalty  coming  within  the 
Investment  Law  which  was  not  assessed  by  the  local  authori- 
ties or  over  and  above  the  amount  assessed  and  which  did  not 
pay  any  tax  to  the  State. 

"Order  reversed.  Matter  remitted  to  the  Surrogate's  Court 
for  the  entry  of  a  decree  in  accordance  with  these  directions. ' ' 

Matter  of  Watson,  226  N.  Y.  384. 

d.  QUESTIONS  OF  CONSTRUCTION. 

Although  the  decision  in  the  Watson  case  determines  the 
constitutionality  of  the  law  it  leaves  many  questions  of  con- 
struction and  application  open  to  further  litigation.  Several 
of  these  were  not  involved  in  the  Watson  case. 

(1.)  As  to  Personal  Property  Assessment. 

Where  investment  bonds  could  not  be  included  in  the  per- 
sonal property  assessment  after  purchase  and  before  death 


THE    NEW    YORK    STATUTE  733 

the  tax  does  not  apply,  although  the  decedent  had  ample 
opportunity  to  pay  the  stamp  tax,  had  he  chosen  to  do  so. 

Matter  of  Otis,  103  Misc.  655;  aff.  190  App.  Div.  517 ;  229  N.  Y.  57. 

Where  a  personal  property  assessment  has  been  paid,  but 
that  assessment  is  less  than  the  value  of  the  bonds,  the  ques- 
tion arises  whether  it  was  the  bonds  that  were  assessed  or 
other  property,  and  whether  the  additional  tax  is  due  under 
the  act. 

The  executor  must  show  that  the  tax  has  been  paid  on  the 
particular  securities  in  question. 

Matter  of  Eeiss,  110  Misc.  482 ;  180  Supp.  876. 

And  the  burden  is  on  the  executor  to  make  this  proof. 

Matter  of  Belden,  189  App.  Div.  417;  179  Supp.  406. 

The  problem  was  clearly  discussed  by  Surrogate  Cohalan 
in  Matter  of  Von  Bernuth,  103  Misc.  522;  171  Supp.  764,  as 
follows : 

4 '  The  purpose  of  the  Legislature  in  enacting  the  amendment 
above  referred  to  was  evidently  to  prevent,  as  far  as  possible, 
a  continuance  of  the  notorious  evasion  of  the  payment  of  per- 
sonal property  taxes.  If  it  were  held  that  the  proof  of  a 
personal  property  assessment  of  $1,000  would  be  sufficient  to 
exempt  from  taxation  under  section  221b  investments  having 
a  value  of  $100,000,  the  purpose  of  the  amendment  would  not 
be  effectuated.  The  executrix  contends  that  the  assessors 
would  have  the  right  to  assess  ten  bonds  at  $4,600,  but  she 
does  not  show  that  the  ten  bonds  were  the  only  personal  prop- 
erty liable  to  taxation  which  the  decedent  had  in  this  State  on 
October  1,  1916.  As  no  deduction  for  the  value  of  the  bonds 
could  be  made  for  the  debts  of  the  decedent  ( §  336  of  the  Tax 
Law)  it  is  difficult  to  see  how  the  ten  bonds  could  be  assessed 
for  $4,600  and  the  conclusion  is  almost  irresistible  that  the  ten 
bonds  were  not  assessed  by  the  assessors.  If  effect  is  to  be 
given  to  the  intention  of  the  Legislature  in  enacting  the  amend- 
ment, the  personal  representatives  of  a  decedent  must  show 
what  property  was  submitted  to  the  assessors  for  assessment ; 
or,  if  it  is  not  desired  that  such  a  disclosure  should  be  made, 
the  decedent,  in  his  lifetime  should  have  paid  the  tax  pro- 


734  INHERITANCE  TAXATION 

• 

vided  by  section  331  of  the  Tax  Law.  Payment  of  that  tax 
precludes  the  necessity  of  making  the  proof  of  assessment 
required  by  section  221b.  If,  therefore,  a  person  fails  to  pay 
the  tax  required  by  section  331,  he  should  not  be  heard  to  com- 
plain that  the  requirements  of  section  221b  are  difficult  of 
fulfillment.  If  section  221b  constitute  an  independent  taxing 
provision,  it  should  be'  strictly  construed ;  but  as  it  is  merely 
alternative,  it  should  be  construed  so  as  to  effect  the  obvious 
intention  of  the  Legislature." 

(2.)  As  to  Exemptions. 

Where  the  bequest  is  to  a  widow  or  children  the  $5,000 
exemption  applies  to  the  additional  tax  of  5%  as  well  as  to 
the  other  taxes  imposed  by  the  statute. 

Matter  of  Washbourne,  190  App.  Div.  940 ;  180  Supp.  501 ;  aff.  229  N.  Y. 
518. 

On  the  other  hand  charitable  bequests  cannot  be  taken  free 
from  their  proportionate  share  of  the  amount  of  this  tax. 

Matter  of  LeFevre,  233  N.  Y.  138. 

But  see 

Matter  of  Zimmerman,  110  Misc.  295;  180  Supp.  508. 

Funeral  and  administration  expenses  are  deductible  from 
the  additional  tax. 

Matter  of  Kent,  186  Supp.  669. 

(3.)  Bonds  Secured  by  Mortgages. 

Where  not  a  part  of  series,  bonds  secured  by  real  estate 
mortgage  not  subject  to  additional  tax. 

Matter  of  Wille,  111  Misc.  61;   182  Supp.  366. 
Matter  of  Sheppard,  189  App.  Div.  370;  179  Supp.  409. 
Matter  of  Austin,  109  Misc.  584;  180  Supp.  502. 


THE    NEW    YORK    STATUTE  735 


THE  NEW  YORK  STATUTE. 

Article  10,  Chapter  62,  Laws  of  New  York,  1909,  being 
Article  10  of  the  Tax  Law,  constituting  Chapter  60  of  the  Con- 
solidated Laws,  as  amended  by  Chapter  476  of  the  Laws  of 

1921,  and  Chapters  430,  432  and  433  of  the  Laws  of  1922. 

TAXABLE  TRANSFERS 

PAGE 
SECTION  220.  Taxable  transfers 736 

221.  Exceptions   and   limitations    740 

221-a.  Rates   of  tax 741 

221-b.  Additional  tax  on  investments  in  certain  cases 743 

(Repealed,  by  Chapter  644,  Laws  of  1920,  approved  May 

20,  1920.) 

221-c.  Rule  for  fixing  tax  as  to  nonresidents 743 

221-d.  Optional  commutation   of  nonresident  tax 744 

222.  Accrual  and  payment  of  tax 744 

223.  Discount  and  interest    744 

224.  Lien  of  tax  and  collection  by  executors,  administrators  and 

trustees     745 

225.  Refund  of  tax  erroneously  paid 746 

226.  Taxes  upon  devises  and  bequests  in  lieu  of  commissions 747 

227.  Liability  of  certain  corporations  to  tax 747 

228.  Jurisdiction    of    the    surrogate 749 

229.  Appointment  of  appraisers,  stenographers  and  clerks. .......  750 

230.  Proceedings    by    appraiser 750 

231.  Determination  of  surrogate    754 

232.  Appeal   and   other   proceedings 755 

233.  Composition  of  transfer  tax  upon  certain  estates 755 

234.  Surrogate's1  compensation  and  surrogate's  assistants  in  New 

York,   Kings  and   other   counties 756 

235.  Proceedings  by   district   attorneys 759 

236.  Receipts  for  taxes    760 

237.  Fees  of  county  treasurer 761 

238.  Books  and  forms  to  be  furnished  by  the  tax  commission....  761 

239.  Reports  of  surrogate  and  county  clerk 762 

240.  Reports  of   county  treasurer 762 

241.  Disposition    of    revenues;     tax    on    contingent    remainders; 

refunds  in  certain  cases    763 

242.  Application  of  taxes    766 

243.  Definitions     766 

244.  Exemptions  in  article  one  not  applicable 767 

245.  Limitation  of  time  767 

NOTE. —  Section  220  is  given  with  matter  stricken  out  by  chap.  430,  Laws  of 

1922,  in  brackets  and  new  matter  added  by  said  act  in   italics.     New  matter 
inserted  by  chap.  476,  Laws  of  1921,  appears  throughout  the  statute  in  italics. 


736  INHERITANCE  TAXATION 

§  220.  Taxable  transfers.  A  tax  shall  be  and  is  hereby 
imposed  upon  the  transfer  of  any  property  real  or  personal, 
or  of  any  interest  therein  or  income  therefrom  in  trust  or 
otherwise,  to  persons  or  corporations  in  the  following  cases, 
subject  to  the  exemptions  and  limitations  hereinafter  pre- 
scribed : 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of 
this  state  from  any  person  dying  seized  or  possessed  thereof 
while  a  resident  of  the  state. 

2.  [When]  In  the  case  of  a  nonresident  decedent  when  the 
transfer  is  by  will  or  intestate  law  of  any  of  the  following 
items: 

(a)  [r].Real  property  within  this  state,  or  [of]  goods,  wares 
and  merchandise  within  this  state [,  or  of]. 

(b)  [s]  /Snares  of  stock [,]  or  certificates  of  interest  of  cor- 
porations organized  under  the  laws  of  this  state,  or  of  national 
banking  associations  located  in  this  state,  [and  the  decedent 
was  a  nonresident  of  the  state  at  the  time  of  his  death;  or  of] 
or  of  joint  stock  companies  or  associations  organized  under  the 
laws  of  this  state  and  including  all  dividends  and  rights  to 
subscribe  to  the  stock  of  such  corporations,  joint  stock  com- 
panies or  associations  or  banks. 

(c)  [p]  Property  evidenced  by  or  consisting  of  shares  of 
stock  of  a  foreign  corporation,  joint  stock  company  or  asso- 
ciation, or  bonds,  notes,  mortgages  or  other  evidences  of  in- 
terest in  any  corporation,  joint  stock  company  or  association 
wherever  incorporated  or  organized [,  except  the  shares  of 
stock  of  a  foreign  corporation,  joint  stock  company  or  asso- 
ciation, or  the  bonds,  notes,  mortgages  or  other  evidences  of 
interest  in  any  corporation,  joint  stock  company  or  associa- 
tion, domestic  or  foreign,  constituting,  being  or  in  the  nature 
of  a  moneyed  corporation,  a  railroad  or  transportation  cor- 
poration, or  a  public  service  or  manufacturing  corporation  as 
denned  and  classified  by  the  laws  of  this  state,  and]  where 
the  property  represented  by  such  shares  of  stock,  bonds,  notes, 
mortgages  or  other  evidences  of  interest,  consists  of  real  prop- 
erty which  is  located  wholly,  or  partly,  within   [the]    this 
state  [of  New  York,  or  of  an]  to  the  extent  to  which  the  value 
of  the  said  items  respectively  is  enhanced,  or  is  represented,' 


THE    NEW   YORK   STATUTE  737 

or  is  secured,  by  real  estate  in  the  state  of  New  York  owned 
~by  such  corporation,  joint  stock  company  or  association. 
There  shall  be  excepted  from  the  classification  of  this  sub- 
division all  of  such  items  where  such  corporation,  joint  stock 
company  or  association  is  or  is  in  the  nature  of  a  moneyed 
corporation,  a  railroad  or  transportation  corporation,  a  public 
service  or  manufacturing  corporation  as  defined  or  classified 
by  the  laws  of  this  state. 

(d)  The  interest  of  such  decedent  in  any  partnership  busi- 
ness conducted,  wholly  or  partly,  within  the  state  of  New 
York[,  and  if  not  wholly  within  the  state  of  New  York,  then 
in  such  proportion  as  the  value  of  the  real  property  of  such 
corporation,  joint  stock  company  or  association,  or  as  the 
value  of  the  entire  property  of  such  partnership  located  in  the 
state  of  New  York  bears  to  the  value  of  the  entire  property  of 
such  corporation,  joint  stock  company  or  association  or  part- 
nership, and  the  decedent  was  a  nonresident  of  the  state  at 
the  time  of  his  death;  or  when  the  transfer  is  by  will  or  in- 
testate law  of]  to  the  extent  of  the  interest  of  the  decedent  in 
the  partnership  property  within  this  state  and  the  good  will 
of  such  business  within  this  state. 

(e)  [c]   Capital  invested  in  business  [in  the]  within  this 
state  [by  a  nonresident  of  the  state  doing  business  in  the  state 
either  as  principal  or  partner]. 

Nothing  in  this  section  shall  be  taken  to  include  deposits 
in  banks  or  trust  companies  or  with  persons  or  corporations 
acting  as  bankers,  or  to  permit  of  a  transfer  tax  by  reason  of 
keeping  securities,  other  than  those  taxable  under  this  article, 
within  this  state. 

3.  [Whenever  the  property  of  a  resident  decedent,  or  the 
property  of  a  nonresident  decedent  within  this  state,  trans- 
ferred by  will  is]  All  property  taxable  under  this  section  not 
specifically  bequeathed  or  devised,  [such  property]  including 
transfers  under  a  residuary  clause  in  a  will,  shall [,  for  the 
purposes  of  this  article,]  be  deemed  to  be  transferred  pro- 
portionately [to  and  divided  pro  rata]  among  all  the  general 
legatees  and  devisees  [named  in  said  decedent's  will,  includ- 
ing all  transfers  under  a  residuary  clause  of  such  will]  in 
accordance  with  their  several  interests  in  the  estate,  and  in 
47 


738  INHERITANCE  TAXATION 

case  of  intestacy  according  to  the  proportions  stated  by  the 
statute  of  distributions  applicable  thereto. 

4.  When  the  transfer  is  of  property  made  by  a  resident,  or 
is  of  [real]  property  [within  this  state,  or  of  goods,  wares 
and  merchandise  within  this  state,  or  of  shares  of  stock  of 
corporations  organized  under  the  laws  of  this  state  or  of 
national  banking  associations  located  in  this  state,  made  by  a 
nonresident;  or  of  property  evidenced  by  or  consisting  of 
shares  of  stock  of  a  foreign  corporation,  joint  stock  company 
or  association,  or  bonds,  notes,  mortgages  or  other  evidences 
of  interest  in  any  corporation,  joint  stock  company,  or  asso- 
ciation wherever  incorporated  or  organized,  except  the  shares 
of  stock  of  a  foreign  corporation,  joint  stock  company  or  asso- 
ciation, domestic  or  foreign,  constituting,  being  or  in  the 
nature  of  a  moneyed  corporation,  a  railroad  or  transportation 
corporation,  or  public  service  or  manufacturing  corporation 
as  defined  and  classified  by  the  laws  of  this  state,  and  the 
property  represented  by  such  shares  of  stock,  bonds,  notes, 
mortgages  or  other  evidences  of  interest  consists  of  real  prop- 
erty which  is  located,  wholly  or  partly,  within  the  state  of 
New  York,  or  of  an  interest  in  any  partnership  business  con- 
ducted, wholly  or  partly,  within  the  state  of  New  York,  and 
if  not  wholly  within  the  state  of  New  York,  then  in  such  pro- 
portion as  the  value  of  the  real  property  of  such  corporation, 
joint  stock  company  or  association,  or  as  the  value  of  the 
entire  property  of  such  partnership  located  in  the  state  of 
New  York  bears  to  the  value  of  the  entire  property  of  such 
corporation,  joint  stock  company  or  association  or  partner- 
ship made  by  a  nonresident  or  capital  invested  in  business  in 
the  state  by  a  nonresident  of  the  state  doing  business  in  the 
state  either  as  principal  or  partner]  of  a  nonresident  included 
within  any  of  the  classes  named  in  subdivision  two;  and  is 
made  by  deed,  grant,  bargain,  sale  or  gift  made  in  contempla- 
tion of  the  death  of  the  grantor,  vendor,  or  donor  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  such 
death,  or  where  any  change  in  the  use  or  enjoyment  of  prop- 
erty included  in  such  transfer,  or  the  income  thereof,  may 
occur  in  the  lifetime  of  the  grantor,  vendor  or  donor  by  reason 
of  any  power  reserved  to  or  conferred  upon  the  grantor, 


THE    NEW    YORK    STATUTE  739 

vendor  or  donor,  either  solely  or  in  conjunction  with  any  per- 
son or  persons  to  alter,  or  to  amend,  or  to  revoke  any  transfer, 
or  any  portion  thereof,  as  to  the  portion  remaining  at  the 
time  of  the  death  of  the  grantor,  vendor  or  donor,  thus  subject 
to  alteration,  amendment  or  revocation.  If  any  one  of  the 
foregoing  transfers  is  made  for  a  valuable  consideration,  the 
portion  of  the  transfer  for  which  the  grantor  or  vendor  re- 
ceives equivalent  monetary  value  is  not  taxable,  but  the, 
remaining  portion  thereof  is  taxable. 

5.  When  any  such  person  or  corporation  becomes  bene- 
ficially entitled,  in  possession  or  expectancy,  to  any  property 
or  the  income  thereof  by  any  such  transfer  whether  made 
before  or  after  the  passage  of  this  chapter. 

6.  Whenever  any  person  or  corporation  shall  exercise  a 
power  of  appointment  derived  from  any  disposition  of  prop- 
erty, made  either  before  or  after  the  passage  of  this  chapter, 
such  appointment  when  made  shall  be  deemed  a  transfer  tax- 
able under  the  provisions  of  this  chapter  in  the  same  manner 
as  though  the  property  to  which  such  appointment  relates 
belonged  absolutely  to  the  donee  of  such  power  and  had  been 
bequeathed  or  devised  by  such  donee  by  will,  and  if  the  donee 
of  the  power  is  a  nonresident  all  of  the  property  and  the  pro- 
ceeds of  the  property  which  was  subject  to  taxation  under  this 
section  at  the  time  of  the  death  of  the  donor  shall  be  deemed 
to  be  included  in  the  transfer. 

7.  Whenever  property  is  held  in  the  joint  names  of  two  or 
more  persons,  or  as  tenants  by  the  entirety,  or  is  deposited  in 
banks  or  other  institutions  or  depositaries  in  the  joint  names 
of  two  or  more  persons  and  payable  to  either  or  the  survivor, 
upon  the  death  of  one  of  such  persons  the  right  of  the  sur- 
viving tenant  by  the  entirety,  joint  tenant  or  joint  tenants, 
person  or  persons,  to  the  immediate  ownership  or  possession 
and  enjoyment  of  such  property,  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  chapter  in  the  same 
manner  as  though  the  whole  property  to  which  snch  transfer 
relates  belonged  absolutely  to  the  deceased  tenant  by  the  en- 
tirety, joint  tenant  or  joint  depositor  and  had  been  bequeathed 
to  the  surviving  tenant  by  the  entirety,  joint  tenant  or  joint 


740  INHERITANCE  TAXATION 

tenants,  person  or  persons,  by  such  deceased  tenant  by  the 
entirety,  joint  tenant  or  joint  depositor  by  will. 

8.  The  tax  imposed  hereby  shall  be  upon  the  clear  market 
value  of  such  property  at  the  rates  hereinafter  prescribed. 

§  221.  Exceptions  and  limitations.  Any  property  devised 
or  bequeathed  for  religious  ceremonies,  observances  or  com- 
memorative services  of  or  for  the  deceased  donor,  or  to  any 
person  who  is  a  bishop  or  to  any  religious,  educational,  library, 
charitable,  missionary,  benevolent,  hospital  or  infirmary  cor- 
poration, wherever  incorporated,  including  corporations  or- 
ganized exclusively  for  bible  or  tract  purposes  and  corpora- 
tions organized  for  the  enforcement  of  laws  relating  to  chil- 
dren or  animals,  or  real  property  to  a  municipal  corporation 
in  trust  for  a  specific  public  purpose,  shall  be  exempted  from 
and  not  subject  to  the  provisions  of  this  article ;  and  the  pro- 
vision of  section  two  hundred  and  twenty-one-b  of  this  article 
enacted  by  chapter  seven  hundred  of  the  laws  of  nineteen 
hundred  and  seventeen  shall  not  apply  to  a  bequest  hereto- 
fore made  to  a  person  who  is  a  bishop  or  to  a  bequest  hereto- 
fore made  to  any  one  or  more  of  the  corporations  wholly 
exempted  from  and  not  subject  to  the  provisions  of  this 
article,  and  in  all  estates  where  an  additional  tax  under  sec- 
tion two  hundred  and  twenty-one-b  has  been  heretofore  im- 
posed on  a  bequest  to  a  person  who  is  a  bishop  or  on  a  bequest 
heretofore  made  to  one  or  more  of  the  wholly  exempt  corpora- 
tions above  named,  the  executors  or  trustees  of  the  estate  may 
apply  to  the  surrogate  of  the  proper  county  to  have  the  tax- 
ing order  amended  by  exempting  such  transfers  from  the 
additional  tax  under  section  two  hundred  and  twenty-one-b 
and  the  state  comptroller  upon  receipt  of  such  amended  order 
of  the  surrogate  is  hereby  authorized  to  make  the  proper  re 
fund  in  all  estates  where  it  appears  from  his  records  that  such 
additional  tax  has  been  paid.  There  shall  also  be  exempted 
from  and  not  subject  to  the  provisions  of  this  article  personal 
property  other  than  money  or  securities  bequeathed  to  a  cor- 
poration or  association  wherever  incorporated  or  located, 
organized  exclusively  for  the  moral  or  mental  improvement 
of  men  or  women  or  for  scientific,  literary,  patriotic,  cemetery 


THE    NEW   YORK   STATUTE  741 

or  historical  purposes  or  for  two  or  more  of  such  purposes 
and  used  exclusively  for  carrying  out  one  or  more  of  such 
purposes.  But  no  such  corporation  or  association  shall  be 
entitled  to  such  exemption  if  any  officer,  member  or  employee 
thereof  shall  receive  or  may  be  lawfully  entitled  to  receive 
any  pecuniary  profit  from  the  operations  thereof  except  rea- 
sonable compensation  for  services  in  effecting  one  or  more  of 
such  purposes  or  as  proper  beneficiaries  of  its  strictly  chari- 
table purposes;  or  if  the  organization  thereof  for  any  such 
avowed  purpose  be  a  guise  or  pretense  for  directly  or  in- 
directly making  any  other  pecuniary  profit  for  such  corpora- 
tion or  association  or  for  any  of  its  members  or  employees  or 
if  it  be  not  in  good  faith  organized  or  conducted  exclusively 
for  one  or  more  of  such  purposes.  There  shall  also  be  ex- 
empted from  and  not  subject  to  the  provisions  of  this  article 
all  property  or  any  beneficial  interest  therein  so  transferred 
to  any  father,  mother,  husband,  wife,  widow  or  child  of  the 
decedent,  grantor,  donor  or  vendor  if  the  amount  of  the 
transfers  to  such  father,  mother,  husband,  wife,  widow  or 
child  is  the  sum  of  five  thousand  dollars  or  less;  but  if  the 
amount  so  transferred  to  any  father,  mother,  husband,  wife, 
widow  or  child  is  over  five  thousand  dollars,  the  excess  above 
these  amounts,  respectively,  shall  be  taxable  at  the  rates  set 
forth  in  the  next  section. 

§  221-a.  Rates  of  tax.  (1)  Upon  all  transfers  taxable  under 
this  article  of  property  or  any  beneficial  interest  therein  in 
excess  of  the  value  of  five  thousand  dollars,  to  any  father, 
mother,  husband,  wife,  or  child  of  the  decedent,  grantor,  bar- 
gainer, donor  or  vendor,  or  to  any  child  adopted  as  such  in 
conformity  with  the  laws  of  this  state,  of  the  decedent, 
grantor,  bargainer,  donor  or  vendor,  or  upon  all  transfers 
taxable  under  this  article  or  property  or  any  beneficial  interest 
therein  in  excess  of  the  value  of  five  hundred  dollars  to  any 
lineal  descendant  of  the  decedent,  grantor,  bargainer,  donor 
or  vendor,  born  in  lawful  wedlock,  the  tax  on  such  transfers 
shall  be  at  the  rate  of 

One  per  centum  on  any  amount  up  to  and  including  the  sum 
of  twenty-five  thousand  dollars; 


742  INHERITANCE  TAXATION 

Two  per  centum  on  the  next  seventy-five  thousand  dollars 
or  any  part  thereof; 

Three  per  centum  on  the  next  one  hundred  thousand  dollars 
or  any  part  thereof; 

Four  per  centum  on  the  amount  representing  the  balance  of 
each  individual  transfer. 

(2)  Upon  all  transfers  taxable  under  this  article  of  prop- 
erty or  any  beneficial  interest  therein  in  excess  of  the  value 
of  five  hundred  dollars,  to  a  brother,  sister,  wife  or  widow  of 
a  son,  or  the  husband  of  a  daughter  of  the  decedent,  grantor, 
bargainer,  donor  or  vendor,  or  to  any  child  to  whom  any  such 
decedent,  grantor,  bargainer,  donor  or  vendor  for  not  less 
than  ten  years  prior  to  such  transfer  stood  in  the  mutually 
acknowledged  relation  of  a  parent,  provided,  however,  such 
relationship  began  at  or  before  the  child's  fifteenth  birthday 
and  was  continuous  for  said  ten  years  thereafter,  the  tax  on 
such  transfers  shall  be  at  the  rate  of 

Two  per  centum  of  any  amount  up  to  and  including  the  sum 
of  twenty-five  thousand  dollars; 

Three  per  centum  on  the  next  seventy-five  thousand  dollars 
or  any  part  thereof; 

Four  per  centum  on  the  next  one  hundred  thousand  dollars 
or  any  part  thereof ; 

Five  per  centum  on  the  amount  representing  the  balance  of 
each  individual  transfer. 

(3)  Upon  all  transfers  taxable  under  this  article  of  prop- 
erty or  any  beneficial  interest  therein  of  an  amount  in  excess 
of  the  value  of  five  hundred  dollars,  to  any  person  or  corpora- 
tion other  than  those  enumerated  in  paragraphs  one  and  two 
of  this  section  the  tax  on  such  transfers  shall  be  at  the  rate  of 

Five  per  centum  on  any  amount  up  to  and  including  the 
sum  of  twenty-five  thousand  dollars ; 

Six  per  centum  on  the  next  seventy-five  thousand  dollars  or 
any  part  thereof ; 

Seven  per  centum  on  the  next  one  hundred  thousand  dollars 
or  any  part  thereof ; 

Eight  per  centum  on  the  amount  representing  the  balance 
of  each  individual  transfer. 


THE    NEW   YORK    STATUTE  743 

§  221-b.  Additional  tax  on  investments  in  certain  cases. 
(Repealed  by  Chapter  644,  Laws  of  1920.) 

(Section  221-b  which  imposed  the  additional  5  per  centum 
tax  on  investments  in  certain  cases  was  repealed  by  Chapter 
644  of  the  Laws  of  1920,  approved  May  10, 1920,  and  effective 
immediately,  which  provided  also  as  follows:  "Such  repeal 
shall  apply  to  the  estate  of  every  decedent  who  died  subse- 
quent to  July  thirty-first,  nineteen  hundred  and  nineteen,  such 
date  being  the  date  fixed  by  section  three  of  chapter  six  hun- 
dred and  twenty-seven  of  the  laws  of  nineteen  hundred  and 
nineteen,  as  the  date  subsequent  to  which  intangible  personal 
property  shall  no  longer  be  subject  to  taxation. ' ' 

"If,  pursuant  to  section  221-b  of  the  tax  law,  a  transfer 
shall  have  been  fixed  on  account  of  a  transfer  of  property 
constituting  a  part  of  the  estate  of  a  decedent  who  shall  have 
died  subsequent  to  July  thirty-first,  nineteen  hundred  and 
nineteen,  such  assessment  shall  be  canceled,  and  if  any  tax 
shall  have  been  paid  on  account  thereof  the  same  shall  be 
refunded  in  the  manner  provided  by  article  ten  of  the  tax 
law.") 

§  221-c.  Rule  for  fixing  the  tax  upon  transfers  from  non- 
resident decedents.  To  fix  the  tax  in  the  case  of  a  transfer 
from  a  nonresident  decedent,  determine 

First:  The  aggregate  transfer;  that  is,  the  fair  market 
value  of  the  property,  real  or  personal,  whether  within  or 
without  the  State,  passing  to  the  transferee  from  the  estate  of 
the  decedent  after  making  the  deductions  computed  as  if  the 
decedent  were  a  resident  of  this  State  and  all  his  property 
were  located  within  this  State. 

Second :  The  New  York  transfer ;  that  is,  the  fair  market 
value  of  that  part  of  the  property,  included  in  said  aggregate 
transfer,  passing  to  the  transferee  from  property  of  which  the 
transfer  is  taxable  under  this  chapter,  after  computing  the 
deductions  as  aforesaid. 

Third :  The  tax  which  would  be  imposed  upon  such  aggre- 
gate transfer  if  the  whole  thereof  were  taxed  under  this 
chapter. 

The  amount  of  the  tax  upon  the  transfer  taxable  hereunder 


744  INHERITANCE  TAXATION 

shall  be  such  a  part  of  what  the  tax  would  be  upon  said 
aggregate  transfer,  as  the  said  New  York  transfer  bears  to 
the  said  aggregate  transfer,  but  without  increasing  the  graded 
rate  by  the  inclusion  of  property  without  the  state  and  without 
taxing  transfers  of  which  the  amount  is  not  over  five  hundred 
dollars.  (Added  by  Chapter  432,  Laws  1922.  Former  §  221-c 
repealed  by  Ch.  476,  L.  1921.) 

§  221-d.  Optional  commutation  of  the  tax  in  nonresident 
estates.  Provided  that  it  is  proved  to  the  satisfaction  of  the 
surrogate  that  the  amount  of  the  tax  will  not  be  decreased  by 
the  following  method,  the  transfer  tax  in  the  estate  of  a  non- 
resident decedent  may  be  commuted  and  finally  settled  as 
between  the  State  and  all  parties  in  interest  by  the  payment 
to  the  State  Tax  Commission  of  a  sum  to  be  determined  by  the 
commission  which  sum  shall  be  not  less  than  two  per  centum 
upon  the  clear  market  value  of  all  the  property  within  the 
State  taxable  under  this  article  and  without  deduction  or 
exemption  of  any  kind.  (Added  by  Ch.  433,  L.  1922.) 

§  222.  Accrual  and  payment  of  tax.  All  taxes  imposed  by 
this  article  shall  be  due  and  payable  at  the  time  of  the  trans- 
fer, except  as  herein  otherwise  provided.  Taxes  upon  the 
transfer  of  any  estate,  property  or  interest  therein  limited, 
conditioned,  dependent  or  determinable  upon  the  happening 
of  any  contingency  or  future  event  by  reason  of  which  the 
fair  market  value  thereof  cannot  be  ascertained  at  the  time  of 
the  transfer  as  herein  provided,  shall  accrue  and  become  due 
and  payable  when  the  persons  or  corporations  beneficially 
entitled  thereto  shall  come  into  actual  possession  or  enjoy- 
ment thereof.  Such  tax  shall  be  paid  to  the  tax  commission 
in  a  county  in  which  the  office  of  appraiser  is  salaried,  and  in 
other  counties,  to  the  county  treasurer,  and  said  tax  commis- 
sion or  county  treasurer  shall  furnish,  and  every  executor, 
administrator  or  trustee  shall  take,  duplicate  receipts  of  such 
payment  as  provided  in  section  two  hundred  and  thirty-six. 

§  223.  Discount  and  interest.  If  such  tax  is  paid  within  six 
months  from  the  accrual  thereof,  a  discount  of  five  per  centum 


THE    NEW   YOBK   STATUTE  745 

shall  be  allowed  and  deducted  therefrom.  If  such  tax  is  not 
paid  within  eighteen  months  from  the  accrual  thereof,  interest 
shall  be  charged  and  collected  thereon  at  the  rate  of  ten  per 
centum  per  annum  from  the  time  the  tax  accrued;  unless  by 
reason  of  claims  made  upon  the  estate,  necessary  litigation  or 
other  unavoidable  cause  of  delay,  such  tax  cannot  be  deter- 
mined and  paid  as  herein  provided,  in  which  case  interest  at 
the  rate  of  six  per  centum  per  annum  shall  be  charged  upon 
such  tax  from  the  accrual  thereof  until  the  cause  of  such 
delay  is  removed,  after  which  ten  per  centum  shall  be  charged ; 
provided,  however,  that  whenever  the  payment  of  any  tax 
imposed  by  this  article  and  payable  to  a  county  treasurer  has 
been  heretofore  or  shall  be  hereafter  tendered,  through  in- 
advertence, to  the  tax  commission  within  the  period  of  time 
before  interest  attaches  to  said  tax,  if  such  tax  is  paid  in  full 
to  the  treasurer  of  the  proper  county  within  ten  days  there- 
after, the  county  treasurer,  when  directed  so  to  do  by  the  tax 
commission,  may  receipt  in  full  for  such  tax  without  collecting 
any  interest  imposed  thereon  by  this  section  of  the  tax  law. 

§  224.  Lien  of  tax  and  collection  by  executors,  administra- 
tor and  trustees.  Every  such  tax  shall  be  and  remain  a  lien 
upon  the  property  transferred  until  paid  and  the  person  to 
whom  the  property  is  so  transferred,  and  the  executors,  ad- 
ministrators and  trustees  of  every  estate  so  transferred  shall 
be  personally  liable  for  such  tax  until  its  payment.  Every 
executor,  administrator  or  trustee  shall  have  full  power  to 
sell  so  much  of  the  property  of  the  decedent  as  will  enable  him 
to  pay  such  tax  in  the  same  manner  as  he  might  be  entitled 
by  law  to  do  for  the  payments  of  the  debts  of  the  testator  or 
intestate.  Any  such  executor,  administrator  or  trustee  having 
in  charge  or  in  trust  any  legacy  or  property  for  distribution 
subject  to  such  tax  shall  deduct  the  tax  therefrom  and  shall 
pay  over  the  same  to  the  tax  commission  or  county  treasurer, 
as  herein  provided.  If  such  legacy  or  property  be  not  in 
money,  he  shall  collect  the  tax  thereon  upon  the  appraised 
value  thereof  from  the  person  entitled  thereto.  He  shall  not 
deliver  or  be  compelled  to  deliver  any  specific  legacy  or  prop- 
erty subject  to  tax  under  this  article  to  any  person  until  he 


746  INHERITANCE  TAXATION 

shall  have  collected  the  tax  thereon.  If  any  such  legacy  shall 
be  charged  upon  or  payable  out  of  real  property,  the  heir  or 
devisee  shall  deduct  such  tax  therefrom  and  pay  it  to  the 
executor,  administrator  or  trustee,  and  the  tax  shall  remain  a 
lien  or  charge  on  such  real  property  until  paid;  and  the  pay- 
ment thereof  shall  be  enforced  by  the  executor,  administrator 
or  trustee  in  the  same  manner  that  payment  of  the  legacy 
might  be  enforced,  or  by  the  district  attorney  under  section 
two  hundred  and  thirty-five  of  this  chapter.  If  any  such 
legacy  shall  be  given  in  money  to  any  such  person  for  a  limited 
period,  the  executor,  administrator  or  trustee  shall  retain  the 
tax  upon  the  whole  amount,  but  if  it  be  not  in  money,  he  shall 
make  application  to  the  court  having  jurisdiction  of  an  ac- 
counting by  him,  to  make  an  apportionment,  if  the  case  require 
it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatees,  and 
for  such  further  order  relative  thereto  as  the  case  may  require. 

§  225.  Refund  of  tax  erroneously  paid.  If  any  debts  shall 
be  proven  against  the  estate  of  a  decedent  after  the  payment 
of  any  legacy  or  distributive  share  thereof,  from  which  any 
such  tax  has  been  deducted  or  upon  which  it  has  been  paid  by 
the  person  entitled  to  such  legacy  or  distributive  share,  and 
such  person  is  required  by  order  of  the  surrogate  having  juris- 
diction, on  notice  to  the  tax  commission,  to  refund  the  amount 
of  such  debts  or  any  part  thereof,  an  equitable  proportion  of 
the  tax  shall  be  repaid  to  him  by  the  executor,  administrator 
or  trustee,  if  the  tax  has  not  been  paid;  or  if  such  tax  has 
been  paid,  the  tax  commission  with  the  approval  of  the  comp- 
troller shall  refund  out  of  the  funds  in  the  custody  of  the 
comptroller  to  the  credit  of  such  taxes  such  equitable  pro- 
portion of  the  tax.  If  after  the  payment  of  any  tax  in  pur- 
suance of  an  order  fixing  such  tax,  made  by  the  surrogate 
having  jurisdiction,  such  order  be  modified  or  reversed  by  the 
surrogate  having  jurisdiction  within  two  years  from  and  after 
the  date  of  entry  of  the  order  fixing  the  tax,  or  be  modified  or 
reversed  at  any  time  on  an  appeal  taken  therefrom  within  the 
time  allowed  by  law  on  due  notice  to  the  tax  commission,  the 
tax  commission  with  the  approval  of  the  comptroller  shall 
refund  to  the  executor,  administrator,  trustee,  person  or  per- 


THE    NEW    YORK    STATUTE  747 

sons  by  whom  such  tax  was  paid,  the  amount  of  any  moneys 
paid  or  deposited  on  account  of  such  tax  in  excess  of  the 
amount  of  the  tax  fixed  by  the  order  modified  or  reversed,  out 
of  the  funds  in  the  custody  of  the  comptroller  to  the  credit  of 
such  taxes ;  but  no  application  for  such  refund  shall  be  made 
after  one  year  from  such  reversal  or  modification,  unless  an 
appeal  shall  be  taken  therefrom,  in  which  case  no  such  applica- 
tion shall  be  made  after  one  year  from  the  final  determination 
on  such  appeal  or  of  an  appeal  taken  therefrom,  and  the  repre- 
sentatives of  the  estate,  legatees,  devisees  or  distributees 
entitled  to  any  refund  under  this  section  shall  not  be  entitled 
to  any  interest  upon  such  refund,  and  the  tax  commission  shall 
deduct  from  the  fees  allowed  by  this  article  to  the  county 
treasurer  the  amount  theretofore  allowed  him  upon  such  over- 
payment. Where  it  shall  be  proved  to  the  satisfaction  of  the 
surrogate  that  deductions  for  debts  were  allowed  upon  the 
appraisal,  since  proved  to  have  been  erroneously  allowed,  it 
shall  be  lawful  for  such  surrogate  to  enter  an  order  assessing 
the  tax  upon  the  amount  wrongfully  or  erroneously  deducted. 

§  226.  Taxes  upon  devises  and  bequests  in  lieu  of  commis- 
sions. If  a  testator  bequeaths  or  devises  property  to  one  or 
more  executors  or  trustees  in  lieu  of  their  commissions  or 
allowances,  or  makes  them  his  legatees  to  an  amount  exceeding 
the  commissions  or  allowances  prescribed  by  law  for  an  execu- 
tor or  trustee,  the  excess  in  value  of  the  property  so  bequeathed 
or  devised  above  the  amount  of  commissions  or  allowances 
prescribed  by  law  in  similar  cases  shall  be  taxable  under  this 
article. 

§  227.  Liability  of  certain  corporations  to  tax.  If  a  foreign 
executor,  administrator  or  trustee  shall  assign  or  transfer 
any  stock  or  obligations  in  this  State  standing  in  the  name  of 
a  decedent,  or  in  trust  for  a  decedent,  liable  to  any  such  tax, 
the  tax  shall  be  paid  to  the  tax  commission  or  the  treasurer 
of  the  proper  county  on  the  transfer  thereof.  No  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institu- 
tion, person  or  persons  having  in  possession  or  under  control 
securities,  deposits,  or  other  assets  belonging  to  or  standing 


748  INHERITANCE    TAXATION 

in  the  name  of  a  decedent  who  was  a  resident  or  nonresident, 
or  belonging  to,  or  standing  in  the  joint  names  of  such  dece- 
dent and  one  or  more  persons,  including  the  shares  of  the 
capital  stock  of,  or  other  interests  in,  the  safe  deposit  com- 
pany, trust  company,  corporation,  bank  or  other  institution 
making  the  delivery  or  transfer  herein  provided,  shall  deliver 
or  transfer  the  same  to  the  executors,  administrators  or  legal 
representatives  of  said  decedent,  or  to  the  survivor  or  sur- 
vivors when  held  in  the  joint  names  of  a  decedent  and  one  or 
more  persons,  or  upon  their  order  or  request,  unless  notice 
of  the  time  and  place  of  such  intended  delivery  or  transfer 
be  served  upon  the  tax  commission  at  least  ten  days  prior  to 
said  delivery  or  transfer ;  nor  shall  any  such  safe  deposit  com- 
pany, trust  company,  corporation,  bank  or  other  institution, 
person  or  persons  deliver  or  transfer  any  securities,  deposits 
or  other  assets  belonging  to  or  standing  in  the  name  of  a  dece- 
dent, or  belonging  to,  or  standing  in  the  joint  names  of  a 
decedent  and  one  or  more  persons,  including  the  shares  of 
the  capital  stock  of,  or  other  interests  in,  the  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institu- 
tion making  the  delivery  or  transfer,  without  retaining  a 
sufficient  portion  or  amount  thereof  to  pay  any  tax  and  interest 
which  may  thereafter  be  assessed  on  account  of  the  delivery 
or  transfer  of  such  securities,  deposits  or  other  assets,  includ- 
ing the  shares  of  the  capital  stock  of,  or  other  interests  in,  the 
safe  deposit  company,  trust  company,  corporation,  bank  or 
other  institution  making  the  delivery  or  transfer,  under  the 
provisions  of  this  article,  unless  the  tax  commission  consents 
thereto  in  writing.  And  it  shall  be  lawful  for  the  said  tax 
commission  or  its  representative  to  examine  said  securities, 
deposits  or  assets  at  the  time  of  such  delivery  or  transfer. 
Failure  to  serve  such  notice  or  failure  to  allow  such  examina- 
tion or  failure  to  retain  a  sufficient  portion  or  amount  to  pay 
such  tax  and  interest  as  herein  provided  shall  render  said  safe 
deposit  company,  trust  company,  corporation,  bank  or  other 
institution,  person  or  persons  liable  to  the  payment  of  the 
amount  of  the  tax  and  interest  due  or  thereafter  to  become 
due  upon  said  securities,  deposits  or  other  assets,  including 
the  shares  of  the  capital  stock  of,  or  other  interests  in,  the 


V 
THE    NEW    YOKK   STATUTE  749 

safe  deposit  company,  trust  company,  corporation,  bank  or 
other  institution  making  the  delivery  or  transfer,  and  in  addi- 
tion thereto,  a  penalty  of  not  less  than  five  or  more  than 
twenty-five  thousand  dollars;  and  the  payment  of  such  tax 
and  interest  thereon,  or  of  the  penalty  above  prescribed,  or 
both,  may  be  enforced  in  an  action  brought  by  the  tax  com- 
mission in  any  court  of  competent  jurisdiction. 

§  228.  Jurisdiction  of  the  surrogate.  The  surrogate 's  court 
of  every  county  of  the  state  having  jurisdiction  to  grant  letters 
testamentary  or  of  administration  upon  the  estate  of  a  dece- 
dent whose  property  is  chargeable  with  any  tax  under  this 
article,  or  to  appoint  a  trustee  of  such  estate  or  any  part 
thereof,  or  to  give  ancillary  letters  'thereon,  shall  have  juris- 
diction to  hear  and  determine  all  questions  arising  under  the 
provisions  of  this  article,  and  to  do  any  act  in  relation  thereto- 
authorized  by  law  to  be  done  by  a  surrogate  in  other  matters 
or  proceedings  coming  within  his  jurisdiction;  and  if  two  or 
more  surrogates'  courts  shall  be  entitled  to  exercise  any  such 
jurisdiction,  the  surrogate  first  acquiring  jurisdiction  here- 
under  shall  retain  the  same  to  the  exclusion  of  every  other 
surrogate.  Every  petition  for  ancillary  letters  testamentary 
or  ancillary  letters  of  administration  made  in  pursuance  of 
the  provisions  of  the  code  of  civil  procedure  or  surrogate  court 
act  shall  set  forth  the  tax  commission  as  a  party  to  be  cited  as 
therein  prescribed,  and  a  true  and  correct  statement  of  all 
the  decedent's  property  in  this  State  and  the  value  thereof; 
and  upon  the  presentation  thereof  the  surrogate  shall  issue  a 
citation  directed  to  the  tax  commission;  and  upon  the  return 
of  the  citation  the  surrogate  shall  determine  the  amount  of  the 
tax  which  may  be  or  become  due  under  the  provisions  of  this 
article  and  his  decree  awarding  the  letters  may  contain  any 
provision  for  the  payment  of  such  tax  or  the  giving  of  security 
therefor  which  might  be  made  by  such  surrogate  if  the  tax 
commission  were  a  creditor  of  the  decedent. 

When  it  is  made  to  appear  to  a  surrogate  of  any  county  in 
this  State  that  a  safe  deposit  company,  trust  company,  bank, 
person  or  corporation  has  in  its  possession  or  under  its  control 
papers  of  a  decedent  of  whose  estate  such  court  has  jurisdic- 


750  INHERITANCE     TAXATION 

tion,  or  that  the  decedent  had  leased  from  such  a  corporation 
a  safe  deposit  box,  and  that  such  papers  or  such  safe  deposit 
box  may  contain  a  will  of  the  decedent,  or  a  deed  to  a  burial 
plot  in  which  the  decedent  is  to  be  interred,  he  may  make  an 
order  directing  such  safe  deposit  company,  trust  company, 
bank,  person  or  corporation  to  permit  a  person  named  in  the 
order  to  examine  such  papers  or  safe  deposit  box  in  the 
presence  of  a  representative  of  the  tax  commission  and  an 
officer  of  such  safe  deposit  company,  trust  company,  bank  or 
corporation,  or  agent  of  such  person,  and  if  a  paper  purport- 
ing to  be  a  will  of  the  decedent,  or  the  deed  to  a  burial  plot  is 
found  among  such  papers,  or  in  such  box,  to  deliver  such  will 
to  the  clerk  of  the  surrogate's  court  of  such  county,  or  such 
deed  to  such  person  as  may  be  designated  in  such  order.  The 
clerk  of  said  court  shall  furnish  a  receipt  upon  the  delivery  to 
him  of  the  will. 

§  229.  Appointment  of  appraisers,  stenographers  and 
clerks.  There  shall  be  a  salaried  appraiser  or  appraisers  in  each 
of  the  counties  of  New  York,  Kings,  Bronx,  Albany,  Dutchess, 
Erie,  Monroe,  Nassau,  Niagara,  Oneida,  Onondaga,  Orange, 
Queens,  Rensselaer,  Richmond,  Suffolk,  Chautauqua  and  West- 
chester.  The  president  of  the  tax  commission  shall  appoint  for 
each  such  county  an  appraiser  or  appraisers,  and  such  stenog- 
raphers and  other  employees  as  may  be  needed  for  the  proper 
administration  of  this  article,  and  shall  fix  their  salaries 
within  the  amounts  appropriated  for  such  purpose;  except 
that  the  number  and  salaries  of  such  appraisers,  stenogra- 
phers and  other  employees  appointed  for  the  fiscal  year  begin- 
ning July  first,  nineteen  hundred  and  twenty-one,  shall  be  ap- 
proved by  the  governor  and  the  chairman  of  the  finance  com- 
mittee of  the  senate  and  the  ways  and  means  committee  of  the 
assembly. 

§  230.  Proceedings  by  appraiser.  In  each  county  in  which 
the  office  of  appraiser  is  not  salaried  the  county  treasurer 
shall  act  as  appraiser.  The  surrogate,  either  upon  his  own 
motion,  or  upon  the  application  of  any  interested  person,  in- 
cluding the  tax  commission,  shall  by  order  direct  the  person  or 
-one  of  the  persons  appointed  pursuant  to  section  two  hundred 


THE    NEW   YORK   STATUTE  751 

and  twenty-nine  of  this  chapter  in  counties  in  which  the  office 
of  appraiser  is  salaried,  and  in  other  counties,  the  county 
treasurer,  to  fix  the  fair  market  value  of  property  of  persons 
whose  estates  shall  be  subject  to  the  payment  of  any  tax 
imposed  by  this  article. 

Every  such  appraiser  shall  forthwith  give  notice  by  mail  to 
all  persons  known  to  have  a  claim  or  interest  in  the  property 
to  be  appraised,  including  the  tax  commission,  and  to  such 
persons  as  the  surrogate  may  by  order  direct,  of  the  time  and 
place  when  he  will  appraise  such  property.  He  shall  at  such 
time  and  place  appraise  the  same  at  its  fair  market  value  as 
herein  prescribed ;  and  for  that  purpose  the  said  appraiser  is 
authorized  to  issue  subpoenas  and  to  compel  the  attendance  of 
witnesses  before  him  and  to  take  the  evidence  of  such  wit- 
nesses under  oath  concerning  such  property  and  the  value 
thereof ;  and  he  shall  make  report  thereof  and  of  such  value  in 
writing,  to  the  said  surrogate,  together  with  the  depositions 
of  the  witnesses  examined,  and  such  other  facts  in  relation 
thereto  and  to  said  matter  as  the  surrogate  may  order  or 
require.  Every  appraiser,  except  in  the  counties  in  which 
the  office  of  appraiser  is  salaried,  for  which  provision  is 
hereinbefore  made,  shall  be  paid  his  actual  and  necessary 
traveling  expenses  and  the  fees  paid  such  witnesses,  which 
fees  shall  be  the  same  as  those  now  paid  to  witnesses  sub- 
poenaed to  attend  in  courts  of  record,  payment  to  be  made 
out  of  moneys  appropriated  for  such  purpose.  No  deduction 
shall  be  allowed  from  the  appraised  value  of  the  property 
transferred  on  account  of  any  liability  of  decedent  incurred 
or  assumed  by  the  acquisition,  care,  improvement,  use,  enjoy- 
ment or  disposition  of  property  without  the  State,  the  trans- 
fer of  which  is  not  subject  to  tax  under  the  provisions  of  this 
article.  Any  transfer  of  his  property  made  by  a  decedent  by 
deed,  sale  or  gift  within  two  years  prior  to  his  death,  without 
a  valid  and  adequate  consideration  therefor,  shall  be  presumed 
to  have  been  made  in  contemplation  of  death  within  the  mean- 
ing of  this  chapter. 

The  value  of  every  future  or  limited  estate,  income,  interest 
or  annuity  for  any  life  or  lives  in  being,  shall  be  determined 
by  the  rule,  method  and  standard  of  mortality  and  value 


752  INHERITANCE     TAXATION 

employed  by  the  superintendent  of  insurance  in  ascertaining 
the  values  of  annuities  for  the  determination  of  liabilities  of 
life  insurance  companies,  except  that  the  rate  of  interest  for 
making  such  computation  shall  be  five  per  centum  per  annum. 

In  estimating  the  value  of  any  estate  or  interest  in  prop- 
erty, to  the  beneficial  enjoyment  or  possession  whereof  there 
are  persons  or  corporations  presently  entitled  thereto,  no 
allowance  shall  be  made  on  account  of  any  contingent  incum- 
brance  thereon,  nor  on  account  of  any  contingency  upon  the 
happening  of  which  the  estate  or  property  or  some  part 
thereof  or  interest  therein  might  be  abridged,  defeated  or 
diminished;  provided,  however,  that  in  the  event  of  such  in- 
cumbrance  taking  effect  as  an  actual  burden  upon  the  interest 
of  the  beneficiary,  or  in  the  event  of  the  abridgement,  defeat, 
or  diminution  of  said  estate  or  property  or  interest  therein 
as  aforesaid,  a  return  shall  be  made  to  the  person  properly 
entitled  thereto  of  a  proportionate  amount  of  such  tax  on 
account  of  the  incumbrance  when  taking  effect,  or  so  much  as 
will  reduce  the  same  to  the  amount  which  would  have  been 
assessed  on  account  of  the  actual  duration  or  extent  of  the 
estate  or  interest  enjoyed.  Such  return  of  tax  shall  be  made 
in  the  manner  provided  by  section  two  hundred  and  twenty- 
five  of  this  chapter. 

Where  any  property  shall,  after  the  passage  of  this  chapter, 
be  transferred  subject  to  any  charge,  estate  or  interest,  deter- 
minable  by  the  death  of  any  person,  or  at  any  period  ascer- 
tainable  only  by  reference  to  death,  the  increase  accruing  to 
any  person  or  corporation  upon  the  extinction  or  determina- 
tion of  such  charge,  estate  or  interest,  shall  be  deemed  a 
transfer  of  property  taxable  under  the  provisions  of  this 
article  in  the  same  manner  as  though  the  person  or  corpora- 
tion beneficially  entitled  thereto  had  then  acquired  such  in- 
crease from  the  person  from  whom  the  title  to  their  respective 
estates  or  interests  is  derived. 

When  property  is  transferred  in  trust  or  otherwise,  and 
the  rights,  interest  or  estates  of  the  transferees  are  dependent 
upon  contingencies  or  conditions  whereby  they  may  be  wholly 
or  in  part  created,  defeated,  extended  or  abridged,  a  tax  shall 
be  imposed  upon  said  transfer  at  the  highest  rate  which,  on 


THE    NEW   YOEK   STATUTE  753 

the  happening  of  any  of  the  said  contingencies  or  conditions, 
would  be  possible  under  the  provisions  of  this  article,  and  such 
tax  so  imposed  shall  be  due  and  payable  forthwith  by  the 
executors  or  trustees  out  of  the  property  transferred,  and  the 
surrogate  shall  enter  a  temporary  order  determining  the 
amount  of  said  tax  in  accordance  with  this  provision;  pro- 
vided, however,  that  on  the  happening  of  any  contingency 
whereby  the  said  property,  or  any  part  thereof,  is  transferred 
to  a  person  or  corporation  exempt  from  taxation  under  the 
provisions  of  this  article,  or  to  any  person  taxable  at  a  rate  less 
than  the  rate  imposed  and  paid,  such  person  or  corporation 
shall  be  entitled  to  a  return  of  so  much  of  the  tax  imposed 
and  paid  as  is  the  difference  between  the  amount  paid  and  the 
amount  which  said  person  or  corporation  should  pay  under 
the  provisions  of  this  article ;  and  the  executor  or  trustee  of 
each  estate,  or  the  legal  representative  having  charge  of  the 
trust  fund,  shall  immediately  upon  the  happening  of  said 
contingencies  or  conditions  apply  to  the  surrogate  of  the 
proper  county,  upon  a  verified  petition  setting  forth  all  the 
facts,  and  giving  at  least  ten  days'  notice  by  mail  to  all 
interested  persons  or  corporations,  for  an  order  modifying 
the  temporary  taxing  order  of  said  surrogate  so  as  to  provide 
for  the  final  assessment  and  determination  of  the  tax  in  accord- 
ance with  the  ultimate  transfer  or  devolution  of  said  property. 
Such  return  of  overpayment  shall  be  made  in  the  manner 
provided  by  section  two  hundred  and  twenty-five  of  this 
chapter. 

Estates  in  expectancy  which  are  contingent  or  defeasible 
and  in  which  proceedings  for  the  determination  of  the  tax 
have  not  been  taken  or  where  the  taxation  thereof  has  been 
held  in  abeyance,  shall  be  appraised  at  their  full,  undiminished 
value  when  the  persons  entitled  thereto  shall  come  into  the 
beneficial  enjoyment  or  possession  thereof,  without  diminution 
for  or  on  account  of  any  valuation  theretofore  made  of  the 
particular  estates  for  purposes  of  taxation,  upon  which  said 
estates  in  expectancy  may  have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by 
the  act  or  omission  of  the  legatee  or  devisee  it  shall  be  taxed 
as  if  there  were  no  possibility  of  such  divesting. 
48 


754  INHERITANCE     TAXATION 

The  report  of  the  appraiser  shall  be  made  in  duplicate,  one 
of  which  duplicates  shall  be  filed  in  the  office  of  the  surrogate 
and  the  other  in  the  office  of  the  tax  commission. 


§  231.  Determination  of  surrogate.  From  such  report  of 
appraisal  and  other  proof  relating  to  any  such  estate  before 
the  surrogate,  the  surrogate  shall  forthwith,  as  of  course, 
determine  the  cash  value  of  all  estates  and  the  amount  of  tax 
to  which  the  same  are  liable ;  or  the  surrogate  may  so  deter- 
mine the  cash  value  of  all  such  estates  and  the  amount  of  tax 
to  which  the  same  are  liable,  without  appointing  an  appraiser. 

The  superintendent  of  insurance  shall,  on  the  application 
of  any  surrogate  or  appraiser,  determine  the  value  of  any 
such  future  or  contingent  estates,  income  or  interest  therein 
limited  for  the  life  or  lives  of  persons  in  being,  upon  the  facts 
contained  in  any  such  appraiser's  report,  and  certify  the 
same  to  the  surrogate  or  appraiser,  and  his  certificate  shall  be 
conclusive  evidence  that  the  method  of  computation  adopted 
therein  is  correct. 

The  surrogate  shall  immediately  give  notice,  upon  the 
determination  by  him  as  to  the  value  of  any  estate  which  is 
taxable  under  this  article,  and  of  the  tax  to  which  it  is  liable, 
to  all  persons  known  to  be  interested  therein,  and  shall  im- 
mediately forward  a  copy  of  such  taxing  order  to  the  tax  com- 
mission. The  surrogate  shall  also  forward  to  the  tax  commis- 
sion copies  of  all  orders  entered  by  him  in  relation  to  or 
affecting  in  any  way  the  transfer  tax  on  any  estate,  including 
orders  of  exemption. 

If,  however,  it  appear  at  any  stage  of  the  proceedings  that 
any  of  such  persons  known  to  be  interested  in  the  estate  is  an 
infant  or  an  incompetent,  the  surrogate  may,  if  the  interest  of 
such  infant  or  incompetent  is  presently  involved  and  is  adverse 
to  that  of  any  of  the  other  persons  interested  therein,  appoint 
a  special  guardian  of  such  infant;  but  nothing  in  this  pro- 
vision shall  affect  the  right  of  an  infant  over  fourteen  years  of 
age  or  of  any  one  on  behalf  of  an  infant  under  fourteen  years 
of  age  to  nominate  and  apply  for  the  appointment  of  a  special 
guardian  for  such  infant  at  any  stage  of  the  proceedings. 


THE    NEW    YORK    STATUTE  755 

§  232.  Appeal  and  other  proceedings.  The  tax  commission 
or  any  person  dissatisfied  with  the  appraisement  or  assess- 
ment and  determination  of  tax  may  appeal  therefrom  to  the 
surrogate  within  sixty  days  from  the  fixing,  assessing  and 
determination  of  tax  by  the  surrogate  as  herein  provided, 
upon  filing  in  the  office  of  the  surrogate  a  written  notice  of 
appeal,  which  shall  state  the  grounds  upon  which  the  appeal 
is  taken;  but  no  costs  shall  be  allowed  by  the  surrogate  on 
such  appeal. 

Within  two  years  after  the  entry  of  an  order  or  decree  of  a 
surrogate  determining  the  value  of  an  estate  and  assessing 
the  tax  thereon,  the  tax  commission  may,  if  it  believes  that 
such  appraisal,  assessment  or  determination  has  been  fraudu- 
lently, collusively  or  erroneously  made,  make  application  to  a 
justice  of  the  supreme  court  of  the  judicial  district  embracing 
the  surrogate's  court  in  which  the  order  or  decree  has  been 
filed,  for  a  reappraisal  thereof.  The  justice  to  whom  such 
application  is  made  may  thereupon  appoint  a  competent  per- 
son to  reappraise  such  estate.  Such  appraiser  shall  possess 
the  powers  and  be  subject  to  the  duties  of  an  appraiser  under 
section  two  hundred  and  thirty  and  shall  receive  compensation 
at  the  rate  of  five  dollars  per  day  for  every  day  actually  and 
necessarily  employed  in  such  appraisal.  Such  compensation 
shall  be  payable  by  the  tax  commission  out  of  moneys  appro- 
priated for  such  purpose,  upon  the  certificate  of  the  justice 
appointing  him.  The  report  of  such  appraiser  shall  be  filed 
with  the  justice  by  whom  he  was  appointed,  and  thereafter 
the  same  proceedings  shall  be  taken  and  had  by  and  before 
such  justice  as  are  herein  provided  to  be  taken  and  had  by 
and  before  the  surrogate.  The  determination  and  assessment 
of  such  justice  shall  supersede  the  determination  and  assess- 
ment of  the  surrogate,  and  shall  be  filed  by  such  justifee  in  the 
office  of  the  tax  commission,  and  a  certified  copy  thereof  trans- 
mitted to  the  surrogate's  court  of  the  proper  county. 

§  233.  Composition  of  transfer  tax  upon  certain  estates. 
The  tax  commission,  by  and  with  the  consent  of  the  attorney- 
general  expressed  in  writing,  is  hereby  empowered  and  author- 
ized to  enter  into  an  agreement  with  the  trustees  of  any  estate 


756  INHERITANCE     TAXATION 

in  which  remainders  or  expectant  estates  have  been  of  such  a 
nature,  or  so  disposed  and  circumstanced,  that  the  taxes 
therein  were  held  not  presently  payable,  or  where  the  interests 
of  the  legatees  or  devisees  were  not  ascertainable  under  the 
provisions  of  chapter  four  hundred  and  eighty-three  of  the 
laws  of  eighteen  hundred  and  eighty-five ;  chapter  three  hun- 
dred and  ninety-nine  of  the  laws  of  eighteen  hundred  and 
ninety-two,  or  chapter  nine  hundred  and  eight  of  the  laws  of 
eighteen  hundred  and  ninety-six,  and  the  several  acts  amen- 
datory thereof  and  supplemental  thereto;  and  to  compound 
such  taxes  upon  such  terms  as  may  be  deemed  equitable  and 
expedient;  and  to  grant  discharge  to  said  trustees  upon  the 
payment  of  the  taxes  provided  for  in  such  composition,  pro- 
vided, however,  that  no  such  composition  shall  be  conclusive 
in  favor  of  said  trustees  as  against  the  interest  of  such  cestuis 
que  trust  as  may  possess  either  present  rights  of  enjoyment, 
or  fixed,  absolute  or  indefeasible  rights  of  future  enjoyment, 
or  of  such  as  would  possess  such  rights  in  the  event  of  the 
immediate  termination  of  particular  estates,  unless  they  con- 
sent thereto,  either  personally,  when  competent,  or  by  guar- 
dian or  committee.  Composition  or  settlement  made  or 
effected  under  the  provisions  of  this  section  shall  be  executed 
in  triplicate,  and  one  copy  filed  in  the  office  of  the  tax  commis- 
sion, one  copy  in  the  office  of  the  surrogate  of  the  county  in 
which  the  tax  was  paid,  and  one  copy  delivered  to  the  execu- 
tors, administrators  or  trustees  who  shall  be  parties  thereto. 

§  234.  Surrogate's  assistants  in  New  York,  Kings  and  other 
counties.  The  president  of  the  tax  commission  may,  upon 
the  recommendation  of  the  surrogate,  appoint,  and  may  at 
pleasure  remove,  assistants  and  clerks  in  the  surrogate's  offices 
of  the  following  counties,  at  annual  salaries  to  be  fixed  by  him 
not  to  exceed  the  amounts  hereinafter  specified : 

(1)  In  New  York  county,  a  transfer  tax  assistant,  six  thou- 
sand five  hundred  dollars;  a  deputy  transfer  tax  assistant, 
three  thousand  five  hundred  dollars ;  a  transfer  tax  clerk,  two 
thousand  four  hundred  dollars;  an  assistant  clerk,  eighteen 
hundred  dollars ;  a  recording  clerk,  thirteen  hundred  dollars ; 
a  stenographer,  twelve  hundred  dollars ;  and  shall  be  entitled 


THE    NEW   YORK    STATUTE  757 

to  expend  not  more  than  seven  hundred  and  fifty  dollars  a 
year  in  such  office  for  expenses  necessarily  incurred  in  the 
assessment  and  collection  of  taxes  under  this  article. 

(2)  In  Kings  county,  a  transfer  tax  assistant,  four  thou- 
sand dollars ;  a  deputy  transfer  tax  assistant,  three  thousand 
dollars ;  two  transfer  tax  clerks,  one  at  a  salary  of  two  thou- 
sand four  hundred  dollars,  one  at  a  salary  of  eighteen  hun- 
dred dollars;  and  shall  be  entitled  to  expend  not  more  than 
five  hundred  dollars  a  year  for  expenses  necessarily  incurred 
in  the  assessment  and  collection  of  taxes  under  this  article. 

(3)  In  Erie  county,  a  transfer  tax  clerk,  twenty-two  hun- 
dred dollars. 

(4)  In  Westchester  county,  a  transfer  tax  assistant,  two 
thousand  five  hundred  dollars. 

(5)  In  Albany  county,  a  transfer  tax  clerk,  fifteen  hundred 
dollars. 

(6)  In  Queens  county,  a  transfer  tax  clerk,  two  thousand 
dollars. 

(7)  In  Onondaga  county,  a  transfer  tax  clerk,  eighteen  hun- 
dred dollars;  and  shall  be  entitled  to  expend  not  more  than 
two  hundred  dollars  a  year  for  expenses  necessarily  incurred 
in  the  assessment  and  collection  of  taxes  under  this  article. 

(8)  In  Monroe  county,  two  transfer  tax  clerks,  one  thou- 
sand dollars  each;  and  shall  be  entitled  to  expend  not  more 
than  two  hundred  dollars  a  year  for  expenses  necessarily 
incurred  in  the  assessment  and  collection  of  taxes  under  this 
article. 

(9)  In  Dutchess  county,  a  transfer  tax  clerk,  twelve  hun- 
dred dollars. 

(10)  In  Oneida  county,  a  transfer  tax  clerk,  fifteen  hun- 
dred dollars. 

(11)  In  Suffolk  county,  a  transfer  tax  clerk,  one  thousand 
dollars. 

(12)  In  Ulster  county,  a  transfer  tax  clerk,  seven  hundred 
and  twenty  dollars. 

(13)  In  Richmond  county,  a  transfer  tax  clerk,  twelve  hun- 
dred dollars. 

(14)  In  Nassau  county,  a  transfer  tax  clerk,  nineteen  hun- 
dred dollars. 


758  INHERITANCE     TAXATION 

(15)  In  Bronx  county,  a  transfer  tax  assistant,  two  thou- 
sand five  hundred  dollars. 

(16)  In  each  county  of  the  State  having  a  population  of 
over  one  million,  and  in  each  county  of  the  State  having  a 
population  of  over  three  hundred  thousand  inhabitants,  in- 
cluded in  or  adjoining  a  city  containing  a  population  of  over 
one  million  inhabitants,  the  surrogate  or  surrogates  shall  each 
annually  receive  for  compensation  for  ministerial  services 
rendered  under  this  article  the  sum  of  twenty-five  hundred 
dollars  in  addition  to  the  salary  or  compensation  paid  to  such 
surrogate  by  the  county,  but  such  salary  and  compensation 
shall  not  together  exceed  the  entire  salary  and  compensation 
paid  to  a  justice  of  the  supreme  court  in  the  judicial  district 
in  which  the  county  is  included.    The  additional  compensation 
provided  for  by  this  subdivision  shall  be  payable  in  the  same 
manner  as  salaries  and  expenses  under  this  section. 

(17)  In  each  county  of  the  State  the  surrogate  shall  receive 
annually  for  such  services  rendered  under  this  article  as  are 
ministerial  only  and  not  incident  to  holding  courts  or  perform- 
ing duties  as  a  judicial  officer  the  respective  sums  following : 

a.  In  any  such  county  having  a  population  of  less  than  ten 
thousand,  one  hundred  dollars. 

b.  In  any  such  county  having  a  population  of  ten  thousand 
or  more  but  less  than  fifty  thousand,  five  hundred  dollars ; 

c.  In  any  such  county  having  a  population  of  fifty  thousand 
or  more  but  less  than  one  hundred  thousand,  six  hundred 
dollars ; 

d.  In  any  such  county  having  a  population  of  one  hundred 
thousand  or  more  but  less  than  two  hundred  thousand,  nine 
hundred  dollars ; 

e.  In  any  such  county  having  a  population  of  two  hundred 
thousand  or  more  but  less  than  five  hundred  thousand,  twelve 
hundred  dollars ; 

f.  In  any  such  county  having  a  population  of  five  hundred 
thousand  or  more,  twenty-five  hundred  dollars. 

No  provision  of  this  subdivision  shall  repeal  or  affect  the 
provisions  of  subdivision  sixteen  of  this  section,  but  the  pro- 
visions of  this  subdivision  shall  apply  to  the  surrogate  or 
surrogates  mentioned  in  said  subdivision  sixteen  of  this  sec- 


THE    NEW   YORK   STATUTE  759 

tion,  provided  that  any  payment  or  payments  made  to  him  or 
them  whether  under  this  subdivision  or  subdivision  sixteen, 
or  both,  shall  not  in  all  exceed  the  sum  of  twenty-five  hundred 
dollars  annually.  Such  sum  shall  not,  however,  in  addition 
to  the  salary  or  compensation  paid  to  any  surrogate  by  the 
county,  together  exceed  the  entire  salary  and  compensation 
paid  to  a  justice  of  the  supreme  court  in  the  judicial  district 
in  which  the  county  is  included. 

The  moneys  provided  to  be  paid  for  services  by  this  sub- 
division shall  be  payable  in  the  same  manner  as  salaries  and 
expenses  under  this  section.  Such  salaries  and  expenses  shall 
be  paid,  upon  proper  vouchers,  out  of  moneys  appropriated 
for  such  purpose. 

§  235.  Proceedings  by  district  attorneys.  If,  after  the  ex- 
piration of  eighteen  months  from  the  accrual  of  any  tax  under 
this  article,  such  tax  shall  remain  due  and  unpaid,  after  the 
refusal  or  neglect  of  the  persons  liable  therefor  to  pay  the 
same,  the  tax  commission  shall  notify  the  district  attorney  of 
the  county,  in  writing,  of  such  failure  or  neglect,  and  such 
district  attorney  shall  apply  to  the  surrogate's  court  for  a 
citation,  citing  the  persons  liable  to  pay  such  tax  to  appear 
before  the  court  on  the  day  specified,  not  more  than  three 
months  after  the  date  of  such  citation,  and  show  cause  why  the 
tax  should  not  be  paid.  The  surrogate,  upon  such  applica- 
tion, and  whenever  it  shall  appear  to  him  that  any  such  tax 
accruing  under  this  article  has  not  been  paid  as  required  by 
law,  shall  issue  such  citation,  and  the  service  of  such  citation, 
and  the  time,  manner  and  proof  thereof,  and  the  hearing  and 
determination  thereon  and  the  enforcement  of  the  determina- 
tion or  order  made  by  the  surrogate  shall  conform  to  the  pro- 
visions of  the  code  of  civil  procedure  or  surrogate  court  act 
for  the  service  of  citations  out  of  the  surrogate's  court,  and 
the  hearing  and  determination  thereon  and  its  enforcement  so 
far  as  the  same  may  be  applicable.  The  surrogate  or  his  clerk 
shall,  upon  request  of  the  district  attorney  or  the  tax  commis- 
sion, furnish,  without  fee,  one  or  more  transcripts  of  such 
decree,  which  shall  be  docketed  and  filed  by  the  county  clerk 
of  any  county  of  the  State  without  fee,  in  the  same  manner 


760  INHERITANCE     TAXATION 

and  with  the  same  effect  as  provided  by  law  for  filing  and 
docketing  transcripts  of  decrees  of  the  surrogate's  court.  The 
costs  awarded  by  any  such  decree  after  the  collection  and  pay- 
ment of  the  tax  to  the  tax  commission  or  county  treasurer  may 
be  retained  by  the  district  attorney  for  his  own  use.  Such 
costs  shall  be  fixed  by  the  surrogate  in  his  discretion,  but  shall 
not  exceed  in  any  case  where  there  has  not  been  a  contest,  the 
sum  of  one  hundred  dollars,  or  where  there  has  been  a  con- 
test, the  sum  of  two  hundred  and  fifty  dollars.  Wherever  the 
surrogate  shall  certify  that  there  was  probable  cause  for 
issuing  a  citation  and  taking  the  proceedings  specified  in  this 
section,  all  expenses  incurred  for  the  service  of  citations  and 
other  lawful  disbursements  shall  be  paid  out  of  moneys  appro- 
priated for  such  purpose,  upon  order  of  the  tax  commission. 
In  proceedings  to  which  the  tax  commission  is  cited  as  a  party 
under  sections  two  hundred  and  twenty-eight  and  two  hun- 
dred and  thirty  of  this  chapter,  it  is  authorized  to  designate 
and  retain  counsel  to  represent  it  and  to  pay  the  expenses 
thereby  incurred  out  of  money  appropriated  for  such  pur- 
pose; provided,  however,  that  in  the  collection  of  taxes  upon 
estates  of  nonresident  decedents  the  tax  commission  shall  not 
allow  for  legal  services  up  to  and  including  the  entry  of  the 
order  of  the  surrogate  fixing  the  tax  a  sum  exceeding  ten  per 
centum  of  the  taxes  and  penalties  collected.  Where,  prior  to 
the  time  this  section  as  amended  takes  effect,  the  State  comp- 
troller shall  have  designated  and  retained  counsel  pursuant 
to  this  section,  such  counsel  shall  be  compensated  for  his  ser- 
vices by  the  tax  commission  in  accordance  with  the  agreement 
under  which  he  was  retained  by  the  State  comptroller. 

§  236.  Receipts  for  taxes.  One  of  the  duplicate  receipts 
issued  for  the  payment  to  the  tax  commission  of  any  tax  under 
this  article,  as  provided  by  section  two  hundred  and  twenty- 
two,  shall  be  signed  by  the  State  treasurer  and  countersigned 
by  the  State  comptroller,  and  by  the  tax  commission  if  issued 
by  any  county  treasurer.  The  officer  so  countersigning  the 
same  shall  charge  the  officer  receiving  the  tax  with  the  amount 
thereof  and  affix  the  seal  of  his  office  to  the  same  and  return 
to  the  proper  person. 


THE   NEW   YORK   STATUTE  761 

No  executor,  administrator  or  trustee  shall  be  entitled  to  a 
final  accounting  of  an  estate  in  settlement  of  which  a  tax  is 
due  under  the  provisions  of  this  article  unless  he  shall  produce 
a  final  receipt  so  sealed  and  countersigned,  or  a  certified  copy 
thereof.  Any  person  shall,  upon  the  payment  of  fifty  cents  to 
the  officer  issuing  such  receipt,  be  entitled  to  a  duplicate 
thereof,  to  be  signed,  sealed  and  countersigned  in  the  same 
manner  as  the  original. 

Any  person  shall,  upon  the  payment  of  fifty  cents,  be  entitled 
to  a  certificate  of  the  tax  commission  that  the  tax  upon  the 
transfer  of  any  real  estate  of  which  any  decedent  died  seized 
has  been  paid,  such  certificate  to  designate  the  real  property 
upon  which  such  tax  is  paid,  the  name  of  the  person  so  paying 
the  same,  and  whether  in  full  of  such  tax.  Such  certificate  may 
be  recorded  in  the  office  of  the  county  clerk  or  register  of  the 
county  where  such  real  property  is  situate,  in  a  book  to  be  kept 
by  him  for  that  purpose,  which  shall  be  labeled  ''transfer 
tax." 

§  237.  Fees  of  county  treasurer.  The  treasurer  of  each 
county  in  which  the  office  of  appraiser  is  not  salaried  shall  be 
allowed  to  retain,  on  all  taxes  paid  and  accounted  for  by  him 
each  fiscal  year  under  this  article,  five  per  centum  on  the  first 
fifty  thousand  dollars,  two  and  one-half  per  centum  on  the  next 
fifty  thousand  dollars,  and  one  per  centum  on  all  additional 
sums.  Such  fees  shall  be  in  addition  to  the  salaries  and  fees 
now  allowed  by  law  to  such  officers. 

§  238.  Books  and  forms  to  be  furnished  by  the  tax  commis- 
sion. The  tax  commission  shall  furnish  to  each  surrogate  a 
book,  which  shall  be  a  public  record,  and  in  which  he  shall 
enter  the  name  of  every  decedent  upon  whose  estate  an  appli- 
cation to  him  has  been  made  for  the  issue  of  letters  of  admin- 
istration, or  letters  testamentary,  or  ancillary  letters,  the 
date  and  place  of  death  of  such  decedent,  the  estimated  value 
of  his  real  and  personal  property,  the  names,  places  of  resi- 
dence and  relationship  to  him  of  his  heirs-at-law,  the  names 
and  places  of  residence  of  the  legatees  and  devisees  in  any  will 
of  any  such  decedent,  the  amount  of  each  legacy  and  the  esti- 


762  INHERITANCE     TAXATION 

mated  value  of  any  real  property  devised  therein,  and  to  whom 
devised.  These  entries  shall  be  made  from  the  data  contained 
in  the  papers  filed  on  any  such  application,  or  in  any  proceed- 
ing relating  to  the  estate  of  the  decedent.  The  surrogate  shall 
also  enter  in  such  book  the  amount  of  the  personal  property 
of  any  such  decedent,  as  shown  by  the  inventory  thereof  when 
made,  and  filed  in  his  office,  and  the  returns  made  by  any  ap- 
praiser appointed  by  him  under  this  article,  and  the  value 
of  annuities,  life  estates,  terms  of  years,  and  other  property 
of  any  such  decedent  or  given  by  him  in  his  will  or  otherwise, 
as  fixed  by  the  surrogate,  and  the  tax  assessed  thereon,  and  the 
amounts  of  any  receipts  for  payment  of  any  tax  on  the  estate 
of  such  decedent  under  -this  article  filed  with  him.  The  tax 
commission  shall  also  furnish  to  each  surrogate  forms  for  the 
reports  to  be  made  by  such  surrogate,  which  shall  correspond 
with  the  entries  to  be  made  in  such  book. 

§  239.  Reports  of  surrogate  and  county  clerk.  Each  surro- 
gate shall,  on  January,  April,  July  and  October  first  of  each 
year,  make  a  report,  upon  the  forms  furnished  by  the  tax 
commission  containing  all  the  data  and  matters  required  to  be 
entered  in  such  book,  which  shall  be  immediately  forwarded 
to  the  tax  commission.  The  county  clerk  of  each  county,  ex- 
cept in  the  counties  where  the  registers  perform  the  duties  of 
the  county  clerk  with  respect  to  the  recording  of  deeds,  and 
when  in  such  counties  the  registers,  shall,  at  the  same  times, 
make  reports  containing  a  statement  of  any  deed  or  other  con- 
veyance filed  or  recorded  in  his  office,  of  any  property,  which 
appears  to  have  been  made  or  intended  to  take  effect  in  pos- 
session or  enjoyment  after  the  death  of  the  grantor  or  vendor, 
with  the  name  and  place  of  residence  of  such  grantor  or 
vendor,  the  name  and  place  of  residence  of  the  grantee  or 
vendee,  and  a  description  of  the  property  transferred,  which 
shall  be  immediately  forwarded  to  the  tax  commission. 

§  240.  Reports  of  county  treasurer.  Each  county  treasurer 
in  a  county  in  which  the  office  of  appraiser  is  not  salaried  shall 
make  a  report,  under  oath,  to  the  tax  commission,  on  January, 
April,  July  and  October  first  of  each  year,  of  all  taxes  received 


THE    NEW   YORK    STATUTE  763 

by  him  under  this  article,  stating  for  what  estate  and  by  whom 
and  when  paid.  The  form  of  such  report  may  be  prescribed  by 
the  tax  commission.  The  county  treasurer  shall,  within  thirty 
days  after  the  receipt  thereof,  pay  the  state  treasurer  all  taxes 
received  by  him  under  this  article  and  not  previously  paid  into 
the  state  treasury,  except  as  provided  in  the  next  section,  and 
for  all  such  taxes  collected  by  him  and  not  paid  into  the  state 
treasury,  he  shall  pay  interest  at  the  rate  of  ten  per  centum 
per  annum. 

§  241.  Disposition  of  revenues;  tax  on  contingent  remain- 
ders; refunds  in  certain  cases.  The  tax  commission  shall 
deposit  all  taxes  collected  by  it  under  this  article,  except  as 
hereinafter  otherwise  provided,  in  a  responsible  bank,  bank- 
ing house  or  trust  company  in  the  city  of  Albany,  which  shall 
pay  the  highest  rate  of  interest  to  the  state  for  such  deposit, 
to  the  credit  of  the  state  comptroller  on  account  of  the  transfer 
tax.  And  every  such  bank,  banking  house,  or  trust  company 
shall  execute  and  file  in  his  office  an  undertaking  to  the  state, 
in  the  sum,  and  with  such  sureties,  as  are  required  and  ap- 
proved by  the  comptroller,  for  the  safekeeping  and  prompt 
payment  on  legal  demand  therefor  of  all  such  moneys  held  by 
or  on  deposit  in  such  bank,  banking  house  or  trust  company, 
with  interest  thereon  on  daily  balances  at  such  rate  as  the 
comptroller  may  fix.  Every  such  undertaking  shall  have  in- 
dorsed thereon,  or  annexed  thereto,  the  approval  of  the  attor- 
ney-general as  to  its  form.  The  tax  commission  shall  on  the 
first  day  of  each  month  make  a  verified  return  to  the  state 
treasurer  of  all  taxes  received  by  it  under  this  article,  stating 
for  what  estate,  and  by  whom  and  when  paid ;  and  shall  credit 
itself  with  all  expenditures  made  since  its  last  previous  return 
on  account  of  such  taxes,  for  refunds  lawfully  chargeable 
thereto.  The  comptroller  shall  on  or  before  the  tenth  day  of 
each  month  pay  to  the  state  treasurer  the  balance  of  such 
taxes  remaining  in  his  hands  at  the  close  of  business  on  the 
last  day  of  the  previous  month. 

Whenever  the  tax  on  a  contingent  remainder  has  been  deter- 
mined at  the  highest  rate  which  on  the  happening  of  any  of 
said  contingencies  or  conditions  would  be  possible  under  the 


764  INHERITANCE     TAXATION 

provisions  of  this  article,  the  tax  commission,  in  the  counties 
wherein  this  tax  is  payable  direct  to  it,  and  in  all  other  coun- 
ties the  treasurer  of  said  counties,  respectively,  when  such  tax 
is  paid  shall  retain  and  hold  to  the  credit  of  said  estate  so 
much  of  the  tax  assessed  upon  such  contingent  remainders  as 
represents  the  difference  between  the  tax  at  the  highest  rate 
and  the  tax  upon  such  remainders  which  would  be  due  if  the 
contingencies  or  conditions  had  happened  at  the  date  of  the 
appraisal  of  said  estate,  and  the  tax  commission  or  the  county 
treasurer  shall  deposit  the  amount  of  tax  so  retained  in  some 
solvent  trust  company  or  trust  companies  or  savings  banks 
in  this  state  designated  by  the  state  comptroller,  to  the  credit 
of  the  state  comptroller  on  account  of  such  estate,  paying  the 
interest  thereon  when  collected  by  him  to  the  executor  or 
trustee  of  said  estate,  to  be  applied  by  said  executor  or  trustee 
as  provided  by  the  decedent's  will.  Upon  the  happening  of 
the  contingencies  or  conditions  whereby  the  remainder  ulti- 
mately vests  in  possession,  if  the  remainder  then  passes  to 
persons  taxable  at  the  highest  rate,  the  state  comptroller  on 
the  certificate  of  the  tax  commission,  shall  turn  over  the 
amount  so  retained  to  the  state  treasurer  as  provided  herein 
and  by  section  two  hundred  and  forty  of  this  chapter,  or  if  the 
remainder  ultimately  vests  in  persons  taxable  at  a  lower  rate 
or  a  person  or  corporation  exempt  from  taxation  by  the  pro- 
visions of  this  article,  the  state  comptroller  on  the  certificate 
of  the  tax  commission  shall  refund  any  excess  of  tax  so  held 
to  the  executor  or  trustee  of  the  estate,  to  be  disposed  of  by 
said  executor  or  trustee  as  provided  by  the  decedent's  will. 
Executors  or  trustees  of  any  estate  may  elect  to  assign  to  and 
deposit  with  the  tax  commission  or  the  county  treasurer,  bonds 
or  other  securities  of  the  estate  approved  by  the  tax  commis- 
sion or  the  county  treasurer,  both  as  to  the  form  of  the  col- 
lateral and  the  amount  thereof,  for  the  purpose  of  securing 
the  payment  of  the  difference  between  the  tax  on  said  remain- 
der at  the  highest  rate  and  the  tax  upon  said  remainder  which 
would  be  due  if  the  contingencies  or  conditions  had  happened 
at  the  date  of  the  appraisal  of  said  estate,  and  cash  for  the 
balance  of  said  tax  as  assessed,  which  said  bonds  or  other 
securities  shall  be  held  by  the  tax  commission,  or  the  county 


THE    NEW   YORK    STATUTE  765 

treasurer,  to  the  credit  of  said  estate  until  the  actual  vesting 
of  said  remainders,  the  income  therefrom  when  received  by 
the  tax  commission  or  the  county  treasurer  to  be  paid  over  to 
the  executor  or  trustee  during  the  continuance  of  the  trust 
estates  and  then  to  be  finally  disposed  of  in  accordance  with 
the  ultimate  transfer  or  devolution  of  said  remainders  as  here- 
inbefore provided;  and  it  shall  be  the  duty  of  the  executors  or 
trustees  of  such  estates  to  forthwith  notify  the  tax  commis- 
sion of  the  actual  vesting  of  all  such  contingent  remainders. 

If  any  executor  or  trustee  shall  have  deposited  with  the 
tax  commission  or  the  county  treasurer,  cash  or  securities,  or 
both  cash  and  securities,  to  an  amount  in  excess  of  the  sum 
necessary  to  pay  the  transfer  tax  upon  such  contingent  re- 
mainders at  the  highest  rate  as  aforesaid,  the  excess  of  tax  so 
deposited  shall  be  returned  to  the  executor  or  trustee,  or  if 
any  executor  or  trustee  shall  have  deposited  with  the  tax  com- 
mission, or  the  county  treasurer,  cash  or  securities,  or  both 
cash  and  securities,  to  an  amount  less  than  is  sufficient  to  pay 
the  tax  upon  such  contingent  remainders  as  finally  assessed 
and  determined,  the  executor  or  trustee  of  said  estate  shall 
forthwith,  upon  the  entry  of  the  order  determining  the  correct 
amount  of  tax  due,  pay  to  the  tax  commission,  or  the  county 
treasurer,  whichever  is  entitled  under  the  provisions  of  this 
article  to  receive  the  tax,  the  balance  due  on  account  of  said 
tax.  //  on  account  of  the  time  or  manner  of  payment  of  a  tax 
under  this  article  it  be  impossible  to  identify  or  separate  the 
portion  thereof  paid  on  account  of  a  contingent  remainder  pur- 
suant to  this  section  and  the  whole  of  such  payment  shall  have 
been  deposited  in  the  state  treasury,  the  portion  of  the  tax  on 
account  of  such  contingent  remainder  to  be  held  or  deposited 
on  account  of  the  estate  pursuant  to  this  section  shall  be 
deemed  a  refund  under  this  article,  and  shall  be  drawn,  on  the 
certificate  of  the  tax  commission  and  approval  of  the  comp- 
troller, from  moneys  deposited  with  the  state  comptroller  and 
available  for  refunds  under  this  article,  and  when  so  drawn 
shall  be  deposited  to  the  credit  of  the  state  comptroller  on  ac- 
count of  the  estate  as  provided  by  this  section.  Bonds  or  other 
securities  to  be  deposited  with  the  tax  commission  pursuant 


766  INHERITANCE     TAXATION 

to  this  section  shall  be  turned  over  by  it  to  the  state  comp- 
troller for  safe  keeping. 

§  242.  Application  of  taxes.  All  taxes  levied  and  collected 
under  this  article  when  paid  into  the  treasury  of  the  state  shall 
be  applicable  to  the  expenses  of  the  state  government  and  to 
such  other  purposes  as  the  legislature  shall  by  law  direct. 

§  243.  Definitions.  The  words  " estate"  and  "property," 
as  used  in  this  article,  shall  be  taken  to  mean  the  property  or 
interest  therein  passing  or  transferred  to  individuals  or  cor- 
porate legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees 
or  vendees,  and  not  as  the  property  or  interest  therein  of  the 
decedent,  grantor,  donor,  or  vendor  and  shall  include  all  prop- 
erty or  interest  therein,  whether  situated  within  or  without 
the  state.  The  word  "transfer,"  as  used  in  this  article  shall 
be  taken  to  include  the  passing  of  property  or  any  interest 
therein  in  the  possession  or  enjoyment,  present  or  future,  by 
inheritance,  descent,  devise,  bequest,  grant,  deed,  bargain,  sale 
or  gift,  in  the  manner  herein  prescribed.  The  words  "county 
treasurer"  and  "district  attorney,"  as  used  in  this  article, 
shall  be  taken  to  mean  the  treasurer  or  the  district  attorney  of 
the  county  of  the  surrogate  having  jurisdiction  as  provided  in 
section  two  hundred  and  twenty-eight  of  this  article.  The 
words  "the  intestate  laws  of  this  state,"  as  used  in  this  article, 
shall  be  taken  to  refer  to  all  transfers  of  property,  or  any  bene- 
ficial interest  therein,  effected  by  the  statute  of  descent  and 
distribution  and  the  transfer  of  any  property,  or  any  beneficial 
interest  therein,  effected  by  operation  of  law  upon  the  death 
of  a  person  omitting  to  make  a  valid  disposition  thereof,  in- 
cluding a  husband's  right  as  tenant  by  the  curtesy  or  the  right 
of  a  husband  to  succeed  to  the  personal  property  of  his  wife 
who  dies  intestate  leaving  no  descendants  her  surviving.  For 
any  and  all  purposes  of  this  article  and  for  the  just  imposi- 
tion of  the  transfer  tax,  every  person  shall  be  deemed  to  have 
died  a  resident  and  not  a  nonresident,  of  the  state  of  New 
York,  if  and  when  such  person  shall  have  dwelt  or  shall  have 
lodged  in  this  state  during  and  for  the  greater  part  of  any 
period  of  twelve  consecutive  months  in  the  twenty-four  months 


THE    NEW   YORK   STATUTE  767 

next  preceding  his  or  her  death ;  and  also  if  and  when  by  for- 
mal written  instrument  executed  within  one  year  prior  to  his 
or  her  death  or  by  last  will  he  or  she  shall  have  declared  him- 
self or  herself  to  be  a  resident  or  a  citizen  of  this  state,  not- 
withstanding that  from  time  to  time  during  such  twenty-four 
months  such  person  may  have  sojourned  outside  of  this  state 
and  whether  or  not  such  person  may  or  may  not  have  voted  or 
have  been  entitled  to  vote  or  have  been  assessed  for  taxes  in 
this  state ;  and  also  if  and  when  such  person  shall  have  been  a 
citizen  of  New  York  sojourning  outside  of  this  state.  The 
burden  of  proof  in  a  transfer  tax  proceeding  shall  be  upon 
those  claiming  exemption  by  reason  of  the  alleged  nonresi- 
dence  of  the  deceased.  The  wife  of  any  person  who  would  be 
deemed  a  resident  under  this  section  shall  also  be  deemed  a 
resident  and  her  estate  subject  to  the  payment  of  a  transfer 
tax  as  herein  provided,  unless  said  wife  has  a  domicile  sepa- 
rate from  him. . 

§  244.  Exemptions  in  article  one  not  applicable.  The  ex- 
emptions enumerated  in  section  four  of  this  chapter  shall  not 
be  construed  as  being  applicable  in  any  manner  to  the  pro- 
visions of  this  article. 

§  245.  Limitation  of  time.  The  provisions  of  the  code  of 
civil  procedure  relative  to  the  limitation  of  time  of  enforcing 
a  civil  remedy  shall  not  apply  to  any  proceeding  or  action 
taken  to  levy,  appraise,  assess,  determine  or  enforce  the  col- 
lection of  any  tax  or  penalty  prescribed  by  this  article,  and 
this  section  shall  be  construed  as  having  been  in  effect  as  of 
date  of  the  original  enactment  of  the  inheritance  tax  law,  pro- 
vided, however,  that  as  to  real  estate  in  the  hands  of  bona  fide 
purchasers,  the  transfer  tax  shall  be  presumed  to  be  paid  and 
cease  to  be  a  lien  as  against  such  purchasers  after  the  expira- 
tion of  six  years  from  the  date  of  accrual. 


APPENDIX 

INCLUDING  : 

List  of  State  Inheritance  Tax  Officials,  with  addresses. 

List  of  the  several  divisions  and  locations  of  offices  of  internal 

revenue  agents  in  charge. 
New  York  Inheritance  Tax  Forms. 
Statutes  of  all  the  States  with  many  of  their  Forms. 
Index. 


[769] 

49 


APPENDIX  771 


LIST  OF 

STATE  INHERITANCE  TAX  OFFICIALS 

WITH   ADDRESSES 

Following  is  a  list  of  the  official  or  department  in  the  sev- 
eral States  to  whom  inquiries  should  be  addressed  by  non- 
resident attorneys  for  information  as  to  the  taxation  of 

nonresident  transfers,  blank  forms,  etc. : 

Arkansas. — Hon.  David  A.  Gates,  Inheritance  Tax  Attorney, 
Little  Kock,  Arkansas. 

Arizona. — Hon.  Raymond  Earhart,  State  Treasurer,  Phoenix, 
Arizona. 

California. — Hon.  Ray  L.  Riley,  Comptroller,  Attention  In- 
heritance Tax  Department,  Sacramento,  Cal. 

Colorado. — Attorney  General,  Inheritance  Tax  Department, 
Denver,  Colo. 

Connecticut. — Hon.  Wm.  H.  Corbin,  Tax  Commissioner,  Hart- 
ford, Conn. 

Delaware. — Register  of  Wills  of  New  Castle  County,  Wilming- 
ton, Del. 

Georgia. — State  Tax  Commission,  Atlanta,  Ga. 

Idaho. — Commissioner  of  Finance,  Boise,  Idaho. 

Illinois. — Hon.  Edward  J.  Brundage,  Attorney  General, 
Springfield,  HI. 

Indiana. — State  Board  of  Tax  Commissioners,  State  House, 
Indianapolis,  Ind. 

Iowa. — Hon.  W.  J.  Burbank,  State  Treasurer,  Des  Moines, 
Iowa. 

Kansas. — State  Tax  Commission,  Topeka,  Kan. 

Kentucky. — State  Tax  Commission,  Frankfort,  Ky. 

Louisiana. — James  J.  0  'Neill,  Clerk  Civil  District  Court,  New 
Orleans,  for  Parish  of  New  Orleans.  For  other  parishes, 
District  Attorney  of  Parish. 

Maine. — Attorney  General,  Office,  Augusta,  Me. 

Maryland. — Hon.  Alexander  Armstrong,  Attorney  General, 
Title  Bldg.,  Baltimore,  Md. 


772  INHERITANCE    TAXATION 

Massachusetts. — State  Tax  Commissioner,  State  House,  Bos- 
ton, Mass. 

Michigan. — Hon.  0.  B.  Fuller,  Auditor  General,  Lansing,  Mich. 

Minnesota. — Hon.  Clifford  L.  Hilton,  Attorney  General,  St. 
Paul,  Minn. 

Missouri. — Hon.  Jesse  W.  Barrett,  Attorney  General,  Jeffer- 
son City,  Mo. 

Montana. — State  Board  of  Equalization,  Helena,  Mont. 

Nebraska. — Legal  Department,  State  of  Nebraska,  Lincoln, 
Neb. 

Nevada. — Hon.  Geo.  A.  Cole,  State  Comptroller,  Carson  City, 
Nev. 

New  Hampshire. — Hon.  Joseph  S.  Mathews,  Assistant  Attor- 
ney General,  Concord,  New  Hampshire. 

New  Jersey. — Comptroller  of  the  Treasury,  State  House, 
Trenton,  N.  J. 

New  York. — State  Tax  Commission,  Capitol,  Albany,  N.  Y. 

North  Carolina. — A.  D.  Watts,  Commissioner  of  Revenue, 
Raleigh,  N.  C. 

North  Dakota. — Tax  Commission,  Bismarck,  N.  Dak. 

Ohio. — State  Tax  Commission,  Columbus,  Ohio. 

Oklahoma. — Hon.  F.  C.  Carter,  State  Auditor,  Oklahoma  City, 
Okla. 

Oregon. — Hon.  0.  P.  Hoff,  State  Treasurer,  Attention  Inherit- 
ance Tax  Department,  Salem,  Oregon. 

Pennsylvania. — Hon.  Samuel  S.  Lewis,  Auditor  General, 
Harrisburg,  Pa. 

Rhode  Island. — Board  of  Tax  Commissioners,  State  House, 
Providence,  R.  I. 

South  Carolina. — Tax  Commission,  Columbia,  S.  C. 

South  Dakota. — Hon.  H.  C.  Preston,  Tax  Commission,  Pierre, 
S.  Dak. 

Tennessee. — Hon.  John  B.  Thompson,  Comptroller,  Nashville, 
Tenn. 

Texas. — Hon.  H.  B.  Terrell,  Comptroller,  Austin,  Texas. 

Utah. — Hon.  Harvey  H.  Cluff,  Attorney  General,  Salt  Lake 
City,  Utah. 

Vermont. — Hon.  Melvin  G.  Morse,  Commissioner  of  Taxes, 
Montpelier,  Vt. 


APPENDIX  773 

Virginia. — Hon.  V.  Lee  Moore,  Auditor  Public  Accounts, 
Richmond,  Va. 

Washington. — State  Board  of  Tax  Commissioners,  Olympia, 
Wash. 

West  Virginia. — Hon.  W.  S.  Hallanan,  State  Tax  Commis- 
sioner, Charleston,  W.  Va. 

Wisconsin. — Wisconsin  Tax  Commission,  Madison,  Wis. 

Wyoming. — Insurance  and  Tax  Commissions,  Cheyenne,  Wyo. 


774 


INHERITANCE     TAXATION 


Federal  Estate  Tax  Officials. 

LIST   OF  THE   SEVERAL   DIVISIONS   AND   LOCATIONS   OF   OFFICES   OF 
INTERNAL  REVENUE  AGENTS  IN  CHARGE. 


(Communications  should  be  addressed: 

United  States  Internal  Revenue  Agent  in  Charge, 


City. 


State. 


Name  of  division' 

Territory  embraced 

Location  of  office. 

Florida  and  Georgia  

Atlanta,  Ga. 
Baltimore,  Md. 

Boston,  Mass. 
Buffalo,  N.  Y. 

Chicago,  111. 
Cincinnati,  Ohio. 

Cleveland,  Ohio. 
Denver,  Colo. 

Detroit,  Mich. 
Greensboro,  N.  0. 
Greenville,  S.  0. 
Honolulu,   Hawaii. 
Huntington,  W.  Va. 
Indianapolis,  Ind. 
Louisville,  Ky. 
Milwaukee,  Wis. 
Nashville,  Tenn. 
Newark,  N.  J. 
New  Haven,  Conn. 

New  Orleans,  La. 
New  York  City. 

Oklahoma,  Okla. 
Omaha,  Nebr. 
Philadelphia,  Pa. 

Pittsburgh,  Pa. 

Portland,  Oreg. 
Richmond,  Va. 
St.  Louis,  Mo. 
St.  Paul,  Minn. 

Salt  Lake  City,  Utah. 
San  Antonio,  Tex. 
San  Francisco,  Calif. 
Springfield,  IU. 
Tacoma,  Wash. 
Wichita,    Kans. 

Delaware,     District     of     Columbia, 
Maryland. 
Maine,  Massachusetts,  New  Hamp- 
shire, and  Vermont. 
Twenty-first  and  twenty-eighth  col- 
lection districts  of  New  York. 
First  collection  district  of  Illinois  .  . 
First    and    eleventh    collection    dis- 
tricts of  Ohio. 
Tenth  and  eighteenth  collection  dis- 
tricts of  Ohio. 
Arizona,  Colorado,  New  Mexico,  and 
Wyoming. 

Buffalo    

Chicago   

Cleveland    

Detroit    .  . 

Greensboro 

North  Carolina  

Greenville   .  .     .    ... 

Honolulu  ... 

Hawaii     

Huntington    

Indianapolis  .  .      .  . 

Indiana    

Louisville    . 

Kentucky    

Milwaukee    

Nashville  

Alabama  and  Tennessee   

Newark    

Rhode     Island,     Connecticut,     and 
fourteenth      collection      district, 
New    York    (except    Westchester 
County,  and  the  twenty-third  and 
twenty-fourth  wards  of  New  York 
City). 

New  Orleans   .  .  . 

New  York  

First  and  second  collection  districts 
of  New  York,  Westchester  County 
and     twenty-third     and     twenty- 
fourth  wards  of  New  York  City 
being  part  of  the  fourteenth  col- 
lection district  of  New  York. 
Arkansas  and  Oklahoma  

Oklahoma    

Omaha  

Iowa  and  Nebraska   

Philadelphia  

First  and  twelfth  collection  districts 
of  Pennsylvania. 
Twenty-third   collection   district   of 
Pennsylvania. 
Oregon     

Pittsburgh    

Portland    

Richmond    

St.   Louis    

St.  Paul   

Minnesota,     North     Dakota,     and 
South  Dakota. 
Idaho,  Montana,  and  Utah  

Salt  Lake  City      . 

San  Antonio 

Texas  

San  Francisco 

California  and  Nevada  

Springfield    

Eighth  collection  district  of  Illinois. 
Washington  and  Alaska  

Tacoma  

Kansas    

APPENDIX  775 


LIST  OF  CORPORATIONS 

Following  is  a  list  of  corporations  incorporated  in  States 
that  taxed  transfers  of  stock  in  domestic  corporations  owned 
by  nonresident  decedents  prior  to  1919. 

The  only  jurisdictions  where  such  transfers  are  not  now 
taxed  are:  Alaska,  Alabama,  Florida,  Delaware,  District  of 
Columbia,  Maryland,  Nebraska,  Tennessee,  Ehode  Island  and 
Vermont.  Texas  taxes  transfers  to  collaterals  and  strangers 
only.  Massachusetts  exempts  them  where  the  State  of 
domicile  does  likewise.  Connecticut  had  a  similar  provision 
under  Chapter  283,  L.  1919,  but  it  has  since  been  repealed. 

State  where 
Name  of  Company.  Corporation  organized. 

Adventure  Consolidated  Copper  Co Mich. 

Algomah  Mining  Co Mich. 

Allis-Chalmers  Co N.  J. 

Allouez  Mining  Co Mich. 

Amalgamated  Copper  Co — N.  J. 

American  Beet  Sugar  Co N.  J. 

American  Brake  Shoe  &  Foundry  Co N.  J. 

American  Can  Co N.  J. 

American  Car  &  Foundry  Co N.  J. 

American  Cotton  Oil  Co.  (The) N.  J. 

American  Hide  &  Leather  Co N.  J. 

American  Ice  Securities  Co N.  J. 

American  Light  &  Traction  Co N.  J. 

American  Linseed  Co N.  J. 

American  Malt  Corp N.  J. 

American  Radiator  Co N.  J. 

American  Sewer  Pipe  Co N.  J. 

American  Shipbuilding  Co N.  J. 

American  Smelters  Securities  Co N.  J. 

American  Smelting  &  Kenning  Co N.  J. 

American  Snuff  Co , .  N.  J. 


776  INHEEITANCE     TAXATION 

State  where 
Name  of  Company.  Corporation  organized. 

American  Steel  Foundries  Co N.  J. 

American  Sugar  Refining  Co.  (The) N.  J. 

American  Tobacco  Co.  (The) N.  J. 

American  Type  Founders  Co N.  J. 

American  Woolen  Co N.  J. 

American  Writing  Paper  Co N.  J. 

Anaconda  Copper  Mining  Co Mont. 

Ann  Arbor  Eailroad  Co Mich. 

Arnold  Mining  Co Mich. 

Associated  Oil  Co Cal. 

Atlantic  Mining  Co Mich. 

Atchison,  Topeka  &  Santa  Fe  Railway  Co.  (The) Kan. 

Bethlehem  Steel  Corp N.  J. 

Bonanza  Development  Co Colo. 

Butte-Ballaklava  Copper  Co Ariz. 

Butte  Coalition  Mining  Co N.  J. 

Calumet  &  Arizona  Mining  Co Ariz. 

Calumet  &  Hecla  Mining  Co Mich. 

Centennial  Copper  Mining  Co Mich. 

Central  Coal  &  Coke  Co Mo. 

Central  of  Georgia  Railway  Co Ga. 

Central  Leather  Co N.  J. 

Central  Pacific  Railway  Co Utah 

Central  Railroad  of  New  Jersey N.  J. 

Chicago  &  Alton  Railroad  Co HI. 

Chicago  &  Eastern  Illinois  Railroad  Co HI. 

Chicago  &  Northwestern  Railway  Co 111.,  Wis.,  Mich. 

Chicago,  Burlington  &  Quincy  Railroad  Co HI. 

Chicago  Great  Western  Railroad  Co HI. 

Chicago  Junction  Railways  &  Union  Stock  Yards  Co. 

(The) N.  J. 

Chicago,  Milwaukee  &  St.  Paul  Railway  Co Wis. 

Chicago  Pneumatic  Tool  Co N.  J. 

Chicago  Railways  Co HI. 

Chicago,  St.  Paul,  Minneapolis  &  Omaha  Railway  Co ...  Wis. 

Chicago  Subway  Co N.  J. 

Chicago  Telephone  Co 111. 

Cincinnati,  Hamilton  &  Dayton  Railway  Co.  (The) Ohio 


APPENDIX  777 

State  where 
Name  of  Company.  Corporation  organized. 

Cleveland,  Cincinnati,  Chicago  &  St.  Louis  Railway. .  .Ohio 

Colorado  Fuel  &  Iron  Co.  (The) Colo. 

Colorado  &  Southern  Eailway  Co.  (The) Colo. 

Columbus  &  Hocking  Coal  &  Iron  Co Ohio 

Commonwealth  Edison  Co HI. 

Consolidated  Mercur  Gold  Mines  Co N.  J- 

Crucible  Steel  Co.  of  America N.  J. 

Cuban- American  Sugar  Co.  (The) N.  J. 

Cumberland  Telegraph  and  Telephone  Co Ky. 

Daly  West  Mining  Co Colo. 

Denver  &  Eio  Grande  Railroad  Co Colo.,  Utah 

Detroit  United  Railway  Co Mich. 

Diamond  Match  Co.  (The) 111. 

Distillers  Securities  Corp N.  J. 

Duluth,  South  Shore  &  Atlantic  Railway  Co Mich.,  Wis. 

Du  Pont  (E.  I.)  De  Nemours  Powder  Co N.  J. 

East  Butte  Copper  Mining  Co.  (The) Ariz. 

Eastman  Kodak  Co N.  J. 

Electric  Storage  Battery  Co.  (The) N.  J. 

Elgin  National  Watch  Co HI. 

Franklin  Mining  Co Mich. 

General  Asphalt  Co N.  J. 

General  Motors  Co N.  J. 

Goldfield  Consolidated  Mines  Co.  (The) Wyo. 

Great  Northern  Iron  Ore  Properties Minn. 

Great  Northern  Railway  Co Minn. 

Greene  Cananea  Copper  Co Minn. 

Hancock  Consolidated  Mining  Co Mich. 

Havana  Electric  Railway  Co N.  J. 

Helvitia  Copper  Co.  (The) Ariz. 

Hocking  Valley  R.  R.  Co Ohio 

Illinois  Brick  Co HI. 

Illinois  Central  Railroad  Co HI. 

Indiana  Mining  Co Mich. 

Ingersoll-Rand  Co N.  J. 

International  and  Great  Northern  R.  R.  Co Texas 

International  Harvester  Co N.  J. 

International  Mercantile  Marine  Co.  .  N.  J. 


778  INHERITANCE     TAXATION 

State  where 
Name  of  Company.  Corporation  organized. 

International  Nickel  Co N.  J. 

International  Power  Co N.  J. 

International  Smelting  &  Eefining  Co N.  J. 

International  Steam  Pump  Co N.  J. 

Iowa  Central  Eailway  Co 111. 

Isle  Koyale  Copper  Co N.  J. 

Kansas  City  Eailway  &  Light  Co N.  J. 

Kansas  City,  Fort  Scott  &  Memphis  Ry.  Co.  (The) Kan. 

Kansas  City,  Mexico  &  Orient  Eailway  Co.  (The) Kan. 

Kansas  City  Southern  Eailway  Co.  (The) Mo. 

Keweenaw  Copper  Co Mich. 

Laclede  Gas  Light  Co.  (The) Mo. 

Lake  Copper  Co Mich. 

Lake  Erie  &  Western  Eailroad  Co 111. 

Lake  Shore  &  Mich.  Southern  Eailway  Co ...  Ohio,  111.,  Mich. 

Lake  Superior  Corp.  (The) N.  J. 

La  Salle  Copper  Co Mich. 

Louisville  &  Nashville  E.  E.  Co Ky. 

Mayflower  Mining  Co Mich. 

Metropolitan  West  Side  Elevated  Eailway  Co.  (The) 111. 

Michigan  Central  Eailroad  Co Mich. 

Michigan  Copper  Mining  Co Mich. 

Michigan  State  Telephone  Co Mich. 

Minneapolis  &  St.  Louis  Eailroad  Co Minn.,  la. 

Minneapolis  General  Electric  (The) N.  J. 

Minneapolis,  St.  Paul  &  Sault  Ste.  Marie  Eailway  Co. 

Minn.,  Wis.  &  Mich. 

Missouri,  Kansas  &  Texas  Eailway  Co Kan. 

Missouri  Pacific  Eailway  Co.  (The) Mo.,  Neb.,*  Kan. 

Mohawk  Mining  Co Mich. 

Nashville,  Chattanooga  &  St.  Louis  Eailway  Co Tenn. 

National  Biscuit  Co N.  J. 

National  Carbon  Co N.  J. 

National  Enameling  &  Stamping  Co N.  J. 

National  Lead  Co N.  J. 

New  Arcadian  Copper  Co Mich. 

*  Virginia  and  Nebraska  do  not  tax  stock  transfers  of  nonresidents. 


APPENDIX  779 

State  where 
Name  of  Company.  Corporation  organized. 

New  York  Air  Brake  Co.  (The) N.  J. 

New  York  Central N.  Y.,  Pa.,  0.,  Ind.,  111.  &  Mich. 

North  American  Co.  (The) N.  J. 

North  Butte  Mining  Co Minn. 

North  Lake  Mining  Co Mich. 

Northern  Pacific  Eailway  Co Wis. 

Northern  Securities  Co N.  J. 

Ojibway  Mining  Co Mich. 

Old  Colony  Copper  Co Mich. 

Osceola  Consolidated  Mining  Co Mich. 

Otis  Elevator  Co N.  J. 

Pacific  Coast  Co.  (The) N.  J. 

Pacific  Telephone  &  Telegraph  Co.  (The) Cal. 

Parrot  Silver  &  Copper  Co Mont. 

Pennsylvania  Steel  Co N.  J. 

People's  Gas  Light  &  Coke  Co 111. 

Peoria  &  Eastern  Railway  Co 111. 

Pere  Marquette  Railroad  Co Mich. 

Philadelphia  Electric  Co N.  J. 

Pittsburgh,  Cincinnati,  Chicago  &  St.  Louis  Railway, 

Ohio,  W.  Va.,*  HI. 

Pittsburgh  Coal  Co N.  J. 

Pittsburgh,  Fort  Wayne  &  Chicago  Railway  Co. . .  .Ohio,  111. 

Pressed  Steel  Car  Co N.  J. 

Pullman  Co.  (The) 111. 

Quincy  Mining  Co Mich. 

Railway  Steel-Spring  Co N.  J. 

Republic  Iron  &  Steel  Co N.  J. 

Rock  Island  Co.  (The) N.  J. 

St.  Joseph  &  Grand  Island  Railway  Co.  (The) . .  .Neb.,*  Kan. 

St.  Louis  &  San  Francisco  Railroad  Co Mo. 

St.  Louis  Southwestern  Railway  Co Mo. 

St.  Mary's  Mineral  Land  Co N.  J. 

San  Pedro,  Los  Angeles  &  Salt  Lake  Railroad  Co Utah 

Santa  Fe  Gold  &  Copper  Mining  Co N.  J. 

Savannah  Electric  Co Ga. 

*  Virginia  and  Nebraska  do  not  tax  stock  transfers  of  nonresidents. 


780  INHERITANCE     TAXATION 

State  where 
Name  of  Company.  Corporation  organized. 

Shattuck  Arizona  Copper  Co. Minn. 

Sloss  Sheffield  Steel  &  Iron  Co N.  J. 

Southern  Pacific  Co Ky. 

Southern  Eailway  Co Va. 

Standard  Oil  Co N.  J. 

Superior  &  Boston  Copper  Co Ariz. 

Superior  &  Pittsburgh  Copper  Co Minn. 

Superior  Copper  Co Mich. 

Swift  &  Co 111. 

Tamarack  Mining  Co Mich. 

Tennessee  Coal,  Iron  &  Railroad  Co Tenn. 

Tennessee  Copper  Co N.  J. 

Texas  Co Texas 

Texas  Pacific  Land  Trust Texas 

Toledo  Railways  &  Light  Co Ohio 

Twin  City  Rapid  Transit  Co N.  J. 

Union  Bag  and  Paper  Co N.  J. 

Union  Pacific  Railroad  Co Utah 

United  Boxboard  Co N.  J. 

United  Fruit  Co N.  J. 

United  Railways  Investment  Co N.  J. 

United  Shoe  Machinery  Corp N.  J. 

United  States  Cast  Iron  Pipe  &  Foundry  Co N.  J. 

United  States  Realty  &  Improvement  Co N.  J. 

United  States  Reduction  &  Refining  Co N.  J. 

United  States  Rubber  Co N.  J. 

United  States  Steel  Corp N.  J. 

Utah  Consolidated  Mining  Co N.  J. 

Utah  Copper  Co N.  J. 

Vandalia  Railroad  Co HI. 

Victoria  Copper  Mining  Co Mich. 

Virginia-Carolina  Chemical  Co N.  J. 

Wabash  Pittsburgh  Terminal  Railway  Co.  (The) 

W.  Va.,  Ohio 

Wabash  Railroad  Co 111.,  Mich.,  Mo.,  Ohio 

Wells  Fargo  &  Co Colo. 

Western  Electric  Co 111. 

Western  Telephone  &  Telegraph  Co N.  J. 


APPENDIX 

State  where 
Name  of  Company.  «  Corporation  organized. 

Wheeling  &  Lake  Erie  Railroad  Co Ohio 

Winona  Copper  Co Mich. 

Wisconsin  Central  Railway  Co Wis. 

Wolverine  Copper  Mining  Co Mich. 

Wyandot  Copper  Co Mich. 


782 


WHERE    SUCH    TRANSFERS    WERE    NOT 
TAXED  PRIOR  TO  1919 

Following  is  a  list  of  corporations  and  joint  stock  com- 
panies formed  or  incorporated  in  States  that  did  not  tax  trans- 
fers of  stock  in  domestic  corporations  prior  to  April  7,  1911. 

As  to  estates  of  persons  dying  after  that  date  the  State  of 
Maine  should  be  excluded. 

As  to  estates  of  persons  dying  after  May  14,  1919,  the  State 
of  New  York  should  be  excluded. 

As  to  estates  of  persons  dying  after  July,  1919,  the  State 
of  Pennsylvania  should  be  excluded. 

Since  the  enactment  of  Chapter  283,  L.  1919,  the  State  of 
Connecticut  should  be  excluded,  if  the  decedent  was  domiciled 
in  a  State  that  taxes  such  transfers.  Tennessee  and  New 
Mexico  have  a  similar  reciprocal  provision. 

The  only  jurisdictions  where  transfers  of  stock  in  domestic 
corporations  are  now  exempt  from  inheritance  taxes  are: 
Alaska,  Alabama,  Florida,  Delaware,  District  of  Columbia, 
Maryland,  Nebraska,  Tennessee,  Khode  Island  and  Vermont. 
Texas  taxes  transfers  to  collaterals  and  strangers  only. 
Massachusetts  exempts  them  where  the  State  of  domicile  also 
exempts  them. 

State  where 
Name  of  Company  Corporation  Organized 

Adams  Express  Co N.  Y. 

American  Agricultural  Chemical  Co.  (The) Conn. 

American  Express  Co N.  Y. 

American  Locomotive  Co N.  Y. 

American  Pneumatic  Service  Co Del. 

American  Telephone  &  Telegraph  Co N.  Y. 

American  Zinc,  Lead  &  Smelting  Co Me. 

Amoskeag  Manufacturing  Co N.  H. 


APPENDIX  783 

State  where 
Name  of  Company.  Corporation  organized. 

Arizona  Commercial  Copper  Co Me. 

Associated  Merchants  Co Conn. 

Atlantic  Coast  Line Va. 

Atlantic,  Gulf  &  West  Indies  Steamship  Lines Me. 

Baltimore  &  Ohio  E.  E.  Co.  (The) Va.  &  Md. 

Batopilas  Mining  Co.  (The) N.  Y. 

Boston  &  Albany  Eailroad  Co Mass.,  N.  Y. 

Boston  &  Corbin  Copper  &  Silver  Mining  Co Me. 

Boston  &  Lowell  Eailroad  Co Mass. 

Boston  &  Maine  Eailroad  Co Mass.,  N.  H.,  Me. 

Boston  &  Northern  Street  Eailway  Co Mass. 

Boston  &  Providence  Eailroad  Corp Mass. 

Boston  Elevated  Eailway  Co Mass. 

Boston,  Eevere  Beach  &  Lynn  Eailroad  Co Mass. 

Brill  ( J.  G.)  Co.  (The) Pa. 

Brooklyn  Eapid  Transit  Co N.  Y. 

Brooklyn  Union  Gas  Co.  (The) ' N.  Y. 

Buffalo,  Eochester  &  Pittsburgh  Eailway  Co N.  Y.,  Pa. 

Butterick  Co.  (The) N.  Y. 

Cambria  Steel  Co Pa. 

Capital  Traction  Co.  (The) Dist.  of  Columbia 

Central  &  South  American  Telegraph  Co N.  Y. 

Central  Vermont  Eailway  Co Vt. 

Chesapeake  &  Ohio  E.  E.  Co.  (The) Va.  &  Md. 

Concord  &  Montreal  Eailroad  Co.  (B.  &  M.) N.  H. 

(B.  &  M.) Vt. 

Connecticut  Eiver  Eailroad  Co.  (B.  &  M.) Mass.,  N.  H. 

Consolidated  Coal  Co.  (The) Md. 

Consolidated  Gas  Co N.  Y. 

Cramp  &  Sons  Ship  &  Engine  Building  Co.  (The  Wm.) . .  .Pa. 

Crex  Carpet  Co Del. 

Delaware  &  Hudson  Co,  (The) .N.  Y. 

Delaware,  Lackawanna  &  Western  Eailroad  Co.  (The) . .  .Pa. 

Draper  Co Me. 

Duluth-Superior  Traction  Co.  (The) Conn. 

East  Boston  Co Mass. 

Eastern  Steamship  Co Me. 

Edison  Electric  Illuminating  Co.  (The) Mass. 


784  INHERITANCE    TAXATION 

State  where 
Name  of  Company.  Corporation  organized. 

Erie  Railroad  Co N.  Y. 

Federal  Mining  &  Smelting  Co Del. 

Fitchburg  Kailroad  Co Mass.,  N.  H.,  Vt.  &  N.  Y. 

Galveston-Houston  Electric  Co Me. 

General  Chemical  Co N.  Y. 

General  Electric  Co N.  Y. 

Giroux  Consolidated  Mines  Co Del. 

Independent  Brewing  Co Pa. 

Inspiration  Copper  Co Me. 

Interborough-Metropolitan  Co N.  Y. 

Interborough  Eapid  Transit  Co N.  Y. 

International  Buttonhole  Machine  Co Me. 

International  Paper  Co N.  Y. 

Island  Creek  Coal  Co Me. 

Kerr  Lake  Mining  Co N.  Y. 

Lackawanna  Steel  Co N.  Y. 

Lehigh  Coal  &  Navigation  Co.  (The) Pa, 

Lehigh  Valley  Kailroad  Co Pa. 

Long  Island  Railroad  Co.  (The) N.  Y. 

Mackay  Companies  (The) Mass. 

Maine  Central  Railroad  Co Me. 

Manhattan  Railway  Co N.  Y. 

Manufacturers  Light  &  Heat  Co.  (The) Pa. 

Massachusetts  Electric  Companies Mass. 

Massachusetts  Gas  Companies Mass. 

Mergenthaler  Linotype  Co N.  Y. 

Mexican  Telephone  &  Telegraph  Co Me. 

Mexico  Consolidated  Mining  &  Smelting  Co Me. 

Miami  Copper  Co Del. 

National  Fire  Proofing  Co Pa. 

Nevada  Consolidated  Copper  Co Me. 

New  England  Cotton  Yarn  Co.  (The) Mass. 

New  England  Telephone  &  Telegraph  Co N.  Y. 

New  York  Central  &  Hudson  River  Railroad  Co. 

N.  Y.,  Pa.,  0.,  Ind.,  111.  &  Mich. 
New  York,  Chicago  &  St.  Louis  Railroad  Co.  (The) . . 

N.  Y.,  Ohio,  Ind.,  Pa. 
New  York  Dock  Co.  .N.  Y. 


APPENDIX  785 

State  where 
Name  of  Company.  Corporation  organized. 

New  York,  New  Haven  &  Hartford  Kailroad  Co .... 

Conn.,  Mass.,  E.  I. 

New  York,  Ontario  &  Western  Railway  Co N.  Y. 

Nipissing  Mines  Co Me. 

Norfolk  &  Western  Eailway  Co Va. 

Northern  Central Md. 

Northern  Texas  Electric  Co Me. 

Old  Colony  Eailroad  Co Mass. 

Old  Dominion  Copper  Mining  &  Smelting  Co Me. 

Pacific  Mail  Steamship  Co N.  Y. 

Pennsylvania  Eailroad  Co.  (The) Pa. 

Philadelphia  Co Pa. 

Philadelphia  Eapid  Transit  Co Pa. 

Pittsburgh  Brewing  Co Pa. 

Pittsburgh  Plate  Glass  Co Pa. 

Quicksilver  Mining  Co N.  Y. 

Eay  Consolidated  Copper  Co Me. 

Eeading  Co Pa. 

Eeece  Button-Hole  Machine  Co Me. 

Eeece  Folding  Machine  Co Me. 

Eotary  Eing  Spinning  Co Del. 

Eutland  Eailroad  Co Vt,  N.  Y. 

Sears,  Eoebuck  &  Co N.  Y. 

Shannon  Copper  Co Del. 

South  Utah  Mines  &  Smelters Me. 

Third  Avenue  Eailroad  Co.  (The) N.  Y. 

Toledo,  St.  Louis  &  Western  Eailroad  Co Ind. 

Tonopah  Mining  Co.,  Nevada  (The) Del. 

Torrington  Co Me. 

Union  Traction  Co.  (Phila.) Pa. 

United  Cigar  Manufacturers'  Co N.  Y. 

United  Dry  Goods  Companies Del. 

United  Gas  Improvement  Co.  (The) Pa. 

United  States  Express  Co N.  Y. 

United  States  Smelting,  Eefining  &  Mining  Co Me. 

Utah- Apex  Mining  Co Me. 

Virginia  Iron,  Coal  and  Coke  Co Va. 

Virginia  Eailway  Co Va. 

50 


786  INHERITANCE     TAXATION 

State  where 
Name  of  Company.  Corporation  organized. 

Western  Maryland  Railway  Co Md. 

West  End  Street  Railway  Co Mass. 

Western  New  York  &  Pennsylvania  Railway  Co . .  Pa.,  N.  Y. 

Western  Union  Telegraph  Co N.  Y. 

Westinghouse  Electric  &  Manufacturing  Co Pa. 


FORMS  737 


FORMS. 


NOTE. — The  more  important  New  York  Forms  are  given  in  the  text  of  the 
chapter  on  Procedure.  Those  that  follow  are  now  in  use  in  the  New  York  office 
of  the  State  Tax  Commission  not  already  set  forth  in  the  text.  The  recent 
changes  in  the  statute  have  necessitated  a  complete  revision  of  the  forms  given 
in  the  prior  editions  of  this  work. 


ORDER  FOR  COMMUTATION  OF  TAX. 


At  a  term  of  the  Surrogate's  Court  held  in  and  for  the 
County  of  New  York   at  the  Hall  of  Records   in  the 

County    of    New    York    on   the    day    of 

,    1922. 


Present :     Hon ,  Surrogate. 


In  the  Matter  of  the  Transfer  Tax  upon  the  Estate  of 

Deceased. 


Upon  reading  and  filing  the  affidavit  of    ............    verified    ............ 

and  upon  the  affidavit  of  GEORGE  F.  MARTIN,  verified  ............  and  upon 

the  appearance  and  motion  of  Lafayette  B.  Gleason,  the  attorney  for  the  State 
Tax  Commission,  and  in  behalf  of  the  commutation  of  the  transfer  tax  regarding 
the  estate  of  the  said  decedent,  and  it  having  been  proved  to  the  satisfaction 
of  the  Surrogate  that  the  decedent  was,  at  the  time  of  death,  a  resident  of  the 


State  of   ............  and  that  the  said  "jlJ         paid  to  the  State  Tax 

Commission  a  sum  determined  by  the  Commission  to  wit:   $  ..........  .  .    and 

which  sum  is  not  less  than  two  per  centum  upon  the  clear  market  value  of  all 
the  property  within  the  state  taxable  under  the  provisions  of  the  Transfer  Tax 
Law,  and  without  deductions  or  exemption  of  any  kind,  and  which  sum  is  not 
less  than  the  transfer  tax  which  would  be  receivable  in  the  event  that  the  tax 
were  not  commuted,  it  is 

ORDERED  and  ADJUDGED,  that  the  transfer  tax  upon  the  transfers  in  the 
estate  of  the  above-named  decedent  is  commuted  and  finally  settled  by  the 
aforesaid  payment. 


788  INHERITANCE     TAXATION 

AFFIDAVIT   FOR   COMMUTATION   OF   NONRESIDENT   TAX. 


(Sec.  221-c,  Tax  Law.) 

To  be  used  only  where  death  occurred  on  or  after  April  1,  1922. 
SURROGATES'  COURT—  New  York  County. 

-  1 
In  the  Matter  of  the  Transfer  Tax  upon  the  Estate  of  I 

Deceased. 

Supply  original  and  two  copies  of  this  affidavit  and  three  copies  of  will. 

STATE   OF    ..............  ) 

County    of    ................  j    88- 

....................   of   ....................   being  duly  sworn,  says  : 

I.  —  That  said  decedent  died  on  the   ............  day  of   ............  ,  192.  .  , 

a  resident  of  the  State  of   .  .  <  and  letters  of 


were  issued  on  the  ..........  day  of  ............   192  .  .  ,  by  the 

Court  of  the  County  of    ............   State  of    ............  ,  to 


and  that  deponent   is   acting  as   such  ect  a'D^   a8^8   *^ 

mission  of  the  State  of  New  York:  to  issue  waivers  permitting  the  transfer 
of  the  property  hereinafter  described;  to  consent  to  a  commutation  of  the 
transfer  tax  of  the  State  of  New  York  regarding  said  estate  at  the  rate  fixed 
by  the  said  Tax  Commission  and  to  procure  from  the  Surrogate  of  New  York 
County  an  order  permitting  such  commutation  and  to  make  such  commutation. 

II.  —  The  facts  showing  decedent  to  be  a  resident  of  such  State  and  the  time 
spent  by  the  decedent  within  the  State  of  New  York   in  the  last  two  years 
preceding  the  death  are  as  follows: 

III.  —  The  following  are  the  names,  ages,  addresses,  relationship  and  amount 
of  interest  of  the  persons  among  whom  the  estate  is  distributed: 

Amount  of 
Name  and  Relationship  Age  Address  Interest 


IV. — The  fair  market  value  of  the  entire  estate  of  decedent  at  the  time  of  the 

death   of  the   decedent  and   wherever   situated   is    $ 

of  which  the  personalty  is   $ 

V. — SCHEDULE  "A"  hereto  annexed  contains  an  itemized  statement  of  all 
the  property,  real  and  personal,  of  which  the  decedent  died  seized  or  possessed 
within  the  State  of  New  York  or  within  the  classes  named  in  said  Schedules. 


FORMS  739 

SCHEDULE  "B"  contains  a  list  of 

bank  deposits 

stocks   in   foreign   corporations 

and   all  other   items   for  which  waivers  are   requested   in   addition   to   waivers 
regarding  the  tiems  named  in  Schedule  A. 

Sworn   to  before    me   this  ) 
day  of    ,   192.. j 

Notary    Public,    County. 

(Attach  county  clerk's  certificate.) 


SCHEDULE    "A" 

All  property  of  which  the  transfer  is  taxable  under  the  Tax  Law  of  the  State 
of  New  York.  [When  any  question  is  answered  "yes"  include  the  items  in  the 
annexed  list.] 

A-l.  Real  estate  in  New  York  as  hereinafter  set  forth  (with  assessed  value 
of  each  parcel  for  the  year  of  decedent's  death  and  estimated  market  value  and 
affidavit  of  appraisal  of  a  competent  real  estate  appraiser). 

Did  the  decedent  own   any   such   property? 

A-2.  Goods,  wares  and  merchandise  of  the  fair  market  value  of  $ 

as  appraised  in  the  accompanying  appraisal  by  items  made  by  a  competent 
appraiser. 

Did  the  decedent  own   any   such   property? 

A-3.  Shares  of  stock  or  certificates  of  interest  of  corporations,  joint  stock 
companies,  or  associations  organized  under  the  laws  of  the  State  of  New  York 
or  of  national  banks  located  in  the  State  of  New  York  and  including  all  divi- 
dends and  rights  to  subscribe  to  the  stock  of  such  corporation,  joint  stock 
companies  or  associations  or  banks  as  hereinafter  stated  in  detail. 

Did  the  decedent  own   any  such   property? 

Also,  the  stock,  bonds,  notes,  mortgages  and  other  evidence  of  interest  in  any 
corporation  wherever  organized,  in  the  nature  of  a  real  estate  corporation 
owning  real  estate  within  the  State  of  New  York. 

Did  the  decedent  own   any   such   property? 

A-4.  Interest  in  a  partnership  business  conducted  wholly  or  partly  within  the 
State  of  New  York  and  in  the  good  will  of  such  business  within  the  State  of 
New  York,  and  capital  invested  in  business  in  New  York  State  by  decedent 
doing  business  either  as  principal  or  partner.  (A  detailed  and  accurate  book 
statement  is  required.) 

Did  the   decedent  own   any   such   property? 

A-5.  A  statement  of  property  of  decedent  included  within  any  of  the  foregoing 
classes  and  held  jointly  with  or  in  trust  for  another  or  as  tenant  by  the  entirety 
or  in  the  name  of  decedent  and  another  payable  to  either  or  to  the  survivor. 

Did  the  decedent  own   any  such   property? 

A-6.  A  statement  of  the  interest  of  the  decedent  in  any  estate  or  trust  holding 
property  within  any  one  or  more  of  the  foregoing  classes. 

Did   the   decedent   own  any   such   interest? 

A-7.  Did  the  decedent  exercise  any  power  of  appointment  regarding  any 
property  included  in  any  of  the  foregoing  classes?  (If  so,  the  exact  facts  must 
be  hereinafter  set  forth.) 

Answer 

A-8.  Did  the  decedent  make  any  transfer  by  deed,  grant,  bargain,  sale  or  gift 
in  contemplation  of  death  or  intended  to  take  effect  in  possession  or  enjoyment 
at  or  after  his  death  of  any  property  of  the  kind  above  described!  If  so,  the 
exact  facts  must  be  hereinafter  set  forth. 


790  INHERITANCE     TAXATION 

Answer 


LIST  OF  ITEMS  TAXABLE  IN  NEW  YORK 
The  following  is  a  detailed  list  of  all  the  property  within  the  State  of  New 

York,  or  subject  to  the  jurisdiction  of  the   State  of  New  York  and  included 

under   the  above-named  classes. 
A-l. 

SCHEDULE    "B" 

1.  List  of  Bank  Deposits  in  the  name  of  the  decedent  within  the  State  of 
New  York. 

2.  Stocks  of  foreign  corporations  having  transfer  offices  within  the  State  of 
New  York. 

3.  Other  items  for  which  waivers  are  also  desired. 

STATE   OF  NEW  YORK) 
County  of  New  York.     $  88< 

George  F.  Martin,  being  duly  sworn,  says:  that  he  is  an  examiner  of  values 
employed  by  the  State  Tax  Commission;  that  he  has  read  the  annexed  list  of 

assets  of  the  estate  of  deceased,  which  list  has  been  valued 

by  him;  that  the  values  therein  specified  are  true  and  correct  as  of  the  date  of 
death  of  such  decedent,  according  to  his  knowledge  and  belief,  and  that  the  said 
assets  were  of  the  value  of  $ at  such  date. 

Sworn   to   before    me   this 

day   of    192. . 

(Signed). 


AFFIDAVIT  FOR  APPRAISAL— NONRESIDENT. 


To  be  used  only  where  death  occurred  on  or  after  April  1,  1922. 
SURROGATES'  COURT— New  York  County. 


In  the  Matter  of  the  Transfer  Tax  upon  the  Estate  of 

Deceased. 


Supply  original  and  2  copies  of  this  affidavit,  and  3  copies  of  will. 

STATE   OF 1 

County    of    j    88- 

of   being  duly  sworn,  says : 

I. — That  said  decedent  died  on  the   day  of   ,  19. . ., 

testate  £  administration 

a  resident  of  the  State  of   intestate  and  letters  °f    testamentary 

were  issued  on  the day  of  ,  19 . . . ,  by  the 


FORMS  791 

Court  of  the  County  of ,  State  of  to  ; 

i   jt    ,     i  i     administrator. 

and  that  deponent  is  acting  as  such       executor 

II. — The  facts  showing  decedent  to  be  a  resident  of  such  state  and  the  time 
spent  by  the  decedent  within  the  State  of  New  York  in  the  last  two  years 
preceding  the  death  are  as  follows: 

III. — The  following  are  the  names,  relationship,  ages,  addresses  and  amount  of 
interest  of  the  persons  among  whom  the  estate  is  distributed. 

Amount  of 
Name  and  Relationship  Age  Address  Interest 


IV. — Schedule  "A"  hereto  annexed  contains  an  itemized  statement  of  all  the 
property,  real  and  personal,  of  which  the  decedent  died  seized  or  possessed 
within  the  State  of  New  York  or  within  the  classes  named  in  said  schedule, 
and  states  the  fair  market  value  of  each  item. 

Schedule  "B"  contains  a  list  of  bank  deposits,  stocks  in  foreign  corporations 
and  all  other  items  for  which  waivers  are  requested  in  addition  to  waivers 
regarding  the  items  named  in  Schedule  A. 

Schedule  "C"  contains  a  list  of  all  the  property  of  the  decedent  wherever 
situated  and  states  the  fair  market  values  of  the  items. 

Schedule  "D"  contains  a  list  of  all  the  deductions  claimed.  The  aggregate 

value  of  all  the  property  of  the  decedent  wherever  situated  is  $ 

of  which  the  value  of  all  the  personalty  is  $ the  amount  of  the 

deductions  is  $ 

Sworn   to  before   me   this 

day  of    ,   19 . 

Notary   Public, 

County. 
(Attach  county  clerk's  certificate.) 

SCHEDULE    "A" 

All  property  of  which  the  transfer  is  taxable  under  the  Tax  Law  of  the  State 
of  New  York.  [Where  any  question  is  answered  yes,  include  the  items  in  the 
annexed  list.] 

A-l.  Real  estate  in  New  York  as  hereinafter  set  forth  (with  assessed  value  of 
each  parcel  for  the  year  of  decedent's  death  and  estimated  value  and  affidavit 
of  appraisal  of  a  competent  real  estate  appraiser). 

Did  the   decedent  own   any  such   property? 

A-2.  Goods,  wares  and  merchandise  of  the  fair  market  value  of  $ 

as  appraised  in  the  accompanying  appraisal  by  items  made  by  a  competent 
appraiser. 

Did  the   decedent  own   any  such   property? 

A-3.  Shares  of  stocks  or  certificates  of  interest  of  corporations,  joint  stock 
companies,  or  associations  organized  under  the  laws  of  the  State  of  New  York 
or  of  national  banks  located  in  the  State  of  New  York  and  including  all  divi- 
dends and  rights  to  subscribe  to  the  stock  of  such  corporation,  joint  stock 
companies  or  associations  or  banks  as  hereinafter  stated  in  detail. 

Did  the  decedent  own   any   such   property? 

Also,  the  stock,  bonds,  notes,  mortgages  and  other  evidence  of  interest  in  any 
corporation  wherever  organized,  in  the  nature  of  a  real  estate  corporation 
owning  real  estate  within  the  State  of  New  York. 


792  INHERITANCE     TAXATION 

Did  the   decedent  own   any  such   property? 

A- 4.  Interest  in  a  partnership  business  conducted  wholly  or  partly  within  the 
State  of  New  York  and  in  the  good  will  of  such  business  within  the  State  of 
New  York,  and  capital  invested  in  business  in  New  York  State  by  decedent 
doing  business  either  as  principal  or  partner.  (A  detailed  and  accurate  book 
statement  is  required.) 

Did  the   decedent  own   any  such   property? 

A-5.  A  statement  of  property  of  decedent  included  within  any  of  the  foregoing 
classes  and  held  jointly  with  or  in  trust  for  another  or  as  tenant  by  the 
entirety  or  in  the  name  of  decedent  and  another  payable  to  either  or  to  the 
survivor. 

Did  the  decedent  own   any   such   property? 

A-6.  A  statement  of  the  interest  of  the  decedent  in  any  estate  or  trust  holding 
property  within  any  one  or  more  of  the  foregoing  classes. 

Did   the   decedent   own   any   such   interest? 

A-7.  Did  the  decedent  exercise  any  power  of  appointment  regarding  any 
property  included  in  any  of  the  foregoing  classes?  (If  so,  the  exact  facts  must 
be  hereinafter  set  forth.) 

Answer     

A-8.  Did  the  decedent  make  any  transfer  by  deed,  grant,  bargain,  sale  or  gift 
in  contemplation  of  death  or  intended  to  take  effect  in  possession  or  enjoyment 
at  or  after  his  death  of  any  property  of  the  kind  above  described?  (If  so,  the 
exact  facts  must  be  hereinafter  set  forth.) 

Answer     

LIST  OF  ITEMS  TAXABLE  IN  NEW  YORK 

The  following  is  a  detailed  list  of  all  the  property  within  the  State  of  New 
York,  or  subject  to  the  jurisdiction  of  the  State  of  New  York  and  included 
under  the  above-named  classes. 

A-l. 

SCHEDULE    "B" 

1.  List  of  Bank  Deposits  in  the  name  of  the  decedent  within  the  State  of 
New  York. 

2.  Stocks  of  foreign  corporations  having  transfer  offices  within  the  State  of 
New  York. 

3.  Other  items  for  which  waivers  are  also  desired. 

SCHEDULE  "C" 

List  of  all  the  property  of  the  decedent  wherever  situated  and  the  fair  market 
value  of  each  item. 


SCHEDULE  "D" 
DEDUCTIONS. 


(Signed). 


COMMUTATION  RECEIPT. 


RECEIVED  OF 

as  administrator  executor  of  the  Estate  of. 


Deceased,  a  resident  of  the  State  of 

the  sum  of  $ in  commutation  of  the  transfer  tax  of  the  State  of 

New  York  upon  the  taxable  transfers  of  property  in  the  estate  of  the  decedent 

as  regards  all  the  property  specifically  named  in  the  

affidavit  of  the  executor,  and  subject  to  the  payment  of  an  additional  tax  in  the 
event  that  other  taxable  assets  are  discovered. 

It  is  understood  that  this  payment  is  voluntarily  made  by  the  executor  in  behalf 
of  all  the  parties  in  interest  and  in  aid  of  the  administration  of  the  said  estate 
and  is  not  subject  to  any  claim  for  refund  on  the  part  of  any  person. 


FORMS  793 

APPLICATION  FOR  WAIVER  ON  STOCKS,  BONDS  AND  BANK  ACCOUNTS. 

(Certificates  of  Letters  Testamentary  or  of  Administration  Must  Be  Presented.) 

WAIVERS— STOCKS  AND  BONDS. 

PILL  OUT  THIS  BLANK. 

NAME  OF  ESTATE 

County State 

Place  of  Death 

Applicant  and  Address 


Executor   or  Administrator . 

With  address 

Date  of  Death 


No.  of  Shares       No.  of  Bonds        Name  of  Stock  or  Bond        If  Bonds,  par  value 


APPLICATION  FOR  WAIVER  NON-TAXABLE 

RESIDENT  ESTATE. 
SURROGATE 'S  COURT — COUNTY  OF  NEW  YORK. 


IN  THE  MATTEK  OF  THE  ESTATE  OF 
,  DECEASED. 


STATE  OF   ) 

County  of  C 

,  being  duly  sworn,  says : 

I.  That  he  resides  at 

That  said  decedent  died  a  resident  of    , 

testate 

on  the day  of ,  19 ,  intestate  and 

letters were  issued  on  the day  of , 

19 . . . . ,  by  the  Surrogate 's  Court  of  New  York  County. 

II.  That  no  order  has  been  made  herein  appointing  an  appraiser. 

III.  That  deponent  is  personally  familiar  with  the  affairs  of  said  estate,  the 
property  constituting  the  assets  thereof  and  their  fair  market  value  and  with  the 
debts,  expenses  and  charges  properly  and  legally  liable  as  deductions  therefrom; 
that  decedent  at  the  time  of  his  death  had  no  safe  deposit  box;  that  to  the  best 
of    deponent's   knowledge,    information    and    belief,    there   is   no    person    better 
informed  than  deponent  upon  the  said  affairs  of  this  estate. 

IV.  That  Schedule  A,  hereunto  annexed,  sets  forth  fully  and  in  detail  all  the 
personal  property  wheresoever  situated,  owned  by  the  decedent,  or  in  which  said 
decedent  had  any  right,  title  or  interest  at  the  time  of  his  death,  or  which,  by 
reason  thereof,  fell  into  or  became  part  of  the  assets  of  this  estate  by  reversion, 
remainder  or  otherwise.     That  decedent  owned  no  real  estate  at  the  time  of  his 
death,  and  decedent  made  no  gift,  grant  or  conveyance  in  contemplation  of  death, 
or  to  take  effect  at  or  after  death,  and  decedent  had  no  power  of  appointment 
vested  in  him  by  the  will  or  deed  or  other  instrument  of  another. 

That  decedent  left  no  money  at  the  time  of  his  death,  either  in  his  immediate 
possession,  standing  to  his  credit,  or  in  which  he  had  any  right,  title  or  interest, 
in  banks  of  deposit,  savings  banks,  trust  companies,  or  other  institutions,  except 
as  set  forth  in  said  Schedule  A.  That  decedent  left  no  wearing  apparel,  jewelry, 
silverware,  pictures,  books,  works  of  art,  household  furniture,  horses,  carriages, 
automobiles,  boats,  or  any  other  personal  chattels  of  any  kind  or  nature,  no  bonds 
or  mortgages  or  claims  due  and  owing  decedent  at  the  time  of  his  death,  and  no 


794  INHERITANCE    TAXATION 

promissory  notes  or  other  instruments  in  writing  for  the  payment  of  money, 
except  as  stated  in  said  Schedule  A. 

That  decedent  was  in  the  employ  of   and 

was  not  interested  in  any  copartnership  or  business.  That  decedent  carried  no 
life  insurance  policy  or  policies  payable  to  himself  or  his  estate,  but  was  insured 

in  the for  the  sum  of  , 

and  also  insured  in  the   for  the  sum 

of ,  and  that  both  policies  were  payable  to  , 

your  petitioner,  as  beneficiary.  That  decedent  owned  no  corporate  stocks  or 
bonds,  or  other  investment  securities,  and  no  property  of  any  kind  or  description 
except  as  set  forth  in  said  Schedule  A. 

V.  That  Schedule  B  hereto  annexed  sets  forth  the  funeral  expenses,  adminis- 
tration expenses  and  counsel  fees  paid  or  incurred  in  connection  with  the  estate. 
That  decedent  left  no  debts  or  claims  against  the  decedent.     The  Executors  also 
claim  to  be  allowed  as  a  deduction  herein  their  lawful  commissions  as  Executors. 

VI.  That  the  only  person  beneficially  interested  in  this  estate  at  the  time  of 
decedent's  death  was  and  is  your  petitioner. 

,  of  decedent,  who  resides  at , 

and  that  he  [she]  is  of  full  age  and  sound  mind. 

VII.  That  decedent  left  no  property  held  by  the  decedent  in  trust  for  or  jointly 
with  another  or  others. 

VIII.  That  petitioner  has  made  due  and  dilegent  search  for  property  of  every 
kind  and  description  left  by  the  decedent,  and  has  been  able  to  discover  only 
that  set  forth  in  Schedule  A,  and  that  no  information  of  other  property  of  the 
decedent  has  come  to  his  [her]  knowledge,  and  that  he  [she]  verily  believes  that 
the  decedent  left  no  property  except  as  therein  set  forth. 

That  all  the  sums  claimed  as  deductions  in  Schedule  B  are  lawful,  just  and  fair. 

WHEREFORE,  deponent  asks  that  a  waiver  be  issued  on  the  following  property: 
(Schedule  A). 
Sworn  to  before  me  this 

day  of ,  192... 


PETITION  AND  ORDER  APPOINTING  APPRAISER  ON  PETITION  OF  TAX 

COMMISSION 
RESIDENT  ESTATE. 

At  a  Surrogate's  Court  held  in  and  for  the  County  of  New  York,  at  the  Hall  of 

Eecords  in  the  .Borough  of  Manhattan,  City  of  New  York,  on  the 

day  of  

Present — Hon ,  Surrogate. 

IN  THE  MATTER  OF  THE  TRANSFER  TAX  UPON  THE 
ESTATE  OF  I 

,  DECEASED,  f 

J 

On  reading  and  filing  the  petition  of  the  State  Tax  Commission  of  the  State  of 

New  York,  verified  the   day  of   ,  I  do  hereby 

pursuant  to  Article  X  of  the  Tax  Law,  direct ,  one 

of  the  appraisers  appointed  by  the  State  Tax  Commission  of  the  State  of  New 
York,  under  said  statute,  to  fix  the  fair  market  value  of  the  property  which  was 
of  the  above-named  decedent,  and  which  is  subject  to  the  payment  of  any  tax 
imposed  by  said  statute. 

SURROGATE 'S  COURT— -COUNTY  OF  NEW  YORK. 


IN  THE  MATTER  OF  THE  ESTATE.  OF 
,  DECEASED. 

To  the  Surrogate's  Court: 

The  petition  of  the  Tax  Commission  of  the  State  of  New  York  respectfully 
shows : 


FORMS  795 

1st.  That  the  Tax  Commission  of  the  State  of  New  York  is  a  department  of 
the  state  of  New  York  duly  created  and  existing  under  and  by  virtue  of  the 
provisions  of  Chapter  90  of  the  Laws  of  1921. 

That  Lafayette  B.  Gleason  is  a  duly  authorized  attorney  for  said  Tax  Com- 
mission in  and  for  New  York  County  in  the  matter  of  the  appraisal  of  estates 
for  the  purpose  of  ascertaining  and  fixing  the  Tax  due  the  State  of  New  York 
under  the  provisions  of  Article  X  of  the  Tax  Law  of  the  State  of  New  York. 

Upon  information  and  belief : 

2nd.  That  said  decedent  died  on  or  about  the day  of 

being  then  a  resident  of  ,  County  and  State  of  New  York, 

and  was  seized  and  possessed  of  property  in  the  County  and  State  of  New  York 
subject  to  taxation  under  the  Act  in  relation  to  Taxable  Transfers  of  Property. 

3rd.  That  said  decedent  made  a  last  Will  and  Testament,  which  was  thereafter 

and  on  or  about  the day  of ,  duly  admitted  to 

probate  by  the  said  Surrogate's  Court  for  the  County  of  New  York,  and  that 
letters  testamentary  have  been  duly  issued  to   

4th.  That  said  decedent  at  the  time  of  death  was  seized  and  possessed  of 
property  subject  to  taxation  under  the  Act  in  relation  to  Taxable  Transfers  of 
Property,  and  that  no  proceedings  have  been  had  for  the  determination  of  said  tax. 

5th.  That  all  persons  who  are  interested  in  said  estate  and  who  are  entitled  to 
notice  of  all  proceedings  and  their  addresses  are  as  follows: 

6th.  That  all  the  persons  above  named  are  of  full  age  and  sound  mind,  except 

WHEREFORE,  your  petitioner  prays  for  the  appointment  of  a  Transfer  Tax 
Appraiser,  as  provided  by  law. 

THE  TAX  COMMISSION  OF  THE  STATE  OF  NEW  YORK. 

Dated,  Albany,  N.  Y.  By 

Attorney. 
STATE  OF  NEW  YORK,  ) 

County  of  New  York,      f 

Lafayette  B.  Gleason,  being  duly  sworn,  deposes  and  says:  That  he  is  the 
attorney  for  the  State  Tax  Commission  of  the  State  of  New  York,  the  petitioner 
herein,  and  is  retained  by  it  in  the  above  entitled  matter;  that  he  is  acquainted 
with  the  facts  in  this  proceeding;  that  he  has  read  the  foregoing  petition  and 
knows  the  contents  thereof,  and  that  the  same  is  true  of  his  own  knowledge, 
except  as  to  the  matters  which  are  therein  stated  to  be  alleged  upon  information 
and  belief,  and  as  to  those  matters  he  believes  the  same  to  be  true. 

Deponent  further  says  that  this  affidavit  is  not  made  by  the  petitioner  herein, 
as  said  petitioner  is  the  Tax  Commission  of  the  State  of  New  York  and  is  not 
within  the  County  of  New  York,  where  deponent  has  his  office.  He  further  says 
that  the  grounds  of  his  belief  as  to  the  matters  not  stated  upon  his  own  knowledge 
are  correspondence  had  by  deponent  with  petitioner,  papers  in  his  possession  and 
the  examination  of  the  records  of  the  Surrogate 's  Office  where  probate  proceedings 
were  taken  upon  decedent's  estate. 
Sworn  to  before  me  this 

day  of  


Notary  Public,  New  York  County. 


PETITION  AND  ORDER  APPOINTING  APPRAISER  ON  PETITION  OF  TAX 

COMMISSION 
NONRESIDENT  ESTATE. 

At  a  Surrogate's  Court  held  in  and  for  the  County  of  New  York,  at  the  Hall  of 

Records  in  the  Borough  of  Manhattan,  City  of  New  York,  on  the 

day  of 

Present — Hon ,  Surrogate. 

IN  THE  MATTER  OF  THE  TRANSFER  TAX  UPON  THE 

ESTATE  OF 
,  DECEASED. 


On  reading  and  filing  the  petition  of  the  Tax  Commission  of  the  State  of  New 
York,  verified  the  day  of   , 


796  INHERITANCE     TAXATION 

I  do  hereby  pursuant  to  Article  X  of  the  Tax  Law,  direct , 

one  of  the  appraisers  appointed  by  the  State  Tax  Commission  of  the  State  of 
New  York,  under  said  Statute,  to  fix  the  fair  market  value  of  the  property  which 
was  of  the  above-named  decedent,  and  which  is  subject  to  the  payment  of  any 
tax  imposed  by  said  Statute. 

SURROGATE 'S  COURT — NEW  YORK  COUNTY. 


IN  THE  MATTER  OF  THE  TRANSFER  TAX  UPON  THE 

ESTATE  OF 
,  DECEASED. 

To  the  Surrogate's  Court: 

The  petition  of  The  Tax  Commission  of  the  State  of  New  York  respectfully 
shows : 

1st.  That  the  Tax  Commission  of  the  State  of  New  York  is  a  department  of  the 
State  of  New  York  duly  created  and  existing  under  and  by  virtue  of  the 
provisions  of  Chapter  90  of  the  Laws  of  1921. 

That  Lafayette  B.  Gleason  is  a  duly  authorized  attorney  for  said  Tax  Com- 
mission in  and  for  New  York  County  in  the  matter  of  the  appraisal  of  estates 
for  the  purpose  of  ascertaining  and  fixing  the  Tax  due  the  State  of  New  York 
under  the  provisions  of  Article  X  of  the  Tax  Law  of  the  State  of  New  York. 

Upon  information  and  belief ; 

2nd.  That  said  decedent  died  on  or  about  the   day  of   , 

19 ,  being  then  a  resident  of  the  city  of in  the  State 

of 

3rd.  That  said  decedent  dies  intestate  and  that  on  or  about  the 

day  of   Letters  of  Administration  were  duly  issued 

to by  the Court  of  the  County 

of ,  State  of 

4th.  That  decedent  at  the  time  of  death  was  seized  and  possessed  of  property 
in  the  County  and  State  of  New  York,  the  transfer  of  which,  or  some  part 
thereof  is  subject  to  tax  under  the  laws  relating  to  Taxable  Transfers. 

5th.  That  no  proceeding  has  been  had  for  the  determination  of  said  tax,  and 
no  application  for  letters  testamentary  or  ancillary  has  been  made  to  the  Surrogate 
of  this  or  any  other  County  of  this  State. 

6th.  That  all  the  persons  who  are  interested  in  said  estate  and  who ,  are 
entitled  to  notice  of  all  proceedings  and  their  addresses  are  as  follows: 

WHEREFORE,  your  petitioner  prays  that  you  will  designate  an  appraiser,  as 
provided  by  law. 

Dated 

THE  TAX  COMMISSION  OF  THE  STATE  OF  NEW  YORK. 
By  LAFAYETTE  B.  GLEASON, 

Attorney. 

STATE  OF  NEW  YORK,) 
County  of  New  York,     f 

Lafayette  B.  Gleason,  being  duly  sworn,  deposes  and  says  that  he  is  the 
attorney  for  the  Tax  Commission  of  the  State  of  New  York,  the  petitioner  herein, 
and  is  retained  by  it  in  the  above  entitled  matter;  that  he  is  acquainted  with 
the  facts  in  this  proceeding;  that  he  has  read  the  foregoing  petition  and  knows 
the  contents  thereof,  and  that  the  same  is  true  of  his  own  knowledge,  except  as 
to  the  matters  which  are  therein  stated  to  be  alleged  upon  information  and 
belief,  and  as  to  those  matters  he  believes  the  same  to  be  true. 

Deponent  further  says  that  this  affidavit  is  not  made  by  the  petitioner  herein, 
as  said  petitioner  is  the  Tax  Commission  of  the  State  of  New  York  and  is  not 
within  the  County  of  New  York,  where  deponent  has  his  office.  He  further  says 
that  the  grounds  of  his  belief  as  to  the  matters  not  stated  upon  his  own  knowl- 


FORMS  797 

edge  are  correspondence  had  by  deponent  with  petitioner,  papers  in  his  pos- 
session and  the  examination  of  the  records  of  the  Surrogate's  office  where 
probate  proceedings  were  taken  upon  decedent's  estate. 

Sworn  to  before  me  this '. . . . 

day  of  


Notary  Public, 

New  York  County. 


ORDER  APPOINTING  APPRAISER. 

SURROGATE'S  COURT— COUNTY  OF   . 


IN   THE   MATTER   OF  THE    TRANSFER   TAX    UPON 

ESTATE  OF 
,  DECEASED. 


On  reading  and  filing  the  petition  of (executor  or  adminis- 
trator)   of,  etc.,  of  said  decedent ,  Esq.,  who  is  a  per- 
son (appointed  by  the  State  Tax  Commission  or  designated  "by  statute)  to  act  as 
appraiser  in  this  proceeding,  to  fix  the  fair  market  value  at  the  time  of  the 
transfer,  of  the  property  of  the  above-named  decedent  which  is  subject  to  the 
payment  of  any  tax  imposed  by  article  X  of  chapter  62  of  the  Laws  of  1909, 
and  the  acts  amendatory  thereof  and  supplemental  thereto.  (Also  any  other 
facts  vn  relation  thereto  which  the  surrogate  may  desire  the  appraiser  to  report 
upon  should  be  stated  here.) 


Surrogate. 


OATH  OF  APPRAISER. 

(§  230,  Tax  Law.) 
SURROGATE'S  COURT— COUNTY  OF   . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED. 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


STATE  OF  NEW  YORK,  } 
County  of  New  York,      J    ss-: 

,  being  duly  sworn,  says :     I  am  the  person  directed  to  appraise 

the  property  of  the  above-named  decedent  by  order  of  Hon ,  surro- 
gate of  the  county  of ,  State  of  New  York,  by  order  dated  the 

day  of ,  192 . . ,  and  in  pursuance  of  chapter  62  of  the 

Laws  of  1909,  and  the  acts  amendatory  thereof  and  supplemental  thereto,  I  will 
faithfully  and  honestly  perform  the  duties  of  such  appraiser  according  to  the  best 
of  my  understanding  and  ability. 

Sworn  to  before  me,  this day 

of    ,  192.. 


Notary  Public. 


798  INHERITANCE     TAXATION 

NOTICE  OF  HEARING  BEFORE  APPRAISER. 

(§  230,  Tax  Law.) 
SURROGATE'S  COURT— COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


To ,  residing  at : 

You  will  please  take  notice  that  pursuant  to  an  order  of  Hon , 

surrogate  of  the  county  of ,  made  and  entered  the day  of 

,  192 . . ,  and  pursuant  to  the  provisions  of  chapter  62  of  the  Laws 

of  1909,  and  the  acts  amendatory  thereof  and  supplemental  thereto,  I  will  on 

the day  of ,  192 . . ,  at o  'clock  in  the noon 

of  that  day,  at ,  in  the ,  proceed  to  appraise  the  prop- 
erty of  the  above-named  decedent  at  its  fair  market  value  at  the  time  of  decedent  'a 
death,  the  transfer  of  which  property  or  some  part  thereof  is,  or  may  be,  subject 
to  the  tax  imposed  by  said  act,  or  the  acts  amendatory  thereof  and  supplemental 
thereto. 

And  such  of  you  as  are  under  the  age  of  twenty-one  years,  are  required  to 
appear  by  guardian,  if  you  have  one,  or,  if  you  have  none,  to  appear  and  apply 
for  one  to  be  appointed,  or,  in  the  event  of  your  neglect  or  failure  to  do  so,  a 
guardian  may  be  appointed  by  the  surrogate  to  represent  and  act  for  you  in  this 
proceeding  at  any  stage  thereof,  as  provided  by  section  231  of  the  Transfer 
Tax  Law. 


Appraiser. 
Dated, ,  192.. 

(A  copy  of  this  notice,  together  with  am,  affidavit  of  mailing  the  same  to  all 
the  persons  interested  in  said  estate,  naming  them,  should  be  attached  to  each  of 
the  appraiser's  reports.) 


SUBPOENA. 
THE  PEOPLE  OF  THE  STATE  OF  NEW  YORK, 

To ,  GREETING  : 

WE  COMMAND  YOU,  that  all  business  and  excuses  being  laid  aside,  you  and 

each  of  you  appear  and  attend  at ,  in  the  city  (or  village)  of 

,  on  the day  of ,  192. .,  at o'clock,  in 

the noon  of  that  day,  before  the  undersigned,  heretofore  duly  desig- 
nated the  appraiser  by  Hon ,  surrogate  of  the  county  of _. ., 

under  the  act  in  relation  to  the  taxable  transfers  of  property,  in  a  proceeding 
now  pending  in  the  said  Surrogate's  Court,  entitled,  "In  the  Matter  of  the 

Appraisal  of  the  Estate  of ,  Deceased, ' '  to  testify  what  you  and 

each  of  you  may  know  concerning  the  estate  or  property  of  the  said  decedent 
on  the  part  of  (the  executors  or  other  interested  party),  and  that  you  produce 

or  bring  with  you  at  the  time  and  place  aforesaid (to  "be  filled  in 

vn,  accordance  with  the  requirements  of  each  case).  And  for  a  failure  to  attend 
or  a  failure  to  produce  the  (boolcs,  papers,  etc.,  above  required)  you  will  be 
deemed  guilty  of  a  contempt  of  court  and  liable  to  pay  all  loss  and  damages 
sustained  thereby  to  the  party  aggrieved,  and  in  addition  thereto,  forfeit  the  sum 
of  fifty  dollars. 

Witness ,  appraiser  aforesaid  at ,  in  the  city  (or 

village)  of ,  this day  of < . ,  192 . . 

Appraiser. 


FORMS  799 

APPLICATION  TO  SUPERINTENDENT  OF  INSURANCE. 

CHAMBERS  OF  THE  SURROGATE'S  COURT— COUNTY  OP   


ESTATE  OF 

,  DECEASED,  I 

DATE  OF  DEATH,  I 

,  192.. 


DEAR  SIR. — In  pursuance  of  chapter  62,  Laws  of  1909,  and  the  acts  amendatory 
thereof  and  supplemental  thereto,  you  are  hereby  requested  to  determine  and 
ascertain  the  value  of  the  following  estate,  annuities  and  interests : 

Value  or 
Name  Age  Legacy  or  Estate  Amount 


To  Superintendent  of  the  Insurance  Department. 

Respectfully, 


Surrogate. 


ORDER  RETURNING  REPORT  TO  APPRAISER. 

At  a  Surrogate 's  Court,  held  in  and  for  the  county  of ,  at  the 

,  in  the  city  (or  village)  of ,  on  the  . .' day 

of ,  192.. 

Present — Hon ,  Surrogate. 

SURROGATE'S  COURT— COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


Upon  reading  and  filing  the  consents  in  writing  of ,  Esq.,  attor- 
ney for  the  executors  (or  administrators),  and ,  Esq.,  attorney 

for  the  State  Tax  Commission,  and  upon  the  affidavit  of ,  dated 

the day  of ,  192. .,  from  which  it  appears 

IT  is  ORDERED:     That  the  report  of  the  appraiser  duly  filed  herein  on  the 

day  of ,  192 . . ,  be  returned  to  him  for  further  consideration, 

and  report,  particularly  in  reference  to  


Surrogate. 


ORDER  DETERMINING  THE  TAXABLE  TRANSFERS  AND  ASSESSING  THE 

TAX. 
SURROGATE'S  COURT— COUNTY  OF   . 


IN  THE  MATTER  OF  THE  PROPERTY  OF 

DECEASED,  SUBJECT  TO  TAXATION  UNDER  THE  TAX- 
ABLE TRANSFER  ACT.  CHAP.  62,  ARTICLE  10, 
CONSOLIDATED  LAWS. 


The  report  of ,  heretofore  appointed  by  me  appraiser 

to  fix  the  clear  market  value  of  the  property  of  said  deceased,  subject  to  any 
tax  imposed  by  the  Taxable  Transfer  Act,  Chap.  (52,  Article  10,  Consolidated 


gQ0  INHERITANCE     TAXATION 

Laws,  having  been  filed  in  the  office  of  the  Surrogate  of  said  County  on  the 

day  of ,  192.. 

Now,  after  reading  the  said  report  and  other  proofs  relating  to  said  estate 
before  me,  it  is : 

ORDERED  AND  ADJUDGED,  that  the  cash  value  of  the  property  referred  to  in  said 
report,  the  transfer  of  which  is  subject  to  the  tax  imposed  by  the  acts  in  relation 
to  the  taxable  transfers  of  property,  and  the  tax  to  which  each  of  said  transfers 
is  liable  are  as  follows,  viz.: 

Cash  Value  Taxable        Tax  Assessed 

Beneficiaries  of  Interest         Exemption  Interest  Thereon 


Cash  value  of  whose  estate  subject  to  tax $ 

Amount  of  tax  thereon $ 

Interest  on  said  tax  is  payable  at  the  rate  of  ten  per  cent,  per  annum  from 

,  192. .,  to  the  date  of  payment,  unless  paid  within  eighteen  months 

from  the  last  mentioned  date;  but  if  paid  within  six  months  from  said  date,  the 
discount  of  five  per  cent,  shall  be  allowed. 


Surrogate  of  County. 


NOTICE  OF  ASSESSMENT  OF  TAX. 

(§  231,  Tax  Law.) 
SURROGATE'S  COURT— COUNTY  OF   . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


To  : 

You  are  hereby  notified  that  I  have,  by  order  made  and  entered  the 

day  of ,  192. .,  assessed  and  fixed  the  cash  value  of  such  interest, 

estate,  legacy,  or  property,  as  you  are  entitled  to  receive  from  the  estate  of  the 
above-named  decedent,  and  the  amount  of  tax  to  which  the  same  is  liable  under 
the  laws  in  reference  to  the  taxable  transfers  of  property,  as  follows: 

Estate,  Interest  or  Property  Transferred  Cash  Value        Tax  Assessed  Thereon 


Surrogate. 


FORMS  801 


NOTICE   OF   APPEAL    TO    SURROGATE. 

(§  232,  Tax  Law.) 
SURROGATE'S  COURT— COUNTY  OF   . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


GENTLEMEN. — You  will  please  take  notice  that is  dissatisfied 

with  the  appraisal  herein  of  the  property  of  the  above-named  decedent,  as  made 

and  set  forth  in  the  report  of ,  the  appraiser  herein,  and  with  the 

order  fixing  and  assessing  the  transfer  tax  in  respect  to  the  transfers  of  the  prop- 
erty of  said  decedent,  made  and  entered  herein  on  the day  of 

192. .,  and  hereby  appeals  to  the  surrogate  from  the  said  appraisal  and  from  said 
order  assessing  tax  as  aforesaid,  upon  the  following  grounds: 

First :     

Second :   (*/  there  a/re  several  grounds  of  appeals,  each  should 

be  stated)    

Dated,  ,  192.. 


Attorney  for  

To ,  Esq., 

Attorney  for 

To ,  Esq., 

Clerk  of  the  Surrogate 's  Court,  County  of 

(Upon  filing  this  notice  in  the  surrogate's  office  the  appeal  to  the  surrogate  has 
been  duly  taken.) 

ORDER  OF  SURROGATE  ON  APPEAL. 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of ,  at  the 

surrogate 's  office,  in  the of ,  on  the day 

of ,  192.. 

Present — Hon ,  Surrogate. 

SURROGATE'S  COURT— COUNTY  OF   . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 

J 

An  appeal  having  been  taken  by ,  the  (executor,  legatee,  or 

other  party  appellant)  from  the  order  fixing  and  assessing  the  transfer  tax 

herein  made  and  entered  on  the day  of ,  192. .,  upon  the 

report  of ,  the  appraiser  herein,  which  report  was  duly  filed  in  the 

office  of  the  surrogate  of  the  county  of on  the day  of , 

192 . . ,  on  the  grounds  that ,  as  will  more  fully  appear  by  reference 

to  the  notice  of  appeal  filed  herein  on  the day  of ,  192. . 

And  said  appeal  coming  on  to  be  heard,  and  having  heard ,  Esq., 

for  the ,  appellant,  and ,  Esq.,  for  the 

respondent : 

Now  on  motion  of  ,  attorney  for  the 

IT  is  ORDERED  :     That  said  appeal  be,  and  the  same  hereby  is 

AND  IT  is  FURTHER  ORDERED:  . 


Surrogate. 

51 


802 

NOTICE  OF  APPEAL   TO  THE  APPELLATE   DIVISION. 
SURROGATE'S  COURT— COUNTY  OF   .  


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


GENTLEMEN. — You  will  please  take  notice  that hereby  appeals 

to  the  Appellate  Division  of  the  Supreme  Court  of  the  State  of  New  York  for 

the Department,  from  the  order  of  the  surrogate  of  the  county 

of heretofore  made  and  entered  herein  on  the day  of 

,  192. .,  affirming  (or  reversing  or  modifying)  the  order  thereto- 
fore made  and  entered  on  the day  of ,  1921. . ,  fixing  and 

assessing  a  tax  upon  the  transfers  of  the  property  of  said  decedent  under  the 
law  relating  to  taxable  transfers  of  property,  and  from  each  and  every  part 
thereof  (or  from  so  much  thereof,  etc.,  stating  the  portion  of  the  order  appealed 
from). 

Dated  the day  of ,  192. . 

Yours,  etc., 


Attorney  for 


To ,  Esq., 

Clerk  of  the  Surrogate's  Court  of  the  county  of 
To ,  Esq., 

Attorney  for  the  State  Tax  Commission. 


PETITION  TO  REMIT  INTEREST. 
SURROGATE'S  COURT— COUNTY  OF   

IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE  I 
OF 

,  DECEASED,  I 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE  j 
TRANSFERS  OF  PROPERTY. 

To  the  Surrogate 's  Court  of  the  County  of : 

The  petition  of respectfully  shows : 

That  your  petitioner  is  the of  the  above-named  decedent,  who 

died  a  resident  of  the  county  of ,  State  of ,  on  the 

day  of ,  192.. 

That  proceedings  have  been  had  before ,  appraiser  herein  for  the 

determination  of  the  tax  upon  the  transfer  of  the  property  of  said  decedent, 

which  tax  has  been  fixed  and  assessed,  by  order  entered  herein  on  the  

day  of ,  192. .,  at  the  sum  of  $ ,  as  by  reference  to  the 

report  of  the  appraiser  duly  filed  in  the  surrogate's  office  of  said  county,  and  the 
order  aforesaid,  will  more  fully  appear. 

That  the  transfer  tax  assessed  herein  has  not  been  paid,  although  more  than 
eighteen  months  have  elapsed  since  the  accrual  thereof,  and  by  reason  of  such 
nonpayment,  interest  thereon  at  the  rate  of  ten  per  centum  per  annum  has  been 
incurred  as  provided  by  statute. 

That  by  reason  of (here  state  the  facts,  showing  the  statutory 

reasons  entitling  the  persons  liable  to  pay  the  tax  to  have  the  interest  thereon 
remitted  to  six  per  cent.)  your  petitioner  believes'  that  the  interest  upon  said  tax 
should  be  remitted  from  ten  per  cent,  to  six  per  cent,  as  provided  by  statute. 

That,  your  petitioner  is  desirous  of  paying  the  tax  as  fixed  by  said  order  herein, 


FORMS  803 

as  soon  as  his  claim  for  the  remission  of  interest,  based  upon  the  foregoing 
reasons,  can  be  passed  upon  by  the  court. 

Wherefore  your  petitioner  prays  that  an  order  be  made  and  entered  herein 
remitting  the  interest  upon  the  tax  assessed  to  six  per  cent.,  to  be  charged  upon 
said  tax  from  the  accrual  thereof  until  the  cause  of  such  delay  was  removed,  after 
which  ten  per  cent,  is  to  be  charged  as  provided  by  statute,  provided  such  pay- 
ment be  made  within  ten  days  from  the  entry  of  the  order  remitting  such  interest 
as  aforesaid,  and  that  your  petitioner  may  have  such  other  and  further  relief  as 
to  the  court  may  seem  just. 

Dated, ,  192.. 

> 

Petitioner. 
(Add  verification.) 


NOTICE  OF  MOTION  ON  APPLICATION  TO  REMIT  INTEREST. 
SUEEOGATE'S  COUET— COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 

OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  EELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


Please  take  notice  that  on   all  the   papers   and  proceedings  herein,   and   the 

verified  petition  of  ,  hereto  annexed  and  bearing  date  the 

day  of ,  192 . . ,  application  will  be  made  to  the  surrogate  of  the 

county  of at  a  Surrogate 's  Court  to  be  held  at on  the 

day  of ,  192 . . ,  at o  'clock  in  the noon  of  that 

day,  for  an  order  remitting  the  interest  upon  the  tax  heretofore  assessed  upon 
the  estate  of  the  above-named  decedent,  by  order  of  said  surrogate  made  and 

entered  the day  of ,  192 . . ,  from  ten  per  cent,  to  six  per  cent. 

per  annum,  to  be  computed  from  the  accrual  of  said  tax  until  the  circumstances 
preventing  the  earlier  payment  of  said  tax  were  removed,  and  for  such  other  and 
further  relief  as  to  the  court  may  seem  just. 

Dated  the day  of ,  192 . . 


Attorney  for  Petitioner. 
To  the  State  Tax  Commission,  Albany,  N.  Y. 


ORDER  REMITTING  INTEREST  FROM  TEN  TO  SIX  PER  CENT. 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of   ,  at  the 

surrogate's  office,  in  the of  .  .,  on  the  .         .  day  of 

,  192.. 

Present — Hon ,  Surrogate. 

SUBEOGATE'S  COUET— COUNTY  OF   . 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  EELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


On  reading  and  filing  the  verified  petition  of ,  wherein  it  appears 

that  payment  of  the  transfer  tax  upon  the  estate  of  the  above  named  decedent, 
as  determined,  has  been  unavoidably  delayed,  by  reason  of 


304  INHERITANCE    TAXATION 

And  due  notice  of  this  application  and  motion  having  been  given  to 

,  Esq.,  attorney  for  the  State  Tax  Commission : 

Now,  on  motion  of ,  Esq.,  attorney  for  the  petitioner  herein, 

appearing  (in  opposition  thereto  or  consenting  thereto),  it  is 

ORDERED:     That  interest  at  the  rate  of  ten  per  cent,  upon  the  tax  heretofore 
assessed  herein,  be  remitted  to  six  per  cent,  per  annum,  to  be  computed  from 

the  accrual  thereof  until  the day  of   ,  192 . . ,  after  which 

date  interest  at  the  rate  of  ten  per  cent,  is  to  be  charged,  until  said  tax  is  paid, 
as  provided  by  the  statute. 


Surrogate. 


ORDER  ASSESSING  TAX  WHERE  NO  APPRAISAL  HAS  BEEN  DIRECTED. 

(§  231,  Tax  Law.) 
SURROGATE'S  COURT— COUNTY  OP   . 


IN  THE  MATTER  OF  THE  PROPERTY  OF 

DECEASED,  SUBJECT  TO  TAXATION  UNDER  THE  TAX- 
ABLE TRANSFER  ACT.  CHAP.  62,  ARTICLE  10, 
CONSOLIDATED  LAWS. 


On  reading  and  filing  the  deposition  of the 

of  ,  late  of  the of  in 

the  County  of ,  deceased,  wherein  appears  that  the  said  decedent 

died  on  the day  of ,  192. .,  and  after  hearing , 

Esq.,  attorney  for  the  State  Tax  Commission,  and ,  Esq.,  attorney 

for  the  petitioner  herein,  it  is: 

ORDERED  AND  ADJUDGED,  that  the  cash  value  of  the  property  referred  to  in  said 
deposition,  the  transfer  of  which  is  subject  to  the  tax  imposed  by  the  acts  in 
relation  to  the  taxable  transfers  of  property,  and  the  tax  to  which  each  of  said 
transfers  is  liable,  are  as  follows,  viz.: 

Cash  Value  Taxable          Tax  Assessed 

Beneficiaries.  of  Interest.         Exemption.  Interest.  Thereon. 


Cash  value  of  whole  estate  subject  to  tax. 
Amount  of  tax  thereon 


Interest  on  said  tax  is  payable  at  the  rate  of  ten  per  cent,  per  annum,  from 

,  192 . . ,  to  the  date  of  payment,  unless  paid  within  eighteen 

months  from  the  last  mentioned  date;  but  if  paid  within  six  months  from  said 
date,  the  discount  of  five  per  cent,  shall  be  allowed. 

i 

Surrogate  of  the  County. 


FORMS 


805 


ORDER  EXEMPTING  ESTATE. 
(§  231,  Tax  Law.) 

At  a  Surrogate 's  Court,  held  in  and  for  the  county  of   at  the 

surrogate 's  office,  in  the of ,  on  the day 

of ,  192.. 

Present — Hon ,  Surrogate. 

SURROGATE'S  COURT— COUNTY  OF   

IN  THE  MATTER  OP  THE  APPRAISAL  OP  THE  ESTATE 
OP 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY, 

Upon  reading  and  filing  the  verified  petition  of ,  wherein  it 

appears  that  the  decedent  above  named  died  on  the day  of , 

192 . . ,  a  resident  of  the  county  of and  State  of ,  and 

that  the  transfer  of  the  property  of  said  decedent  is  not  subject  to  tax  under 
the  law  relating  to  taxable  transfers  of  property,  and  that  due  notice  of  this 

application  was  given  to  ,  Esq.,  attorney  for  the  State  Tax 

Commission. 

Now,  on  motion  of ,  Esq.,  attorney  for  the  petitioner  herein,  it  is 

ORDERED:  That  the  transfer  of  property  of  which  said  decedent  died  seized 
and  possessed  and  mentioned  in  said  petition  is  exempt  from  tax  under  the  law 
relating  to  taxable  transfers  of  property. 

••• 

Surrogate. 


DISTRICT  ATTORNEY  PROCEEDINGS 

(§  235,  Tax  Law.) 
SURROGATE'S  COURT—  COUNTY  OF   . 


PETITION. 


IN  THE  MATTER  OP  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


To  the  Surrogate 's  Court  of  the  County  of : 

The  petition  of respectfully  shows : 

First :  That  your  petitioner  is  the  district  attorney  of  the  county  of , 

in  the  State  of  New  York,  and  your  petitioner  further  alleges  upon  information 
and  belief: 

Second :  That  on  or  about  the day  of ,  192 . . ,  the  above- 
named  decedent  died  a  resident  of  the  county  of ,  State  of 

Third:  That  thereafter  proceedings  were  duly  instituted  in  the  Surrogate's 
Court  of  the  county  of to  have  the  amount  of  tax  upon  the  trans- 
fers of  the  property  of  said  decedent  fixed  and  determined,  as  provided  by  the 
law  relating  to  the  taxable  transfers  of  property  of  decedents,  and  that  an  order 

was  entered  by  the  surrogate  of  the  county  of in  such  proceedings 

on  the day  of  ,  1921. .,  fixing  and  assessing  the  transfer  tax 

therein  at  the  sum  of dollars. 


806  INHERITANCE     TAXATION 

Fourth:  Your  petitioner  further  shows  that  eighteen  months  have  elapsed 
since  the  accrual  of  said  tax,  and  that  the  State  Tax  Commission  has  notified  your 
petitioner  in  writing  of  the  refusal  or  neglect  of  the  persons  liable  therefor  to 
pay  the  said  tax  and  the  interest  due  thereon,  and  that  no  part  thereof  has  been 
paid  (except,  etc.,  where  some  legatee  has  paid  the  tax  on  his  individual  transfer) 
and  your  petitioner  believes  that  the  same  still  remains  due  and  unpaid. 

Wherefore  your  petitioner  prays  that  a  citation  issue  under  the  seal  of  this 

court  directed  to  ,  the  executor  (or  administrator)  of  said 

estate,  and  to the  persons  or  corporations  liable  to  taxation  upon 

the  transfers  of  the  property  of  said  decedent  to  them  respectively,  as  appears 
by  the  taxing  order,  entered  herein,  as  aforesaid,  citing  them,  and  each  of  them, 
to  appear  before  this  court  on  a  certain  day  to  be  designated  therein  and  show 
cause,  if  any  they  have,  why  the  tax  and  interest  under  the  law  relating  to  the 
taxable  transfers  of  property  should  not  be  paid. 

Dated  the day  of ,  192. . 


District  Attorney  of  the  County  of 
(Add  verification.) 


ORDER  GRANTING  CITATION. 
(§  235,  Tax  Law.) 

At  a  Surrogate 's  Court,  held  in  and  for  the  county  of ,  at  the 

surrogate 's  office,  in  the of on  the day  of 

,  192.. 

Present — Hon ,  Surrogate. 

SURROGATE'S  COURT— COUNTY  OF   . 


IN  THE  MATTER  OP  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


On  reading  and  filing  the  verified  petition  of ,  district  attorney 

in  and  for  the  county  of ,  bearing  date  the day  of 

..,  192..,  it  is 

ORDERED:     That  a  citation  issue  herein  in  accordance  with  the  prayer  of  said 
petitioner. 


Surrogate. 


CITATION  TO  SHOW  CAUSE. 

(§  235,  Tax  Law.) 
THE  PEOPLE  OF  THE  STATE  OF  NEW  YORK: 

By  the  grace  of  God,  free  and  independent,  to 

(executors  or  administrators  of,  etc.),  and  to 


,  greeting: 

You,  and  each  of  you  are  hereby  cited  and  required  personally  to  be  and 

appear  before  the  surrogate  of  the  county  of ,  at  the  Surrogate's 

Court  in  and  for  said  county,  held  at on  the day  of 

,  192 . . ,  at o  'clock  in  the noon  of  that  day,  then  and 

there  to  show  cause  why  the  transfer  tax  upon  the  transfer  of  the  property  of 


FORMS  807 

the  above-named  decedent,  and  upon  your,  and  each  of  your,  shares  or  interests 
respectively,  pursuant  to  chapter  908  of  the  Laws  of  1896  and  the  acts  amenda- 
tory thereof  and  supplementary  thereto,  should  not  be  paid,  which  tax  has  been 

duly  fixed  and  assessed  by  order  of  the  surrogate  of  the  county  of 

made  and  entered  the  day  of  ,  192 . . ,  together  with  the 

interest  thereon,  which  is  now  due  and  unpaid. 

And  such  of  you  hereby  cited  as  are  under  the  age  of  twenty-one  years  are 
required  to  appear  by  your  guardian,  if  you  have  one,  or,  if  you  have  none,  to 
appear  and  apply  for  one  to  be  appointed;  or  in  the  event  of  your  neglect  or 
failure  to  do  so,  a  guardian  will  be  appointed  by  the  surrogate  to  represent  and 
act  for  you  in  this  proceeding. 

IN  TESTIMONY  WHEREOF  we  have  caused  the  seal  of  the  Surrogate's  Court  of 
the  county  of to  be  hereunto  affixed. 

Witness,  Hon ,  surrogate  of  the  county  of ,  at 

(us.)     the day  of ,  192. . 

Clerk  of  the  Surrogate's  Court. 


DECREE  DIRECTING  PAYMENT. 

At  a  Surrogate's  Court,  held  in  and  for  the  county  of ,  at  the 

surrogate's  office  in  the of on  the day  of 

,  192.. 

Present — Hon ,  Surrogate. 

SURROGATE 'S  COURT— COUNTY  OF   


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 

OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


Upon  the  petition  of  the  district  attorney,  heretofore  filed  herein  on  the 

day  of  ,  192. .,  and  the  report  of  the  appraiser,  and  the  order 

entered  thereon  on  the day  of  ,  192 . . ,  fixing  and  assess- 
ing the  tax  upon  the  transfers  of  the  property  of  the  above-named  decedent, 

and  after  hearing ,  Esq.,  on  behalf  of  Hon ,  district 

attorney,  in  support  of  said  petition  and  upon  all  the  papers  and  proceedings 

herein,  and  (no  one  appearing  in  opposition  thereto  or)  attorney 

for herein,  having  appeared  in  opposition  thereto,  it  is 

ORDERED  :  That the  (executor  or  administrator)  herein  make 

payment  forthwith  to  the  State  Tax  Commission  of  the  sum  of 

dollars,  being  the  amount  of  tax  upon  the  interests  of  

together  with  interest  upon  each  of  said  sums  respectively,  at  the  rate  of  ten 

per  cent,  per  annum,  from  the day  of ,  192 . . ,  to  the  date 

of  payment  (or) 

ORDERED:  That  (reciting  a  direction  similar  to  the  foregoing  that  each  legatee 
or  distributee  shall  pay  forthwith  the  tax  and  interest  assessed  upon  the  transfer 
to  him  individually). 

AND  IT  Is  FURTHER  ORDERED:  That  said  (executor  or  administrator)  pay  to 

Hon ,  district  attorney,  the  sum  of dollars,  as  and  for 

his  costs  and  disbursements  herein;  (or) 

AND  IT  Is  FURTHER  ORDERED  :  That  Hon ,  district  attorney,  is 

allowed  the  sum  of  dollars,  as  and  for  his  costs  and  disburse- 
ments herein,  to  be  paid  forthwith  by  the  above  legatees  or  distributees  in 
proportion  to  the  amount  of  tax  due  and  owing  by  each  respectively,  and  in 
addition  to  said  tax  and  interest. 


Surrogate. 


808  INHERITANCE     TAXATION 

AGREEMENT  —  UPON  COMPOSITION  OF  TRANSFER  TAX. 
SURROGATE'S  COURT— COUNTY  OF   . 


IN  THE  MATTER  OP  THE  APPRAISAL  OP  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


WHEREAS,  The  above-named  died  on  the  day 

of ,  192 . . ,  a  resident  of  the  county  of  and  State 

of  ,  leaving  a  last  will  and  testament  which  was  duly 

admitted  to  probate  in  the  Surrogate 's  Court  of  the  county  of , 

and  letters  testamentary  were  thereupon  issued  to ,  of , 

New  York. 

AND  WHEREAS,  Transfer  tax  proceedings  were  thereafter  regularly  instituted 

in  the  Surrogate 's  Court  of  the  county  of ,  and  by  order  of 

Hon ,  surrogate  of  said  county  of ,  made  and 

entered  the day  of ,  192 . . ,  ,  Esq.,  wai 

directed  to  appraise  the  property  of  said  decedent  pursuant  to  the  provision  of 
the  law  relating  to  the  taxable  transfers  of  property,  and  the  report  of  such 
appraiser  was  filed  in  the  office  of  the  surrogate  aforesaid,  and  an  order  entered 

thereupon  on  the day  of ,  192 . . ,  fixing  and  assessing 

a  transfer  tax  upon  certain  transfers  of  said  decedent's  property  at  the  sum 
of  $ 

AND  WHEREAS,  Decedent  by  the clause  of  his  will  provided 

as  follows :  

AND  WHEREAS,  It  appears  from  the  report  of  said  appraiser  that  in  view 
of  the  foregoing  provision  (or  provisions)  of  said  decedent's  will  it  was  impos- 
sible to  presently  determine  the  value  of  the  estate  or  property  transferred 

to at  the  time  of  the  decedent 's  death,  and  that  the  appraisal 

thereof  was  therefore  postponed  until  the  value  of  said  transfers  could  be 
definitely  determined  (or  such  other  facts  by  reason  of  which  the  present  tax- 
ability of  the  transfer  has  been  heretofore  held  for  future  appraisal,  it  appearing 
that  the  remainders  or  expectant  estates  were  of  such  a  nature,  or  so  disposed 
and  circumstanced,  that  the  taxes  thereon  were  held  not  present  payable,  or  where 
the  interests  of  the  legatees  or  devisees  were  not  ascertainable  as  provided  in 
section  233  of 'the  Tax  Law). 

AND  WHEREAS,  The  said  (executor  or  trustees)  above  named  are  now  desirous 
of  personally  settling  the  remaining  claims  of  the  people  of  the  State  of  New 
York  upon  or  in  respect  to  the  transfers  of  the  property  or  estates,  and  the  tax 
thereon  which  may  now  be  due  and  payable,  or  which  may  hereafter  become  pay- 
able, under  the  laws  of  the  State  of  New  York,  and  by  compounding  all  such 
taxes  upon  terms  which  are  equitable  and  expedient,  and  that  said  executor  or 
trustees  be  granted  a  discharge  upon  the  payment  of  the  taxes  provided  for  in 
this  composition  agreement  in  pursuance  of  the  law  in  such  case  made  and 
provided. 

Now,  THEREFORE,  In  consideration  of  the  following: 

IT  is  HEREBY  STIPULATED  AND  AGREED:  That  the  transfer  tax  in  respect 
to  be,  and  the  same  hereby  is  ascertained,  fixed,  com- 
pounded, and  adjusted  at  the  sum  of dollars  ($ ),  which 

sum  it  is  agreed  shall  be  accepted  by  the  State  Tax  Commission  of  the  State  of 

New  York,  by  and  with  the  approval  of  the  Hon ,  Attorney-General 

of  the  State  of  New  York,  in  full  payment,  satisfaction,  and  discharge  of  all 
transfer  taxes  which  are  payable,  or  which,  but  for  this  agreement,  might  at  any 
time  hereafter  become  due  and  payable  to  the  State  of  New  York,  under  or  by 
virtue  of  the  laws  thereof,  upon  or  in  respect  to  the  transfers  of  the  property  or 
estate  of  the  above-named  decedent  which  are  mentioned  and  referred  to  as  com- 
promised, and  which  have  become  fully  settled  and  adjusted  by  the  execution  of 
this  composition  agreement,  as  provided  by  section  233  of  the  Transfer  Tax  Law. 

IN  WITNESS  WHEREOF,  the  said (executor  or  trustees),  under 


FORMS  809 

the  will  of  the  said deceased,  and  the  State  Tax  Commission  of 

the  State  of  New  York,  have  signed  and  acknowledged  the  execution  of  these 

presents  in  triplicate,  this day  of ,  192. . 

[1*8.] 

[L.S.] 


Approved,  this day  of ,  192 . . 

Attorney-General. 

(Add  acknowledgments  by  the  representatives  of  the   estate,   and  State  Tax 
Commission.) 


CERTIFICATE. 

Of    Comptroller    Showing    Payment    of    Tax    upon    Real    Estate    Belonging    to 

Decedent. 

STATE  OF  NEW  YORK, 
COMPTROLLER'S  OFFICE. 


IN  THE  MATTER  OF  THE  APPRAISAL  OF  THE  ESTATE 
OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 


ALBANY,  N.  Y., ,  192. . 

I,  ,  Comptroller  of  the  State  of  New  York,  do  hereby 

certify  that  it  appears  from  the  records  of  this  office  that  upon  the  report  of 

,  appraiser  in  and  for  the  county  of   ,  in  the 

State  of  New  York,  a  duplicate  copy  of  which  report  was  filed  in  this  office  on 

the day  of  ,  192 . .,  an  order  was  made  by  Hon. 

,  surrogate  of   county,  on  the   day 

of  ,  192 . . ,  assessing  a  transfer  tax  upon  the  transfers  of  the 

property  of  said ,  who  died  a  resident  of on 

the   day  of   ,  192 . . ;  that  the  amount  of  said  tax 

assessed,  as  aforesaid,  was  the  sum  of  $ ,  a  part  of  which  sum 

is  the  tax  assessed  upon  the  transfer  of  certain  real  estate,  of  which  the  above- 
named  decedent  died  seized  and  which  is  described  and  appraised  in  the  report  of 
said  appraiser  as  follows,  namely:  

And  I  further  certify  that  the  account  of  said  tax  (less  the  discount  for  pay- 
ment within  six  months  from  the  accrual  thereof ;   or,   together   with   interest 

thereon  at  the  rate  of per  cent,  per  annum  from,  the  accrual  thereof, 

where  not  paid  within  eighteen  months)  has  been  fully  paid  by 

(the  executor  or  administrator)  of  said  estate,  and  that  the  final  duplicate  receipts 

showing  such  payments  were  issued  under  date  of ,  192 . . ,  and 

that^by  reason  thereof  the  lien  of  the  State  of  New  York  upon  the  real  estate 
hereinbefore  described,  for  tax  (and  interest)  due  upon  the  transfer  thereof,  has 
been  fully  satisfied  and  discharged. 

IN  WITNESS  WHEREOF,  I  have  hereunto  set  my  hand  and  affixed  my  official 
[L.  8.]     seal,  this day  of ,  192 .. 


Comptroller. 

(//  the  tax  upon  real  estate  was  paid  by  the  devisee  or  heir-at-law  the  foregoing 
certificate  will  be  modified  accordingly.  It  would  seem  that  the  heir  or  devisee  is 
not  entitled  to  this  certificate  until  the  tax  has  been  assessed,  although  payment 
on  account  thereof  may  have  been  made.) 

(If  the  tax  was  paid  subsequent  to  July  I,  1921,  application  for  this  certificate 
should  be  made  to  the  State  Tax  Commission.) 


810  INHERITANCE     TAXATION 

APPLICATION  TO  JUSTICE  OF  SUPREME  COURT  FOR  REAPPRAISAL 

SUPREME  COURT— COUNTY  OF  . 


IN  THE  MATTER  OF  THE  APPLICATION 

OF 

THE  STATE  TAX  COMMISSION,  FOE  A  REAPPRAISAL 
OF  THE  PROPERTY 

OF 

,  DECEASED, 

UNDER  THE  ACTS  IN  RELATION  TO  THE  TAXABLE 
TRANSFERS  OF  PROPERTY. 

To  the  Hon ,  one  of  the  Justices  of  the  Supreme  Court  of  the 

Judicial  District : 

The  petition  of  Hon respectfully  shows : 

(1)  That  your  petitioner  is  the  Tax  Commission  of  the  State  of  New  York, 

and  that  the  above-named  decedent  was  a  resident  of in  the 

county  of ,  and  State  of  New  York  at  the  time  of  his  death, 

which  said  place  is  within  the judicial  district  of  the  Supreme 

Court  of  this  State. 

(2)  That  the  said  decedent  died  on  the   day  of  , 

192..,  and  letters  (testamentary  or  of  administration)  were  issued  by  the  surro- 
gate of  the  county  of to ,  who  were  and 

are  the  duly  qualified  and  acting  (executors  and  administrators)  of  the  estate  of 
said  decedent. 

(3)  That  proceedings  have  heretofore  been  instituted  to  determine  the  clear 
market  value  of  the  decedent's  estate  at  the  time  of  the  transfer  thereof  and 
the   liability   of   the   transfers   of    said   decedent's   property   to   taxation   under 
chapter  62  of  the  Laws  of  1909  and  the  acts  amendatory  thereof  and  supple- 
mental thereto,  and  upon  the  report  of  ,  Esq.,  the  appraiser 

in  such  proceedings,  an  order  was  entered  by  the  surrogate  of  the  county  of 

on  the   day  of   ,  192 . .    (determining 

the  value  of  decedent's  estate  to  ~be  the  sum  of  $ and  exempting 

said  estate  or  fixing  and  assessing  the  tax  upon  the  transfers  of  said  decedent's 
property,  as  follows: 

(4)  That  your  petitioner  is  informed  and  believes  that  such  appraisal  (assess- 
ment  or   determination)    was    (fraudulently,   collusively,    or   erroneously    made) 
owing  to  the  following  errors  of  fact,  namely, 

(5)  That  two  years  have  not  elapsed  since  the  entry  of  the  order  or  decree  of 
the  surrogate  determining  the  value  of  said  estate  and  assessing  the  tax  thereon 
(or  exempting  said  estate  from  taxation). 

(6)  That  all  the  persons   (or  corporations)  who  are  interested  in  said  estate 
and  who  are  entitled  to  notice  of  all  proceedings  herein,  together  with  their  post- 
office  addresses  or  places  of  business,  are  as  follows: 

Name.  Interested  as  P.  O.  Address. 


And  that  all  of  said  persons  are  of  full  age  and  sound  mind  except. 


Wherefore  your  petitioner  prays  for  the  appointment  of  some  competent 
person  to  reappraise  the  estate  of  the  above-named  decedent,  in  accordance  with 
the  provisions  of  section  232  of  the  Tax  Law. 

Dated,  Albany,  N.  Y.,    ,  192. . 


(Add  verification.)  Petitioner. 


FORMS 

AFFIDAVIT  TO  BE  FILED   UPON  APPLICATION  FOR   LETTERS   TESTA- 
MENTARY OR  LETTERS   OF  ADMINISTRATION. 

SUEEOGATE  'S  COUET  —  COUNTY  OF  . 


IN  THE  MATTEK  OF  THE  APPLICATION  FOR  LETTERS 
(Testamentary  or  of  Administration)  UPON  THE 
ESTATE 

OF 

DECEASED. 


-j 


STATE  OF  NEW  YOEK, 
COUNTY  OF   , 

,  being  duly  sworn,  says:     That  he  is  the  petitioner  herein;  that 

the  above-named  decedent  died  at  the of ,  in  the  county  of 

,  and  State  of  New  York,  on  the day  of ,  192 . . . 

That  the  estimated  value   of  the  real  property  in  this  State  of  which  said 

decedent  died  seized  (less  any  mortgage  incumbrance  thereon)  is   

dollars  ($ ). 

That  the  estimated  value  of  the  personal  property  of  which  said  decedent  died 
possessed  is  dollars  ($ ). 

That  the  following  is  a  complete  list  of  the  names,  residence,  and  relationship 
to  decedent  of  all  persons  entitled  to  any  legacy  or  share  of  the  decedent's  estate 
(and  the  names  and  place  of  business  of  all  corporations  who  are  entitled  to  any 
legacy  or  devise  under  the  will  of  said  decedent),  together  with  the  character 
and  value  of  such  legacy,  devise  (or  share)  as  far  as  the  same  can  at  present  be 
determined : 

Name.  P.  O.  Address.        Eelationship.  Value 


Petitioner,  and  executor  named  in  decedent's  will 
(or  petitioner,  and  person  entitled  to  administer 
upon  decedent's  estate.) 


Sworn  to  before  me,  this   day 

of  .  ,  192.. 


Notary  Public. 


NOTICE  BY  BANK  OR  TRUST  COMPANY  OF  THE  TRANSFER  OF 

DEPOSITS. 

,  192.. 

To  the  State  Tax  Commission,  Albany,  N.  Y. : 

GENTLEMEN. — The   (bank  or  trust  company)   pursuant  to  chapter 

62  of  the  Laws  of  1909,  hereby  gives  notice  that  on  the day  of , 

192 . . ,  or  earlier,  upon  receipt  of  your  written  consent,  it  will  deliver  or  transfer 

the  funds  now  on  deposit  to  the  credit  of   ,  who  was  a  resident 

of  the  county  of   ,   State   of    ,  who   is  the  duly 

qualified  and  acting  executor  (or  administrator)  of  the  estate  of  said  decedent. 
The  post-office  address  of  the  said  executor  (or  administrator)  is 

Yours,  etc., 


Secretary  or  Treasurer,  Etc. 


INHERITANCE     TAXATION 

NOTICE    OF    THE    INTENDED    TRANSFER    OF    STOCK    OF    NEW    YORK 

CORPORATIONS. 

,    192.. 

State  Tax  Commission,  Albany,  N.  Y. : 
GENTLEMEN. — In  compliance  with  chapter  62  of  the  Laws  of  1909,  you  are 

hereby  notified   that   on    ,    192..,    or    earlier,   upon   receipt   of    your 

written    consent,    I    will    transfer    shares    of    the    capital    stock    of 

,  registered  in  the  name  of   ,  now 

deceased,  and  whose  late  residence  was  at ,  in  the  State,  of 


The  executor  (or  administrator)  of  the  above-named  decedent  is , 

whose  post-office  address  is ,  State  of  

If  there  be  no  objection  to  the  proposed  transfer  kindly  forward  the  usual 
consent. 

Yours,  etc., 


Secretary  or  other  officer. 


NOTICE  OF  INTENDED  DELIVERY  OF  CONTENTS  OF  SAFE-DEPOSIT  BOX 

TO  EXECUTORS,  ETC. 

,  192.. 

State  Tax  Commission,  Albany,  N.  Y. : 

GENTLEMEN. — This  will  notify  you  that    late   a  resident   of   the 

county  of ,  in  the  State  of ,  was  (the  individual  or  joint) 

lessee  of  a  safety-deposit  box  in  the  vaults  of  (tank  or  other  institution),  and 
that  application  has  been  made  by  the  (executors  or  administrators  or  the 
surviving  lessee)  for  the  delivery  of  the  contents  of  said  box,  belonging  to  the 
above-named  decedent,  to  such  (executor,  administrator,  or  other  person 
aforesaid),  and  that  pursuant  to  chapter  62  of  the  Laws  of  1909  the  (bank  or 

other  institution)   aforesaid  hereby  notifies  you  that  it  will  on  the    day 

of ,  192 . . ,  at o  'clock  in  the noon  of  that  day  deliver 

the  contents  of  said  safety-deposit  box  to  the  said  (executor,  administrator,  etc.). 

(In  case  of  resident  decedents.)  Your  consent  for  such  delivery,  without  retain- 
ing a  sufficient  portion  or  amount  thereof  to  pay  any  tax  and  interest  which  may 
be  thereafter  assessed  upon  the  transfer  of  such  property,  is  requested. 

Yours,  etc., 


NOTICE  BY  BANK  OR  TRUST  COMPANY  OF  THE  TRANSFER  OF  DEPOSITS 
IN  THE  JOINT  NAMES  OF  A  DECEDENT  AND  ONE  OR  MORE  PERSONS, 
OR  IN  TRUST  FOR  ANOTHER. 

,   192.. 

State  Tax  Commission,  Albany,  N.  Y. : 

GENTLEMEN. — The (bank  or  trust  company),  of • 

hereby  gives  notice  that  there  is  standing  upon  the  books  of  this  (bank  or  trust 

company)  a  deposit  amounting  to  $ in  the  name  (or  in  the  joint  names) 

of  ("John  Doe  or  Bichard  Boe" — "John  Doe  (and)  (or  Bichard  Boe,  either  or 
the  survivor  can  draw" — "John  Doe,  in  trust  for  Bichard  Boe" — or  otherwise) 
and  the  officers  of  said  (bank  or  trust  company)  are  informed  and  believe  that 

,  one  of  the  persons  above  named,  has  recently  died,  a  resident 

of in  the  county  of and  State  of , 

and  that  on  the day  of ,  192. . ,  at o  'clock,  A.  M., 

the  said  (bank  or  trust  company)  will,  at  the  request  of  (the  executor,  adminis- 
trator, cestui  que  trust,  survivor,  or  other  interested  person)  transfer  or  deliver 
the  funds  representing  said  deposit  to  the  said  (name  the  person  making  appli- 
cation therefor).  Your  consent  to  this  transfer  is  desired  pursuant  to  chapter  62 
of  the  Laws  of  1909. 

Yours,  etc., 


ARIZONA 


813 


THE  STATE  STATUTES 


ALABAMA. 

This  State  has  levied  no  inheritance  tax  since  1868. 

The   State  Constitution,  section   219,   prohibits   a   direct   inheritance   tax   and 
Emits  any  collateral  inheritance  tax  to  two  and  one-half  per  cent. 


ALASKA. 


Levies  no  inheritance  taxes. 


ARIZONA. 

Taxes  all  property  of  nonresidents  within  the  State. 

TABLE  OF  GRADED  RATES— Ch.  15,  L.  1912 


CLASSIFICATION  OR  RELATION- 
SHIP 

Property  exempt 

Application  of  rates  to  value  of 
inheritance  or  bequest 

Grandparents,  parents,  husband, 
wife,  child,  brother,  sister,  wife  or 
widow  of  son,  husband  of  daughter 
adopted  or  mutually  acknowl- 
edged child,  or  any  lawful  lineal 
descendant. 

Where  whole  estate 
less  than  $10,000 
no  tax. 

1%  on  all  above  $5,000. 

Exempt  $5,000. 

Uncle,  aunt,  niece,  nephew  or  lineal 
descendant  of  the  eame. 

Where  whole  estate 
valued  at  less 
than  $5,000  no 
tax.  Exemption 
$2,000. 

2%  on  all  above  $2,000. 

All  others. 

Exemption  $500. 

Up  to 
$10,000  in 
excess  of 
exemption 

$10,000 
to 
$20,000 

$20,000 
to 
$50,000 

All  in 

excess  of 
$50,000 

3% 

4% 

5% 

«% 

RATES  AND  EXEMPTIONS  UNDER  THE  ACT  OF  1913  AS  AMENDED  BY  THE  ACT  OF  1921 
State  Institutions  and  Hospitals  not  conducted  for  profit,  wholly  exempt. 


EXEMPTION 

Above  exemption 
up  to 
$10,000 

$10,000 
to 
$20,  -000 

Over  $20,  000 

Grandparents,  parents, 
husband,      wife,      child, 
brother,    sister,    son-in- 
law,        daughter-in-law, 
adopted  or  mutually  ac- 
knowledged    child     and 
lawful  descendants  — 
$5,000 

1% 

2% 

3% 

Uncle,  aunt,  niece,  nephew, 
lineal  descendants  — 
None 

2% 

3% 

4% 

All  others  —  None 

4% 

5% 

6%  (up  to)            Over  0$5,000 
$50300                       7% 

814  THE  STATE  STATUTES 

CHAPTER  XIII,   TITLE  39,  R.   S.,    1913   AND    1921   AMENDMENTS 
Property  subject  to  tax. 

4995.  All   property   within   the   jurisdiction   of    this   State,    and    any   interest 
therein,  whether  belonging  to  the  inhabitants  of  this  State  or  not,  and  whether 
tangible  or  intangible,  which  shall  pass  by  will  or  by  statutes  of  inheritance  of 
this  or  any  other  State,  or  by  deed,  grant,  bargain,  sale  or  gift  made  in  contem- 
plation of  the  death  of  the  grantor,  or  bargainer,  or  intended  to  take  effect  in 
possession  or  enjoyment  after  the  death  of  the  grantor,  bargainer  or  donor,  to 
any  person  or  persons,  or  to  any  body  or  bodies,  politic  or  corporate,  educational, 
religious  or  other  institution,  in  trust  or  otherwise,  or  by  reason  whereof  any 
person,  or  body,  politic  or  corporate,  educational,  religious  or  other  institution, 
shall  become  beneficially  entitled,  in  possession  or  expectation,  to  any  property 
or  income  thereof,  shall  be  and  is  subject  to  a  tax  at  the  rate  specified  in  the  next 
section,  to  be  paid  to  the  State  Treasurer  for  the  use  of  the  State;  and  all  heirs, 
legatees,    and    devisees,    administrators,    executors,    and    trustees,    and   any   such 
grantee  under  a  conveyance,  and  any  such  donee  under  a  gift,  made  during  the 
life  of  the  grantor  or  donor,  shall  be  respectively  liable  for  any  and  all  such  taxes 
with  interest  thereon  until  the  same  shall  have  been  paid,  as  hereinafter  provided ; 
provided  that  State  institutions  and  hospitals  not  conducted  for  the  purpose  of 
profit  shall  be  exempt  from  the  provision  of  this  chapter. 

Rate  of  tax  and  exemption. 

4996.  When  such  inheritance,  devise,  bequest,  legacy,  gift  or  beneficial  inter- 
est to  any  property  or  income  therefrom  shall  pass  to  or  from  the  use  or  benefit 
of  any  grandfather,  grandmother,  father,  mother,  husband,  wife,  child,  brother, 
sister,  wife  or  widow  of  son,  or  the  husband  of  a  daughter,  or  any  child  or  chil- 
dren adopted  as  such  in  conformity  with  the  laws  of  the  State  of  Arizona,  or  to 
any  person  to  whom  the  decedent  for  not  less  than  ten  years  prior  to  death  stood 
in  the  acknowledged  relative  of  a  parent,  or  to  any  lineal  descendant  born  in 
lawful  wedlock,  and  in  every  such  case  the  tax  shall  be  at  the  rate  of  one  per 
centum  on  the  appraised  value  thereof  received  by  each  person,  on  all  amounts 
not  exceeding  ten  thousand  dollars ;  two  per  centum  on  all  amounts  received  over 
ten  thousand  dollars  and  not  exceeding  twenty  thousand  dollars;  three  per  centum 
on  all  amounts  received  over  twenty  thousand  dollars;  provided,  that  the  tax  is 
to  be  levied  in  the  above  cases  only  on  the  excess  of  five  thousand  dollars  received 
by  such  person.     When   such   inheritance,   devise,   bequest,   legacy,   gift    or   the 
beneficial  interest  to  any  property  or  income  therefrom  shall  pass  to  or  for  the 
use  or  benefit  of  any  uncle,  aunt,  niece,  nephew,  or  any  lineal  descent  of  the  same, 
in  every  such  case  the  tax  shall  be  at  the  rate  of  two  per  centum  on  the  appraised 
value  thereof  received  by  each  person  on  all  amounts  not  exceeding  ten  thousand 
dollars ;  three  per  centum  on  all  amounts  received  over  ten  thousand  dollars  and 
not  exceeding  twenty  thousand  dollars;  four  per  centum  on  all  amounts  received 
over  twenty  thousand  dollars.     In  all  other  cases  the  tax  shall  be  at  the  rate  of 
four  per  centum  on  the  appraised  value  thereof  received  by  each  such  person, 
body  politic  or  corporate,  educational,  religious,  or  other  institution,  on  the  whole 
of  all  amounts  received  not  exceeding  the  thousand  dollars;  five  per  centum  on 
the  whole  of  all  amounts  received  over  ten  thousand  dollars  and  not  exceeding 
twenty  thousand  dollars;  six  per  centum  on  the  whole  of  all  amounts  received 
over  twenty  thousand  dollars  and  not  exceeding  fifty  thousand  dollars;  seven  per 
centum  on  the  whole  of  all  amounts  received  over  fifty  thousand  dollars. 

Tax  due;  when. 

4997.  All  taxes  imposed  by  this  chapter  shall  take  effect  at  and  accrue  upon 
the  death  of  the  decedent,  or  donor,  and  shall  be  due  and  payable  at  the  expira- 
tion of  twelve  months  from  such  death  except  as  otherwise  provided  in  this  chap- 
ter; provided,  however,  that  taxes  upon  any  devise,  bequest,  legacy,  or  gift, 
limited,  conditioned,  dependent,  or  determinable,  upon  the  happenings  of  any 
contingency  or  future  event  by  reason  of  which  the  full  and  true  value  thereof 
cannot  be  ascertained  at  or  before  the  time  when  the  taxes  become  due  and  pay- 
able as  aforesaid,  shall  accrue  and  become  due  and  payable  when  the  persons  or 
corporation  beneficially  entitled  thereto  shall  come  into  actual  possession  or 
enjoyment  thereof. 


ARIZONA  815 

Administrator  to  pay  tax. 

4998.  Any  administrator,  executor,  or  trustee,  having  in  charge,  or  in  trust, 
any   property   for   distribution,   embraced   in   or   belonging   to    any   inheritance, 
devise,  bequest,  legacy,  or  gift,  subject  to  the  tax  thereon  as  imposed  by  this 
chapter,  shall  deduct  the  tax  therefrom,  and  within  thirty  days  thereafter  he  shall 
pay  over  the  same  to  the  State  Treasurer,  as  herein  provided.     If  such  property 
be  not  in  money,  he  shall  collect  the  tax  on  such  inheritance,  devise,  bequest, 
legacy,  or  gift,  upon  the  appraised  value  thereof  from  the  person  entitled  thereto. 
He  shall  not  deliver,  or  be  compelled  to  deliver,  any  property  embraced  in  any 
inheritance,  devise,  bequest,  legacy,  or  gift,  subject  to  tax  under  this  chapter,  to 
any  person  until  he  shall  have  collected  the  tax  thereon. 

Court  not  to  allow  settlement  until  tax  is  paid. 

4999.  The  tax  imposed  by  this  chapter  upon  inheritances,   devises,   bequests, 
or  legacies  shall  be  payable  to  the  State  Treasurer,  and  the  Treasurer  shall  give 
the  executor,  administrator,  trustee  or  person  paying  such  tax,  a  receipt,  where- 
upon it  shall  be  a  proper  voucher  in  the  settlement  of  his  accounts. 

No  final  settlement  of  the  account  of  any  executor,  administrator  or  trustee 
shall  be  accepted  or  allowed  unless  it  shall  show  and  the  courts  shall  find,  that  all 
taxes  imposed  by  the  provisions  of  this  title  upon  any  property  or  interest  therein 
belonging  to  the  estate  to  be  paid  by  such  executors,  administrators  or  trustees, 
and  to  be  settled  by  said  accounts,  shall  have  been  paid  and  the  receipt  of  the 
State  Treasurer  for  such  tax  shall  be  the  proper  voucher  for  such  payment.  All 
taxes  paid  into  the  State  Treasury  under  the  provisions  of  this  chapter  shall 
belong  to  and  be  a  part  of  the  inheritance  tax  fund  of  the  State;  provided,  that 
whenever  the  amount  of  money  in  this  fund  exceeds  ten  thousand  dollars,  then  all 
moneys  in  excess  of  five  thousand  dollars  shall  be  transferred  to  the  general  fund. 

Liability  for  non-payment  of  tax. 

5000.  Every  tax  imposed  by  this  chapter  shall  be  a  lien  upon  the  property, 
embraced  in  any  inheritance,  devise,  bequest,  legacy,  or  gift,  until  paid,  and  the 
person  to  whom  such  property  is  transferred,  and  the  administrators,  executors, 
and  trustees  of  every  estate  embracing  such  property  shall  be  personally  liable 
for  such  tax  until  its  payment,  to  the  extent  of  the  value  of  such  property;  and 
provided,  further,  in  that  all  inheritance  taxes  shall  be  sued  for  within  five  years 
after  they  are  due  and  legally  demandable,  otherwise  they  shall  be  conclusively 
presumed  to  be  paid  and  cease  to  be  a  lien  as  against  the  estate,  or  any  part 
thereof,  of  the  decedent. 

Tax  to  be  paid  within  one  year. 

5001.  If  such  tax  is  not  paid  within  twelve  months  from  the  accruing  thereof, 
interest  shall  be  charged  and  collected  therefrom  at  the  rate  of  eight  per  centum 
per  annum  from  the  time  the  tax  is  due  and  payable. 

May  sell  property  to  pay  tax. 

5002.  Every  executor,  administrator,  or  trustee,  shall  have  full  power  to  sell 
so  much  of  the  property  embraced  in  any  inheritance,  devise,  bequest,  or  legacy, 
as  will  enable  him  to  pay  the  tax  imposed  by  this  chapter,  in  the  same  manner  as 
he  might  be  entitled  by  law  to  do  for  the  payment  of  the  debts  of  a  testator  or 
intestate. 

Tax  to  be  lien  until  paid 

5003.  If  any  bequest  or  legacy  shall  be  charged  upon  or  payable  out  of  any 
property,  the  heir  or  devisee  shall  deduct  such  tax  therefrom  and  pay  such  tax  to 
the  administrator,  executor,  or  trustee,  and  the  tax  shall  remain  a  lien  or  charge 
on  such  property  until  paid;  and  the  payment  thereof  shall  be  enforced  by  the 
executor,   administrator,   or  trustee,  in  the   same  manner  that   payment   of   the 
bequest  or  legacy  might  be  enforced;  or  by  the  County  Attorney  under  Sec.  27 
(Par.  5021)  of  this  chapter.     If  any  bequest  or  legacy  shall  be  given  in  money  , 
for  a  limited  period,  the  administrator,  executor,  or  trustee  shall  retain  the  tax 
upon  the  whole  amount;  but,  if  it  be  not  in  money,  he  shall  make  application  to 
the  court  having  jurisdiction  of  any  accounting  by  him  to  make  an  apportion- 


THE  STATE  STATUTES 

ment,  if  the  ease  requires,  of  the  sum  to  be  paid  into  his  hands  by  such  legatee 
or  beneficiary,  and  for  such  further  order  relative  thereto  as  the  case  may  require. 

Erroneous  taxation;   reimbursement. 

5004.  When  any  tax  imposed  by  this  chapter  shall  have  been  erroneously  paid, 
wholly  or  in  part,  the  person  paying  the  same  shall  be  entitled  to  a  refund  of  the 
amount  so  erroneously  paid;  and  the  State  Auditor  shall,  upon  satisfactory  proofs 
presented  to  him  of  the  facts  relative  thereto,  draw  his  warrant  upon  the  State 
Treasurer  for  the  amount  thereof  in  favor  of  the  person  entitled  thereto,  payable 
from  the  inheritance  tax  fund;  provided,  however,  that  all  applications  for  such 
refunding  or  erroneous  taxes  shall  be  made  within  three  years  from  the  payment 
thereof. 

Tax  to  be  paid  before  transfer. 

5005.  If  a  foreign  executor,  administrator,  or  trustee  shall  assign  or  transfer 
any  stock  or  obligations  in  this  State  standing  in  the  name  of  the  decedent,  or 
in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  State 
Treasurer  on  or  before  the  transfer  thereof,  and  no  such  assignment  or  transfer 
shall  be  valid  unless  said  tax  is  paid. 

Securities  shall  not  be  delivered  without  consent  of  State  Treasurer. 

5006.  No  safe   deposit  company,   trust  company,   bank,  corporation,  or   other 
institution,  person  or  persons,  holding  securities  of  assets  of  a  decedent,  or  cor- 
poration in  which  said  decedent,  at  the  time  of  his  death,  owned  any  stock,  shall 
deliver  or  transfer  the  same  to  the  executors,  administrators,  or  legal  representa- 
tives of  said  decedent  or  upon  their  order  or  request,  unless  notice  of  the  said 
time  and  place  of  such  intended  transfer  be  served  upon  the  State  Treasurer  in 
writing  at  least  five  days  prior  to  the  said  transfer,  and  it  shall  be  lawful  for  the 
said  State  Treasurer,  personally  or  by  representative,  to  examine  said  securities 
prior  to  the  time  of  such  delivery  or  transfer.     If  upon  such  examination  the 
State  Treasurer,  or  his  said  representative,  shall  for  any  cause,  deem  it  advisable 
that  such  securities  or  assets  should  not  be  immediately  delivered  or  transferred, 
he  may  forthwith  notify,  in  writing,  such  company,  bank,  institution,  or  person, 
to  defer  delivery  or  transfer  thereof,  for  a  period  not  to  exceed  ten  days  from  the 
date  of  such  notice,  and  thereupon  it  shall  be  the  duty  of  the  party  notified  to 
defer  such  delivery  until  the  time  stated  in  such  notice,  or  until  the  revocation 
thereof  within  such  ten  days;  failure  to  serve  the  notice  first  above-mentioned  or 
to  allow  such  examination  or  to  defer  the  delivery  of  such  securities  or  assets  for 
the  time  stated  in  the  second  of  said  notices,  shall  render  said  safe  deposit  com- 
pany, trust  company,  corporation,  bank  or  other  institution,  person  or  persons, 
liable  to  the  payment  of  the  tax  due  on  said  securities  or  assets,  pursuant  to  the 
provisions  of  this  chapter. 

May  give  bond  to  secure  payment  of  tax. 

5007.  Any  person  or  corporation  beneficially  interested  in  any  property  charge- 
able with  a  tax  under  this  chapter,  and  executors,  administrators,  and  trustees, 
thereof,  may  elect,  within  six  months  from  the  death  of  the  decedent,  not  to 
pay  such  tax  until  the  person  or  persons  beneficially  interested  therein  shall  come 
into  actual  possession  or  enjoyment  thereof.     If  it  be  personal  property,  the  per- 
son or  persons  so  electing  shall  give  a  bond  to  the  State  in  the  penal  sum  of 
three  times  the  amount  of  such  tax,  with  such  sureties  as  the  superior  judge  of  the 
proper  county  may  approve,  conditioned  upon  the  payment  of  such  tax  and  interest 
thereon,  at  such  time  and  period  as  the  person  or  persons  beneficially  interested 
therein  may  come  into  actual  possession  or  enjoyment  of  such  property,  which 
bond  shall  be  executed  and  filed,  and  a  full  return  of  such  property  made  upon 
oath  to  the  Superior  Court  within  six  months  from  the  date  of  transfer  thereof, 
as  herein  provided,  and  such  bond  must  be  renewed  every  five  years. 

Court  to  determine  compensation. 

5008.  Whenever  a  decedent  appoints  one  or  more  executors  or  trustees,  and  in 
lien  of  their  allowance  or  commission,  makes  a  bequest  or  devise  of  property  to 
them,  which  would  otherwise  be  liable  to  said  tax,  or  appoints  them  his  residuary 
legatees,  and  said  bequests,  devises,  or  residuary  legacies  exceed  what  would  be 


ARIZONA  817 

a  reasonable  compensation  for  their  services,  such  excess  shall  be  liable  to  such 
tax,  and  the  court  having  jurisdiction  of  their  accounts,  upon  its  own  motion,  or 
on  the  application  of  the  State  Treasurer,  shall  fix  such  compensation. 

Superior  Court   to   have   jurisdiction. 

5009.  The  Superior  Court  of  every  county  in  this  State  having  jurisdiction 
to  grant  letters  testamentary  or  of  administration  upon  the  estate  of  a  decedent 
whose  property  is  chargeable  with  any  tax  under  this  chapter,  or  to  give  ancillary 
letters  thereon  or  to  appoint  a  trustee  of  such  estate,  or  any  part  thereof,  shall 
have  jurisdiction  to  hear  and  determine  all  questions  arising  under  the  provisions 
of  this  chapter,  and  to  do  any  act  in  relation  thereto  authorized  by  law  to  be  done 
by  such  court  in  other  matters  or  proceedings  coming  within  its  jurisdiction;  and 
if  two  or  more  Superior  Courts  shall  be  entitled  to  exercise  any  such  jurisdiction, 
the  Superior  Court  first  acquiring  jurisdiction  hereunder  shall  retain  the  same  to 
the  exclusion  of  every  other  Superior  Court. 

Clerk  of  court  to  send  certificate  to  State  Treasurer. 

5010.  The  judge  of  the  Superior  Court  having  jurisdiction  of  the  estate  of  any 
decedent  shall,  within  ten  days  after  the  filing  of  a  will  or  the  application  for 
letters  of  administration,  of  the  granting  of  letters  of  testamentary  or  of  letters 
of  administration,  cause  the  clerk  of  the  Superior  Court  to  send  to  the  State 
Treasurer  a  certificate  of  the  filing  of  such  will,  or  application,  or  the  granting 
of  such  letters  of  administration.      The  court  shall  thereupon,  and  as  soon  as 
practicable  after  the  granting  of  any  such  letters,  proceed  to  ascertain  and  deter- 
mine the  value  of  every  inheritance,  devise,  bequest  or  legacy  embraced  in  or 
payable  out  of  the  estate  in  which  such  letters  are  granted,  and  the  tax  due 
thereon.     The  State  Treasurer  shall  have  the  same  right  to  apply  for  letters  of 
administration  as  that  conferred  by  law  upon  creditors. 

Inventory  to  be  made;   when. 

5011.  It  shall  be  the  duty  of  the  executor,  administrator  or  trustee  of  every 
estate,  within  one  month  from  the  date  of  his  appointment,  or,  if  a  trustee,  from 
the  acceptance  of  this  trust,  or  if  necessary,  such  further  time  as  the  clerk  of 
the  Superior  Court  or  judge  thereof  may  allow,  to  make  an  inventory,  verified  by 
his  own  oath,  of  all  the  real  and  personal  property  of  the  deceased  which  shall 
come  to  his  possession  or  knowledge,  any  will  or  directions  of  the  decedent  to  the 
contrary  notwithstanding,  and  to   cause  the  same  to  be  appraised,  as  by  law 
required,  and  filed  with  the  clerk  of  the  court  having  jurisdiction  of  said  estate. 

Extension  of  time  of  filing  inventory. 

5012.  Whenever,  by  reason  of  the  complicated  nature  of  an  estate,  or  by  reason 
of  the  confused  condition  of  the  decedent's  affairs,  it  is  impractable  for  the 
executor,   administrator,  trustee  or  beneficiary,   of   said   estate  to   file  with  the 
clerk  of  the  court,  a  full,  complete,  and  itemized  inventory  of  the  personal  assets 
belonging  to  the  estate  within  the  time  required  by  statute  for  filing  inventories 
of  estates  of  decedents,  the  court  may,  upon  the  application  of  ?ueh  representa- 
tive or  parties  in  interest,  extend  the  time  for  filing  the  appraisement  for  a  period 
not  to  exceed  three  months  beyond  the  time  fixed  by  law,  or  such  further  times  as 
may  be  necessary  upon  good  cause  shown. 

State  Treasurer  must  be  notified  of  appraisement. 

5013.  Every  executor  or  administrator,  or  trustee  of  any  estate  shall,  at  least 
ten  days  prior  to  the  first  appraisement  thereof,  as  provided  by  law,  notify  the 
State  Treasurer  in  writing  of  the  time  and  place  of  such  appraisement,  and  shall 
file  due  proof  of  such  notice  with  a  copy  thereof  with  the  clerk  of  the  court 
having  jurisdiction  of  such  estate  or  trust.     Every  executor,  administrator  or 
trustee,  within  ten  days  after  such  appraisement,  or  appraisement  of  any  bene- 
ficial interest  or  re-appraisement  thereof,  and  before  payment  and  distribution  to 
the  legatees  or  any  parties  entitled  to  beneficiary  interest  therein,  shall  make  and 
render  to  the  said  State  Treasurer  a  copy  of  the  said  inventory  and  appraisement, 
duly  certified  as  such  by  the  clerk  of  the  court  having  jurisdiction  of  estate,  and 
shall  also  make  and  file  with  the  said  clerk  of  the  court  having  jurisdiction  of 
said  State  Treasurer  a  schedule,  list  or  statement  of  the  amount  of  such  legacy 

52 


THE  STATE  STATUTES 

or  distributive  share,  together  with  the  amount  of  tax  which  has  accrued  or  will 
accrue  thereof,  verified  by  his  oath  or  affirmation,  to  be  administered  and  certi- 
fied thereon  by  some  magistrate  or  officer  having  lawful  power  to  administer  such 
oaths,  in  such  form  and  manner  as  may  "be  prescribed  by  the  State  Treasurer, 
which  schedule,  list,  or  statement,  shall  contain  the  name  of  each  and  every 
person  entitled  to  any  beneficiary  interest  therein,  together  with  the  clear  value  of 
such  interest  therein,  as  found  and  determined  by  the  court  having  jurisdiction 
of  said  estate. 

Court  may  order  reappraisement. 

5014.  In  ascertaining  and  determining  the  value  of  any  inheritance,  devise, 
bequest,  or  legacy,  embraced  in  or  payable  out  of  any  estate  or  trust,  and  the  tax 
due  thereon,  the  court  may  act  upon  the  inventory  and  appraisement  of   such 
estate  as  prepared  and  filed  by  the  executor,  administrator,  or  trustee  thereof, 
pursuant  to  law,  or  it  may  require  an  appraisement  or  re-appraisement,  as  herein 
provided,  of  the  true  and  full  value  of  the  property,  embraced  in  any  inheritance, 
devise,  bequest  or  legacy,  subject  to  the  payment  of  any  tax  imposed  by  this 
chapter. 

Powers  of  court  where  no  inventory  has  been  made. 

5015.  The  Superior  Court  may,  in  any  matter  mentioned  in  Sections  16,   17 
and  18   (Pars.  5010,  5011,  5012),  or  if  no  inventory  or  appraisement  has  been 
made,  or  if  it  deem  it  for  any  cause  insufficient  or  inadequate,  either  upon  its 
own  motion  or  upon  the  application  of  any  interested  party,  including  the  State 
Treasurer,  and  as  often  as  and  when  occasion  requires,  appoint  one  or  more  per- 
sons as  appraisers  to  appraise  the  true  and  full  value  of  the  property  embraced 
in  any  inheritance,  devise,  bequest,  or  legacy,  subject  to  the  payment  of  any  tax 
imposed  by  this  chapter. 

Appraisement  to  be  made  immediately  after  death. 

5016.  Every  inheritance,   devise,  bequest,  legacy,   or   gift,   upon   which  a   tax 
is  imposed  under  this  chapter,  shall  be  appraised  at  its  full  and  true  value  imme- 
diately upon  the  death  of  the  decedent,  or  as  soon  thereafter  as  may  be  prac- 
ticable; provided,  however,  that  when  such  devise,  bequest,  legacy  or  gift,  shall  be 
of  such  a  nature  that  its  full  and  true  value  cannot  be  ascertained  at  such  time, 
it  shall  be  appraised  in  like  manner  at  the  time  when  such  value  first  becomes 
ascertainable.    The  value  of  every  future  or  contingent  or  limited  estate,  income, 
interest,  or  annuity  dependent  upon  any  life  or  lives  in  being,  shall  be  determined 
by  the  rules  or  standard  or  mortality,  and  of  value  commonly  used  by  actuaries' 
combined  experience  tables  except  that  the  rates  of  interest  on  computing  the 
present  value  of  all  future  and  contingent  interest  of  estates  shall  be  four  per 
centum  per  annum. 

Time  and  place  of  appraisement;  State  Treasurer  to  be  present. 

5017.  The   Superior  Court   shall   by   order  fix   the   time   and   place   when   the 
appraisers  appointed  under  the  provisions   of   Section   20    (Par.    5014)    of   this 
chapter  shall  make  said  appraisement.     The  clerk  of  the  Superior  Court  shall 
forthwith  give  notice  to  the  State  Treasurer,  and  to  all  persons  known  to  have  a 
claim  or  interest  in  the  property,  inheritance,  devise,  bequest,  legacy,  or  gift,  to 
be  appraised,  and  to  such  persons  as  the  Superior  Court  may  by  order  direct,  of 
the  time  and  place  when  said  appraisers  will  make  such  appraisal.     Such  notice 
shall  be  given  by  mail.    They  shall,  at  such  time  and  place,  appraise  the  same  at 
its  full  value,  as  herein  prescribed,  and  for  that  purpose  the  said  appraisers  are 
authorized  to  issue  subpoenas  and  to  compel  the  attendance  of  witnesses  before 
them,  and  to  take  evidence  of  such  witnesses  under  oath  concerning  ^uch  property 
and  the  value  thereof,  and  they  shall  make  report  thereof,  and  of  such  value,  in 
writing  to  the  said  Superior  Court,  together  with  the  testimony  of  the  witnesses 
examined,  and  such  other  facts  in  relation  thereto,  and  to  the  said  matter,  as  said 
Superior  Court  may  order  or  require.     Every  appraiser  shall  be  entitled  to  com- 
pensation at  the  rate  of  three  dollars  per  day  for  each  day  actually  and  necessarily 
employed  in  such  appraisal,  and  his  actual  and  necessary  traveling  expenses,  and 
such  witnesses,  and  the  officer  or  person  serving  any  such   subpoena,   shall  be 
entitled  to  the  same  fees  as  those  allowed  witnesses  or  sheriffs  for  similar  service 


ARIZONA  819 

in  courts  of  record.  The  compensation  and  fees  claimed  by  any  person  for  services 
performed  under  this  chapter  shall  be  approved  by  the  Superior  Judge,  who  shall 
certify  the  amount  thereof,  as  so  approved  to  the  State  Auditor,  who  shall 
examine  the  same,  and,  if  found  correct,  he  shall  draw  his  warrant  upon  the  State 
Treasurer  for  the  amount  thereof  in  favor  of  the  person  entitled  thereto,  payable 
from  the  inheritance  tax  fund. 

Court  to  determine  value  and  tax. 

5018.  The  report  of  the  appraisers  shall  be  filed  with  the  Superior  Court,  and 
from  such  report  and  other  proof  relating  to  any  such  estate,  before  the  Superior 
Court,  the  court  shall  forthwith,  as  of  course,  determine  the  full  and  true  value 
of  all  such  estates,  and  the  amount  of  the  tax  to  which  the  same  are  liable;  or 
the  Superior  Court  may  so  determine  the  full  and  true  value  of  all  such  estates, 
and  the  amount  of  tax  to  which  the  same  are  liable  without  appointing  appraisers, 
as  herein  provided. 

Court  to  notify  interested  parties  of  value. 

5019.  The  Superior  Court  shall  immediately  give  notice  upon  the  determination 
of  the  value  of  any  inheritance,  devise,  bequest,  legacy,  or  gift,  which  is  taxable 
under  this  chapter,  and  of  the  tax  to  which  it  is  liable,  to  all  parties  known  to  be 
interested  therein,  including  the  State  Auditor  and  State  Treasurer.    Such  notices 
shall  be  given  by  mail. 

State  Treasurer  may  ask  for  new  appraisement. 

5020.  Within    thirty    days    after    the    assessment    and    determination    by    the 
Superior  Court  of  any  tax  imposed  by  this  chapter,  the  State  Treasurer,  or  any 
person  interested  in  such  tax,  may  file  with  the  said  court  objections  thereto,  in 
writing,  and  praying  for  a  re-assessment  and  re-determination  of  such  tax.     Upon 
any  objection  being  so  filed,  the  Superior  Court  shall  appoint  a  time  for  the  hear- 
ing thereof,  and  cause  notice  of  such  hearing  to  be  given  by  mail  to  the  State 
Treasurer,  and  all  parties  interested,  at  least  ten  days  before  the  hearing  thereof; 
at  the  time  appointed  in  such  notice,  the  court  shall  proceed  to  hear  such  objec- 
tion, and  any  evidence  which  may  be  offered  in  support  thereof  or  opposition 
thereto;  and  if,  after  such  hearing  the  said  court  finds  the  amount  at  which  the 
property  is  appraised  is  its  market  value,  and  the  appraisement  was  made  fairly 
and  in  good  faith,  it  shall  approve  such  appraisement;  but  if  it  finds  that  the 
appraisement  was  made  at  a  greater  or  less  sum  than  the  market  value  of  the 
property,  or  that  the  same  was  not  made  fairly  or  in  good  faith,  it  shall  be  set 
aside  by  the  Superior  Court  and  an  appraisement  made  to  determine  such  value. 
The  State  Treasurer,  or  any  one  interested  in  the  property  appraised,  may  appeal 
to  the  Supreme  Court  from  the  judgment,  order  and  decree  of  the  Superior  Court 
in  the  premises.     All  evidence  heard  on  such  re- appraisement  shall  be  reduced  to 
writing  and  filed  with  the  clerk  of  the  court.     All  appeals  taken  from  the  judg- 
ment or  decree  of  the  court  shall  be  had  and  tried  on  appeals  in  the  same  manner 
and  with  like  effect  as  appeals  in  suits  in  equity  are  now  heard  and  tried. 

County  attorney  to  sue  for  unpaid  tax. 

5021.  If  the  State  Treasurer  shall  have  reason  to  believe  that  any  tax  is  due 
and  unpaid  under  the  chapter,  after  the  refusal  or  neglect  of  the  person  liable 
therefor  to  pay  the  same,  he  shall  notify  the  County  Attorney  in  writing  of  such 
failure  or  neglect,  and  such  County  Attorney  shall  apply  to  the  Superior  Court 
for  a  citation  citing  the  person  liable  to  pay  such  tax  to  appear  before  the  court 
on  the  day  specified,  not  more  than  thirty  days  from  the  date,  of  such  citation, 
unless  the  court,  for  good  cause  shown,  grants  a  longer  time,  and  show  cause 
why  the  tax  should  not  be  paid.     The  Superior  Court,  upon  such  application,  and 
whenever  it  shall  appear  to  him  that  any  such  tax  accruing  under  this  chapter 
has  not  been  paid  as  required  by  law,  shall  issue  such  citation,  and  the  service  of 
such  citation,  and  the  time,  manner,  and  proof,  thereof,  and  the  hearing  and 
determination  thereon,  shall  conform  as  nearly  as  may  be  to  the  provisions  of  the 
probate  practice;  provided,  that  where  no  provision  is  made  for  manner  of  such 
service  or  proof  of  same,  the  court  or  judge  at  the  time  such  order  or  citation  is 
issued,  shall  direct  the  manner  of  giving  notice   and  proof  of  the  same;    and 


320  THE  STATE  STATUTES 

wherever  it  shall  appear  that  any  such  tax  is  due  and  payable  and  the  payment 
thereof  cannot  be  enforced  under  the  provisions  of  this  chapter  in  said  Superior 
Court,  the  person  or  corporation  from  which  the  same  is  due  is  hereby  made  liable 
to  the  State  for  the  amount  of  such  tax,  and  it  shall  be  the  duty  of  the  County 
Attorney  of  the  proper  county  to  sue  for  in  the  name  of  the  State,  and  enforce 
the  collection  of  such  tax;  and  all  taxes  so  collected  shall  be  forthwith  paid  into 
the  inheritance  tax  fund  of  the  State.  It  shall  be  the  duty  of  said  County 
Attorney  to  appear  for  and  represent  the  State  Treasurer  on  the  hearing  of  such 
citation,  or  of  any  other  hearing.  Whenever  the  Superior  Judge  shall  certify 
that  there  was  probable  cause  for  issuing  a  citation  and  taking  the  proceeds 
specified  in  this  section,  the  State  Treasurer  shall  file  with  the  State  Auditor  a 
duly  verified  itemized  account  of  all  expenses  incurred  for  the  service  of  the  cita- 
tion, and  other  lawful  disbursements  not  otherwise  paid,  and  the  State  Auditor 
shall  thereupon  draw  his  warrant  upon  the  State  Treasurer  for  the  payment 
thereof,  and  in  favor  of  the  said  Treasurer,  payable  from  the  inheritance  tax  fund. 

Court  to  keep  record  of  all  estates. 

5022.  Each  Superior  Court  shall  keep  a  book,  which  shall  be  a  public  record, 
and  in  which  shall  be  entered  by  the  judge  or  clerk  of  said  court,  under  the 
direction  of  said  judge,  the  name  of  every  decedent  upon  whose  estate  and  appli- 
cation has  been  made  for  the  issue  of  letters  of  administration  or  letters  testa- 
mentary, or  ancillary  letters;  the  date  and  place  of  death  of  such  decedent,  the 
estimated  value  of  the  property  of  such  decedent;  names  and  places  of  residence 
and  relationship  to  decedent  of  the  heirs  at  law  of  such  decedent;  the  names  and 
places  of  residence  of  the  legatees,  devisees,  and  other  beneficiaries  in  any  will  of 
such  decedent ;  the  amount  of  each  legacy,  and  the  estimated  value  of  any  property 
devised  therein,  and  to  whom  devised.     These  entries  shall  be  made  from  data 
contained  in  the  papers  filed  on  any  such  application,  or  in  any  proceeding  relating 
to  the  estate  of  the  deceased.    The  superior  judge,  or  the  clerk  of  the  court  under 
his  direction  shall  also  enter  in  such  book  the  amounts  of  the  property  of  any 
such  decedent,  as  shown  by  the  inventory  thereof,  when  made  and  filed  in  his 
office,  and  the  return  made  by  appraisers  appointed  by  him  under  this  chapter, 
and  the  value  of  all  inheritances,  devises,  bequests,  legacies,  and  gifts,  inherited 
from  such  decedent,  or  given  by  such  decedent  in  his  will,  or  otherwise,  as  fixed 
by  the  Superior  Court;  and  the  tax  assessed  thereon,  and  the  amounts  of  any 
receipts   for   payment  thereof   filed  in   said   court.      The    State    Treasurer   shall 
furnish  to  each  Superior  Court  forms  for  the  reports  to  be  made  by  such  judge, 
which  shall  correspond  with  the  entry  to  be  made  in  such  book. 

Clerk  of  court  must  furnish  State  Treasurer  with  reports. 

5023.  Each  superior  judge  shall,  on  the  first  Monday  of  January,  April,  July 
and  October,  of  each  year,  under  the  seal  of  the  court,  make  a  report,  upon  the 
forms  furnished  by  the  State  Treasurer  containing  all  the   data  and  matters 
required  to  be  entered  in  such  book  to  the  State  Treasurer.     The  county  recorder 
of  each  county  having  custody  of  records  of  deeds  shall,  at  the  same  time,  make 
reports  containing  a  statement  of  any  conveyances  filed  or  recorded  in  his  office 
of  any  property  which  appears  to  have  been  made  or  intended  to  take  effect  in 
possession  or  enjoyment  after  the  death  of  the  grantor  or  vendor,  with  the  name 
and  place  of  residence  of  the  vendor  and  vendee,  and  a  description  of  the  property 
transferred  as  shown  by  such  instrument,  which  shall  be  immediately  transmitted 
to  the  State  Treasurer. 

State  Treasurer  to  issue  duplicate  receipts. 

5024.  It  shall  be  the  duty  of  the  State  Treasurer,  upon  the  payment  of  the  sum 
of  twenty-five  cents,  to  issue  to  any  person  demanding  the  same,  a  copy  of  a 
receipt  that  may  have  been  given  by  such  Treasurer  for  the  payment  of  any  tax 
under  this  chapter,  which  receipt   shall   designate  upon  what  real  property,  if 
any,  of  which  any  decedent  may  have  died  seized,  such  tax  shall  have  been  paid, 
by  whom  paid,  and  whether  in  full  of  such  tax.    Such  receipts  may  be  recorded 
in  the  office  of  the  county  recorder  of  the  county  in  which  such  property  is 
situated,  in  a  book  to  be  kept  by  him  for  that  purpose,  which  shall  be  labeled 
' '  transfer  tax. ' ' 


ARIZONA  821 

County  Supervisors  shall  provide  books. 

5025.  The   county  supervisors  of   each   county  shall  provide   a   book   for   the 
recording  of  such  receipts.     The  county  recorder  of  each  county  shall  charge  and 
collect  at  the  time  said  receipt  is  presented  for  record,  for  the  use  of  the  county, 
the  sum  of  twenty-five  cents  for  recording  each  receipt.     The  sum  paid  to  the 
State  Treasurer  for  copies  of  receipts  shall  be  paid  by  him  into  the  inheritance 
tax  fund. 

State  Treasurer  may  make  compromise;  how  and  when. 

5026.  Whenever  an  estate  charged,  or  sought  to  be  charged,  with  the  inherit- 
ance tax,  is  of  such  a  nature  or  is  so  disposed  that  the  liability  of  the  estate  is 
doubtful,  or  the  value  thereof  cannot  with  reasonable  certainty  be  ascertained 
under  the  provisions  of  law,  the  State  Treasurer  may,  with  the  written  approval 
of  the  Attorney-General,  which  approval  shall  set  forth  the  reasons  therefor,  com- 
promise with  the  beneficiaries  or  representatives  of  such  estate;   and  compound 
the  tax  thereon ;  but  said  settlement  must  be  approved  by  the  Superior  Court 
having  jurisdiction  of  the  estate,  and  after  such  approval  the  payment  of  the 
amount  of  the  taxes  so  agreed  upon  shall  discharge  the  lien  against  the  property 
of  the  estate. 

Administrators  must  furnish  State  Treasurer  with  certified  copies. 

5027.  Administrators,    executors,    or    trustees,    of    the    estates    subject    to    the 
inheritance  tax  shall,  when  required  by  the  State  Treasurer,  send  to  such  Treas- 
urer certified  copies  of  such  parts  of  their  reports  as  may  be  required  by  him, 
and,  upon  refusal  of  said  parties  to  comply  with  the  Treasurer's  demand,  it  is  the 
duty  of  the  clerk  of  the  court  to  comply  with  such  demand,  and  the  expense  of 
making  such  copies  and  transcripts  shall  be  charged  against  the  estate,  as  are 
other  costs  in  probate. 

Appeal  to  Supreme  Court. 

5028.  Appeals  may  be  taken  to  the  Supreme  Court  from  all  final  orders,  judg- 
ments, and  decrees,  entered  under  the  provisions  of  this  chapter,  in  the  same 
manner  and  with  the  same  effect  as  other  appeals  are  taken  from  final  orders 
and  judgments  made  or  rendered  by  the  Superior  Court.     All  such  appeals  shall 
be  had  and  tried  in  the  same  manner  and  with  like  effect  as  appeals  in  suits  in 
equity  are  now  heard  and  tried. 

Penalty  for  sequestering  will  with  intent  to  defraud. 

5029.  Any  person  who  shall  wilfully  sequester  or  secrete  any  last  will  or  testa- 
ment of  a  person  then  deceased,  or  who,  having  the  custody  of  any  such  will  and 
testament,  shall  wilfully  fail  or  neglect  to  produce  and  deliver  the  same  to  the 
judge  of  the  Superior  Court  having  jurisdiction  of  its  probate,  or  to  any  executor 
named  therein,  within  a  reasonable  time  after  the  death  of  the  testator  thereof, 
with   intention   to    injure   or    defraud   any   person    interested    therein,    shall    be 
punished  by  imprisonment  in  the  county  jail  not  more  than  one  year  or  by  a  fine 
not  exceeding  five  hundred  dollars. 

Penalty  for  failure  to  take  out  letters  on  personal  estate  within  six  months. 

5030.  Every  person  who  shall  administer  the  personal   estate   of  any  person 
dying  after  the  taking  effect  of  this  chapter,  or  any  part  thereof,  without  proving 
the  will  of  the  deceased  or  taking  out  letters  of  administration  of  such  personal 
estate  within  six  calendar  months  after  the  death  of  the  person  so  dying,  shall 
be  punished  by  imprisonment  in  the  county  jail  not  more  than  one  year  or  by  a 
fine  not  exceeding  five  hundred  dollars. 

Administrator  to  notify  State  Treasurer  before  transferring  real  estate. 

5031.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  politic  or  corporate,  or  to  any  person  or  persons,  or  in 
trust  for  them,  or  some  of  them,  it  shall  be  the  duty  of  the  executor,  administrator, 
or  trustee,  of  such  decedent  to  give  information  thereof  in  writing  to  the  State 
Treasurer,  within  three  months  after  undertaking  the  execution  of  his  expected 


822  THE  STATE  STATUTES 

duties,  or,  if  the  fact  be  not  known  to  him  within  that  period  then  within  one 
month  after  the  same  shall  have  come  to  his  knowledge. 

Property  located  outside  State;  how  taxed. 

5032.  Except  as  to  real  property  located  outside  of  the  State  passing  in  fee 
from  the  decedent  owner,  the  tax  imposed  under  this  chapter  shall  hereafter  be 
assessed  against  and  be  collected  from  property  of  every  kind,  which,  at  the  death 
of  the  decedent  owner,  is  subject  to,  or  thereafter,  for  the  purpose  of  distribution, 
is  brought  into  this  State,  and  becomes  subject  to  the  jurisdiction  of  the  courts 
of  this  State  for  distributive  purposes,   or  which  was  owned  by  any  decedent 
domiciled  within  the  State  at  the  time  of  the  death  of  such  decedent,  even  though 
the  property  of  said  decedent  so  domiciled  was  situated  outside  of  the  State. 

Deductions  allowed  on  indebtedness  of  foreign  State. 

5033.  In  case  of  any  property  belonging  to  a  foreign  estate,  which  estate  in 
whole  or  in  part  is  liable  to  pay  an  inheritance  tax  in  this  State,  the  said  tax 
shall  be  assessed  upon  the  market  value  of  said  property  remaining  after  payment 
of  such  debts  and  expenses  as  are  chargeable  to  the  property  under  the  laws  of 
this  State.     In  the  event  that  the  executor,  administrator,  or  trustee,  of   such 
foreign  estate  files  with  the  clerk  of  the  court  having  ancillary  jurisdiction,  and 
with  the  State  Treasurer,  duly  certified  statements  exhibiting  the  true  market 
value  of  the  entire  estate  of  the  decedent  owner,  and  the  indebtedness  for  which  the 
said  estate  has  been  adjudged  liable,  which  statements  shall  be  duly  attested  by 
the  judge  of  the  court  having  original  jurisdiction,  the  beneficiaries  of  said  estate 
shall  then  be  entitled  to  have  deducted  such  proportion  of  the  said  indebtedness 
of  the  decedent  from  the  value  of  the  property  as  the  value  of  the  property  within 
this  State  bears  to  the  value  of  the  entire  estate. 

No  officer  shall  receive  additional  compensation. 

5034.  Except  as  otherwise  provided  in  this  chapter,  no  officer  shall  receive  any 
additional  compensation  to  that  now  allowed  him  by  law,  by  reason  of  any  duties 
imposed  upon  him  by  the  provisions  of  this  chapter. 

State  Treasurer  to  make  itemized  expense  account. 

5035.  The   State  Treasurer  shall  file  with  the  State  Auditor   a  duly  verified 
itemized  account  of  all  expenses  incurred  and  disbursements  made  by  him  in  exam- 
ining or  having  examined  any  securities  under  Sec.  12  (Par.  5006)  of  this  chap- 
ter, or  any  other  expense  actually  incurred  by  him  in  enforcing  or  carrying  out 
the  provisions  of  this  chapter,  and  the  State  Auditor  shall  thereupon  draw  his 
warrant  upon  the  State  Treasurer  for  the  payment  thereof  and  in  favor  of  said 
Treasurer,  payable  from  the  inheritance  tax  fund. 

Penalty  for  accepting  fee  or  reward  by  appraiser. 

5036.  Any  appraiser  appointed  under  this  chapter  who  shall  take  any  fee  or 
reward  from  any  executor,  administrator,  trustee,  legatee,  next  of  kin,  or  heir  of 
any  decedent,  or  from  any  other  person  liable  to  pay  said  tax  or  any  portion 
thereof,  shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof  he  shall  be 
fined  not  less  than  two  hundred  and  fifty  dollars,  nor  more  than  five  hundred  dol- 
lars, and  imprisoned  not  exceeding  ninety  days,   and,  in  addition  thereto,  the 
superior  judge  shall  dismiss  him  from  such  service. 


ARKANSAS 


823 


&     ! 

*  la 


s  >> 

•  r-l    jj 
O>     O 


>>  bo 

73  a 

Q}  *"H 

II 


CO 

<      5' 


fl  ^ 


•—I     «-H 

•s§ 

a  * 


'    MrH 


50° 

•O^S 
0»        M 


M  «  aX  OT 


824  THE  STATE  STATUTES 

Chapter  197,  L.  1913,  as  amended  by  L.  1915,  approved  March  23,   1915,  and 

L.  1917. 

Section  1.  (1)  The  words  "estate"  and  "property"  as  used  in  this  act,  shall 
be  taken  to  mean  the  property  or  interest  therein,  passing  or  transferring  to  any 
individual  or  corporate  legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees  or 
vendees,  including  the  widow's  dower,  or  any  property  in  any  way  granted,  given 
or  devised  to  the  widow  in  lieu  of  dower,  and  the  husband's  courtesy,  or  any  gift, 
grant  or  bequest  by  the  wife  to  the  husband,  and  not  as  the  property  or  interest 
therein  of  the  decedent,  donor  or  vendor,  and  shall  include  all  property  or  interest 
therein,  whether  situated  within  or  without  the  state.  Provided,  five  thousand 
($5,000.00)  dollars  of  the  market  value  of  the  widow's  dower  or  the  husband's 
courtesy  shall  be  exempt  from  taxation.  [As  amended  by  L.  1917.] 

"^2)  The  words  "tangible  property"  as  used  in  this  act  shall  be  taken  to  mean 
corporeal  property,  such  as  real  estate  and  goods,  wares  and  merchandise,  and 
shall  not  be  taken  to  mean  money,  deposits  in  banks,  shares  of  stock,  bonds,  notes, 
credits  or  evidences  of  an  interest  in  property  or  evidences  of  debt. 

(3)  The  words  "intangible  property"  as  used  in  this  act  shall  be  taken  to 
mean  incorporeal  property,  including  money,  deposits  in  bank,  shares  of  stock, 
bonds,  notes,  credits,  evidences  or  an  interest  in  property  and  evidences  of  debt. 

(4)  The  word  "transfer"  as  used  in  this  act  shall  be  taken  to  include  the 
passing  of  property  or  any  interest  therein  in  possession  or  enjoyment,  present  or 
future,  by  inheritance,  descent,  devise,  bequest,  grant,  deed,  bargain,  sale  or  gift 
in  the  manner  herein  prescribed. 

§  2.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  tangible 
property  within  the  state  and  of  intangible  property  or  any  interest  therein  or 
income  therefrom  in  trust  or  otherwise,  to  persons  or  corporations  in  the  following 
cases,  subject  to  the  exceptions  and  limitations  hereinafter  prescribed. 

(1)  When  a  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  of  any 
intangible  property  or  of  tangible  property  within  the  state  from  any  person 
dying  seized  or  possessed  thereof  while  a  resident  of  the  state. 

(2)  When  the  transfer  is  by  will  or  by  the  interstate  laws  of  this  state  of 
tangible  property  within  the  state,  or  intangible  property  consisting  of  shares 
of  tock  or  of  bonds  of  corporations  organized  and  existing  under  the  laws  of 
Arkansas;  or  if  intangible  property,  consisting  of  shares  of  stock  or  of  bonds  of 
foreign   corporations   owning   property   within   the   state   of   Arkansas,   and   the 
decedent  was  a  nonresident  of  the  state  at  the  time  of  his  death;  provided,  that 
in  the  case  of  stocks  or  bonds  held  by  a  nonresident  decedent  in  a  foreign  cor- 
poration, owning  property  within  this  state,  the  value  of  such  stock  for  the  pur- 
poses of  this  act  shall  be  taken  to  be  that  proportion  of  its  true  value,  which  the 
physical  property  of  such  corporation  located  in  this  state  bears  to  the  total 
physical  property  of  such  corporation  wherever  located. 

(3)  When  the  transfer  is  of  intangible  property  or  of  tangible  property  within 
the  state  made  by  a  resident,  or  of  tangible  property  within  the  state  made  by  a 
nonresident,  by  deed,  grant,  bargain,  sale  or  gift  made  in  contemplation  of  the 
death  of  the  grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession  or 
enjoyment  at  or  after  such  death. 

(4)  When   any   such  person    or   corporation   becomes   beneficially   entitled,   in 
possession  or  expectancy,  to  any  property  or  the  income  thereof   of  any  such 
transfer. 

(5)  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  act,  such  appointment  when  made  shall  be  deemed   a  transfer 
taxable  under  the  provisions  of  this  act. 

(6)  The  tax  imposed  hereby  shall  be  upon  the  clear  market  value  of  such 
property,  and  shall  be  and  remain  a  lien  upon  the  property  transferred  until  paid. 

§  3.  The  following  exemptions  from  the  tax  are  hereby  allowed: 
(1)  All  property  transferred  in  good  faith  to  societies,  corporations  and  insti- 
tutions now  or  hereafter  exempted  by  law  from  taxes,  or  to  any  public  corporation 
or  to  any  society,  corporation,  institution  or  association  of  persons  engaged  in  or 
devoted  to  any  charitable,  benevolent,  educational,  public  or  other  like  work 
(pecuniary  profit  not  being  its  object  or  purpose)  or  to  any  person,  society,  cor- 
poration, institution  or  association  of  persons  in  trust  for  or  to  be  devoted  to  any 
charitable,  benevolent,  educational  or  public  purpose,  by  reason  whereof  any  such 


ARKANSAS  825 

person  or  corporation  shall  become  beneficially  entitled  in  possession  of  expectancy 
to  any  such  property  or  to  the  income  thereof,  shall  be  exempt. 

(2)  Property  of  the  clear  value  of  three  thousand  dollars   ($3,000.00)   trans- 
ferred to  a  widow  or  to  a  minor  child  of  the  decedent,  and  of  one  thousand  dollars 
($1,000.00)  transferred  to  each  of  the  persons  described  in  the  first  subdivision  of 
section  4,  shall  be  exempt. 

(3)  Property  of  the  clear  value  of  five  hundred  dollars  ($500.00)  transferred 
to   any  person   or   corporation   other   than   the    persons    described   in    said    first 
subdivision  of  section  4. 

(4)  Provided,  that  when  any  estate  on  which  the  tax  is  due  is  large  enough  to 
pay  the  tax  in  full  and  leave  a  sum  equal  to  or  greater  than  the  exemptions  pro- 
vided in  subdivisions  No.  2  and  No.  3  of  this  section,  the  tax  shall  be  paid  on  the 
value  of  the   entire  estate  without   deductions   of  the   exemptions   provided   by 
subdivisions  No.  2  and  No.  3,  or  any  other  deduction  or  abatement  whatever. 

Sections  4  and  5  fix  the  rates  as  shown  in  the  foregoing  table. 

§  6.  This  act  shall  apply  to  all  transfers  from  the  estates  of  decedents  whose 
death  occurs  subsequent  to  the  date  when  this  act  takes  effect,  and  not  to  transfers 
from  estates  when  the  decedent  died  prior  to  the  taking  effect  of  this  act,  except 
as  provided  in  subdivision  5  of  section  2. 

§  7.  When  any  grant,  gift,  legacy  or  succession  upon  which  a  tax  is  imposed 
by  section  2  of  this  act  shall  be  an  estate,  income  or  interest  for  a  term  of  years, 
or  for  life,  or  determinable  upon  any  future  or  contingent  event,  or  shall  be  a 
remainder,  reversion  or  other  expectancy,  real  or  personal,  the  entire  property  or 
fund  by  which  such  estate,  income  or  interest  is  supported,  or  of  which  it  is  a 
part,  shall  be  appraised  immediately  after  the  death  of  the  decedent  and  the 
market  value  thereof  determined,  in  the  manner  provided  in  section  13  of  this 
act,  and  the  tax  prescribed  by  this  act  shall  be  immediately  due  and  payable  to 
the  state  treasurer,  and,  together  with  the  interest  thereon,  shall  be  and  remain  a 
lien  on  said  property  until  the  same  is  paid. 

§  8.  Taxes  excess  over  reasonable  compensation  of  devise  to  executors  or 
trustees  in  lieu  of  commissions. 

§  9.  Provides  that  taxes  are  due  at  death.  No  interest  until  after  six  months. 
After  twelve  months  a  ten  per  cent,  penalty  in  addition  to  the  interest  except  in 
case  of  necessary  litigation  or  unavoidable  delay  but  litigation  to  defeat  the  tax 
is  not  ' '  necessary  litigation. ' ' 

§  10.  (1)  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any 
legacy  or  property  for  distribution,  subject  to  the  said  tax,  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect  the  tax 
thereon,  upon  the  market  value  thereof,  from  the  legatee  or  person  entitled  to 
such  property,  and  he  shall  not  deliver,  or  be  compelled  to  deliver,  any  specific 
legacy  or  property  subject  to  tax  to  any  person  until  he  shall  have  collected  the 
tax  thereon;  and  whenever  any  such  legacy  shall  be  charged  upon  or  payable  out 
of  real  estate,  the  executor,  administrator  or  trustee  shall  collect  said  tax  from 
the  heir  or  devisee  thereof,  and  the  same  shall  remain  a  charge  on  such  real  estate 
until  paid ;  if,  however,  such  legacy  be  given  in  money  to  any  person  for  a  limited 
period,  the  executor,  administrator  or  trustee  shall  retain  the  tax  upon  the  whole 
amount;  but  if  it  be  not  in  money  he  shall  make  application  to  the  probate  court 
to  make  an  apportionment,  if  the  case  require  it,  of  the  sum  to  be  paid  into  his 
hands  by  such  legatees  and  for  such  further  order  relative  thereto  as  the  case 
may  require. 

(2)  And  all  executors,  administrators  and  trustees  shall  have  full  power  to 
sell  so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax, 
such  sale  to  be  had  in  the  same  manner  as  provided  by  statute  for  the  sale  of 
lands  of  decedents  to  pay  debts  of  the  estate,  and  the  amount  of  said  tax  shall 
be  paid  as  hereinafter  directed. 

§  11.  Provides  that  foreign  executors  or  administrators  shall  not  transfer  assets 
within  the  state  without  paying  the  tax  and  that  trust  companies,  safe  deposit 
companies,  banks,  etc.,  shall  not  deliver  securities  of  a  decedent  in  their  possession 
to  an  executor  or  administrator  without  retaining  enough  to  pay  the  tax,  interest 
and  penalties  unless  the  state  treasurer  shall  consent  in  writing  under  a  penalty 
of  twice  the  tax  and  interest  and  gives  the  state  treasurer  the  right  to  examine 
said  securities. 

§  12.  Provides  that  taxes  shall  be  paid  to  general  fund. 

§  13.  Provides  for  the  appointment  of  appraisers,  notice  to  beneficiaries  to  fix 


826  THE  STATE  STATUTES 

the  market  value  of  property  and  compute  like  estates,  remainders,  annuities, 
etc.,  fixes  appraisers'  compensation  and  imposes  a  penalty  for  accepting  fee  or 
reward. 

§  14.  Gives  the  probate  court  jurisdiction  in  inheritance  tax  cases. 

§  15.  Provides  for  collection  of  delinquent  taxes  by  the  attorney-general  who 
may  employ  counsel.  [Repealed  by  L.  1917.] 

§  16.  Provides  for  the  enforcement  of  tax  liens  by  the  attorney-general. 

§  17.  Provides  for  actions  to  quiet  title  and  to  declare  that  property  is  not 
subject  to  the  lien  of  any  tax  under  this  or  any  former  act. 

§  18.  Provides  that  actions  under  sections  16  and  17  shall  be  commenced  in  the 
probate  court. 

§  19.  An  act,  entitled  "An  act  to  impose  a  tax  based  upon  the  right  of  succes- 
sion to  gifts,  legacies  and  inheritances  in  certain  cases,  and  to  provide  for  the 
collection  of  such  taxes,"  approved  May  31,  1909,  and  all  acts  and  parts  of  acts 
in  conflict  with  this  act  are  hereby  expressly  repealed;  provided,  nothing  in  this 
act  shall  be  construed  to  affect  or  prevent  the  collection  of  any  inheritance  tax 
which  may  have  become  due  and  payable,  and  has  not  yet  been  paid  under  the 
laws  in  force  prior  to  the  passage  of  this  act. 

§  20.  Whereas,  it  is  necessary  for  the  immediate  preservation  of  the  public 
peace,  health  and  safety  that  this  act  becomes  a  law  immediately;  therefore,  be  it 
enacted  that  this  act  take  effect  and  be  in  force  from  and  after  its  passage. 

The  Act  of  1917  adds  the  following  procedure  provisions: 

§  3.  There  is  hereby  created  for  a  term  of  twelve  (12)  years  an  office  to  be 
known  as  the  inheritance  tax  attorney,  for  the  state  of  Arkansas,  and  the 
governor,  with  the  advice  and  consent  of  the  senate  shall  appoint  some  person 
learned  in  the  law,  who  shall  be  inheritance  tax  attorney  for  the  state,  for  a  term 
of  two  years,  and  who  shall  take  and  subscribe  to  the  oath  of  office  prescribed  by 
the  constitution  of  this  state  for  officers.  The  inheritance  tax  attorney  shall 
have  the  power  to  file  complaint  in  the  name  of  the  state  in  the  probate  court  of 
any  county  having  jurisdiction  of  the  estate,  from  which  any  taxes  under  this  act 
may  be  due  or  owing,  against  the  administrator,  or  executor  of  such  estate,  or 
against  the  heirs,  legatees,  beneficiaries  or  other  persons  having  or  claiming  to 
have  any  interest  in  said  estate,  if  there  is  no  administrator  or  executor,  alleging 
that  the  inheritance  tax  is  due  and  unpaid,  or  that  the  value  of  said  estate  upon 
which  the  inheritance  tax  is  owing,  is  unknown.  Upon  filing  of  the  complaint,  a 
summons  shall  be  issued  and  served  upon  the  defendants  and  the  case  shall  stand 
for  trial  at  the  next  regular  or  adjourned  term  of  the  court;  provided  the  term 
shall  not  begin  within  ten  days  from  the  service  of  the  summons.  The  case  shall 
be  tried  before  the  probate  judge  without  a  jury,  upon  oral  testimony  or  depo- 
sitions, and  he  shall  render  judgment  in  favor  of  the  state  for  whatever  sum  he 
may  find  it  due  by  said  estate  as  inheritance  taxes.  An  appeal  may  be  taken 
from  the  judgment  of  the  probate  court  to  the  circuit  court  for  the  plaintiff, 
without  bond,  by  the  inheritance  tax  attorney  filing  his  motion  and  prayer  there- 
for, either  in  the  probate  court  or  with  the  clerk  of  the  circuit  court.  The 
defendants,  or  any  of  them,  may  appeal  to  the  circuit  court  in  the  same  manner 
as  appeals  are  now  taken,  or  may  hereafter  be  taken,  from  the  probate  court. 

§  4.  The  inheritance  tax  attorney  may  examine  under  oath  in  the  proceeding 
provided  for  in  section  2  of  this  act,  the  administrator,  executor,  heirs,  legatees, 
beneficiaries  or  other  person  having,  or  claiming  to  have  any  interest  in  the  estate, 
or  any  other  person  having  any  knowledge  of  the  property  of  the  estate  or  its 
value.  When  it  has  been  determined  how  much  tax  is  due  under  this  act,  the 
inheritance  tax  attorney  shall  certify  the  amount  thereof  to  the  state  treasurer, 
and  all  taxes  shall  be  paid  direct  to  the  treasurer  of  the  state. 

§  5.  The  inheritance  tax  attorney  shall  devote  his  entire  time  to  the  discharge 
of  the  duties  of  his  office  and  shall  not  engage  in  any  occupation  or  business 
interfering  or  inconsistent  with  the  duties  of  his  office.  He  shall  receive  as  his 
salary  the  sum  of  three  thousand  dollars  ($3,000.00)  per  annum,  payable  as  other 
salaries  are  paid;  and  in  addition  thereto,  his  necessary  traveling  expenses,  which 
shall  be  itemized,  verified  and  filed  with  the  auditor  of  state  each  month,  and  when 
so  filed,  the  auditor  shall  draw  his  warrant,  separate  from  any  salary  warrant, 
from  the  amount  of  his  traveling  expenses,  which  shall  be  deducted  from  any 
taxes  collected  under  this  act  before  the  same  is  credited  to  the  general  revenue 
fund. 

§  6.  The  inheritance  tax  attorney  shall  be  provided  with  suitable  and  necessary 


ARKANSAS  827 

offices,  furniture,  supplies  and  stationery,  and  shall  also  be  allowed  one  stenog- 
rapher who  shall  be  paid  a  salary  not  to  exceed  seventy-five  dollars  ($75-00)  per 
month,  to  be  paid  by  the  state  as  other  salaries  are  paid. 

§  7.  If  any  non-resident  of  this  state  shall  die  leaving  any  property  in  this 
state  subject  to  taxation  under  this  act,  the  probate  court  of  any  county  wherein 
any  of  such  decedent's  property  is  situated,  shall,  on  petition  of  inheritance  tax 
attorney,  appoint  some  suitable  person  administrator  of  the  estate  of  such 
decedent,  or  require  the  public  administrator  to  take  charge  of  such  property 
until  the  amount  of  inheritance  tax  owing  under  this  act  is  determined  and  paid. 

§  8.  The  probate  judge  shall  not  approve  the  settlement  of  any  administrator 
or  executor  until  the  inheritance  taxes  due  under  the  inheritance  tax  laws  is  paid. 

§  9.  Any  action  provided  for  by  the  inheritance  tax  laws  of  this  state  may  be 
brought  at  any  time  before  the  estate  is  fully  administered. 

|  10.  Section  15  of  Act  No.  197  of  the  Acts  of  1913  and  all  laws  and  parts  of 
laws  in  conflict  herewith  are  hereby  repealed,  and  this  act  being  necessary  for 
the  immediate  preservation  of  the  public  peace,  health  and  safety  an  emergency 
is  hereby  declared  to  exist,  and  this  act  shall  be  in  force  and  effect  from  and  after 
its  passage. 

Prior  Statutes:  L.  1901,  Act  156,  p.  295;  L.  1903,  Act  89,  p.  153:  L.  1907 
Act  345,  p.  852 ;  L.  1909,  Act  303,  p.  904. 


828 


THE  STATE  STATUTES 


o 

fe 

t-H 

>-) 

3 


b,  ^. 


«  » 
55  S 

w  •- 

ssl 


OQ    Q 

8 


>   ao 

51 


.  °^ 

r§ 

** «* 


o-'ej 

3  S 


11 

a 


J 

o  S 

II 

a 


65 


65 


65 


CALIFORNIA 


829 


§ 

% 

ri 

8 
E 
& 

00  « 

§  s 

O  ~i 

ii 

w  « 

Q  1 

23 

1 
§ 

3 
a 


1s! 


rs 


bl  Hi 

j£  a  M  -i 
)    •i'S-B' 


I 


fe,  line 

owledi 


6? 


her  slater,  o 
n.  husband  of 


830 


THE  STATE  STATUTES 


1  i 

g      ^-7 

2 

[S 

1 

I 

**     «» 

o     § 

IN 

o 

* 

o 

1 

-  oo 

<N 

r-i 

CO 

o 
1 
"C 

i  i 

O 

S 

S 

»o 

«5 

1 

g   8 

65 

N 

1° 
ia 

* 

s 

0 

•  o   - 

<N 

a 

2     £1 

o 

"3 

. 

_o 

_ 

65 

65 

,o 

6? 

<-r 

o     2 

•* 

o> 

0 

U5 

w  ^-- 

So 

Q". 

03 
E 

*o 

1*1 

»    S 

Ig 

1 

I  1 

M 

CO 

If 

O 

P5-S 

1 

<N       1C 

ia  >, 

h 

iJels 

g 

CO 

* 

to 

c 

M  £  O   O  *«-<  O_ 

OS  '5 

®  **-j  3  ^  ^  iO 

2   a 

0  S 

O      'O  *O  "-5 

fc  « 

S  * 

b 
o 

8 

S 

i 

<5  in" 

EsS 

. 

. 

3 

«  2 

fl 

*o" 

•» 

S 

W  oo 

£| 

•  2 

o  -s 

2  1 

4) 

•33« 

<  S 

£° 

BI 

C 

o 

oS 

fS 

<j  •§ 

"rt 

o 

o  a. 

CJ  a 

B.    • 

w 

is 

2  a 

fa  "^ 
O 

S 

1 

O 

1 

i 

i 

B  or  wido 

ranger  in 
•ities,  exe 

03 
JS 

S 

» 

h 

§° 

^ 

P 

0 

• 

•a  e 

2 

M 

1 

lj 

c  — 

0 

§ 

•s 

r- 

So  ~~ 

I 

.S-T3 

o 

2 

g  g 

0 

1 

c?lfl 
3  0 
m 

11 

"o 

is"  a 

1-1 

a:  -O 

•  -   ffl 

d  ^* 

Q>   - 

i 

"3  2.2 

o 

j"O 

oa  -^ 

^ 

*J   t7  ^ 

o 

§JJ 

•§  c8 

2 

|8| 

1 

.  o 

O  ° 

•8 

0  o  « 

o 

usband,  wife, 
mutually  ack 

rother,  sister, 
eon,  husband 

u 
O 

1 
•1 

c 

ther  degree  oi 
body  politic 
by  section  6, 

H 

M 

0 

jj 

§ 

oo 

f 

o 

£  s 

-  o   * 

65 

^ 

i= 

65 

o 

•" 

i 

§ 

"-2  " 

g 

i 

i 

i 

*    S» 

f 

c: 

o 

IO 

§   § 

65 

& 

65 

65 

w^"*"*  o" 

IN 

o 

00 

0 

^ 

<N         0 

6; 

Jfol 

g 

CO 

f 

g 

GO 

•<  §     IN 

D 

0 

C 

•o 

< 

1  . 

c_j 

0    g 

U 

a 

O  J3 

o 

H] 

o 

-"§ 

§ 

g 
fa 

K 

"o, 
o 

1|8 

3 

3 

DO 
g 

H 

ill 

i 

£ 

•3 

.f 

J 

*H 

3 

rt 

'o 

fa 

0 

e 

.s 

§ 

o 

^ 

b 

_S 

•^ 

O 

< 

1 

1 

_2 

o 

1 

** 

1 

"^ 

8 

£ 

•c 

c 

. 

i 

OS 

1 

1 

1  • 

k 

0 

i 

fe 

oi 

ll 

fj 

n 

'3 

s 

. 

o 

B 

a 

'3 
c 

"o 

'ss 

O 

i 

= 

•a 

5 

-3 

a 

3CC 

e,  lineal 
ed  child. 

•S 

3 

or  desce 

ii 

o| 

—   03 

rZ  ao 

~2 

"s 

S» 

^ 

X 

3 

t-   SS 

b 

rt 

Husband, 
acknovt 

Brother  o 

Uncle  or 

t-   d 

-Si 
5 

CALIFORNIA  831 

California  has  adopted  an  entirely  new  statute.  Approved  August  2,  1921. 
The  new  statute  is  in  full  as  follows: 

CHAPTER  821,  L.  1921. 

An  act  to  be  known  as  the  "inheritance  tax  act,"  to  establish  a  tax  on  gifts, 
legacies,  inheritances,  bequests,  devises,  successions  and  transfers,  to  provide 
for  its  collection  and  to  direct  the  disposition  of  its  proceeds;  to  provide  for 
the  enforcement  of  liens  created  by  this  act  and  by  any  act  hereby  repealed 
and  for  suits  to  quiet  title  against  claims  of  liens  arising  hereunder,  or  under 
an  act  hereby  repealed;  and  to  repeal  chapter  five  hundred  eighty-nine  of 
the  laws  of  the  session  of  the  legislature  of  California  of  1917,  approved 
May  23,  1917,  known  as  the  "inheritance  tax  act,"  and  to  repeal  all  acts 
and  parts  of  acts  in  conflict  with  this  act. 

[Approved  June  3,  1921.    In  effect  August  2,  1921.] 
The  People  of  the  State  of  California  do  enact  as  follows: 

Section  1.  (1)  This  act  shall  be  known  as  the  "inheritance  tax  act." 

(2)  The  words  "estate"  and  "property"  as  used  in  this  act  shall  be  taken  to 
mean  the  real  and  personal  property  or  interest  therein  of  the  testator,  intestate, 
grantor,  bargainer,  vendor,  or  donor  passing  or  transferred  to  individual  legatees, 
devisees,  heirs,  next  of  kin,  grantees,  donees,  vendees,  or  successors,  and  shall 
include  all  personal  property  within  or  without  the  state;  provided,  that  for  the 
purpose  of  this  act  the  one-half  of  the  community  property  which  goes  to  the 
surviving  wife  on  the  death  of  the  husband,  under  the  provisions  of  section  one 
thousand  four  hundred  two  of  the  Civil  Code,  shall  not  be  deemed  to  pass  to  her 
as  heir  to  her  husband,  but  shall,  for  the  purpose  of  this  act,  be  deemed  to  go, 
pass,  or  be  transferred  to  her  for  valuable  and  adequate  consideration  and  her 
said  one-half  of  the  community  shall  not  be  subject  to  the  provisions  of  this  act; 
provided,  further,  that  in  case  of  a  transfer  of  community  property  from  the 
husband  to  the  wife,  within  the  meaning  of  subdivision  (3)  or  (5)  of  section  two 
of  this  act,  one-half  of  the  community  property  so  transferred  shall  not  be  subject 
to  the  provisions  of  this  act;  and  provided,  further,  that  the  presumption  that 
property  acquired  by  either  husband  or  wife  after  marriage  is  community  prop- 
erty, shall  not  obtain  for  the  purpose  of  this  act  as  against  any  claim  by  the 
state  for  the  tax  hereby  imposed;  but  the  burden  of  proving  such  property  to  be 
community  property  shall  rest  upon  the  person  claiming  the  same  to  be  community 
property. 

(3)  The  word  "transfer"  as  used  in  this  act  shall  be  taken  to  include  the 
passing  of  property  or  any  interest  therein,  in  possession  or  enjoyment,  present 
or  future,  by  inheritance,  descent,  devise,  succession,  bequest,  grant,  deed,  bargain, 
sale,  gift,  or  appointment  in  the  manner  herein  described. 

(4)  The   word   "decedent"   as  used   in   this   act   shall   include   the   testator, 
intestate,  grantor,  bargainer,  vendor,  or  donor. 

(5)  The  words  "county  treasurer"  and  "inheritance  tax  appraiser,"  as  used 
in  this  act,  shall  be  taken  to  mean  the  treasurer  or  the  inheritance  tax  appraiser 
of  the  county  of  the  superior  court  having  jurisdiction  as  provided  in  section 
fifteen  of  this  act. 

§  2.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  property, 
real,  personal  or  mixed,  or  of  any  interest  therein  or  income  therefrom  in  trust 
or  otherwise,  to  persons,  institutions  or  corporations,  not  hereinafter  exempted, 
to  be  paid  to  the  treasurer  of  the  proper  county,  as  hereinafter  directed,  for  the 
use  of  the  state,  said  taxes  to  be  upon  the  market  value  of  such  property  at  the 
rates  hereinafter  prescribed  and  only  upon  the  excess  over  the  exemptions  herein- 
after granted,  in  the  following  cases: 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  or  homestead  laws  of  this 
state,  from  any  person  dying  seized  or  possessed  of  the  property  while  a  resident 
of  the  state,  or  by  any  order  of  court  setting  apart  property  pursuant  to  article 
one,  chapter  five,  title  eleven,  part  three  of  the  Code  of  Civil  Procedure. 

(2)  When  the  transfer  is  by  will  or  intestate  laws  of  property  within  this 
state  and  the  decedent  was  a  nonresident  of  the  state  at  the  time  of  his  death, 

r  by  any  order  of  court  setting  apart  property  pursuant  to  article  one,  chapter 
five,  title  eleven,  part  three  of  the  Code  of  Civil  Procedure. 

(3)  When  the  transfer  is  of  property  made  by  a  resident,  or  by  a  nonresident 


THE  STATE  STATUTES 

when  such  nonresident's  property  is  within  this  state,  by  deed,  grant,  bargain, 
sale,  assignment  or  gift,  made  without  valuable  and  adequate  consideration  (i.  e., 
a  consideration  equal  in  money  or  in  money's  worth  to  the  full  value  of  the 
property  transferred)  : 

(a)  In  contemplation  of  the  death  of  the  grantor,  vendor,  assignor  or  donor,  or, 

(6)  Intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 

When  such  person,  institution  or  corporation  becomes  beneficially  entitled  in 

possession  or  expectancy  to  any  property  or  the  income  therefrom,  by  any  such 

transfer,  whether  made  before  or  after  the  passage  of  this  act. 

(4)  The  words  "contemplation  of  death,"  as  used  in  this  act,  shall  be  taken 
to  include  that  expectancy  of  death  which  actuates  the  mind  of  a  person  on  the 
execution  of  his  will,  and  in  nowise  shall  said  words  be  limited  and  restricted  to 
that  expectancy  of  death  which  actuates  the  mind  of  a  person  making  a  gift 
causa  mortis;  and  it  is  hereby  declared  to  be  the  intent  and  purpose  of  this  act 
to  tax  any  and  all  transfers  which  are  made  in  lieu  of  or  to  avoid  the  passing  of 
property  transferred  by  testate  or  intestate  laws. 

(5)  Whenever  property,  real  or  personal,  is  held  in  the  joint  names  of  two  or 
more  persons,  or  is  deposited  in  banks  or  other  institutions  or  depositaries  in  the 
joint  names  of  two  or  more  persons  and  payable  to  either  or  the  survivor,  upon 
the  death  of  one  of  such  persons,  the  right  of  the  surviving  joint  tenant  or  joint 
tenants,  person  or  persons  to  the  immediate  ownership  or  possession  and  enjoyment 
of  such  property  shall  be  deemed  a  transfer  taxable  under  the  provisions  of  this 
act  in  the  same  manner  as  though  the  whole  property  to  which  such  transfer 
relates  belonged  absolutely  to  the  deceased  joint  tenant  or  joint  depositor  and 
had  been  devised  or  bequeathed  to  the  surviving  joint  tenant  or  join  tenants, 
person  or  persons,  by  such  deceased  joint  tenant  or  joint  depositor  by  will,  except- 
ing therefrom  such  part  thereof  aa  may  be  proved  by  the  surviving  joint  tenant 
or  joint  tenants  to  have  originally  belonged  to  him  or  them  and  never  to  have 
belonged  to  the  decedent. 

(6)  Whenever  any  person,  trustee  or  corporation   shall  exercise   a  power   of 
appointment  derived  from  any  disposition  of  property  made  either  before  or  after 
the  passage  of  this  act,  such  appointment,  when  made,  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  act,  in  the  same  manner  as  though  the  prop- 
erty to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such 
power,  and  had  been  bequeathed  or  devised  by  such  donee  by  will;  and  whenever 
any  person,   trustee   or   corporation   possessing   such   power   of   appointment   so 
derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor, 
in  whole  or  in  part,  a  transfer  taxable  under  the  provisions  of  this  act  shall  be 
deemed  to  take  place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner 
as  though  the  persons,  trustees  or  corporations  thereby  becoming  entitled  to  the 
possession  or  enjoyment  of  the  property  to  which  such  power  related  had  suc- 
ceeded thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  power, 
taking  effect  at  the  time  of  such  omission  or  failure. 

(7)  Whenever  a  decedent  appoints  or  names  one  or  more  executors  or  trustees, 
and  makes  a  bequest  or  devise  of  property  to  them  in  lieu  of  commissions  or  allow- 
ances, which  otherwise  would  be  liable  to  said  tax,  or  appoints  them  his  residuary 
legatees,  and  said  bequest,  devise,  or  residuary  legacies  exceeds  what  would  be  a 
reasonable    compensation    for    their    services,    such    excess    over    and    above    the 
exemptions  herein  provided  for  shall  be  liable  to  said  tax;  and  the  superior  court 
in  which  the  probate  proceedings  are  pending  shall  fix  the  compensation. 

(8)  Where  any  property  shall,  after  the  passage  of  this  act,  be  transferred 
subject  to  any  charge,  estate  or  interest,  determinable  by  the  death  of  any  person, 
or  at  any  period  ascertainable  only  by  reference  to  death,  the  increase  accruing 
to  any  person  or  corporation  upon  the  extinction  or  determination  of  such  charge, 
estate  or  interest,  shall  be  deemed  a  transfer  of  property  taxable  under  the  pro- 
visions  of  this  act  in  the   same  manner  as  though  the   person   or   corporation 
beneficially  entitled  thereto  had  then  acquired  such  increase  from  the  person  from 
whom  the  title  to  their  respective  estates  or  interests  is  derived. 

(9^  When  more  than  one  transfer  within  the  meaning  of  any  of  the  preceding 
subdivisions  of  this  section  has  been  made,  either  before  or  after  the  passage 
of  this  act,  by  a  decedent  to  one  person,  the  tax  shall  be  imposed  upon  the  aggre- 
gate market  value  of  all  of  the  property  so  transferred  to  such  person  in  the  same 
manner  and  to  the  same  extent  as  if  all  of  the  property  so  transferred  were 
actually  transferred  by  one  transfer. 


CALIFORNIA  833 

(10)  In  determining  the  market  value  of  the  property  transferred,  the  fol- 
lowing deductions  and  no  others  shall  be  made  from  the  appraised  value  thereof: 

(a)  Debts  of  decedent  owing  at  date  of  death; 

(b)  Expenses  of  funeral  and  last  illness; 

(0)  All    state,    county,   and   municipal   taxes   which    are   a   lien   against    said 
property  at  the  date  of  death; 

(d)  The    ordinary    expenses    of    administration,    including    the    ordinary    fees 
allowed  executors  and  administrators  and  the  ordinary  fees  of  their  attorneys 
under  the   provisions  of   sections   one   thousand   six   hundred   eighteen   and   one 
thousand  six  hundred  nineteen  of  the  Code  of  Civil  Procedure  of  California; 

(e)  The  amount  due  or  paid  the  government  of  the  United  States  as  a  federal 
inheritance  or  estate  tax;  provided,  however,  that  the  amount  of  such  tax  allow- 
able herein  as  a  deduction  shall  be  limited  to  a  computation  thereof  (commencing 
at  the  primary  rates)  made  by  the  acting  state  inheritance  tax  appraiser  upon  his 
own  valuations  of  that  portion  of  such  property  only,  the  transfer  of  which  is 
taxable  under  the  provisions  of  this  act,  by  applying  to  such  valuations  the  exemp- 
tions and  rates  of  the  federal  inheritance  or  estate  tax  in  force  at  the  date  of 
such  transfer; 

(/)  The  amount  due  or  paid  any  state  or  states  of  the  United  States  (except- 
ing California)  as  a  state  inheritance,  succession  or  transfer  tax;  provided,  how- 
ever, that  the  amount  of  such  tax  allowable  herein  as  a  deduction  shall  be  limited 
to  a  computation  thereof  (commencing  at  the  primary  rates)  made  by  the  acting 
state  inheritance  tax  appraiser  upon  his  own  valuations  of  that  portion  of  such 
property  only,  the  transfer  of  which  is  taxable  under  the  provisions  of  this  act, 
by  applying  to  such  valuations  the  exemptions  and  rates  of  such  state  inheritance, 
succession  or  transfer  tax  in  force  at  the  date  of  such  transfer. 

§  3.  Such  taxes  shall  be  and  remain  a  lien  upon  the  property  passed  or  trans- 
ferred until  paid;  provided,  however,  that  where  property  is  sold  under  and  in 
accordance  with  the  provisions  of  chapter  seven,  title  eleven,  part  three  of  the 
Code  of  Civil  Procedure  the  lien  therein  provided  for  shall  be  released  from  the 
property  so  sold  and  shall  attach  to  the  proceeds  of  such  sale,  and  the  person  to 
whom  the  property  passes  or  is  transferred,  except  as  herein  in  this  section  pro- 
vided, and  all  administrators,  executors  and  trustees  of  every  estate  so  transferred 
or  passed,  shall  be  liable  for  any  and  all  such  taxes  until  the  same  shall  have  been 
paid  as  hereinafter  directed.  The  provisions  of  the  Code  of  Civil  Procedure 
relative  to  the  limitation  of  time  of  enforcing  a  civil  remedy  shall  not  apply  to 
any  proceeding  or  action  taken  to  levy,  appraise,  assess,  determine,  or  enforce 
the  collection  of  any  tax  or  penalty  prescribed  by  this  act,  and  this  section  shall 
be  construed  as  having  been  in  effect  as  of  date  of  the  original  enactment  of  the 
inheritance  tax  law;  provided,  that  unless  sued  for  within  five  years  after  they 
are  due  and  legally  demandable,  such  taxes,  or  any  taxes  accruing  under  any  act 
herein  repealed,  shall  cease  to  be  a  lien  as  against  any  bona  fide  purchaser  of  said 
property;  and  provided,  that  no  such  lien  shall  cease  within  two  years  from  the 
date  of  the  passage  of  this  act. 

§  4.  When  the  property  or  any  beneficial  interest  therein  so  passed  or  trans- 
ferred exceeds  in  value  the  exemption  hereinafter  specified  and  shall  not  exceed 
in  value  twenty- five  thousand  dollars,  the  tax  hereby  imposed  shall  be: 

(1)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  husband,  wife,  lineal  ancestor,  lineal  issue  of  the  decedent  or 
any  child  adopted  as  such  in  conformity  with  the  laws  of  this  state,  or  any  child 
to  whom  such  decedent  for  not  less  than  ten  years  prior  to  such  transfer  stood  in 
the  mutually  acknowledged  relation  of  a  parent,  (provided,  however,  such  relation- 
ship began  at  or  before  the  child's  fifteenth  birthday,  and  was  continuous  for 
said  ten  years  thereafter),  or  any  lineal  issue  of  such  adopted  or  mutually  acknowl- 
edged child,  at  the  rate  of  one  per  centum  of  the  clear  value  of  such  interest  in 
such  property. 

(2)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  or  a  descendant  of  a  brother  or  sister  of 
a  decedent,  a  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of  the 
decedent  at  the  rate  of  three  per  centum  of  the  clear  value  of  such  interest  in 
such  property. 

(3)  Where  the  person  or  persons  entitled  to   any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother,  or  a  descendant 

53 


THE  STATE  STATUTES 

of  a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the  rate  of  four 
per  centum  of  the  clear  value  of  such  interest  in  such  property. 

(4)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a  body 
politic  or  corporate,  at  the  rate  of  five  per  centum  of  the  clear  value  of  such 
interest  in  such  property. 

§  5.  (1)  When  the  market  value  of  such  property  or  interest  passed  or  trans- 
ferred to  any  of  the  persons  mentioned  in  subdivision  one  of  section  four  exceeds 
twenty-five  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall  be  as  follows : 

(a)  Upon  all  in  excess  of  twenty- five  thousand  dollars  and  up  to  fifty  thousand 
dollars,  two  per  centum  of  such  excess. 

(6)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred  thousand 
dollars,  four  per  centum  of  such  excess. 

(c)  Upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  two  hundred 
thousand  dollars,  seven  per  centum  of  such  excess. 

(d)  Upon  all  in  excess  of  two  hundred  thousand  dollars  and  up  to  five  hundred 
thousand  dollars,  ten  per  centum  of  such  excess. 

(e)  Upon  all  in  excess  of  five  hundred  thousand  dollars,  twelve  per  centum  of 
such  excess. 

(2)  When  the  market  value  of  such  property  or  interest  passed  or  transferred 
to  any  of  the  persons  mentioned  in  subdivision  two  of  section  four  exceeds  twenty- 
five  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall  be  as  follows: 

(a)  Upon  all  excess  of  twenty-five  thousand  dollars  and  up  to  fifty  thousand 
dollars,  six  per  centum  of  such  excess. 

(fc)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred 
thousand  dollars,  nine  per  centum  of  such  excess. 

(c)  Upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  two  hundred 
thousand  dollars,  twelve  per  centum  of  such  excess. 

(d)  Upon  all  in  excess  of  two  hundred  thousand  dollars,  twelve  per  centum  of 
such  excess. 

(e)  Upon  all  in  excess  of  five  hundred  thousand  dollars,  eighteen  per  centum 
of  such  excess. 

(3)  When  the  market  value  of  such  property  or  interest  passed  or  transferred 
to  any  of  the  persons  mentioned  in  subdivision  three   of  section  four   exceeds 
twenty-five   thousand   dollars,   the   rates    of    tax   upon    such    excess    shall   be    as 
follows : 

(a)  Upon  all  in  excess  of  twenty- five  thousand  dollars  and  up  to  fifty  thousand 
dollars,  eight  per  centum  of  such  excess. 

(b)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred  thousand 
dollars,  ten  per  centum  of  such  excess. 

(c)  Upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  two  hundred 
thousand  dollars,  fifteen  per  centum  of  such  excess. 

(d)  Upon  all  in  excess  of  two  hundred  thousand  dollars,  twenty  per  centum 
of  such  excess. 

(4)  When  the  market  value  of  such  property  or  interest  passed  or  transferred 
to  any  of  the  persons  mentioned  in   subdivision  four   of   section  four    exceeds 
twenty-five   thousand   dollars,   the    rates    of   tax  upon   such   excess    shall   be   as 
follows : 

(a)  Upon  all  in  excess  of  twenty-five  thousand  dollars  and  up  to  fifty  thousand 
dollars,  ten  per  centum  of  such  excess. 

(&)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred 
thousand  dollars,  fifteen  per  centum  of  such  excess. 

(c)  Upon  all  in  excess  of  one  hundred  thousand  dollars,  twenty  per  centum 
of  such  excess. 

§  6.  The  following  exemptions  from  the  tax  are  hereby  allowed: 

(1)  All  property  transferred  to  societies,  corporations,  and  institutions  now  or 
hereafter  exempted  by  law  from  taxation,  or  to  any  public  corporation,  or  to  any 
society,  corporation,  institution,  or  association  of  persons  engaged  in  or  devoted 
to  any  charitable,  benevolent,  educational,  public  or  other  like  work  (pecuniary 
profit  not  being  its  object  or  purpose),  or  to  any  person,  society,  corporation, 
institution  or  association  of  persons  in  trust  for  or  to  be  devoted  to  any  charitable, 
benevolent,  educational,  or  public  purpose,  by  reason  whereof  any  such  person  or 
corporation  shall  become  beneficially  entitled,  in  possession  or  expectancy,  to  any 


CALIFORNIA  835 

such  property  or  to  the  income  thereof,  shall  be  exempt;  provided,  however,  that 
such  society,  corporation,  institution  or  association  be  organized  or  existing  under 
the  laws  of  this  state  or  that  the  property  transferred  be  limited  for  use  within 
this  state. 

(2)  (a)  Property  of  the  clear  value  of  twenty-four  thousand  dollars,  trans- 
ferred to  the  widow  or  to  a  minor  child  of  the  decedent,  and  of  ten  thousand 
dollars  transferred  to  each  of  the  other  persons  described  in  the  first  subdivision 
of  section  four,  shall  be  exempt. 

(b)  All  property  transferred  by  a  decedent  to  any  person  described  in  the 
first  subdivision  of  section  four,  providing  the  same  was  transferred  to  such 
decedent  not  more  than  five  years  prior  to  his  death  by  another  decedent  of  the 
class  described  in  the  first  subdivision  of  section  four,  and  a  tax  paid  thereon, 
shall  be  exempt. 

(3)  Property  of  the  clear  value  of  two  thousand  dollars,  transferred  to  each  of. 
the  persons  described  in  the  second  subdivision  of  section  four,  shall  be  exempt. 

(4)  Property  of  the  clear  value  of  one  hundred  thousand  dollars,  transferred 
to  each  of  the  persons  described  in  the  third  subdivision  of  section  four,  shall 
be  exempt. 

(5)  Property  of  the  clear  value  of  five  hundred  dollars  transferred  to  each  of 
the  persons  and  corporations  described  in  the  fourth  subdivision  of  section  four, 
shall  be  exempt. 

(6)  In  computing  the  tax  upon  transfers  subject  to  tax  under  the  provisions  of 
this   act,   the   exemptions   in   this   section   allowed   shall   be    deducted   from   the 
aggregate  amount  of  property  transferred,   and  the  transfer   of   the  remainder 
of  the  property  after  making  such  deduction  shall  be  taxed  at  the  rates  at  which 
it  would  have  been  taxed  had  no  exemption  whatever  been  allowed. 

§  7.  (1)  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for, 
shall  be  due  and  payable  at  the  death  of  the  decedent,  and  if  the  same  are  paid 
within  eighteen  months,  no  interest  shall  be  charged  and  collected  thereon,  but  if 
not  so  paid,  interest  at  the  rate  of  ten  per  centum  per  annum  shall  be  charged 
and  collected  from  the  time  said  tax  accrued;  provided,  that  if  said  tax  is  paid 
within  six  months  from  the  accruing  thereof  a  discount  of  five  per  centum  shall 
be  allowed  and  deducted  from  said  tax.  And  in  all  cases  where  the  executors, 
administrators,  or  trustees  do  not  pay  such  tax  within  eighteen  months  from  the 
death  of  the  decedent,  they  shall  be  required  to  give  a  bond  for  the  payment  of 
said  tax,  together  with  interest. 

(2)  The  penalty  of  ten  per  cent  per  annum  imposed  by  subdivision  (1)  of  this 
section  for  the  nonpayment  of  said  tax,  shall  not  be  charged  in  cases  where,  in 
the  judgment  of  the  court,  by  reason  of  claims  made  upon  the  estate,  necessary 
litigation,  or  other  unavoidable  cause  of  delay,  the  estate  of  any  decedent,  or  a 
part  thereof,  can  not  be  settled  at  the  end  of  eighteen  months  from  the  death  of  the 
decedent;  but  in  such  cases  seven  per  cent  per  annum  shall  be  charged  upon  the 
said  tax  from  the  expiration  of  said  eighteen  months  until  the  cause  of  such 
delay  is  removed,  after  which  ten  per  cent  interest  per  annum  shall  again  be 
charged  until  the  tax  is  paid;  but  litigation  to  defeat  the  payment  of  the  tax 
shall  not  be  considered  necessary  litigation. 

§  8.  (1)  When  any  grant,  gift,  legacy,  devise  or  succession  upon  which  a  tax 
is  imposed  by  section  two  of  this  act  shall  be  an  estate,  income,  or  interest  for  a 
term  of  years,  or  for  life,  or  determinable  upon  any  future  or  contingent  event, 
or  shall  be  a  remainder,  reversion,  or  other  expectancy,  real  or  personal,  the  entire 
property  or  fund  by  which  such  estate,  income,  or  interest  is  supported,  or  of 
which  it  is  a  part,  shall  be  appraised  immediately  after  the  death  of  the  decedent, 
and  the  market  value  thereof  determined,  in  the  manner  provided  in  section 
sixteen  or  seventeen  of  this  act,  and  the  tax  prescribed  by  this  act  shall  be  im- 
mediately due  and  payable  to  the  treasurer  of  the  proper  county,  and,  together 
with  the  interest  thereon,  shall  be  and  remain  a  lien  on  said  property  until  the 
same  is  paid. 

(2)  In  estimating  the  value  of  any  estate  or  interest  in  property,  to  the 
beneficial  enjoyment  or  possession  whereof  there  are  persons  or  corporations 
presently  entitled  thereto,  no  allowance  shall  be  made  on  account  of  any  con- 
tingent incumbrance  thereon,  nor  on  account  of  any  contingency  upon  the 
happenings  of  which  the  estate  or  property  or  some  part  thereof  or  interest 
therein  might  be  abridged,  defeated  or  diminished;  provided,  however,  that  in 
the  event  of  such  ineumbrance  taking  effect  as  an  actual  burden  the  interest  of 


836  THE  STATE  STATUTES 

the  beneficiary,  or  in  the  event  of  the  abridgement,  defeat  or  diminution  of  said 
estate  or  property  or  interest  therein  as  aforesaid,  a  return  shall  be  made  to 
the  person  properly  entitled  thereto  of  a  proportionate  amount  of  such  tax  on 
account  of  the  incumbrance  when  taking  effect,  or  so  much  as  will  reduce  the  same 
to  the  amount  which  would  have  been  assessed  on  account  of  the  actual  duration  or 
extent  of  the  estate  or  interest  enjoyed.  Such  return  of  tax  shall  be  made  in 
the  manner  provided  by  section  11  hereof  upon  order  of  the  court  having  juris- 
diction. 

(3)  When  property  is  transferred  in  trust  or  otherwise,  and  the  rights,  interest 
or  estates   of   the   transferees   are   dependent   upon   contingencies   or   conditions 
whereby  they  may  be  wholly  or  in  part  created,  defeated,  extended,  or  abridged, 
a  tax  shall  be  imposed  upon  said  transfer  at  the  highest  rate  which,   on  the 
happening  of  any  of  the  said  contingencies  or  conditions,  would  be  possible  under 
the  provisions  of  this  act,  and  such  tax  so  imposed  shall  be  due  and  payable 
forthwith  by  the  executors  or  trustees  out  of  the  property  transferred;  provided, 
however,  that  on  the  happening  of  any  contingency  whereby  the  said  property,  or 
any  part  thereof,  is  transferred  to  a  person  or  corporation  exempt  from  taxation 
under  the  provisions  of  this  act,  or  to  any  person  taxable  at  a  rate  less  than  the 
rate  imposed  and  paid,  such  person  or  corporation  shall  be  entitled  to  a  return  of 
so  much  of  the  tax  imposed  and  paid  as  the  difference  between  the  amount  which 
said  person  or  corporation  should  pay  under  the  provisions  of  this  act;  such  re- 
turn of  overpayment  shall  be  made  in  the  manner  provided  by  section  eleven  of 
this  act,  upon  order  of  the  court  having  jurisdiction;  provided,  that  the  person 
or  persons   or  body  politic  or  corporate  beneficiary  interested  in  the  property 
chargeable  with  said  tax  or  the  trustees  thereof  may  elect  not  to  pay  the  same 
until  such  person  or  persons,  or  body  politic  or  corporate  beneficially  interested  in 
such  property  shall  come  into  actual  possession  or  enjoyment  thereof,  and  in  that 
case  such  person  or  persons  or  body  politic  or  corporate  or  trustees  shall  execute  a 
bond  to  the  people  of  the  State  of  California  in  a  penalty  of  twice  the  amount  of 
said  tax  with  such  sureties  as  the  said  superior  court  may  approve,  conditioned  for 
the  payment  of  said  tax  and  interest  thereon  at  the  rate  of  seven  per  cent  per 
annum  commencing  at  the  expiration  of  eighteen  months  from  the  death  of  the 
decedent  at  such  time  or  period  as  they  or  their  representatives  may  come  into 
the  actual  possession  or  enjoyment  of  such  property,  and  conditioned  further, 
that  if  said  bond  be  not  renewed  and  the  returns  made  as  herein  provided,  the 
amount   of   said   tax   and   interest   thereon    shall   immediately   become    due    and 
payable.     Said  bond  shall  be  filed  in  the  office  of  the  county  clerk  of  the  proper 
county   and   a   certified   copy  thereof   shall  be   immediately  transmitted   to    the 
state  controller;  provided,  further,  that  such  person  or  persons  or  body  politic  or 
corporate,  or  trustees,  shall  enter  into  such  security  within  a  period  of  ninety 
days  after  the  entry  of  the  order  or  decree  the  inheritance  tax  charged  against 
such  transfer,  or  within  such  period  thereafter  as  the  court  may  in  its  discretion 
permit,  and  shall  make  a  full  and  verified  return  of  such  property  to  said  court 
and  file  the  same  in  the  office  of  the  county  clerk  within  one  year  from  the  date  of 
such  order  or  decree  fixing  tax,  and  at  such  times  thereafter  as  the  court  on  the 
application  of  the  state  controller  may  require,  and  renew  such  security  every  five 
years  after  the  date  of  the  approval  thereof.    Upon  the  approval  of  said  bond  as 
herein  provided,  said  tax  shall  cease  to  be  a  lien  upon  the  property  so  transferred. 
If  such  security  shall  not  be  renewed  before  the  expiration  of   each  five-year 
period,  said  bond  shall  immediately  become  due  and  payable  and  if  the  same  be 
not  paid  forthwith,  the  attorney  general  shall  file  an  action  in  the  name  of  the 
people  of  the  state  on  the  relation  of  the  controller,  to  recover  the  same  and  the 
penalties  thereunder  and  no  demand  for  payment  shall  be  necessary  before  the 
institution  of  such  suit.    Whenever  it  shall  be  made  to  appear  to  the  satisfaction 
of  the  court  that  any  surety  on  such  bond  or  undertaking  has  for  any  reason 
become  insufficient,  the  court  may  on  motion  of  the  state  controller,  after  such 
notice  to  such  person  or  persons,  body  politic  or  corporate,  or  trustees  as  the 
court  may  require,  order  the  giving  of  a  new  undertaking  with  sufficient  sureties 
in  lieu  of  such  insufficient  undertaking.    In  case  such  new  undertaking  so  required 
shall  not  be  given  within  the  time  required  by  such  order,  or  in  case  the  sureties 
thereon  fail  to  justify  thereon  when  required,  all  rights  obtained  by  the  filing  of 
such  original  undertaking,  or  subsequent  undertaking,  shall  cease  and  the  amount 
of  said  tax  and  interest  thereon  shall  immediately  become  due  and  payable. 

(4)  Estates  in  expectancy  which  are  contingent   or  defeasible  and  in  which 


CALIFORNIA  837 

proceedings  for  the  determination  of  the  tax  have  not  been  taken  or  where  the 
taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their  full, 
undiminished  value  when  the  persons  entitled  thereto  shall  come  into  the  beneficial 
enjoyment  or  possession  thereof,  without  diminution  for  or  on  account  of  any 
valuation  theretofore  made  of  the  particular  estates  for  purposes  of  taxation, 
upon  which  said  estates  in  expectancy  may  have  been  limited. 

(5)  Where  an  estate  or  interest  can  be  divested  by  the  act  or  omission  of  the 
legatee  or   devisee  it   shall  be   taxed  as   if   there  were  no   possibility   of   such 
divesting. 

(6)  The  value   of  every  future,   or   contingent   or   limited   estate,   income   or 
interest,  shall,  for  the  purposes  of  this  act  be  determined  by  the  rule,  methods 
and  standards  of  mortality  and  of  value  that  are  set  forth  in  the  actuaries'  com- 
bined experience  tables  of  mortality  for  ascertaining  the  value  of  policies  of  life 
insurance   and    annuities    and   for   the   determination    of   the   liabilities   of   life 
insurance  companies,  save  that  the  rate  of  interest  to  be  assessed  in  computing 
the  present  value  of  all  future  interest  and  contingencies  shall  be  five   (5)   per 
cent  per  annum.    The  insurance  commissioner  shall  without  a  fee  on  the  applica- 
tion of  any  superior  court  or  of  any  inheritance  tax  appraiser  determine  the  value 
of  any  future  or  contingent  estate,  income  or  interest  therein  limited,  contingent, 
dependent  or  determinable  upon  the  life  or  lives  of  persons  in  being,  upon  the 
facts  contained  in  any  such  appraiser's  application  or  other  facts  to  him  sub- 
mitted by  said  appraiser  or  said  court  and  certify  the  same  in  duplicate  to  such 
court  or  appraiser,  and  his  certificate  thereof  shall  be  conclusive  evidence  that 
the  method  of  computation  therein  is  correct.    When  an  annuity  of  a  life  estate 
is  terminated  by  the  death  of  the  annuitant  or  life  tenant,  and  the  tax  upon  such 
interest  has  not  been  fixed  and  determined,  the  value  of  said  interest  for  the 
purpose  of  taxation  under  this  act  shall  be  the  amount  of  the  annuity  or  income 
actually  paid  or  payable  to  the  annuitant  or  life  tenant  during  the  period  for 
which   such   annuitant   or   life   tenant   was   entitled   to    the   annuity   or   was   in 
possession  of  the  life  estate. 

§  9.  (1)  Any  administrator,  executor,  or  trustee  having  in  charge  or  trust  any 
legacy  or  property  for  distribution,  subject  to  the  said  tax,  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect  the  tax 
thereon,  upon  the  market  value  thereof,  from  the  legatee  or  person  entitled  to 
such  property,  and  he  shall  not  deliver,  or  be  compelled  to  deliver,  any  specific 
legacy  or  property  subject  to  tax  to  any  person  until  he  shall  have  collected  the 
tax  thereon;  and  whenever  any  such  legacy  shall  be  charged  upon  or  payable  out 
of  real  estate,  the  executor,  administrator,  or  trustee  shall  collect  said  tax  from 
the  distributee  thereof,  and  the  same  shall  remain  a  charge  on  such  real  estate 
until  paid;  if,  however,  such  legacy  be  given  in  money  to  any  person  for  a 
limited  period,  the  executor,  administrator,  or  trustee  shall  retain  the  tax  upon 
the  whole  amount;  but  if  it  be  not  in  money  he  shall  make  application  to  the 
superior  court  to  make  an  apportionment,  if  the  case  require  it,  of  the  sum  to  be 
paid  into  his  hands  by  such  legatees,  and  for  such  further  order  relative  thereto 
as  the  case  may  require. 

(2)  All  executors,  administrators,  and  trustees  shall  have  full  power  to  sell  so 
much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax,  in  the 
same  manner  as  they  may  be  enabled  by  law  to  do  for  the  payment  of  debts  of 
the  estate,  and  the  amount  of  said  tax  shall  be  paid  as  hereinafter  directed. 

(3)  Every  sum  of  money  retained  by  an  executor,  administrator,  or  trustee, 
or  paid  into  his  hands,  for  any  tax  on  property,  shall  be  paid  by  him,  within 
thirty   days   thereafter,   to   the   treasurer   of   the   county   in   which   the   probate 
proceedings  are  pending. 

§  10.  Upon  the  payment  to  any  county  treasurer  of  any  tax  due  under  this  act, 
such  treasurer  shall  issue  a  receipt  therefor,  in  triplicate,  one  copy  of  which  he 
shall  deliver  to  the  person  paying  said  tax,  and  the  original  and  one  copy  thereof 
he  shall  immediately  send  to  the  controller  of  state,  whose  duty  it  shall  be  to 
charge  the  treasurer  so  receiving  the  tax  with  the  amount  thereof,  and  said 
controller  shall  retain  one  of  said  receipts  and  the  other  he  shall  countersign 
and  seal  with  the  seal  of  his  office,  and  immediately  transmit  to  the  clerk  of  the 
court  fixing  such  tax.  And  an  executor,  administrator,  or  trustee  shall  not  be 
entitled  to  credits  in  his  accounts,  nor  be  discharged  from  liability  for  such  tax, 
nor  shall  said  estate  be  distributed,  unless  a  receipt  so  sealed  and  countersigned 
by  the  controller,  or  a  copy  thereof,  certified  by  him,  shall  have  been  filed  with 


838  THE  STATE  STATUTES 

the  court.  Any  person  shall,  upon  payment  to  the  county  treasurer  of  the  sum 
of  fifty  cents,  be  entitled  to  a  duplicate,  or  copy,  of  any  receipt  that  may  have 
been  given  by  said  treasurer  for  the  payment  of  any  tax  under  this  act. 

§  11.  (1)  If  any  debts  shall  be  proved  against  the  estate  of  a  decedent  after 
the  payment  of  any  legacy  or  distributive  share  thereof,  from  which  any  such 
tax  has  been  deducted  or  upon  which  it  has  been  paid  by  the  person  entitled  to 
such  legacy  or  distributive  share,  and  such  person  is  required  by  order  of  the 
superior  court  having  jurisdiction,  on  notice  to  the  state  controller,  to  refund 
the  amount  of  such  debts  or  any  part  thereof,  an  equitable  proportion  of  the  tax 
shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee,  if  the  tax  has 
not  been  paid  to  the  county  treasurer;  or  if  such  tax  has  been  paid  to  such 
county  treasurer,  such  officer  shall  refund  out  of  any  inheritance  tax  moneys  in 
his  hands  or  custody  such  equitable  proportion  of  the  tax,  and  credit  himself 
with  the  same  in  the  account  required  to  be  rendered  by  him  under  this  act. 

(2)  Where  it  shall  be  proved  to  the  satisfaction  of  the  superior  court  that 
deductions  for  debts  were  allowed  upon  the  appraisal,  since  proved  to  have  been 
erroneously  allowed,  it  shall  be  lawful  for  such  superior  court  to  enter  an  order 
assessing  the  tax  upon  the  amount  wrongfully  or  erroneously  deducted. 

(3)  If,  after  the  payment  of  any  tax  in  pursuance  of  an  order  fixing  such 
tax,  made  by  the  superior  court  having  jurisdiction,  such  order  be  modified  or 
reversed  by  the  superior  court  having  jurisdiction  within  two  years  from  and  after 
the  date  of  entry  of  the  order  fixing  the  tax,  or  be  modified  or  reversed  at  any 
time  on  an  appeal  taken  therefrom  within  the  time  allowed  by  law  on  due  notice 
to  the  state  controller,  the  county  treasurer  shall  refund  to  the  executor,  adminis- 
trator, trustee,  person  or  persons  by  whom  such  tax  was  paid,  the  amount  of  any 
moneys  paid  or  deposited  on  account  of  such  tax  in  excess  of  the  amount  of  tax 
fixed  by  the  order  modified  or  reversed,  out  of  any  inheritance  tax  moneys  in 
his  hands  or  custody,  and  credit  himself  with  the  same  in  the  account  required 
to  be  rendered  by  him  to  the  controller  on  his  semiannual  settlement ;   but  no 
application  for  such  refund  shall  be  made  after  one  year  from  such  reversal  or 
modification,  unless  an  appeal  shall  be  taken  therefrom,  in  which  case  no  such 
application  shall  be  made  after  one  year  from  the  final  determination  on  such 
appeal  or  of  an  appeal  taken  therefrom,  and  the  representatives  of  the  estate, 
legatees,  devisees  or  distributees  entitled  to  any  refund  under  this  section  shall 
not  be  entitled  to  any  interest  upon  such  refund,  and  the  state  controller  shall 
deduct  from  the  fees  allowed  by  this  act  to  the  county  treasurer  the  amount 
theretofore  allowed  him  upon  such  overpayment. 

(4)  When  any  amount  of  said  tax  shall  have  been  erroneously  paid,  the  superior 
court  having  jurisdiction,  on  application  after  notice  to  the  state  controller,  and 
on  satisfactory  proof  to  it,  shall  by  order  require  the  county  treasurer  to  refund 
and  pay  to  the  executor,  administrator,  trustee,  person  or  persons  who  had  paid 
any  such  tax  in  error  the  amount  of  such  tax  so  erroneously  paid;  provided,  that 
all  applications  for  such  repayment  of  such  tax  so  erroneously  paid  shall  be  made 
within  one  year  of  the  date  of  the  entry  of  the  order  fixing  tax  or  of  the  decree 
of  final  distribution  of  the  estate.     Such  refund  shall  be  made  by  said  treasurer 
out  of  any  inheritance  tax  moneys  in  his  hands  or  custody  and  he  shall  credit 
himself  with  the  same  in  the  amount  required  to  be  rendered  by  him  to   the 
controller  on  semiannual  settlement;   and  the  state  controller  shall  deduct  from 
the  fees   allowed   by  this   act  to   the  county  treasurer  the   amount   theretofore 
allowed  him  upon  such  erroneous  payment. 

(5)  This   section,  as   amended,   shall   apply   to   appeals    and   proceedings   now 
pending  and  taxes  heretofore  paid  in  relation  to  which  the  period  of  one  year 
from  such  reversal  or  modification  has  not  expired  when  this  section,  as  amended, 
takes  effect. 

§  12.  (1)  Whenever  the  state  controller  shall  have  reasonable  cause  to  believe 
that  a  tax  is  due  under  the  provisions  of  this  act,  upon  any  transfer  of  any  prop- 
erty, and  that  any  person,  firm,  institution,  company,  association  or  corporation 
has  possession,  custody  or  control  of  any  books,  accounts,  papers  or  documents 
relating  to  or  evidencing  such  transfer,  the  state  controller  or  inheritance  tax 
attorney,  or  any  assistant  inheritance  tax  attorney  of  the  inheritance  tax  depart- 
ment, is  hereby  authorized  and  empowered  to  inspect  the  books,  records,  accounts, 
papers  and  documents  of  any  such  person,  firm,  institution,  company,  association 
or  corporation,  including  the  stock  transfer  book  of  any  corporation,  for  the 
purpose  of  acquiring  any  information  deemed  necessary  or  desirable  by  said  state 


CALIFORNIA  839 

controller  or  such  inheritance  tax  attorney  or  assistant  inheritance  tax  attorneys, 
for  the  proper  enforcement  of  this  act,  and  for  the  collection  of  the  full  amount 
of  tax  which  may  be  due  the  state  hereunder.  Any  and  all  information  acquired 
by  said  state  controller  or  said  inheritance  tax  attorney  or  assistant  inheritance 
tax  attorneys  shall  be  deemed  and  held  by  said  state  controller  and  said  inherit- 
ance tax  attorney  and  assistant  inheritance  tax  attorneys  and  each  of  them,  as 
confidential,  and  shall  not  be  divulged,  disclosed  or  made  known  by  them  or  any 
of  them  except  in  so  far  as  may  be  necessary  for  the  enforcement  of  the  provisions 
of  this  act.  Any  controller  or  ex-controller,  or  inheritance  tax  attorney  or 
ex-inheritance  tax  attorney,  or  assistant  inheritance  tax  attorney  or  ex-assistant 
inheritance  tax  attorney,  who  shall  divulge,  disclose  or  make  known  any  informa- 
tion acquired  by  such  inspection  and  examination  aforesaid,  except  in  so  far  as 
the  same  may  be  necessary  for  the  enforcement  of  the  provisions  of  this  act, 
shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof  shall  be  fined  not 
less  than  two  hundred  fifty  dollars  nor  more  than  five  hundred  dollars,  or  be 
imprisoned  in  the  county  jail  for  not  more  than  ninety  days,  or  both. 

(2)  Any  officer  or  agent  of  any  firm,  institution,  company,  association  or  cor- 
poration having  or  keeping  an  office  within  this  state,  who  has  in  his  custody  or 
under  his  control  any  book,  record,  account,  paper  or  document  of  such  firm, 
institution,  company,  association  or  corporation,  and  any  person  having  in  his 
custody  or  under  his  control  such  book,  record,  account,  paper  or  document  who 
refuses  to  give  to  the  state  controller,  or  said  inheritance  tax  attorney,  or  any  of 
said  assistant  inheritance  tax  attorneys,  lawfully  demanding,  as  provided  in  this 
section,  during  office  hours  to  inspect  or  take  a  copy  of  the  same,  or  any  part 
thereof,  for  the  purposes  hereinabove  provided,  a  reasonable  opportunity  so  to 
do,  shall  be  liable  to  a  penalty  of  not  less  than  one  thousand  dollars  nor  more 
than  twenty  thousand  dollars,  and  in  addition  thereto  shall  be  liable  for  the 
amount  of  the  taxes,  interest  and  penalties  due  under  this  act  on  such  transfer, 
and  the  said  penalties  and  liabilities  for  the  violation  of  this  section  may  be 
enforced  in  an  action  brought  by  the  state  controller  in  any  court  of  competent 
jurisdiction. 

§  13.  (1)  No  corporation  organized  or  existing  under  the  laws  of  this  state, 
shall  transfer  on  its  books  or  issue  a  new  certificate  for  any  share  or  shares  of 
its  capital  stock  belonging  to  or  standing  in  the  name  of  a  decedent  or  in  trust 
for  a  decedent  or  belonging  to  or  standing  in  the  joint  names  of  a  decedent  and 
one  or  more  persons,  without  the  written  consent  of  the  state  comptroller  or  person 
by  him  in  writing  authorized  to  issue  such  consent. 

(2)  No    safe    deposit    company,    trust    company,    corporation,   bank,    or    other 
institution,  person  or  persons  engaged  in  the  business  of  renting  safe  deposit 
boxes    or    other   receptacles    of    similar    character   shall    rent    any    such   box    or 
receptable  without  first  requiring  all  persons  given  access  thereto  to   agree  in 
writing  to  notify  such  safe  depositary,  bailee,  or  lessor,  from  whom  such  box  or 
receptacle  is  rented  of  the  death  of  any  person  having  the  right  of  access  thereto, 
before  seeking  access  to  such  box  or  receptacle  after  the  death  of  such  person; 
and  all  persons  having  the  right  of  access  to  any  such  safe  deposit  box  or  recep- 
tacle upon  the  death  of  any  other  person  having  access  thereto,  before  seeking 
access  to  such  box  or  receptacle  must  notify  such  safe  depositary,  bailee,   or 
lessor,  from  whom  such  box  or  receptacle  is  rented  of  the  death  of  such  person; 
and  it  shall  be  unlawful  for  any  safe  deposit  company,  trust  company,  corpora- 
tion, bank,  or  other  institution,  person  or  persons  having  in  possession  or  under 
control,  custody  or  partial  custody  any  safe  deposit  box  or  similar  receptacle,  to 
permit  access  thereto  by  any  one  after  the  death  of  any  person  who  at  the  time 
of  his  death  had  the  right  or  privelege  of  access  thereto   either  as  principal, 
deputy,  agent,  or  cotenant  without  the  consent  of  the  state  controller  or  such 
person  by  him  in  writing  authorized  to  issue  such  consent. 

(3)  No  safe  deposit  company,  trust  company,  corporation,  bank  or  other  insti- 
tution, person  or  persons  having  in  possession  or  under  control  or  custody  or 
under  partial  control  or  partial  custody  securities,  deposits,  assets  or  property 
belonging  to  or  standing  in  the  name  of  a  decedent  who  was  a  resident  or  non- 
resident, or  belonging  to,  or  standing  in  the  joint  names  of  such  a  decedent  and 
one  or  more  persons,  including  the  shares  of  the  capital  stock  of,  or  other  interest 
in,  the  safe  deposit  company,  trust  company,  corporation,  bank  or  other  insti- 
tution making  the  delivery  or  transfer  herein  provided,  shall  deliver  or  transfer 
the  same  to  the  executors,  administrators  or  legal  representatives,  agents,  deputies, 


840  THE  STATE  STATUTES 

attorneys,  trustees,  legatees,  heirs,  successors  in  interest  of  said  decedent  or  to 
any  other  person  or  persons,  or  to  the  survivor  or  survivors  when  held  in  the  joint 
names  of  a  decedent  and  one  or  more  persons,  or  upon  their  order  or  request, 
without  retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax  and 
interest  which  may  thereafter  be  assessed  thereon  under  this  act  and  unless 
notice  of  the  time  and  place  of  such  delivery  or  transfer  be  served  upon  the  state 
controller  and  county  treasurer  at  least  ten  days  prior  to  said  delivery  or 
transfer;  provided,  that  the  state  controller,  or  person  by  him  in  writing  author- 
ized so  to  do,  may  consent  in  writing  to  said  delivery  or  transfer,  and  such 
consent  shall  relieve  said  safe  deposit  company,  trust  company,  corporation,  bank 
or  other  institution,  person  or  persons  from  the  obligation  hereunder  to  give  such 
notice  or  to  retain  any  portion  of  said  securities,  deposits  or  other  assets  in  their 
possession  or  control.  And  it  shall  be  lawful  for  the  state  controller  or  county 
treasurer,  personally  or  by  representatives,  to  examine  said  securities,  deposits 
or  assets  at  the  time  of  said  delivery  or  otherwise. 

(4)  Failure  to  comply  with  the  provisions  of  this  section  shall  render  such 
safe  deposit  company,  trust  company,  corporation,  bank  or  other  institution, 
person  or  persons,  liable  to  a  penalty  of  not  more  than  twenty  thousand  dollars, 
and  in  addition  thereto  said  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution,  person  or  persons  shall  be  liable  for  the  amount  of  the 
taxes,  interest  and  penalties  due  under  this  act  on  said  securities,  deposits,  or 
other  assets  above  mentioned,  and  said  penalties  and  liabilities  of  said  safe 
deposit  company,  corporation,  bank  or  other  institution,  person  or  persons  for 
the  violation  of  this  section  may  be  enforced  in  an  action  brought  by  the  state 
controller  in  any  court  of  competent  jurisdiction. 

§  14.  The  state  controller  shall  appoint,  and  may  at  his  pleasure  remove,  one 
or  more  persons  in  each  county  of  the  state  to  act  as  inheritance  tax  appraisers 
therein.  Every  such  inheritance  tax  appraiser  (in  addition  to  any  fees  paid 
him  as  appraiser  under  section  one  thousand  four  hundred  forty-four  of  the  Code 
of  Civil  Procedure)  shall  be  paid  for  his  services  out  of  any  inheritance  tax 
moneys  in  the  hands  of  the  treasurer  of  the  county  in  which  he  may  be  acting, 
a  reasonable  compensation,  to  be  fixed  by  the  superior  court  of  said  county,  or  a 
judge  thereof,  and,  together  with  said  compensation,  said  appraiser  shall  be 
allowed  his  actual  and  necessary  traveling  and  other  incidental  expenses,  and 
the  fees  paid  such  witnesses  as  he  shall  subpoena  before  him,  said  expenses  and 
fees  to  be  allowed  by  said  superior  court  or  a  judge  thereof ;  provided,  that  any 
claim  for  any  such  services  or  expenditure,  must  before  payment,  first  receive 
the  approval  of  the  state  controller;  and  provided,  fu/rther,  that  in  any  probate 
proceeding  in  which  the  executor  or  administrator  shall  have  failed  to  have  had 
the  inheritance  tax  appraiser  act  as  one  of  the  appraisers  under  section  one 
thousand  four  hundred  forty-four  of  the  Code  of  Civil  Procedure  and  to  have 
paid  him  his  fees  therefor,  the  expense  of  making  the  inheritance  tax  appraise- 
ment in  this  act  provided  for  shall  be  paid  out  of  said  estate,  and  the  executor 
or  administrator  thereof  shall  be  liable  for  said  fee.  Any  such  appraiser  who 
shall  take  any  fee  or  reward,  other  than  such  as  may  be  allowed  him  by  law, 
from  any  executor,  administrator,  trustee,  legatee,  next  of  kin,  or  heir  of  any 
decedent,  or  from  any  other  person  liable  to  pay  said  tax,  or  any  portion  thereof, 
shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof  shall  be  fined  not 
less  than  two  hundred  fifty  dollars  nor  more  than  five  hundred  dollars,  or  be 
imprisoned  in  the  county  jail  ninety  days  or  both,  and  in  addition  thereto  the 
court  shall  dismiss  him  from  such  service. 

§  15.  The  superior  court  in  the  county  in  which  is  situate  the  real  property 
of  a  decedent,  who  was  not  a  resident  of  the  state,  or  if  there  be  no  real  prop- 
erty, then  in  the  county  in  which  any  of  the  personal  property  of  such  nonresi- 
dent is  situate,  or  in  the  county  of  which  the  decedent  was  a  resident  at  the  time 
of  his  death,  shall  have  jurisdiction  to  hear  and  determine  all  questions  in  rela- 
tion to  the  tax  arising  under  the  provisions  of  this  act;  the  court  first  acquiring 
jurisdiction  hereunder  shall  retain  the  same,  to  the  exclusion  of  every  other; 
provided,  that  the  superior  court  having  acquired  jurisdiction  in  probate  of  the 
estate  of  a  decedent  shall  hear  and  determine  in  said  probate  proceedings  all 
questions  in  relation  to  any  tax  arising  under  the  provisions  of  this  act:  (a) 
Upon  property  passing  in  said  probate  proceedings,  (fe)  Upon  any  other  prop- 
erty transferred,  within  the  meaning  of  subdivision  three  of  section  two  or  any 


CALIFORNIA  841 

other  provisions  of  this  act,  to  any  person,  institution  or  corporation  taking  any 
property  under  and  by  virtue  of  said  probate  proceedings. 

§  16.  (1)  When  any  superior  court,  having  jurisdiction  in  probate  of  the  estate 
of  any  decedent,  or  a  judge  of  such  court,  shall,  in  accordance  with  section  one 
thousand  four  hundred  forty-four  of  the  Code  of  Civil  Procedure,  appoint  the 
appraiser  or  appraisers  in  said  section  provided  for,  said  superior  court  or  judge 
thereof  shall  also  at  the  same  time  designate  and  appoint  an  inheritance  tax 
appraiser  (unless  such  designation  and  appointment  be  previously  made)  to 
ascertain  and  report  to  said  superior  court  the  amount  of  inheritance  tax  due 
upon  any  property  passing  in  said  probate  proceeding,  or  a  lien  thereon,  or  upon 
any  other  property  transferred  within  the  meaning  of  subdivision  (3)  of  section 
two  of  this  act,  or  under  any  other  provision  of  this  act,  to  any  person,  institu- 
tion or  corporation  taking  property  under  and  by  virtue  of  said  probate  proceed- 
ings, together  with  such  other  or  additional  information  as  shall  assist  said  court 
in  the  determination  of  said  tax.  Thereupon  said  inheritance  tax  appraiser 
shall  have  all  the  powers  of  a  refereee  of  said  superior  court,  and  shall  have 
jurisdiction  to  require  the  attendance  before  him  of  the  executor  or  administrator 
of  said  state,  or  any  person  interested  therein,  or  any  other  person  whom  he  may 
have  reason  to  believe  possesses  knowledge  of  the  estate  of  said  decedent,  or 
knowledge  of  any  property  transferred  by  said  decedent  within  the  meaning  of 
this  act,  or  knowledge  of  any  facts  that  will  aid  said  appraiser  or  the  court  in 
the  determination  of  said  tax.  For  the  purpose  of  compelling  the  attendance  of 
such  person  or  persons  before  him,  and  for  the  purpose  of  appraising  any 
property  or  interest  subject  to,  or  liable  for  any  inheritance  tax  hereunder,  and 
for  the  purpose  of  determining  the  amount  of  tax  due  thereon,  the  said  inherit- 
ance tax  appraiser  is  hereby  authorized  to  issue  subpoenas  compelling  the  attend- 
ance of  witnesses  before  him.  Any  person  or  persons  who  shall  be  served  with 
a  subpoena,  issued  by  said  inheritance  tax  appraiser,  to  appear  and  testify  or 
to  produce  books  and  papers,  and  who  shall  refuse  and  neglect  to  appear  and 
testify  or  to  produce  books  and  papers  relevant  to  such  appraisement,  as  com- 
manded in  such  subpoena,  shall  be  guilty  of  a  contempt  of  court.  And  he  may 
examine  and  take  the  evidence  of  such  witnesses  or  of  such  executor  or  adminis- 
trator, or  other  person  under  oath  concerning  such  property  and  the  value  thereof, 
and  concerning  the  property  or  the  estate  of  such  decedent  subject  to  probate, 
and  concerning  any  transfer  made  by  such  decedent  within  the  meaning  of  thia 
act.  Upon  the  completion  of  his  inheritance  tax  appraisement  in  any  probate 
proceeding,  the  inheritance  tax  appraiser  shall  make  a  report  in  writing  to  the 
superior  court  of  the  clear  market  value  of  the  several  interests  in  the  estate  of 
the  decedent,  and  shall  report  the  amount  of  inheritance  or  transfer  tax  charge- 
able against,  or  a  lien  upon  such  interests,  acquired  by  virtue  of  said  probate 
proceedings  or  by  any  transfer  within  the  meaning  of  this  act,  to  any  person, 
institution  or  corporation  acquiring  any  property  by  virtue  of  said  probate 
proceedings  together  with  such  other  facts  as  may  advise  the  court  in  regard 
thereto,  or  which  the  court  may  require,  and  may  return  to  said  superior  court 
such  depositions  as  he  may  have  had  reduced  to  writing,  exhibits,  or  other 
testimony  or  information  taken  before  him,  or  submitted  to  him. 

(2)  Upon  the  filing  of  said  report  said  appraiser  shall  mail  a  copy  thereof  to 
the  state  controller  and  the  clerk  of  said  superior  court  shall  on  said  day  or  the 
next  succeeding  judicial  day  give  notice  of  such  filing  to  all  persons  interested  in 
such  proceedings  by  causing  notices  to  be  posted  in  at  least  three  public  places 
in  the  county,  one  of  which  must  be  the  place  where  the  court  is  held,  and  in 
addition  thereto  shall  mail  to  the  state  controller  and  to  all  persons  chargeable 
with  any  tax  in  said  report  who  have  appeared  in  such  proceeding,  a  copy  of 
said  notice.  At  any  time  after  the  expiration  of  ten  days  thereafter,  if  no 
objection  to  said  report  be  filed,  the  said  superior  court  or  a  judge  thereof,  may, 
without  further  notice  give  and  make  its  order  confirming  said  report  and  fixing 
the  tax  in  accordance  therewith.  At  any  time  prior  to  the  making  of  said  order, 
any  person  interested  in  said  proceeding  (including  the  state  controller)  may  file 
objections  in  writing  to  said  report.  Thereupon  said  superior  court  shall,  by 
order,  fix  a  time,  not  less  than  ten  days  thereafter,  for  the  hearing  thereof,  and 
shall  direct  the  clerk  of  said  superior  court  to  give  such  notice  thereof  as  it  shall 
deem  necessary ;  provided,  that  a  copy  of  such  notice  and  of  such  objections  shall 
be  forthwith  mailed  to  the  state  controller,  county  treasurer  and  inheritance  tax 


842  THE  STATE  STATUTES 

appraiser.    Upon  the  hearing  of  said  objections,  said  court  may  make  such  order 
as  to  it  may  seem  meet  and  proper  in  the  premises. 

(3)  If,  upon  examination  of  the  executor  or  administrator  of  said  estate  or 
other  persons  familiar  with  the  affairs  of  such  decedent,  or  from  other  informa- 
tion before  him,  it  shall  appear  to  the  inheritance  tax  appraiser  that  there  is  no 
inheritance  tax  due  out  of  said  estate  or  a  lien  upon  any  property  or  interest 
therein,  said  appraiser  may  so  certify  to  the  superior  court,  and  at  any  time 
thereafter,  if  no  objection  to  said  certificate  shall  have  been  fded,  said  superior 
court  or  a  judge  thereof  may,  without  further  notice,  make  an  order  or  decree 
that  there  are  no  inheritance  taxes  due  out  of  said  estate  or  upon  any  interest 
therein  or  may  make  such  different  order  as  may  to  it  seem  meet  in  the  premises. 
Such  order  shall  be  conclusive  only  as  to  such  property  as  may  have  been  returned 
in  the  inventory  or  inventory  and  appraisement  in  said  probate  proceedings. 

§  17.  (1)  If  it  shall  appear  to  the  superior  court  upon  petition  of  the  state 
controller  that  any  transfer  has  been  made  within  the  meaning  of  this  act,  and 
the  taxability  thereof,  and  the  liability  for  such  tax  and  the  amount  thereof  have 
not  been  determined,  and  that  no  proceedings  are  pending  in  any  court  in  this 
state  wherein  the  taxability  of  such  transfer  and  the  liability  therefor,  and  the 
amount  thereof  may  be  determined,  said  court  shall  issue  a  citation  ordering  and 
directing  the  persons  who  may  appear  liable  therefor  or  known  to  own  any 
interest  in  or  part  of  the  property  transferred,  to  appear  before  said  court  or 
before  an  inheritance  tax  appraiser  to  be  designated  by  said  order  at  a  time  and 
place  in  said  order  named,  not  less  than  ten  days  nor  more  than  one  year  from 
the  date  of  such  order,  to  be  examined,  under  oath  by  said  court  or  by  said 
appraiser  as  the  case  may  be,  concerning  said  transfer  and  all  facts  connected 
therewith,  and  concerning  the  property  transferred  and  the  character  and  value 
thereof. 

If  said  person  or  persons  shall  be  directed  to  appear  before  said  appraiser 
said  appraiser  shall,  at  the  time  and  place  in  said  order  named,  or  at  such  time 
and  place  to  which  said  appraiser  may  adjourn  said  hearing,  proceed  to  examine 
said  person  or  persons  and  such  witnesses  as  said  appraiser  may  subpoena  before 
him,  and  for  the  purpose  of  said  hearing,  and  for  the  purpose  of  ascertaining 
any  facts  concerning  the  taxability  of  said  transfer  or  any  taxes  due  on  account 
of  such  transfer,  said  appraiser  shall  have  the  powers  of  a  referee  of  said  court, 
and  is  hereby  authorized  to  issue  subpoenas  compelling  the  attendance  of  wit- 
nesses before  him,  and  to  administer  oath,  and  to  take  the  evidence  of  such 
witnesses  under  oath  concerning  such  property  and  the  value  thereof  and  con- 
cerning such  transfer.  Said  appraiser  shall  report  to  said  court  his  findings  and 
conclusions  in  relation  to  said  transfer  and  said  tax,  and  may  return  to  said 
court,  any  depositions,  exhibits  or  other  testimony  or  information  taken  before 
him  or  exhibited  to  him.  The  procedure  subsequent  to  the  filing  of  said  report 
shall  conform  to  subdivision  (2)  of  section  sixteen  of  this  act. 

Except  as  herein  otherwise  provided,  the  service  of  such  citation  and  the  time, 
manner  and  proof  thereof,  and  the  hearing  and  determination  thereon,  and  the 
hearing  and  determination  upon  the  facts  returned  in  such  report,  and  the 
enforcement  of  the  determination  or  decree,  shall  conform  to  the  provisions  of 
chapter  twelve,  title  eleven,  part  three  of  the  Code  of  Civil  Procedure,  and  the 
clerk  of  the  court  shall,  upon  the  request  of  the  state  controller,  furnish,  without 
fee,  one  or  more  transcripts  of  such  decree,  and  the  same  shall  be  docketed  and 
filed  by  the  county  clerk  of  any  county  in  the  state,  without  fee,  in  the  same 
manner  and  with  the  same  effect  as  provided  by  section  six  hundred  seventy-four 
of  said  Code  of  Civil  Procedure  for  filing  a  transcript  of  an  original  docket. 

The  superior  court  may  hear  the  said  cause  upon  the  relation  of  the  parties 
and  the  testimony  of  witnesses,  and  evidence  produced  in  open  court,  and,  if  the 
court  shall  find  said  property  is  not  subject  to  any  tax,  as  herein  provided,  the 
court  shall,  by  order,  so  determine;  but  if  it  shall  appear  that  said  property, 
or  any  part  thereof,  is  subject  to  any  such  tax,  the  same  shall  be  appraised  and 
taxed  as  in  other  cases. 

(2)  Verified  petitions  may  be  filed  by  any  interested  party  with  the  superior 
court,  alleging  and  admitting  that  a  transfer  within  the  meaning  of  this  act  has 
been  made  and  the  taxability  thereof  and  the  liability  for  such  tax  and  the 
amount  thereof  has  not  been  determined,  and  that  no  proceedings  are  pending  in 
any  court  in  this  state  wherein  the  taxability  of  such  transfer  and  the  liability 
therefor  and  the  amount  thereof,  may  be  determined,  and  that  the  petitioner 


CALIFORNIA  843 

desires  such  determination  and  desires  to  pay  said  tax,  if  any  be  due.  Upon  the 
filing  of  such  petition  the  superior  court  or  a  judge  thereof  shall  by  order 
designate  and  appoint  an  inheritance  tax  appraiser  to  ascertain  and  report  to 
said  court  the  amount  of  the  inheritance  tax,  if  any,  due  by  said  petitioner  on 
account  of  such  transfer,  and  shall  fix  a  time  and  place,  not  less  than  ten  days 
thereafter,  for  the  hearing  of  said  matter  before  said  inheritance  tax  appraiser, 
a  copy  of  which  petition  and  order  shall  be  forthwith  mailed  to  the  state  con- 
troller, and  shall  refer  said  petition  and  said  matter  to  said  inheritance  tax 
appraiser  who  shall  have  all  the  powers  of  a  referee  of  said  court,  including  the 
powers  prescribed  in  subdivision  (1)  of  section  sixteen  of  this  act.  The  pro- 
cedure subsequent  to  said  reference  to  said  appraiser  shall  conform  to  the  pro- 
visions of  subdivisions  (1)  and  (2)  of  section  sixteen  of  this  act. 

In  the  event  that  final  judgment  is  rendered  in  said  proceeding,  ascertaining 
and  determining  that  no  inheritance  tax  is  due  on  account  of  said  transfer  or 
that  the  amount  of  the  tax  to  which  said  transfer  is  liable,  is  less  than  twenty 
dollars  the  court  shall,  in  addition  to  tne  amount  of  the  tax,  if  any,  include  in 
such  judgment  and  assess  against  the  petitioner  reasonable  compensation  for 
said  inheritance  tax  appraiser,  not  exceeding  the  sum  of  ten  dollars,  and  the  neces- 
sary traveling  and  incidental  expenses  of  said  appraiser. 

(3)  Actions  may  be  brought  against  the  state  by  any  interested  person  for 
the  purpose  of  quieting  the  title  to  any  property  against  the  lien  or  claim  of  lien 
of  any  tax  or  taxes  under  this  act,  or  for  the  purpose  of  having  it  determined 
that  any  property  is  not  subject  to  any  lien  for  taxes  nor  chargeable  with  any 
tax  under  this  act.     No  such  action  shall  be  maintained  where  any  proceedings 
are  pending  in  any  court  in  this  state  wherein  the  taxability  of  such  transfer 
and   the   liability   therefor   and   the    amount   thereof   may   be    determined.     All 
parties  interested  in  said  transfer  and  in  the  taxability  thereof  shall  be  made 
parties  thereto  and  any  interested  person  who  refuses  to  join  as  plaintiff  therein 
may  be  made  a  defendant.    Summons  for  the  state  in  said  action  shall  be  served 
upon  the  state  controller. 

At  any  time  after  issue  is  joined  in  such  action  the  court,  on  its  own  motion, 
or  upon  the  motion  of  any  interested  party,  may  by  order  appoint  and  designate 
an  inheritance  tax  appraiser  to  hear  said  matter  and  report  to  the  court  thereon 
and  shall  in  such  order  fix  a  time  and  place  for  the  hearing  of  said  matter  before 
said  inheritance  tax  appraiser,  and  direct  notice  of  such  time  and  place  to  be 
given  in  such  manner  as  the  court  shall  deem  proper,  and  shall  refer  said  matter 
to  said  inheritance  tax  appraiser  who  shall  have  all  of  the  powers  of  a  referee 
of  said  court,  including  the  powers  prescribed  in  subdivision  (1)  of  section 
sixteen  of  this  act.  The  procedure  subsequent  to  said  reference  to  said  appraiser 
shall  conform  to  the  provisions  of  subdivisions  (1)  and  (2)  of  section  sixteen 
of  this  act. 

Should  the  court  determine  that  the  property  described  in  the  complaint  is 
subject  to  the  lien  of  said  tax  and  that  said  property  has  been  transferred  within 
the  meaning  of  this  act,  the  court  shall  award  affirmative  relief  to  the  state  in 
said  action,  and  judgment  shall  be  rendered  therein  in  favor  of  the  state,  ascer- 
taining and  determining  the  amount  of  said  tax,  and  the  person  or  persons  liable 
therefor,  and  the  property  chargeable  therewith  or  subject  to  lien  therefor,  and 
shall  assess  against  such  person  or  persons  reasonable  compensation  for  said 
inheritance  tax  appraiser  and  his  necessary  traveling  and  incidental  expenses. 

(4)  Actions  under  this  section  shall  be  commenced  in  the  superior  court  of 
the  county  in  which  is  situated  any  part  of  any  real  property  against  which  any 
lien  is  sought  to  be  enforced,  or  to  which  title  is  sought  to  be  quieted  against 
any  lien,  or  claim  of  lien;  but  if  in  said  action  no  lien  against  real  property  is 
sought  to  be  enforced,  the  action  shall  be  brought  in  the  superior  court  of  the 
county  which  has  or  which  had  jurisdiction  of  the  administration  of  the  estate 
of  the  decedent  mentioned  herein. 

(5)  No  fee  shall  be  charged  said  state  controller  by  any  public  officer  in  this 
state  for  the  filing  or  recording  of  any  petition,  lis  pendens,  decree  or  order,  or 
for  the  taking  of  oaths  or  acknowledgments  in  any  proceeding  taken  under  this 
act;  nor  shall  any  undertaking  be  required  from  or  costs  charged  against  the 
state  controller  or  the  State  of  California  in  any  such  proceeding. 

§  18.  The  orders,  decrees  and  judgments  fixing  tax  or  determining  that  no 
tax  is  due,  mentioned  in  this  act,  shall  have  the  force  and  effect  of  judgments 
in  civil  actions.  Except  as  otherwise  herein  provided,  the  provisions  of  the  Code 


844  THE  STATE  STATUTES 

of  Civil  Procedure  relative  to  judgments,  new  trials,  appeals,  attachments  and 
execution  of  judgments,  so  far  as  applicable,  shall  govern  all  proceedings  taken 
under  this  act.  Nothing  in  this  section  shall  preclude  the  state  from  relief 
herein  provided  for,  which  may  be  inconsistent  with  the  provisions  of  the  Code 
of  Civil  Procedure. 

§  19.  The  treasurer  of  each  county  shall  collect  all  taxes  and  moneys  that 
may  be  due  and  payable  under  this  act  and  pay  the  same  to  the  state  treasurer 
(excepting  such  moneys  as  he  may  put  out  from  time  to  time  pursuant  to  the 
provisions  of  this  act)  and  the  state  treasurer  shall  give  him  a  receipt  therefor; 
of  which  collection  and  payment  he  shall  make  a  report,  under  oath,  to  the 
controller,  between  the  first  and  fifteenth  days  of  May  and  December  of  each 
year,  stating  for  what  estate  paid,  and  in  such  form  and  containing  such  particu- 
lars as  the  controller  may  prescribe;  and  for  all  such  taxes  collected  by  him  and 
not  paid  to  the  state  treasurer  by  the  first  day  of  June  and  January  of  each 
year  he  shall  pay  interest  at  the  rate  of  ten  per  centum  per  annum. 

§  20.  The  treasurer  of  each  county  shall  be  allowed  to  retain,  on  all  taxes 
paid  and  accounted  for  by  him  each  year  under  this  act,  in  addition  to  his 
salary  or  fees  now  allowed  by  law,  three  per  centum  of  the  first  fifty  thousand 
dollars  so  paid  and  accounted  for  by  him,  one  and  one-half  per  centum  on  the 
next  fifty  thousand  dollars  so  paid  and  accounted  for  by  him,  and  one-half  of 
one  per  centum  on  all  additional  sums  so  paid  and  accounted  for  by  him;  pro- 
vided, that  no  county  treasurer  shall  be  entitled  to  retain  to  his  own  use  more 
than  the  sum  of  two  hundred  dollars  out  of  the  inheritance  taxes  paid  on  account 
of  any  transfer  or  transfers  made  by,  or  resulting  from  the  death  of,  any  one 
decedent;  provided,  that  no  portion  of  the  moneys  paid  on  account  of  inherit- 
ance taxes  in  any  one  case  in  excess  of  the  sum  entitling  the  treasurer  to  retain 
two  hundred  dollars  for  his  own  use  shall  be  considered  in  computing  his  com- 
missions in  succeeding  cases ;  and  provided,  further,  that  no  county  treasurer 
shall  be  entitled  to  retain  as  commissions  more  than  five  thousand  dollars  out 
of  the  total  inheritance  taxes  accounted  for  by  him  in  any  one  year. 

§  21.  The  state  controller,  whenever  he  shall  be  cited  as  a  party  in  any  pro- 
ceeding or  action  to  determine  any  tax  under  this  act  provided,  or  whenever 
he  shall  deem  it  necessary  for  the  better  enforcement  of  this  act  to  make  any 
special  employment  to  secure  evidence  of  evasion  of  said  tax,  or  to  commence 
or  appear  in  any  proceeding  or  action  to  determine  any  tax  hereunder,  may,  by 
and  with  the  consent  and  approval  of  the  attorney  general,  make  such  special 
employment  or  designate  and  employ  counsel  or  attorney  in  or  out  of  this  state 
to  represent  him  on  behalf  of  the  state,  and,  by  and  with  such  consent  of  the 
attorney  general,  he  is  hereby  authorized  to  incur  the  necessary  expense  for  such 
employment  and  any  reasonable  and  necessary  expense  incident  thereto.  And 
the  county  treasurer  is  hereby  authorized  and  directed  to  pay  out  of  any  funds 
which  may  be  in  his  hands  on  account  of  this  tax,  on  presentation  of  a  sworn 
itemized  account  and  on  certificate  of  the  state  comptroller  and  attorney  general, 
all  expenses  incurred  as  in  this  section  above  provided,  but  no  expense  of  such 
special  employment  or  legal  services,  up  to  and  including  the  entry  of  the  order 
of  the  court  fixing  the  tax  and  the  same  becoming  final,  shall  exceed  ten  per 
centum  of  the  tax  and  penalties  collected;  provided,  that  all  reasonable  and 
necessary  expenses  incurred,  in  any  legal  action  or  proceeding  in  any  court  of 
this  state  or  any  appeal  therefrom,  other  than  attorney's  fees,  including  expense 
of  serving  processes  and  printing  and  preparing  of  necessary  legal  papers,  may 
be  allowed  and  paid  in  the  manner  above  provided,  even  though  no  tax  be  re- 
covered in  such  action  or  proceeding,  and  the  limitations  herein  made  shall  not 
apply  thereto. 

§  22.  All  taxes  levied  and  collected  under  this  act,  up  to  the  amount  of  two 
hundred  fifty  thousand  dollars  annually,  shall  be  paid  into  the  treasury  of  the 
state,  for  the  uses  of  the  state  school  fund,  and  all  taxes  levied  and  collected 
in  excess  of  two  hundred  fifty  thousand  dollars  annually  shall  be  paid  into  the 
state  treasury  to  the  credit  of  the  general  fund  thereof. 

§  23.  Every  officer  who  fails  or  refuses  to  perform,  within  a  reasonable  time, 
any  and  every  duty  required  by  the  provisions  of  this  act,  or  who  fails  or 
refuses  to  make  and  deliver  within  a  reasonable  time  any  statement  or  record 
required  by  this  act,  shall  forfeit  to  the  State  of  California  the  sum  of  one 
thousand  dollars,  to  be  recovered  in  an  action  brought  by  the  attorney  general 
in  the  name  of  the  people  of  the  state  on  relation  of  the  controller. 


CALIFORNIA  845 

§  24.  If  any  section,  subsection,  sentence,  clause  or  phrase  of  this  act  is  for 
any  reason  held  to  be  unconstitutional,  such  decision  shall  not  affect  the  validity 
of  the  remaining  portions  of  this  act.  The  legislature  hereby  declares  that  it 
would  have  passed  this  act,  and  each  section,  subsection,  sentence,  clause  and 
phrase  thereof,  irrespective  of  the  fact  that  any  one  or  more  other  sections, 
subsections,  sentences,  clauses  or  phrases  be  declared  unconstitutional. 

§  25.  An  act  entitled  ''An  act  to  establish  a  tax  on  gifts,  legacies,  in- 
heritances, bequests,  devises,  successions  and  transfers,  to  provide  for  its 
collection  and  to  direct  the  disposition  of  its  proceeds;  to  provide  for  the 
enforcement  of  liens  created  by  this  act  and  by  any  act  thereby  repealed  and 
for  suits  to  quiet  title  against  claims  of  liens  arising  hereunder,  or  under  an 
act  hereby  repealed,  to  be  known  as  the  '  inheritance  tax  act ' ;  and  to  repeal 
chapter  five  hundred  and  ninety-five  of  the  laws  of  the  session  of  the  legisla- 
ture of  California  of  1913,  approved  June  16,  1913,  known  as  the  'inheritance 
tax  act,'  and  all  amendments  thereto,  and  to  repeal  all  acts  and  parts  of  act* 
in  conflict  with  this  act,"  approved  May  23,  1917,  and  all  acts  and  parts  of" 
acts  in  conflict  with  this  act  hereby  expressly  repealed;  provided,  however,  that 
such  repeal  shall  in  nowise  affect  any  suit,  prosecution  or  proceeding  pending  at 
the  time  this  act  shall  take  effect,  or  any  right  which  the  State  of  California 
may  have  at  the  time  of  the  taking  effect  of  this  act,  to  claim  a  tax  upon  any 
property  under  the  provisions  of  this  act  or  acts  hereby  repealed,  for  which  no 
proceeding  has  been  commenced,  and  where  no  proceeding  has  been  commenced, 
to  collect  any  tax  arising  under  any  act  hereby  repealed  the  procedure  to 
collect  such  tax  shall  conform  to  the  provisions  hereof;  nor  shall  such  repeal 
affect  any  appeal,  right  of  appeal  in  any  suit  pending,  or  orders  fixing  tax, 
existing  in  this  state  at  the  time  of  the  taking  effect  of  this  act. 

APPENDIX. 

Form  of  agreement  between  lessor  and  lessee  of  safe  deposit  box,  as  required 
by  subdivision  2  of  section  13: 

"The  lessee  of  said  safe  deposit  box  hereby  agrees  to  notify  the  lessor  herein, 
of  the  death  of  any  person  having  the  right  of  access  to  such  box,  before  seeking 
access  thereto  after  the  death  of  such  person,  and  said  lessee  further  agrees  that 
no  person  shall  be  given  access  to  such  box  unless  he  has  first  agreed  in  writing 
with  the  lessor  to  notify  the  lessor  herein,  of  death  of  any  person  having  the 
right  of  access  to  such  box,  before  seeking  access  thereto  after  the  death  of  such 
person. ' ' 

Notice  of  Intended  Transfer  of  Securities,  Deposits  or  Other  Assets  Subject  to 

Inheritance  Tax. 

,  Cal.,  192... 

To  HON.  BAY  L.  EILET, 

Controller  of  the  State  of  California,  and 


Treasurer  of   County. 

You  are  hereby  notified  that,  in  accordance  with  the  provisions  of  section  13 

of  the  "Inheritance  Tax  Act,"  the  undersigned,  on  ,  192. ., 

at   o  'clock   m.,  or  earlier,  upon  receipt  of   your  written 

consent,  will  deliver  or  transfer  to ,  at  the  address 

below,    the    following    described    securities,    deposits    or    other    assets,    in    the 
possession,  or  under  the  control,  of  the  undersigned,  belonging  to  or  standing 

in  the  name  of   deceased,  or  the  joint 

names  of  said  decedent  and  any  other  person  or  persons. 


(Name  of  bank,  corporation,  etc.) 

By  

(Secretary  or  other  officer.) 

NOTE — If   bank   account,    give   amount    and    accrued   interest.    If    stock,   giva 
number  of  shares  and  name  of  corporation.    If  safe  deposit  box,  give  number. 


846  THE  STATE  STATUTES 

I  hereby  consent  to  the  above  delivery  or  transfer,  this    

day  of    

RAY   L.    RILEY,    State   Controller. 
By 


(Duly  authorized  in  writing.) 

Each  county  treasurer  and  his  deputy  or  deputies  has  been  authorized  by  the 
State  Controller  in  writing  to  consent  to  such  transfers  as  are  contemplated  by 
section  13  of  the  Inheritance  Tax  Act. 


Affidavit  for  Transfer  of  Securities,  Deposits,  etc. 

(Section  13,  Inheritance  Tax  Act.) 

NONRESIDENT  DECEDENT. 
(No  Administration  in  California.) 

State  of   | 

County   of    f     " 


,  being  duly  sworn,  says : 

1.  That died  . .  .testate  on  or  about 

,  192..,  at  

a  resident  of ,  State  of 

2.  That  no  administration  of  his  estate  has  been  commenced  in  the  State  of 
California  (nor  is  about  to  be). 

3.  That  the  clear  market  value  of  decedent's  property  subject  to  the  inheritance 

tax  law  of  the  State  of  California  does  not  exceed  $ ,  and 

consists  of: 

(a)  Personal  property  situate  in  California  of  the  following  kind  and  character 
and  valued  as  follows: 

(1)  Bonds  or  notes  present  in  California,  or   owned  by  California  debtors: 

(2)  Shares  of  stock  in  California  corporations: 

(3)  Deposits  or  other  assets,  or  contents  of  safe  deposit  boxes  standing  in  the 
name  of  decedent,  or  in  the  name  of  decedent  and  one  or  more  persons : 


(4)  Other  personal  property: 


(&)  Real  property  situate  in  California  (name  county  where  situate  and  name 
of  person  in  whose  name  title  stands)  : 

4.  That  said  property  of  decedent  passed  to  the  following  persons,  whose 
relationship  to  decedent  and  the  approximate  value  of  whose  interests  are  as 
follows : 

NAME  ADDRESS  RELATIONSHIP  VALUE  OF  INTEREST 


5.  That  affiant  had  a  general  knowledge  of  the  financial  and  physical  condition 
of  decedent  for  a  number  of  years  prior  to  his  death,  and  thereupon  answers  the 
following  questions  (if  affiant  is  not  well  acquainted  with  the  financial  and 
physical  condition  of  decedent,  as  above  stated,  name  person  best  acquainted 
therewith  and  his  address)  : 

Q.  Did  decedent  make  any  transfer  or  transfers  of  any  of  his  property  without 
valuable  and  adequate  consideration,  in  contemplation  of  his  death,  or  intended 


CALIFORNIA  847 

to  take  effect  in  enjoyment  at  or  after  such  death?     (Give  names  of  transferee 
and  brief  description  of  property) :    

Q.  Did  decedent,  during  the  latter  part  of  his  life,  transfer  the  greater  part  or 
a  large  part  of  his  property  without  valuable  and  adequate  consideration,  that  is, 
as  a  gift  or  partly  as  a  gift  or  to  avoid  probate? 


Residing  at 
Subscribed  and  sworn  to  before  me  this day  of ,  192 . . 


Notary  Public  in  and  for  the 

County  of  

,  State  of   


Consent  to  Transfer  of  Stock  Standing  in  Name  of  Decedent. 

, ,  192.. 

Company. 

,  California. 

GENTLEMEN  : 

Re  JOHN  DOE,  Deceased: 
Pursuant  to  section  13,  chapter  821,  Statutes  1921,  and  pursuant  to  law,  I 

hereby  consent  to  the  transfer  of shares  of  stock  in  the 

Company,  standing  in  the  name  of  John  Doe,  Deceased. 

Yours  very  truly, 

RAY  L.  RILEY,  Controller, 

(SEAL.)  By  

Deputy  Controller. 


848 


THE  STATE  STATUTES 


.1 

>o 

00 
^U5 

g 

O 

I 

65 
o 

-a       -3- 

•§5     8§ 

•?!  Si 

O                         TO 

49 

®     a  m 

OJ3        0  2 

§Q 

3"  p 

o 

o  c       g  » 

-  o°- 

o 

00 

|J 

65 

52     ®  » 

—             *>  -U 

-  •-        ~  ~ 

CN       1O 

3»    -a 

t-i    G)          M.   ^ 

O   «          £    « 

°3       g.2 

O      O 

;S  b      x  a 

~  o     o  a 

0-2o 

10 

o~     a  * 
.&_,    .9  o 

»-H        M 

•2^     £•§ 

6%       «» 

a-B    5™ 

M 

£ 

O 

65 

CM 

I.s  -a* 

—           -MT* 
b                O 

8    8 

O3 

o     o 

65 

.S.S     .§5 

grg 

•* 

o>>    -3S 

S 

5-1       5§ 

*^J 

6*       » 

§  o      go 

S 

o     o 

P     <£>o 

b    b          GO.* 

o  »      ae» 

.0          =3   t. 

S 

!•*§ 

o      ® 

CO 

o 

«S    i| 

Is  || 

1 

jj| 

00 

65 
o 

fcl   I" 

•is  •§•§ 

>,--       § 

i  i 

M 

W 

lo'-^o 

So 

C  m       GO 

*§  -sg 

g 

g  fe 

f-s  i§ 

g  =i 

1  i 

O.g        0W 

dg      g^ 

Q    ^  °° 
^1    0*0 

* 

o 

65 

05 

•g  D.   *•» 

•  w       m  o 

t.      t.                g]     O 

1     —  -     o> 

,OO                           X               <B 

W   £  i 

I     ^     w 

65 

o!*t    -a  °    "S 
Oo     «S!    J§ 

Q  IS 

•^    R  a 

O     H  '>» 

14 

<N 

10 

65 

00 

««  °     fe  a     * 

°s  1|  : 
1!  «*  1 

y  ^ 

e© 

b? 

ot.      C  -S      5 

&     o 

o^ 

5  °     2§     S 

•<  a 

03     H 

W   o 

a  - 

S 

65 

•«  oo        OS        w 

-°|    if  3 

rf    .§£     S 

3LE  OF  RA 
applies  to  ta 

&8 

O    t,          '-5'5          +3 

§^2     S§     § 
ao    ||    ^ 
"o^>     e"£     * 

£  >      °  *     & 
jj'3      og      § 

£_o 

>o"        o 

1| 

pi! 

«'  m  C  o"  * 

<  — 
EH  ^ 

w"^ 

^8    °S 

Ww 

c 

!?     -"e 

oS  ^      ^3  •--       o 
C"       ft'c.     * 
o3  x       aS      a> 

IB 

13   03 
C  0) 

>  ° 

1 

•^   n         m   *         0 

aS    5»    ^ 

2 

IJ 

O"S 

a 

*?°     2g    ^ 

T)  O 

a    +j         2 

a 

S  >, 

SJ 

h 

HS     £65     S 

_o 

2 

b 

3 

,j  a    xjco      o 

"a 

I 

D.' 

3 

0) 

o 

C  b 

O    O 

fa 

o  § 

r  LC 

o 

1 

go      MO     -t> 
<J3     ^5     i 

*•§  ^§  a 

**)  ^       -^S        c8 

i 

1 

B! 

IJ 

D 
h 

^^  s§  i 

fe"     »S     § 

00 

i 

b"O      • 

-  cd 

O  g    .55s    -^ 

0? 

M 

-fi  **    p 

5*8 

S    5 

feloo     "b      a 

1 

d 
c 

CLASS  OF 

i  Heirs  —  Fat 
•,  child,  adoi 
;endant  of  sai 

!!l 

||-8 

ij 

;ers,  all  other! 

§§    =51     § 

g:»  «°  s 

gf8     l§    •§ 

^s  «•§   * 

-^    .6H  d       03 

C5  g-aOo    "S 

• 

v<»  m 

"Op 

o"  S 

a 

E-i-c  S^g    pg 

g 

H  *P>Q 

5*o£ 

2-§ 

1 

es  0      0. 

!5 

S 

£ 

3  w 

3 

Q 

-S§    S^' 

zry     ee  o 

COLORADO 
TABLE  OF  GRADED  RATES  ACT  1913 


849 


CLASS  OB  RELATIONSHIP 

Exemp- 
tion 

Application  of  rates  to  value  of  inheritance 

Excess  of 
exemption 
to  $100,000 

$100,000                 All  in 
to                    excess  of 
$200,000              $200,000 

Father,  mother,  husband,  wife,  child, 
brother,  sister,  wife  or  widow  of  eon, 
daughter's  husband,  adopted  or  mu- 
tually acknowledged  child  or  law- 
fully born  lineal  descendant. 

$10,000 

2% 

3%                          4% 

Up  to 
$10,000 

$10,000 
to 
$20,000 

$20,000 
to 
850,000 

$50,000 
to 
3100,000 

All 
over 
$100,000 

Uncle,  aunt,  niece  or  nephew  or  lineal 
descendant  of  same. 

$500 

3C/ 
SO 

3% 

47o 

5% 

6% 

All  others  except  charities  exempted  by 
section  4. 

$300 

4% 

5% 

6% 

8% 

10% 

INHERITANCE  TAX  LAW,  EFFECTIVE  JULY  10,  1921. 
Definitions;   "Estate"  and  "Property,"  "transfer,"  "decedent,"  "residence." 
Section  1.   (1)  This  act  shall  be  known  as  the  "Inheritance  Tax  Act." 

(2)  The  words  "estate"  and  "property"  as  used  in  this  act  shall  be  taken 
to  mean  the  real  and  personal  property  or  interest  therein  or  income  therefrom 
of  the  testator,  intestate,  grantor,  bargainer,  vendor  or  donor  passing  or  trans- 
ferred to  individual  legatees,  devisees,  heir,  next  of  kin,  grantees,  donee,  vendees 
or  successors,  and  shall  include  all  personal  property  within  or  without  the  State. 

(3)  The  word  "transfer"  as  used  in  this  act  shall  be  taken  to  include  the 
passing  of  property  or  any  interest  therein  or  income  therefrom,  in  possession  or 
enjoyment,  present  or  future,  by  inheritance,  descent,  devise,  succession,  bequest, 
grant,  deed,  bargain,  sale,  gift,  or  appointment  in  the  manner  herein  described. 

(4)  The  word   "decedent"  as  used   in   this   act   shall   include   the   testator, 
intestate,  grantor,  bargainor,  vendor  or  donor. 

(5)  For  any  and  all  purposes  of  this  act  and  for  the  just  imposition  of  the 
inheritance  tax,  every  person  shall  be  deemed  to  have  died  a  resident  and  not  a 
non-resident,  of  the  State  of  Colorado,  if  and  when  such  person  shall  have  dwelt 
or  shall  have  lodged  in  this  State  during  and  for  the  greater  part  of  any  period 
of  twelve  consecutive  months  in  the  twenty-four  months  next  preceding  his  or 
her  death;  and  also  if  and  when  by  formal  written  instrument  executed  within 
one  year  prior  to  his  or  her  death  or  by  last  will  he  or  she  shall  have  declared 
himself  or  herself  to  be  a  resident  or  a  citizen  of  this  State,  notwithstanding  that 
from   time   to    time   during    such   twenty-four   months    such    persons    may   have 
sojourned  outside  of  this  State  and  whether  or  not  such  person  may  or  may  not 
have  voted  or  have  been  entitled  to  vote  or  have  been  assessed  for  taxes  in  this 
State;  and  also  if  and  when  such  person  shall  have  been  a  citizen  of  Colorado, 
sojourning  outside  of  this  State.     The  burden  of  proof  in  an  inheritance  tax 
proceeding  shall  be  upon  those  claiming  exemption  by  reason  of  the  allaged  non- 
residence  of  the  deceased.     The  wife  of  any  person  who  would  be   deemed   a 
resident  under  this  section  shall  also  be  deemed  a  resident  and  her  estate  subject 
to  the  payment  of  an  inheritance  tax  as  herein  provided,  unless  said  wife  has  a 
domicile  separate  from  him. 

Transfers  that  are  taxable;  rates  of  taxation  and  classification;  exemption. 

Section  2.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  prop- 
erty, real,  personal  or  mixed,  or  of  any  interest  therein  or  income  therefrom,  in 
trust  or  otherwise,  to  any  person  or  persons,  institution  or  corporation,  except  as 
hereinafter  exempted,  in  the  following  cases : 

A.  When  the  transfer  is  by  will  or  by  intestate  laws  of  this  State,  from  any 
person  dying  seized  or  possessed  of  any  such  property  while  a  resident  of  the 
State. 

B.  When  the  transfer  is  by  will  or  intestate  laws  of  property  within  the  State 
and  the  decedent  was  a  non-resident  of  the  State  at  the  time  of  his  death. 

C.  When  the  transfer  is  made  by  a  resident  or  by  a  non-resident  when  such 
non-resident  'B  property  is  within  this  State,  by  deed,  grant,  bargain,  sale,  assign- 

54 


g50  THE  STATE  STATUTES 

ment,  gift  or  contract,  in  contemplation  of  the  death  of  the  grantor,  vendor, 
assignor  or  donor,  or  intended  to  take  effect  in  possession  or  enjoyment  at  or 
after  such  death;  provided,  that  any  such  gift,  or  any  such  deed,  grant,  bargain, 
sale,  assignment  or  contract  without  valuable  and  adequate  consideration  (i.e.,  a 
consideration  equal  in  money  or  money's  worth  to  the  full  value  of  the  property 
transferred)  made  within  one  year  prior  to  the  death  of  the  decedent  shall  be 
deemed  and  held  to  have  been  made  in  contemplation  of  the  death  of  the  decedent. 
The  words  "contemplation  of  death"  as  used  in  this  Act,  shall  be  taken  to 
include  that  expectancy  of  death  which  actuates  the  mind  of  a  person  on  the 
execution  of  his  will,  and  in  nowise  shall  said  words  be  limited  and  restricted  to 
that  expectancy  of  death  which  actuates  the  mind  of  a  person  making  a  gift 
causa  mortis;  and  it  is  hereby  declared  to  be  the  intent  and  purpose  of  this  act 
to  tax  any  and  all  transfers  which  are  made  in  lieu  of  or  to  avoid  the  passing  of 
property  transferred  by  testate  or  intestate  laws. 

D.  When  any  person,  institution  or  corporation  becomes  beneficially  entitled 
in  possession  or  expectancy  to  any  property  or  the  income  therefrom,  by  any 
such  transfer,  whether  made  before  or  after  the  passage  of  this  Act. 

E.  Whenever  any  person,  institution  or  corporation  shall  exercise  a  power  of 
appointment  derived  from  any  disposition   of   property  made   either  before   or 
after  the  passage  of  this  Act,  such  appointment,  when  made,  shall  be  deemed  a 
taxable  transfer  under  the  provisions  of  this  Act,  in  the  same  manner  as  though 
the  property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee 
of  such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will;  and 
whenever   any   person,   institution,   or   corporation   possessing    such    a   power    of 
appointment  so  derived  shall  omit  or  fail  to  exercise  the  same  within  the  time 
provided  therefor,  in  whole  or  in  part,  a  transfer  taxable  under  the  provisions 
of  this  Act  shall  be  deemed  to  take  place  to  the  extent  of  such  omission  or  failure, 
in  the  same  manner   as  though  the  persons   or   corporations   thereby   becoming 
entitled  to  the  possession  or  enjoyment   of  the  property  to  which  such  power 
related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to 
exercise  such  power,  taking  effect  at  the  time  of  such  omission  or  failure. 

F.  Whenever  any  property,  real  or  personal,  is  held  in  the  joint  names  of  two 
or  more  persons,  or  as  tenants  by  the  entirety,  orjs  deposited  in  banks  or  other 
institutions  or  depositories  in  the  joint  names  of  two  or  more  persons,  and  pay- 
able to  either  or  the  survivor,  upon  the  death  of  one  of  such  persons  the  right 
of  the  surviving  tenant  by  the  entirety,  joint  tenant  or  tenants,  person  or  persons 
to  the  immediate  ownership  or  possession  and  enjoyment  of  such  property  shall 
be  deemed  a  transfer  taxable  under  the  provisions  of  this  Act  in  the  same  manner 
as  though  the  whole  property  to  which  such  transfer  relates  belonged  absolutely 
to  the  deceased  tenant  by  the  entirety,  joint  tenant  or  joint  depositor  and  had 
been  devised  or  bequeathed  to  the  surviving  tenant  by  the  entirety,  joint  tenant 
or  joint   depositor,  person   or  persons,   by  will,  excepting  therefrom   such   part 
thereof  as  may  be  proved  by  the  surviving  tenant  by  the  entirety,  joint  tenant  or 
tenants  to  have  originally  belonged  to   him,   her   or   them,  and  never   to   have 
belonged  to  the  decedent. 

G.  Where  any  property  shall  be  transferred  subject  to  any  charge,  estate  or 
interest,  determinable  by  the  death  of  any  person,  or  at  any  period  ascertainable 
only  by  reference  to  death,  the  increase  occurring  to  any  person  or  corporation 
upon  the  extinction  or  determination  of  such  charge,  estate  or  interest,  shall  be 
deemed  a  transfer  of  property  taxable  under  the  provisions  of  this  Act  in  the 
same  manner  as  though  the  person  or  corporation  beneficially  entitled  thereto  had 
acquired  such  increase  from  the  person  from  whom  the  title  to  their  respective 
estates  or  interests  is  derived. 

H.  Whenever  a  decedent  appoints  one  or  more  executors  or  trustees,  and  in 
lieu  of  their  allowances  or  commissions,  makes  a  bequest  or  devise  of  property  to 
them  which  would  otherwise  be  liable  to  said  tax,  or  appoints  them  his  residuary 
legatees,  and  said  bequests,  devises  or  residuary  legacies  exceed  what  would  be  a 
reasonable  compensation  for  their  services,  such  excess  over  and  above  the 
exemptions  hereinafter  provided  for  shall  be  liable  to  said  tax,  and  the  court 
having  jurisdiction  of  their  accounts,  upon  its  own  motion,  or  on  the  application 
of  the  Attorney  General,  shall  fix  such  compensation. 

When  the  beneficial  interest  in  any  property  or  income  therefrom  shall  pass 
to  or  for  the  use  of  any  father,  mother,  husband,  wife,  child,  or  any  child  or 
children  adopted  as  such  in  conformity  with  the  laws  of  the  State  of  Colorado,  or 


COLORADO  851 

to  any  lineal  descendant  of  such  decedent  born  in  lawful  wedlock,  in  every  such 
case  the  rate  of  such  tax  shall  be  two  dollars  on  every  one  hundred  dollars  of 
the  clear  market  value  of  such  property  received  by  each  person  on  all  amounts 
not  exceeding  fifty  thousand  dollars;  on  all  such  transfers  exceeding  fifty  thou- 
sand dollars  and  not  exceeding  one  hundred  thousand  dollars,  the  rate  of  tax 
shall  be  three  dollars  on  every  one  hundred  dollars  of  the  clear  market  value  of 
such  property  received  by  each  person;  on  all  such  transfers  exceeding  one 
hundred  thousand  dollars  and  not  exceeding  one  hundred  fifty  thousand  dollars, 
the  rate  of  tax  shall  be  four  dollars  on  every  one  hundred  dollars  of  the  clear 
market  value  of  such  property  received  by  each  person;  on  all  transfers  exceeding 
one  hundred  fifty  thousand  dollars  and  not  exceeding  two  hundred  fifty  thousand 
dollars,  the  rate  of  tax  shall  be  five  dollars  on  every  one  hundred  dollars  of  the 
clear  market  value  of  such  property  received  by  each  person ;  on  all  such  transfers 
exceeding  two  hundred  fifty  thousand  dollars  and  not  exceeding  five  hundred 
thousand  dollars,  the  rate  of  tax  shall  be  six  dollars  on  every  hundred  dollars  of 
the  clear  market  value  of  such  property  received  by  each  person;  on  all  such 
transfers  exceeding  five  hundred  thousand  dollars  the  rate  of  taxation  shall  be 
seven  dollars  on  every  one  hundred  dollars  of  the  clear  market  value  of  such 
property  received  by  each  person;  provided,  that  any  such  gift,  legacy,  inherit- 
ance, transfer,  appointment  or  interest  vesting  in  perpetuity  which  may  be  valued 
at  a  less  sum  than  ten  thousand  dollars  shall  not  be  subject  to  any  such  duty 
or  taxes,  and  the  tax  to  be  levied  in  the  above  cases  vesting  in  perpetuity  only 
upon  the  excess  of  ten  thousand  dollars  received  by  each  person. 

Provided,  further,  that  any  such  gift,  legacy,  inheritance,  transfer,  appoint- 
ment or  interest  vesting  in  perpetuity  which  may  be  valued  at  a  less  sum  than 
twenty  thousand  dollars,  so  passing  to  a  wife,  shall  not  be  subject  to  any  such 
duty  or  taxes,  and  the  tax  to  be  levied  in  the  above  case  vesting  in  perpetuity 
only  upon  the  excess  of  twenty  thousand  dollars  received  by  such  person. 

When  the  beneficial  interest  in  any  property  or  income  therefrom  shall  pass 
to  or  for  the  use  of  the  wife  or  widow  of  the  son,  or  the  husband  or  widower  of 
the  daughter,  or  the  grandfather  or  grandmother,  or  to  any  brother  or  sister, 
or  to  any  person  to  whom  the  deceased,  for  not  less  than  ten  years  prior  to  death, 
stood  in  the  mutually  acknowledged  relation  of  a  parent;  provided,  however, 
such  relationship  began  at  or  before  said  person's  fifteenth  birthday  and  was 
continuous  for  ten  years  thereafter;  and,  provided,  also,  that,  except  in  the  case 
of  a  stepchild,  the  parents  of  such  person  so  standing  in  such  relation  shall  be 
deceased  when  such  relationship  commenced,  in  every  such  case  the  rate  of  such 
tax  shall  be  three  dollars  on  every  one  hundred  dollars  of  the  clear  market  value 
of  such  property  received  by  each  person  when  the  amount  so  received  does  not 
exceed  the  sum  of  ten  thousand  dollars,  and  four  dollars  on  every  one  hundred 
dollars  of  the  clear  market  value  of  such  property  received  by  each  person 
when  the  amount  so  received  exceeds  the  sum  of  ten  thousand  dollars  and  does 
not  exceed  the  sum  of  twenty-five  thousand  dollars  of  the  clear  market  value  of 
such  property  received  by  each  person;  and  five  dollars  on  every  one  hundred 
dollars  of  the  clear  market  value  of  such  property  received  by  each  person  when 
the  amount  so  received  exceeds  the  sum  of  twenty-five  thousand  dollars  and  does 
not  exceed  the  sum  of  fifty  thousand  dollars ;  and  six  dollars  on  every  one  hundred 
dollars  of  the  clear  market  value  of  such  property  received  by  each  person  when 
the  amount  so  received  exceeds  the  sum  of  fifty  thousand  dollars  and  does  not 
exceed  the  sum  of  one  hundred  thousand  dollars;  and  seven  dollars  on  every 
one  hundred  dollars  of  the  clear  market  value  of  such  property  received  by  each 
person  when  the  amount  so  received  exceeds  the  sum  of  one  hundred  thousand 
dollars  and  does  not  exceed  the  sum  of  two  hundred  fifty  thousand  dollars,  and 
eight  dollars  on  every  one  hundred  dollars  of  the  clear  market  value  of  such 
property  received  by  each  person  when  the  amount  so  received  exceeds  the  sum 
of  two  hundred  fifty  thousand  dollars  and  does  not  exceed  the  sum  of  five  hundred 
thousand  dollars ;  and  ten  dollars  on  every  one  hundred  dollars  of  the  clear  market 
value  of  such  property  received  by  each  person  when  the  amount  so  received 
exceeds  the  sum  of  five  hundred  thousand  dollars;  provided,  that  any  such  gift, 
legacy,  inheritance,  transfer,  appointment  or  interest  vesting  in  perpetuity 
which  may  be  valued  at  a  less  sum  than  two  thousand  dollars  shall  not  be  subject 
to  any  such  duty  or  taxes,  and  the  tax  is  to  be  levied  in  such  cases  vesting  in 
perpetuity  only  upon  the  excess  of  two  thousand  dollars  received  by  each  person. 

When  the  beneficial  interest  in  any  property  or  income  therefrom  shall  pass  to 


852  THE  STATE  STATUTES 

or  for  the  use  of  any  uncle,  aunt,  niece  or  nephew  or  any  lineal  descendant  of 
the  same,  in  such  case  the  rate  of  such  tax  shall  be  four  dollars  on  every  one 
hundred  dollars  of  the  clear  market  value  of  such  property  received  by  each 
person  when  the  amount  so  received  does  not  exceed  the  sum  of  five  thousand 
dollars;  and  five  dollars  on  every  one  hundred  dollars  of  the  clear  market  value 
of  such  property  received  by  each  person  when  the  amount  so  received  exceeds 
the  sum  of  five  thousand  dollars  and  does  not  exceed  the  sum  of  ten  thousand 
dollars;  and  six  dollars  on  every  one  hundred  dollars  of  the  clear  market  value 
of  such  property  received  by  each  person  when  the  amount  so  received  exceeds 
the  sum  of  ten  thousand  dollars  and  does  not  exceed  the  sum  of  twenty-five 
thousand  dollars;  and  eight  dollars  on  every  one  hundred  dollars  of  the  clear 
market  value  of  such  property  received  by  each  person  when  the  amount  so 
received  exceeds  the  sum  of  twenty-five  thousand  dollars  and  does  not  exceed  the 
sum  of  one  hundred  thousand  dollars;  and  ten  dollars  on  every  one  hundred 
dollars  of  the  clear  market  value  of  such  property  received  by  each  person  when 
the  amount  so  received  exceeds  the  sum  of  one  hundred  thousand  dollars  and  does 
not  exceed  the  sum  of  two  hundred  fifty  thousand  dollars;  and  twelve  dollars 
on  every  one  hundred  dollars  of  the  clear  market  value  of  such  property  received 
by  each  person  when  the  amount  so  received  exceeds  the  sum  of  two  hundred 
fifty  thousand  dollars  and  does  not  exceed  the  sum  of  five  hundred  thousand 
dollars;  and  fourteen  dollars  on  every  one  hundred  dollars  of  the  clear  market 
value  of  such  property  received  by  each  person  when  the  amount  so  received 
exceeds  the  sum  of  five  hundred  thousand  dollars. 

When  the  beneficial  interest  in  any  property  or  income  therefrom  shall  in  any 
case  not  enumerated  above  pass  to  or  for  the  use  of  any  person,  co-partnership, 
association,  institution,  private,  public  or  quasi-public  corporation,  the  rate  of 
such  tax  shall  be  as  follows :  On  each  and  every  one  hundred  dollars  of  the  clear 
market  value  of  all  property  and  at  the  same  rate  for  any  less  amount  on  all 
transfers  not  exceeding  five  thousand  dollars,  seven  dollars;  on  all  transfers 
over  five  thousand  dollars  and  not  exceeding  ten  thousand  dollars,  eight  dollars; 
on  all  transfers  over  ten  thousand  dollars  and  not  exceeding  twenty-five  thousand 
dollars,  nine  dollars;  on  all  transfers  over  twenty- five  thousand  dollars  and  not 
exceeding  one  hundred  thousand  dollars,  ten  dollars;  on  all  transfers  over  one 
hundred  thousand  dollars  and  not  exceeding  two  hundred  fifty  thousand  dollars, 
twelve  dollars;  on  all  transfers  over  two  hundred  fifty  thousand  dollars  and  not 
exceeding  five  hundred  thousand  dollars,  fourteen  dollars;  on  all  transfers  over 
five  hundred  thousand  dollars,  sixteen  dollars. 

Provided,  that  any  gift,  legacy,  inheritance,  transfer,  appointment  or  interest 
which  may  be  valued  at  a  less  sum  than  five  hundred  dollars  shall  not  be  subject 
to  any  duty  or  tax. 

Life  estates;  time  of  appraisal;  may  elect  not  to  pay  until  actual  possession; 
bond. 

Section  3.  When  any  property  or  interest  therein  or  income  therefrom  shall 
pass  or  be  limited  for  the  life  of  the  beneficiary  or  for  the  life  of  another,  or 
for  a  term  of  years,  or  to  terminate  on  the  expiration  of  a  certain  period,  the 
property  of  the  decedent  so  passing  shall  be  appraised  immediately  after  the  death 
of  the  decedent,  and  the  value  of  the  said  life  estate,  term  of  years,  or  period  of 
limitation  shall  be  fixed  upon  mortality  tables,  using  the  interest  rate  or  income 
rate  of  five  per  cent;  and  the  value  of  the  remainder  in  said  property  so  limited 
shall  be  ascertained  by  deducting  the  value  of  life  estate,  term  of  years,  or  period 
of  limitation  from  the  fair  market  value  of  the  property  so  limited,  and  the  tax 
on  the  several  estate  or  estates,  remainder  or  remainders,  or  interests  shall  be 
immediately  due  and  payable,  together  with  interest  thereon,  except,  however, 
in  cases  where  property  is  transferred  by  deed,  grant  or  gift  made  in  contempla- 
tion of  death,  in  which  event  the  tax  thereon  shall  be  due  and  payable  at  the 
time  of  such  transfer;  provided,  that  if  the  person  or  persons,  body  politic  or 
corporate,  beneficially  interested  in  property  chargeable  with  said  tax,  elect  not 
to  pay  the  same  until  they  shall  come  into  actual  possession  or  enjoyment  of  such 
property,  then  in  that  case  said  person  or  persons,  or  body  politic  or  corporate, 
shall  give  bond  to  the  People  of  the  State  of  Colorado  in  a  penal  sum  three  times 
the  amount  of  the  tax  arising  from  such  property,  with  such  sureties  as  the 
County  Judge  may  approve,  conditioned  for  the  payment  of  the  said  tax  and 
interest  thereon  at  such  time  or  period  as  they  or  their  representatives  may  come 


COLORADO  853 

into  the  actual  possession  or  enjoyment  of  said  property;  which  bond  shall  be 
filed  in  the  office  of  the  County  Judge  of  the  proper  County;  provided,  further, 
that  such  person  or  persons,  body  politic  or  corporate,  shall  make  a  full  verified 
return  of  said  property  to  said  County  Judge  and  file  the  same  in  his  office 
within  one  year  from  the  death  of  the  decedent,  with  the  bond  as  above  provided ; 
and  further,  said  person  or  persons,  body  politic  or  corporate  shall  renew  said 
bond  every  five  years  after  the  date  of  the  death  of  the  decedent. 

Estates  on  contingencies;  appraisements. 

Section  4.  When  property  is  transferred  or  limited  in  trust  or  otherwise  and 
the  rights,  interest  or  estates  of  the  transferees  or  beneficiaries  are  dependent 
upon  contingencies  or  conditions  whereby  they  may  be  wholly  or  in  part  created, 
defeated,  extended  or  abridged,  a  tax  shall  be  imposed  upon  said  transfer  at  the 
highest  rate  which,  on  the  happening  of  any  of  the  said  contingencies  or  con- 
ditions, would  be  possible  under  the  provisions  of  this  Act,  and  such  tax  so 
imposed  shall  be  due  and  payable  forthwith  by  the  executors  or  trustees  out  of  the 
property  transferred. 

Estates  or  interests  in  expectancy  which  are  contingent  or  defeasible  and  in 
which  proceedings  for  the  determination  of  the  tax  have  not  been  taken,  as  in 
this  section  or  in  section  three  hereof  provided,  or  where  the  taxation  thereof  has 
been  held  in  abeyance,  shall  be  appraised  at  their  full,  undiminisked  value  when 
the  persons  entitled  thereto  shall  come  into  the  beneficial  enjoyment  or  possession 
thereof,  without  diminution  for  or  on  account  of  any  valuation  theretofore  made 
of  the  particular  estates  for  the  purpose  of  taxation,  upon  which  said  estate  or 
interests  in  expectancy  may  have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  Act  or  omission 
of  the  legatee  or  devisee,  it  shall  be  taxed  as  if  there  was  no  possibility  of  such 
divesting. 

Property  exempt  from  tax. 

Section  5.  The  following  transfers  of  property  shall  be  exempt  from  the  inherit- 
ance tax,  to-wit:  All  transfers  of  property  to  the  State  of  Colorado,  or  to  any 
County,  City,  Town  or  any  other  municipality,  or  for  the  use  of  public  libraries, 
for  religious  or  charitable  purposes  exclusively,  or  for  schools  and  colleges  not 
for  profit;  provided,  however,  that  the  same  be  situated  within  this  State,  or  the 
property  be  limited  for  use  within  this  State. 

Taxes  due  at  death;  discount  within  six  months;  when  interest  begins. 

Section  6.  All  taxes  imposed  by  this  Act  shall  be  due  and  payable  at  the  death 
of  the  decedent,  except  as  hereinbefore  provided.  If  such  tax  is  paid  within  six 
months  from  the  accruing  thereof,  a  discount  of  five  per  cent,  shall  be  allowed 
and  deducted  therefrom.  If  such  tax  is  not  paid  within  one  year  from  the  accru- 
ing thereof,  interest  shall  be  charged  and  collected  thereon  at  the  rate  of  ten  per 
cent,  per  annum  from  the  time  the  tax  accrued.  In  all  cases  where  the  executors, 
administrators  or  trustees  do  not  pay  such  tax  within  one  year  from  the  death  of 
the  decedent,  they  shall  upon  petition  of  the  Attorney  General  to  the  County 
Court,  be  required  to  give  a  bond  in  the  form  and  in  the  effect  prescribed  in 
section  three  of  this  Act,  for  the  payment  of  said  tax,  together  with  interest. 

Tax  a  lien;  recording;  enforcement  of  law  by  Attorney  General. 

Section  7.  Every  tax  imposed  by  this  Act  shall  be  and  remain  a  lien  upon  the 
property  passed  and  transferred  until  paid,  except  where  the  transfer  is  by  deed 
or  grant  in  the  hands  of  a  bona  fide  purchaser  or  incumbrancer  without  notice. 
In  such  case  a  certified  copy  of  the  application  for  probate  of  the  will  or  estate 
of  the  decedent  or  a  copy  of  the  order  of  the  County  Court  assessing  the  inherit- 
ance tax  may  be  recorded  in  the  office  of  the  county  clerk  of  the  county  where 
any  real  property  described  therein  is  situated,  which  record  shall  thereafter  be 
deemed  to  be  a  notice  of  such  taxes  to  a  subsequent  purchaser  and  incumbrancer 
of  such  real  property,  which  record  may  be  discharged  by  recording  the  receipt 
of  the  State  Treasurer  to  that  effect.  The  person  to  whom  the  property  passes 
or  is  transferred  and  all  executors,  administrators  and  trustees  shall  be  personally 
liable  for  the  payment  of  all  such  taxes  and  interest  and  where  proceedings  for 


854  THE  STATE  STATUTES 

collection  of  taxes  assessed  shall  be  had,  said  executors,  administrators  and 
trustees  shall  be  personally  liable  for  the  expenses,  costs  and  fees  of  collection. 
In  all  cases  where  any  tax  has  become,  or  shall  hereafter  become  a  lien  upon 
any  property  under  or  by  virtue  of  any  of  the  provisions  of  this  Act,  the  Attorney 
General  may,  whenever  any  property  of  said  estate  has  been  distributed  without 
the  payments  to  the  State  or  all  or  any  part  of  the  tax  payable  on  account  thereof 
under  this  Act,  or  any  former  Act,  bring  and  prosecute  an  action  or  actions  in 
the  name  of  the  State  as  plaintiff  for  the  purpose  of  enforcing  such  lien  or  liens 
against  all  or  any  of  the  property  subject  thereto.  In  any  such  action  the  owner 
of  any  property,  or  of  any  interest  in  the  property,  against  which  the  lien  of  any 
such  tax  is  sought  to  be  enforced,  and  any  predecessor  in  interest  of  any  such 
owner  whose  title  or  interest  was  deraigned  through  any  such  decedent  by  will 
or  succession  or  by  decree  of  distribution  of  the  estate  of  such  decedent  or  any 
lien  or  incumbrance  subsequent  to  the  lien  of  such  tax,  may  be  made  a  party 
defendant. 

Executor  deduct  tax;  no  distribution  until  paid. 

Section  8.  Any  administrator,  executor,  or  trustee  having  any  charge  or  trust 
in  legacies  or  property  for  distribution  subject  to  the  said  tax,  shall  deduct  the 
tax  therefrom,  or  if  the  legacy  or  property  be  not  money,  he  shall  collect  a  tax 
thereon  upon  the  appraised  value  thereof  from  the  legatee  or  person  entitled  to 
such  property,  and  he  shall  not  deliver  or  be  compelled  to  deliver  any  specific 
legacy  or  property  subject  to  tax  to  any  person  until  he  shall  have  collected  the 
tax  thereon,  and  whenever  any  such  legacy  shall  be  charged  upon  or  payable  out 
of  real  estate,  the  executor,  administrator  or  trustee,  before  paying  the  same 
shall  deduct  said  tax  therefrom  and  pay  the  same  to  the  State  Treasurer,  and  the 
same  shall  remain  a  charge  on  such  real  estate  until  paid  and  the  payment  thereof 
shall  be  enforced  by  the  executor,  administrator  or  trustee  in  the  same  manner 
that  the  payment  of  said  legacies  might  be  enforced;  if,  however,  such  legacy 
be  given  in  money  to  any  person  for  a  limited  period,  the  administrator,  executor 
or  trustee  shall  retain  the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money, 
he  shall  make  application  to  the  court  having  jurisdiction  of  his  accounts  to 
make  an  apportionment,  if  the  case  requires  it,  of  the  sum  to  be  paid  into  his 
hands  by  such  legatees,  and  for  such  further  order  relative  thereto  as  the  case 
may  require.  All  administrators,  executors,  or  trustees  shall  have  full  power  to 
sell  so  much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax, 
in  the  same  manner  as  they  may  be  enabled  to  do  by  law,  for  the  payment  of 
debts  of  their  testators  and  intestates,  and  the  amount  of  said  tax  shall  be  paid 
as  hereinafter  directed. 

Executor  pay  State  Treasurer;  no  final  account  accepted  until  tax  is  paid. 

Section  9.  Every  sum  of  money  retained  by  an  executor,  administrator  or 
trustee,  or  paid  into  his  hands  for  any  tax  under  this  Act,  shall  be  paid  by  him 
within  thirty  days  thereafter  to  the  State  Treasurer,  who  shall  give  him  receipts 
for  such  payments  which  shall  be  proper  vouchers  in  the  settlement  of  the  accounts 
of  such  executor,  administrator  or  trustee  and  no  estate  shall  be  distributed  nor 
shall  any  final  account  of  any  executor,  administrator  or  trustee  be  accepted  or 
allowed  by  the  County  Court  unless  such  account  shows,  and  the  judge  of  said 
court  finds,  that  all  taxes  with  interest  thereon  imposed  by  the  provisions  of  this 
Act  upon  any  property  or  interest  therein  belonging  to  the  said  estate  to  be 
settled  by  said  account  and  already  payable,  have  been  paid,  and  that  all  taxes 
which  may  become  due  on  said  estate  have  been  paid  or  settled  as  hereinbefore 
provided,  or  that  the  payment  thereof  to  the  State  is  secured  by  bond  or  has  been 
duly  waived  in  the  manner  provided  for  in  this  Act.  The  receipt  of  the  State 
Treasurer  for  the  amount  of  the  tax  shall  be  conclusive  as  to  the  proof  of  the 
payment  of  such  tax. 

County  Court  orders  payment  of  tax. 

Section  10.  No  tax  shall  in  any  case  be  collected  by  or  paid  to  the  State  Treas- 
urer except  upon  and  in  accordance  with  an  assessment  order  issued  from  the 
proper  County  Court.  No  fees  shall  be  charged  against  the  representatives  of 
the  State  of  Colorado,  or  against  any  person  otherwise  than  as  herein  provided, 
but  the  clerk  of  the  County  Court  shall  tax  the  sum  of  fifty  cents  for  each  enter- 


COLORADO  855 

ing  of  an  assessment  order  and  five  cents  for  each  notice  of  assessment  order 
mailed,  as  costs  in  the  estate  in  such  case  in  which  the  estate  in  which  a  tax  is 
due  is  undergoing  administration  in  the  County  Court;  and  in  addition  thereto 
shall  charge  such  fees  for  recording,  when  such  is  proper,  as  may  be  provided 
by  law  in  other  cases.  If  the  estate  is  not  undergoing  administration,  no  fees 
shall  be  charged,  unless  objections  are  filed  and  further  proceedings  had  upon 
them.  In  every  case  in  which  objections  are  filed,  and  further  proceedings  had, 
costs  shall  be  taxed  against  the  persons  objecting  except  the  State  as  in  ordinary 
civil  actions.  In  special  proceedings  occurring  under  section  18  of  this  Act, 
costs  shall  be  assessed  as  in  ordinary  civil  actions  against  the  persons  in  default, 
excepting  the  State. 

Executor  file  sworn  statement  with  Attorney  General;  extension  of  time  granted 
in  certain  cases. 

Section  11.  Every  administrator,  executor  or  trustee  of  the  estate  of  a  decedent 
who  was  at  the  time  of  his  death  a  resident  of  this  State,  shall  within  three 
months  after  the  date  of  his  appointment,  file  with  the  Attorney  General  a  sworn 
statement  of  all  property,  real,  personal  or  mixed,  and  of  any  and  all  interests 
therein,  owned  by  the  said  decedent  at  the  time  of  his  death,  and  of  all  such 
property  and  interest,  if  any,  transferred  by  said  decedent  in  his  life  time,  by 
deed,  grant,  bargain,  sale  or  gift,  made  in  contemplation  of  death,  of  such 
decedent,  or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such 
death,  so  far  as  the  same  shall  have  come  to  the  knowledge  of  such  administrator, 
executor  or  trustee.  Any  person  swearing  to  such  statement  knowing  the  same  to 
be  false,  shall  be  deemed  guilty  of  perjury  and  upon  conviction  thereof  shall  be 
punished  accordingly. 

Whenever,  by  reason  of  the  complicated  nature  of  an  estate  or  by  reason  of  the 
confused  condition  of  the  decedent's  affairs,  it  is  impracticable  for  the  executor, 
administrator  or  trustee  of  said  estate  to  file  with  the  Attorney  General  a  full, 
complete  and  itemized  inventory  of  the  property  belonging  to  the  estate  within 
the  time  hereinbefore  required,  the  Attorney  General  may,  upon  application  of 
such  representative  or  parties  interested,  extend  the  time  for  filing  the  state- 
ment for  a  period  not  to  exceed  six  months,  beyond  the  time  fixed  by  law,  or  such 
further  time  as  may  be  necessary  upon  good  cause  shown. 

Transfer  of  stock  subject  to  tax;  notice  to  commissioner;  when  corporation 
liable;  "corporation"  and  "assets"  defined;  examination  free. 

Section  12.  If  an  executor,  administrator  or  trustee  shall  assign  or  transfer 
any  stock  or  obligations  of  any  domestic  or  foreign  corporation  doing  business 
within  this  State,  standing  in  the  name  of,  or  in  trust  for  a  decedent,  resident 
or  non-resident,  or  belonging  to  or  standing  in  the  joint  name  of  such  a  decedent 
and  one  or  more  persons,  not  exempt  from  taxation  under  section  two  hereof,  the 
tax  shall  be  paid  to  the  State  Treasurer  on  the  transfer  thereof.  No  corporation 
or  other  institution,  person  or  persons,  holding  or  controlling  the  transfer  of 
securities  or  assets  of  a  decedent,  resident  or  non-resident,  nor  any  corporation 
in  which  such  decedent  held  stock  at  the  time  of  his  decease,  shall  deliver  or 
transfer  the  same  to  the  executors,  administrators,  trustees,  heirs  or  legatees  of 
such  decedent  or  to  the  survivor  or  survivors  when  held  in  the  joint  names  of  a 
decedent  and  one  or  more  persons,  upon  their  order  or  request  unless  notice  in 
writing  of  the  time  and  place  of  such  intended  transfer  or  delivery  be  served 
upon  the  commissioner  appointed  under  this  Act  at  least  ten  days  prior  to  such 
transfer  or  delivery;  nor  shall  any  corporation,  institution,  person  or  persons, 
transfer  or  deliver  any  securities  or  assets  of  the  estate  of  a  decedent  without 
first  obtaining  the  written  consent  thereto  of  the  Attorney  General,  who  shall  as 
a  condition  of  such  consent,  require  that  a  sufficient  amount  or  portion  of  such 
securities  or  assets  be  retained  to  pay  any  tax,  and  the  interest  thereon,  which 
may  thereafter  be  assessed  upon  the  transfer  of  such  property  under  the  pro- 
visions of  this  Act  or  any  amendment  thereof.  And  it  shall  be  lawful  for  the 
said  commissioner  or  Attorney  General  to  examine  said  securities  or  assets  at 
the  time  of  such  delivery  or  transfer.  Failure  to  serve  such  notice  or  to  allow 
such  examination  or  to  retain  a  sufficient  portion  or  amount  to  pay  such  tax  and 
interest  as  herein  provided,  shall  render  such  corporation  or  other  institution, 
person  or  persons,  liable  to  the  payment  of  the  tax  and  interest  due  upon  the 


856  THE  STATE  STATUTES 

transfer  of  said  securities  or  assets,  in  pursuance  of  the  provisions  of  this  Act 
and  in  addition  thereto,  or  in  the  absence  of  any  tax,  to  a  penalty  of  one  thou- 
sand dollars.  The  payment  of  such  tax  and  interest  and  penalty,  or  either,  may 
be  enforced  against  the  corporation,  institution  or  person  in  the  same  way  as 
the  liability  of  legatees,  or  legal  representatives,  or  may  be  collected  by  a  civil 
action  by  the  Attorney  General  brought  in  any  court  of  competent  jurisdiction. 
The  terms  "corporation"  and  "institution"  are  denned  to  include  corporations 
generally,  foreign  or  domestic,  which  are  qualified  to  do  business  in  this  State, 
and  also  all  banks,  trust  companies,  safe  deposit  companies,  or  other  corporate 
or  non-corporate  institutions  occupying  fiduciary  relations.  The  term  "securities 
or  assets"  shall  include  stocks,  bonds,  notes,  securities,  choses  in  action,  and 
other  personal  property,  or  the  evidences  thereof;  and  as  applied  to  banks  or 
similar  organizations  or  persons,  shall  include  deposits  or  other  funds  or  papers 
held  in  storage,  deposit  or  trust;  and  as  to  safe  deposit  companies,  the  contents 
or  control  of  safe  deposit  boxes,  and  as  to  corporations  or  institutions  generally, 
shall  include  shares  in,  or  registered  bonds  of,  or  other  interests,  in  the  corpora- 
tion or  institution  transferring.  Assets  or  securities,  including  safe  deposit 
boxes,  shall  be  considered  the  property  of  the  decedent  if  held  by  him  jointly 
with  one  or  more  other  persons,  or  in  any  other  qualified  or  limited  sense,  so 
long  as  the  ownership  possesses  a  pecuniary  or  proprietary  value. 

A  fee  of  ten  dollars  shall  be  charged  and  collected  for  each  such  examination, 
whether  such  transfer  be  found  to  be  taxable  or  not,  provided,  that  only  one  such 
fee  shall  be  charged  against  any  estate.  Said  fee  shall  be  paid  into  the 
Inheritance  Tax  Fund. 

Inheritance  Tax  Commissioner;  qualifications;  deputies  and  appraisers;  bond; 
duties;  powers;  reports  to  County  Court;  proper  deductions;  procedure  in 
County  Court;  appeals;  actions  to  remove  lien  of  inheritance  tax. 

Section  13.  For  the  purpose  of  facilitating  the  collection  of  said  inheritance 
tax  and  in  order  to  fix  the  value  of  the  property  of  persons  whose  estates  shall 
be  subject  to  the  payment  of  said  tax,  there  is  hereby  created  the  office  of 
Inheritance  Tax  Commissioner,  which  shall  be  filled  by  appointment  by  the 
Attorney  General,  of  an  attorney  at  law  licensed  to  practice  in  this  State,  and 
who  shall  have  been  actually  engaged  therein  in  the  practice  of  law  for  not  less 
than  five  years  last  preceding  the  date  of  his  appointment.  Said  Inheritance 
Tax  Commissioner  shall  be  an  assistant  to  the  Attorney  General,  charged  with 
the  special  duty  of  representing  him  in  all  matters  connected  with  the  administra- 
tion and  enforcement  of  the  provisions  of  this  Act,  and  shall  hold  his  office  at 
the  pleasure  of  the  Attorney  General.  Said  Inheritance  Tax  Commissioner  shall 
appoint  two  deputy  inheritance  tax  commissioners,  two  inheritance  tax  appraisers, 
a  clerk  and  two  stenographers  who  shall  devote  their  entire  time  to  the  perform- 
ance of  the  duties  of  said  office.  Said  Commissioner  shall  also  have  power  and  he 
may,  with  the  consent  of  the  Attorney  General  and  the  approval  of  the  State 
Civil  Service  Commission,  employ  such  other  assistant  or  assistants  as  from  time 
to  time  may  become  necessary  to  the  proper  conduct  and  administration  of  his 
office. 

The  Inheritance  Tax  Commissioner,  Deputy  Inheritance  Tax  Commissioners 
and  the  Inheritance  Tax  Appraisers  shall  each  receive  in  addition  to  their  annual 
salary  as  fixed  by  law  their  actual  and  necessary  traveling  expenses  and  witness 
fees.  The  State  Treasurer  shall  pay  the  said  necessary  traveling  expenses  of  the 
Inheritance  Tax  Commissioners,  Deputy  Inheritance  Tax  Commissioners  and 
Inheritance  Tax  Appraisers  and  witness  fees  and  the  necessary  and  incidental 
expenses  connected  with  the  business,  conduct  and  equipment  of  the  office  of  the 
Inheritance  Tax  Commissioner  and  the  compensation  and  expenses  of  said  addi- 
tional assistants  as  above  authorized,  monthly  out  of  the  funds  in  his  hands  or 
custody  on  account  of  the  inheritance  tax,  and  he  shall  retain  out  of  any  funds 
in  his  hands  received  from  said  inheritance  tax,  a  sufficient  fund  at  all  times  to 
pay  the  said  expenses,  compensation  and  for  such  equipment;  and  a  continuing 
appropriation  from  said  funds  is  hereby  made  for  the  purpose  of  paying  such 
expenses,  compensation  and  for  such  equipment.  The  State  Auditor  is  authorized 
to  issue  a  warrant  upon  the  State  Treasurer  upon  presentation  to  him  of  a 
voucher  signed  by  the  Attorney  General  for  the  amount  of  said  expenses, 
compensation  and  for  such  equipment. 

Said  Inheritance  Tax  Commissioner  and  each  of  his  said  deputies  and  each  of 


COLORADO  857 

said  appraisers  shall  file  with  the  Secretary  of  State  his  oath  of  office  and  official 
bond  in  the  penal  sum  of  not  less  than  one  thousand  dollars,  and  not  more  than 
twenty  thousand  dollars  in  the  discretion  of  the  Attorney  General,  conditioned 
on  the  faithful  performance  of  his  duties  as  such  Inheritance  Tax  Commissioner 
or  deputy  or  appraiser,  which  bonds  shall  be  approved  by  the  Attorney  General. 

It  shall  be  the  duty  of  the  Inheritance  Tax  Commissioner,  as  often  as,  or  when- 
ever occasion  may  require,  or  upon  the  motion  of  any  person  interested  in  the 
estate,  to  appraise  the  estate  of  any  deceased  person  upon  which  letters  of  admin- 
istration or  letters  testamentary  have  issued,  forthwith  giving  notice  by  mail  to 
all  persons  known  to  have,  or  claim,  an  interest  in  said  property,  and  to  such 
persons  as  the  County  Judge  may  by  order  direct,  of  the  time  and  place  at  which 
he  will  appraise  such  property,  and  at  such  time  and  place  to  appraise  the  same 
at  a  fair  market  value,  and  for  that  purpose  the  Commissioner  and  each  of  his 
deputies  is  authorized  is  issue  subpoenas  for,  and  compel  the  attendance  of, 
witnesses  before  him,  and  to  take  the  evidence  of  such  witnesses  under  oath 
concerning  such  property  and  the  value  thereof,  and  he  shall  make  a  report  in 
duplicate  thereon  in  writing  to  the  County  Court  and  to  the  Attorney  General 
showing  the  fair  market  value  of  all  of  the  estate  belonging  to  the  deceased  at 
the  time  of  his  death  and  the  description  of  the  same,  all  debts,  claims,  fees  and 
commissions,  including  the  fees  and  commissions,  of  the  executor  and  adminis- 
trator, provided,  that  when  such  executor  or  administrator  is  a  legatee,  devisee 
or  beneficiary,  such  fees  and  commission  shall  not  be  considered  a  proper  claim 
or  deduction  when  such  amount  received  as  a  beneficiary  is  in  excess  of  a  reason- 
able fee  and  commission;  when  such  reasonable  fee  or  commission  would  be  of  a 
greater  amount  than  the  administrator  or  executor  received  as  a  beneficiary 
then  the  amount  in  excess  of  the  sum  so  received  as  a  beneficiary  shall  be  deducted 
when  same  shall  have  been  filed  against  said  estate  or  allowed  by  the  court,  pro- 
vided further,  that  statutory  allowances  authorized  by  section  7223  of  the  Revised 
Statutes  of  1908,  and  section  7056  of  the  Compiled  Statutes  of  Colorado,  1921, 
and  the  Federal  Estate  Tax  and  the  Inheritance  or  Transfer  Tax  of  any  State 
shall  not  be  considered  a  proper  claim  or  deduction  in  computing  the  value  of  the 
estate  of  a  decedent,  the  names,  relationship,  and  residence  of  all  persons,  cor- 
porations or  institutions,  receiving  or  claiming  any  of  the  estate  of  the  deceased, 
a  description  of  any  property  belonging  to  the  estate  of  said  decedent  alleged 
to  have  been  transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation  of 
death  by  the  said  decedent,  or  intended  to  take  effect  in  possession  or  enjoyment 
after  such  death,  a  description  of  all  estates  left  by  said  decedent  whether  an 
estate  in  fee,  annuities,  life  estates,  or  for  a  term  of  years,  whether  such  decedent 
died  intestate  or  left  a  will;  and  such  other  facts  in  relation  thereto,  together 
with  the  depositions  of  the  witnesses  examined,  as  the  County  Court,  may  by 
order,  require  to  be  filed  in  the  office  of  the  clerk  of  said  County  Court;  and 
from  this  report  the  said  County  Court  shall  forthwith  enter  an  order  fixing  the 
then  cash  value  of  the  property  of  such  estate  and  of  the  interest  therein  passing 
to  each  person,  corporation  or  institution  under  the  will  or  by  descent  and  the 
tax  to  which  the  same  is  liable,  and  shall  immediately  give  notice  by  mail  to  all 
parties  known  to  be  interested  therein. 

Any  person  or  persons  including  the  Attorney  General,  dissatisfied  with  the 
assessment  made  or  tax  fixed  by  the  County  Court  in  the  estate  of  the  decedent 
may  object  thereto,  either  upon  the  ground  of  erroneous  valuation,  appraisement 
or  assessment,  or  otherwise,  by  a  written  objection  filed  in  the  County  Court 
within  sixty  days  after  the  making  of  the  assessment  order.  The  County  Court 
shall  thereupon,  after  a  hearing  wherein  the  Attorney  General  shall  represent 
the  State,  modify,  review  or  confirm  in  whole  or  in  part,  the  appraisement  and 
assessment.  Witnesses  subpoenaed  under  the  provisions  of  this  section  shall  have 
such  fees  as  are  now  provided  by  law;  provided,  that  on  the  petition  of  the 
Attorney  General  and  with  the  consent  of  the  County  Court,  expert  witnesses 
may  be  called,  and  the  amount  of  whose  fees  shall  be  determined  by  the  County 
Court. 

Any  person  or  persons  interested  in  the  estate  of  a  decedent,  who  may  b« 
dissatisfied  with  the  assessment  made  or  tax  fixed  by  the  County  Court,  may  at 
any  time  within  ten  days  after  the  entry  of  judgment  upon  such  objections, 
appeal  therefrom  to  the  District  Court  of  the  proper  county,  upon  giving  bond 
to  be  approved  by  the  County  Court  conditioned  to  prosecute  said  appeal  and  to 
pay  all  costs  and  whatever  taxes  shall  be  fixed  by  the  District  Court  on  appeal 


858  THE  STATE  STATUTES 

Neither  costs  nor  bonds  shall  in  any  case  be  required  from  the  representatives  of, 
or  charged  against  the  State  of  Colorado. 

Actions  may  be  brought  against  the  State  by  any  interested  person  for  the 
purpose  of  quieting  the  title  to  any  property  against  the  lien  or  claim  of  lien 
of  any  tax  or  taxes  under  this  Act,  or  for  the  purpose  of  having  it  determined 
that  any  property  is  not  subject  to  any  lien  for  taxes,  nor  chargeable  with  any 
tax  under  this  Act.  No  such  action  shall  be  maintained  where  any  proceedings 
are  pending  in  any  court  in  this  State  wherein  the  taxability  of  such  transfer 
and  the  liability  therefor  and  the  amount  thereof  may  be  determined.  All 
parties  interested  in  said  transfer  and  in  the  taxability  thereof  shall  be  made 
parties  thereto  and  any  interested  person  who  refuses  to  join  as  plaintiff  therein 
may.be  made  a  defendant.  Summons  for  the  State  in  said  action  shall  be 
served  upon  the  Attorney  General.  Should  the  court  determine  that  the  property 
described  in  the  complaint  is  subject  to  the  lien  of  said  tax  and  that  said  prop- 
erty has  been  transferred  within  the  meaning  of  this  Act,  the  court  shall  award 
affirmative  relief  to  the  State  in  said  action,  and  judgment  shall  be  rendered 
therein  in  favor  of  the  State,  ascertaining  and  determining  the  amount  of  said 
tax,  the  person  or  persons  liable  therefor,  and  the  property  chargeable  therewith 
or  subject  to  lien  therefor. 

It  shall  be  the  duty  of  said  Inheritance  Tax  Commissioner  and  each  of  his  said 
deputies  upon  learning  of  the  death  of  any  person  known  or  supposed  to  have 
died  possessed  of  property  in  this  State  or  subject  to  the  tax  imposed  by  this 
Act,  to  make  an  immediate  investigation  and  to  inform  the  Attorney  General 
and  the  County  Court  of  the  county  wherein  said  property  is  situated  or  wherein 
said  decedent  resided,  of  any  facts  learned  by  him  respecting  the  estate  of  such 
decedent. 

Whenever  an  executor,  administrator,  trustee  or  any  other  person  who  is  liable 
to  taxation  under  the  provisions  of  this  Act  refuses  or  neglects  to  furnish  the 
Inheritance  Tax  Commissioner  wfth  any  information  which  in  the  opinion  of  the 
Inheritance  Tax  Commissioner  is  necessary  to  the  proper  computation  of  the  taxes 
payable  by  such  executor,  administrator,  trustee  or  person,  after  having  been 
requested  so  to  do,  the  Inheritance  Tax  Commissioner  shall  certify  such  taxes  at 
the  highest  rate  at  which  they  could  in  any  event  be  computed. 

In  case  letters  testamentary  or  of  administration  shall  not  have  been  issued 
upon  the  estate  of  any  deceased  person  and  the  tax  provided  for  herein  shall  not 
have  been  paid  to  the  satisfaction  of  the  Attorney  General  within  sixty  days 
from  the  date  of  the  death  of  any  deceased  person,  the  County  Court  having 
jurisdiction  in  the  matter  may  grant  letters  of  administration  or  letters  of 
administration  with  the  will  annexed,  as  the  case  may  be,  to  any  person  or 
persons,  upon  the  application  of  the  Attorney  General,  provided,  that  nothing 
contained  in  this  provision  shall  be  construed  to  compel  the  Attorney  General  to 
apply  for  such  appointment,  unless  he  so  desires,  or  to  prevent  the  enforcement 
of  the  collection  of  any  tax  provided  for  herein  in  any  other  manner  as  may  be 
provided  in  this  Act  or  by  law. 

Commissioner  certifies  estates  not  subject  to  tax;  fees  for  waivers. 

Section  14.  Whenever  the  Inheritance  Tax  Commissioner  shall,  upon  investi- 
gation, be  satisfied  that  the  transfer  of  any  property  of  a  deceased  person  is  not 
liable  to  taxation  under  this  Act,  he  shall,  upon  the  request  of  the  executor, 
administrator  or  trustee,  make  and  sign  a  certificate  to  that  effect  which  shall  be 
countersigned  by  the  Attorney  General  and  filed  with  the  clerk  of  the  court 
having  jurisdiction  of  the  administration  of  such  estate.  Such  certificate  shall 
be  conclusive  upon  the  State  as  to  the  liability  of  said  estate  to  taxation,  except 
as  to  property  subsequently  found  to  belong  to  said  estate,  and  the  court,  upon 
the  filing  of  such  certificate  shall  enter  an  order  finding  that  said  estate  is  not 
liable  to  taxation  under  this  Act.  A  fee  of  one  dollar  shall  be  charged  and  col- 
lected for  such  certificate  in  all  estates  the  gross  value  of  which,  as  reported  to 
said  inheritance  tax  department,  equals  or  is  less  than  five  thousand  dollars;  in 
all  other  estates  a  fee  of  five  dollars  shall  be  charged  and  collected  for  such 
certificate.  Such  fees  shall  be  paid  into  the  inheritance  tax  fund. 

All  waivers  of  appraisement  by  the  Attorney  General  heretofore  filed  in  con- 
nection with  estates  administered  before  the  passage  of  this  Act  are  hereby 
validated  and  declared  to  have  like  effect  with  the  certificate  provided  for  by  this 
section. 


COLORADO  859 

County  Courts  may  fix  value  of  estates  on  failure  off  commissioner  to  act. 

Section  15.  In  case  of  the  failure  of  the  Inheritance  Tax  Commissioner  to 
make  such  appraisement  of  the  property  of  the  estate  of  any  decedent  or  to  make 
and  file  the  certificate  provided  for  in  section  14  of  this  Act,  within  one  year 
after  the  issuance  of  letters  testamentary  or  letters  of  administration,  provided, 
that  the  Attorney  General  has  received  the  sworn  statement  provided  for  in 
section  11  of  this  Act,  the  County  Court,  upon  motion  of  any  person  interested 
in  said  estate,  as  executor,  administrator,  trustee,  heir,  legatee,  or  devisee,  upon 
giving  twenty  days'  notice  by  mail  to  all  persons  known  to  be  interested  in  said 
estate,  including  the  Attorney  General  and  the  Inheritance  Tax  Commissioner, 
of  the  time  and  place  of  hearing,  may  at  the  time  so  fixed,  hear  evidence  and 
determine  the  value  of  such  estate,  and  the  amount  of  taxes  to  which  the  same  is 
liable,  with  the  same  effect  as  if  the  value  of  such  estate  and  the  fixing  of  said 
tax  were  made  upon  the  report  of  the  Commissioner  as  provided  for  in  section  13 
of  this  Act,  and  appeals  from  such  order  may  be  taken  in  the  same  manner  as 
provided  by  said  section  13. 

Commissioner,  deputies,  appraisers,  demanding  fee,  guilty  of  felony;  penalty. 

Section  16.  Any  interitance  tax  commissioner  appointed  under  this  Act,  any 
deputy  inheritance  tax  commissioner  or  any  inheritance  tax  appraiser,  who  shall 
take  or  demand  any  fees  or  reward  from  any  executor,  administrator,  trustee, 
legatee,  devisee,  next  of  kin,  or  heir  of  any  decedent,  or  from  any  other  person 
liable  to  pay  said  tax  or  any  portion  thereof,  shall  be  guilty  of  a  felony,  and 
upon  conviction  thereof  shall  be  punished  by  confinement  in  the  penitentiary 
for  a  term  of  not  less  than  one  year  nor  more  than  five  years. 

County  Court  shall  have  jurisdiction  over  all  questions  relating  to  this  tax. 

Section  17.  The  County  Court  of  any  county  which  has  assumed  lawful  juris- 
diction over  the  property  of  the  decedent  for  general  probate  or  administration 
purposes  under  the  laws  of  Colorado,  shall  have  jurisdiction  to  hear  and  determine 
all  questions  in  relation  to  the  tax  arising  under  the  provisions  of  this  Act.  If 
no  administration  or  probate  proceedings  have  been  taken  out  in  the  courts  of 
this  State,  the  County  Court  of  the  county  in  which  the  decedent  was  a  resident, 
if  the  decedent  was  domiciled  in  this  State,  or  if  the  decedent  was  not  so  domi- 
ciled, any  court  which  has  or  had  sufficient  jurisdiction  over  the  property  the 
transfer  of  which  is  taxable,  to  have  issued  probate  or  administration  proceedings 
thereon  had  the  same  been  justified  by  the  legal  status  of  such  property,  or  the 
same  been  applied  for,  shall  have  jurisdiction.  The  County  Court  first  acquiring 
jurisdiction  hereunder  shall  retain  the  same  to  the  exclusion  of  every  other. 

Court  shall  summon  persons  liable  when  tax  is  not  paid. 

Section  18.  If  it  shall  appear  to  the  County  Court  either  from  its  own  knowl- 
edge, or  upon  petition  of  the  Attorney  General,  that  any  tax  accruing  under  this 
Act  has  not  been  paid  according  to  law,  whether  such  tax  has  been  previously 
appraised  or  assessed  or  not,  or  whether  or  not  the  estate  of  the  decedent  con- 
cerned is  already  pending  in  such  court,  it  shall  issue  a  summons  summoning  the 
person  interested  in  the  property  liable  to  the  tax  to  appear  before  the  court  on 
a  day  certain,  not  more  than  three  months  after  the  date  of  such  summons,  to 
show  cause  why  said  tax  should  not  be  paid.  If  appraisement  and  assessment, 
or  assessment  alone,  be  necessary,  the  court  shall  order  the  same  or  complete 
the  same  as  in  ordinary  cases  and  the  procedure  thereon  and  appeal  or  writ  of 
error  therefrom,  shall  be  the  same  as  provided  in  all  other  cases  of  appraisement 
and  assessment  under  this  Act.  If  such  be  not  necessary  after  the  hearing  upon 
return  of  the  summons,  either  because  previously  completed  and  binding  upon 
the  parties,  or  because  no  tax  is  due,  or  for  any  other  reason,  then  the  process, 
practice  and  pleadings  and  the  hearing  and  determination  thereof,  and  the 
judgment  in  said  court  in  said  cases  and  appeal  or  writ  of  error,  shall  be  the 
same  as  those  which  follow  after  the  hearing  of  objections  and  judgment  thereon, 
as  elsewhere  provided  in  this  Act,  or  as  near  as  may  be  to  the  same.  All  sum- 
mons and  notices  required  in  the  proceeding  under  this  Act  may  be  served  in 
every  respect  as  now  or  hereafter  provided  for  summons  in  civil  actions  in  rem, 
unless  otherwise  provided. 


860  THE  STATE  STATUTES 

Attorney  General  may  sue;   may  compromise. 

Section  19.  Whenever  the  Attorney  General  shall  be  informed  of  any  tax  due 
under  any  of  the  provisions  of  this  Act  which  is  unpaid,  after  the  refusal  or 
neglect  of  the  person  or  persons  liable  to  pay  the  same  within  one  year  from 
the  accrual  thereof,  and  where  no  bond  shall  have  been  given  as  provided  in 
section  6  it  shall  be  his  duty  to  file  a  petition  under  section  18  of  this  Act,  and 
press  the  same  to  a  final  conclusion.  In  addition  to  any  other  remedy  for  the 
collection  of  inheritance  taxes,  the  State  may  enforce  its  claim  therefor  and  the 
lien  thereof  by  a  civil  action,  in  any  court  of  competent  jurisdiction,  against  any 
person  liable  to  pay  the  same,  and  against  any  property  subject  to  the  lien 
thereof,  and  the  Attorney  General  shall  be  authorized  to  appear  in  behalf  of  the 
State  in  any  and  all  inheritance  tax  matters  before  any  court  of  record.  The 
Attorney  General  shall  be  authorized  to  compromise  any  tax  matters  with  the 
consent  of  the  Governor  and  the  State  Treasurer  in  writing,  and  to  waive  on  his 
own  responsibility  any  provisions  of  section  12  hereof,  in  writing.  No  interest 
shall  be  waived  except  upon  the  judge's  certificate  that  the  delay  in  payment  has 
been  due  to  proper  and  necessary  litigation  or  other  unavoidable  cause. 

County  Judge  and  County  Clerk  shall  report  to  Attorney  General  every  three 

months. 

Section  20.  The  county  judge  and  county  clerk  of  each  county,  shall  every  three 
months,  make  a  statement  in  writing  to  the  Attorney  General  of  the  property 
from  which,  or  the  person  from  whom,  they,  or  either  of  them  have  reason  to 
believe  a  tax  under  this  Act  is  due  and  unpaid. 

County  Judge  shall  keep  record  of  estates. 

Section  21.  The  Treasurer  of  the  State  shall  furnish  to  each  county  judge,  a 
book  in  which  he  shall  enter  the  returns  made  by  commissioners,  the  cash  value 
of  annuities,  life  estates  and  terms  of  years  and  other  property  fixed  by  him, 
and  the  tax  assessed  thereon,  and  the  amounts  of  any  receipts  for  payments 
thereof  filed  with  him,  which  book  shall  be  kept  in  the  office  of  the  county  judge 
as  a  public  record. 

County  Clerk  shall  report  every  six  months  all  transfers  apparently  made  in 

contemplation  of  death. 

Section  22.  The  county  clerk  and  recorder  of  each  county  shall,  on  the  first 
day  of  January  and  July  of  each  year,  make  reports  to  the  Attorney  General, 
containing  a  statement  of  any  conveyance  filed  or  recorded  in  his  office  of  any 
property  which  appears  to  have  been  made  or  intended  to  take  effect  in  posses- 
sion or  enjoyment  after  the  death  of  the  grantor  or  vendor,  with  the  name  and 
place  of  residence  of  the  vendee  or  grantee  and  description  of  the  property 
transferred,  as  shown  by  such  instrument.  Such  county  official  shall  also  furnish 
to  the  Attorney  General,  upon  request,  all  information  specifically  requested  as 
to  any  instruments  of  record  in  his  office. 

All  Colorado  corporations  shall  report  every  six  months  on  all  transfers  of  stock 

made  contingent  upon  the  fact  of  death;  when  corporation  is  liable. 
Section  23.  All  Colorado  corporations  organized  for  pecuniary  profit  shall  on 
the  first  day  of  January  and  July  of  each  year,  by  its  proper  officers  under  oath, 
make  a  full  and  correct  report  to  the  Attorney  General  of  all  transfers  of  its 
stock  made  during  the  preceding  year  by  any  person  who  appears  on  the  books 
of  such  corporation  as  the  owner  of  such  stock,  when  such  transfer  is  made  to 
take  effect  at  or  after  the  death  of  the  owner  or  transferor,  and  all  transfers 
which  are  made  by  an  administrator,  executor,  trustee,  or  any  person  other  than 
the  owner  or  person  in  whose  name  the  stocks  appeared  of  record  on  the  books 
of  such  corporation,  prior  to  the  transfer  thereof.  Such  report  shall  show  the 
name  of  the  owner  of  such  stocks  and  his  place  of  residence,  the  name  of  the 
person  at  whose  request  the  stock  was  transferred,  his  place  of  residence  and  the 
authority  by  virtue  of  which  he  acted  in  making  such  transfer,  the  name  of  the 
person  to  whom  the  transfer  was  made,  and  the  residence  of  such  person,  together 
with  such  other  information  as  the  officers  reporting  may  have  relating  to  estates 
of  persons  deceased  who  may  have  been  owners  of  stock  in  such  corporation. 
If  it  appears  that  any  such  stock  so  transferred  is  subject  to  tax  under  the  pro- 
visions of  this  Act,  and  the  tax  has  not  been  paid,  the  Attorney  General  shall 


COLORADO  861 

notify  the  corporation  in  writing  of  its  liability  for  the  payment  thereof,  and 
shall  bring  suit  against  such  corporation  as  in  other  cases  herein  provided  unless 
payment  of  the  tax  is  made  within  sixty  days  from  the  date  of  such  notice. 

Receipts  may  be  obtained  from  State  Treasurer  and  recorded. 

Section  24.  Any  person  shall,  upon  the  payment  of  fifty  cents,  be  entitled  to  a 
copy  of  the  receipt  from  the  State  Treasurer  that  may  have  been  given  for  the 
payment  of  any  tax  under  this  Act,  to  be  sealed  with  the  seal  of  his  office,  which 
receipt  shall  designate  upon  the  transfer  of  what  real  property,  if  any,  of  which 
any  decedent  may  have  died  seized,  said  tax  has  been  paid  and  by  whom  paid, 
and  whether  or  not  it  is  in  full  of  said  tax;  and  said  receipt  may  be  recorded 
in  the  office  of  the  county  clerk  of  the  county  in  which  the  property  may  be 
situated  in  a  book  to  be  kept  for  such  purpose. 

Attorney  General  may  file  caveat  in  County  Court. 

Section  25.  The  Attorney  General  may  in  any  estate  pending  in  any  County 
Court  of  this  State  at  any  time  before  the  final  settlement  and  discharge  of  the 
administrator  or  executor  therein,  file  with  the  court  a  caveat  setting  forth  upon 
oath  the  fact  that  he  believes  an  inheritance  tax  is  due  on  account  of  transfers 
made  by  the  decedent.  In  every  such  case  in  which  a  caveat  shall  have  been 
filed,  the  county  judge  shall  not  approve  the  report  of  the  executor  or  adminis- 
trator therein,  nor  discharge  him  or  them,  until  a  receipt  for  the  payment  of  the 
inheritance  tax  therein  has  been  duly  filed  in  said  estate,  or  the  court  has  entered 
a  final  decree  as  provided  for  under  sections  13  and  18  of  this  Act. 

Appointment  of  special  guardian  for  infants,  etc. 

Section  26.  If  it  appears  at  any  stage  of  an  inheritance  tax  proceeding  that 
any  person  known  to  be  interested  therein  is  an  infant  or  person  under  disability 
the  county  judge  may  appoint  a  special  guardian  of  such  infant  or  person  under 
disability. 

Tax  upon  expectant  estates  may  be  agreed  upon;  trustees  discharged. 

Section  27.  The  Attorney  General,  by  and  with  the  consent  of  the  State  Treas- 
urer, expressed  in  writing,  is  hereby  empowered  and  authorized  to  enter  into  an 
agreement  with  the  trustees  of  any  estate  in  which  remainders  or  expectant 
estates  have  been  of  such  a  nature,  or  so  disposed  and  circumstanced  that  the 
taxes  therein  were  held  not  presently  payable,  or  where  the  interests  of  the 
legatees  or  devisees  were  not  ascertainable  under  an  Act  entitled,  "An  Act  in 
relation  to  public  revenue  and  repealing  all  previous  Acts  or  parts  of  Acts  in 
conflict  therewith,"  approved  March  22d,  1902,  and  amendments  thereto;  and 
to  compound  such  taxes  upon  such  terms  as  may  be  deemed  equitable  and  expedi- 
ent, and  to  grant  discharge  to  said  trustees  upon  the  payment  of  the  taxes  pro- 
vided for  in  such  composition;  provided,  however,  that  no  such  composition  shall 
be  conclusive,  in  favor  of  said  trustees  as  against  the  interests  of  such  cestuis 
que  trust  as  may  possess  either  present  rights  of  enjoyment,  or  fixed,  absolute  or 
indefeasible  rights  of  future  enjoyment,  or  of  such  as  would  possess  such  rights 
in  the  event  of  the  immediate  termination  of  particular  estates,  unless  they 
consent  thereto,  either  personally,  when  competent,  or  by  guardian.  Composition 
or  settlement  made  or  effected  under  the  provisions  of  this  section  shall  be 
executed  in  triplicate,  and  one  copy  filed  in  the  office  of  the  State  Treasurer,  one 
copy  in  the  office  of  the  County  Court  wherein  the  appraisement  was  had  or  the 
tax  was  paid,  and  one  copy  delivered  to  the  executors,  administrators,  or  trustees 
who  shall  be  parties  thereto. 

Information   concerning   transfers  by   non-residents;    appropriation   for   outside 
information. 

Section  28.  The  Attorney  General  may,  with  the  unanimous  approval  of  the 
Governor,  the  State  Treasurer  and  the  Auditor  of  State,  from  time  to  time,  enter 
into  arrangements  with  persons  outside  of  the  State  of  Colorado  for  the  supply- 
ing of  information  in  regard  to  transfers  taxable  under  this  Act,  which  might 
otherwise  escape  collection,  or  may  likewise,  with  the  approval  of  the  above 
officers,  make  arrangements  for  special  legal  services,  or  other  extraordinary 
expenses,  when  considered  necessary  in  connection  with  the  collection  of  taxes, 
the  liability  for  which  is  in  dispute.  Any  vouchers  drawn  under  this  section 


§62  THE  STATE  STATUTES 

shall  be  signed  by  all  officers  above  named  and  the  Auditor  of  State  shall  there- 
upon draw  a  warrant  upon  the  State  Treasurer  against  the  Inheritance  Tax 
Fund,  as  provided  for  the  expenses  of  the  commissioner  and  his  deputies.  And 
there  is  hereby  appropriated  from  said  Inheritance  Tax  Fund  the  sum  of  two 
thousand  dollars  per  annum,  or  so  much  thereof  as  may  be  necessary,  as  a 
continuing  appropriation  to  pay  for  such  information  and  services. 

Constitutional  section. 

Section  29.  If  any  section,  subsection,  sentence,  clause  or  phrase  of  this  Act 
is  for  any  reason  held  to  be  unconstitutional,  such  decision  shall  not  affect  the 
validity  of  the  remaining  portion  of  this  Act.  The  Legislature  hereby  declares 
that  it  would  have  passed  the  Act,  and  each  section,  subsection,  sentence,  clause 
and  phrase  thereof,  irrespective  of  the  fact  that  any  one  or  more  other  sections, 
subsections,  sentences,  clauses  or  phrases  be  declared  unconstitutional. 

Repealing  section;   taxes  already  accrued  not  released. 

Section  30.  Sections  23  to  43,  inclusive,  of  chapter  94,  Session  Laws  of  1901, 
of  the  Act  entitled,  "An  Act  in  relation  to  public  revenue  and  repealing  all 
previous  Acts  in  relation  thereto, ' '  approved  April  5th,  1901 ;  sections  21  to  41, 
inclusive,  of  chapter  3,  Session  Laws  of  1902,  of  the  Act  entitled,  "An  Act  in 
relation  to  public  revenue  and  repealing  all  previous  Acts  or  parts  of  Acts  in 
conflict  therewith, ' '  approved  March  22d,  1902 ;  chapter  193  of  the  Session  Laws 
of  1909,  entitled,  "An  Act  to  amend  sections  twenty-one  (21),  twenty- two  (22), 
twenty-nine  (29),  thirty-one  (31),  and  forty-one  (41)  of  an  Act  approved 
March  24th,  1902,  entitled,  'An  Act  in  relation  to  public  revenue  and  repealing 
all  previous  Acts  or  parts  of  Acts  in  conflict  therewith,'  the  same  being  part 
of  chapter  three  (3)  of  the  Session  Laws  of  1902,"  approved  April  17th,  1909; 
chapter  136  of  the  Session  Laws  of  1913,  entitled,  "An  Act  imposing  an  inherit- 
ance tax,  providing  for  the  collection  thereof,  denning  and  providing  for  offenses 
in  relation  thereto,  making  an  appropriation  to  carry  out  the  provisions  thereof, 
and  repealing  all  Acts  and  parts  of  Acts  in  conflict  therewith, ' '  approved  May  14th, 
1913,  and  all  other  Acts  and  parts  of  Acts  in  conflict  herewith  are  hereby 
repealed;  provided,  however,  that  this  Act  shall  not  operate  to  release  or  waive 
or  otherwise  alter  any  tax  or  taxes  which  may  have  accrued  under  the  provisions 
of  any  prior  Act. 

Safety  clause. 

Section  31.  It  is  hereby  declared  that  this  Act  is  necessary  for  the  immediate 
preservation  of  the  public  peace,  health  and  safety. 


CONNECTICUT 


863 


CONNECTICUT. 

TABLE  OF  GRADED  RATES  AS  TO  RESIDENT  TO  1921.  SEC.  3. 


Exemp- 

In excess 

tion, 

of 

CLASS  OR  RELATIONSHIP 

only  one 
allowed 

exemp- 
tion 

$25,000 
to 

$100,000 
to 

In  excess 
of 

to   each 

up  to 

$100,000 

$200,000 

$200,000 

class 

$25,000 

CLASS  A 
Parent,      grandparent,      husband,    wife, 

$10,000 

1% 

2% 

3% 

4% 

lineal  descendant,  adopted  child,  adop- 

tive parent,  and  lineal  descendant  of 

adopted  child. 

CLASS  B 

Husband  or  wife  of  any  child,  any  step- 

$3,000 

2% 

3% 

4% 

5% 

child,  brother  or  sister  of  the  half  or  full 

blood    and    the    descendants    of    such 

brother  or  sister. 

CLASS  C 

All  others. 

$500 

5% 

6% 

7% 

8% 

Except  charitable  exemptions  prescribed 

by  section  3. 

NOTE. — As  to  non-residents,  8%  tax  unless  executor  duly  files  affidavits  include  case  tax  at  above 
rates  with  exceptions  proportional  to  amount  of  property  within  the  state. 

SUCCESSION   TAX. 
General  Statutes  Revision  of  1918. 
"  Choses  in  action  "  defined. 

Section  1260.  The  words  "choses  in  action,"  as  used  in  this  chapter,  shall 
include  deposits  in  banks,  bonds,  notes,  credits,  and  evidences  of  debt,  but  shall 
not  include  shares  of  stock  of  any  corporation. 

[Succession  tax,  law  constitutional  76  C.  235.     Nature  of  tax,  76  C.  621;   77 
C.  649.    91  C.  535;  92  C.  99.] 
Tax  on  life  estates  with  remainder  over,  how  computed. 

Sec.  1266.  In  case  any  estate  or  annuity  is  given,  devised,  or  bequeathed  to  one 
or  more  persons  for  life  or  for  limited  term  with  remainder  over  to  another  or 
others,  the  principal  sum  given,  devised,  or  bequeathed,  or  the  fund  set  aside  to 
produce  such  annuity  shall,  for  the  purpose  of  computing  the  tax,  be  treated  as 
gifts,  devises,  or  bequests  to  the  persons  in  the  class  to  which  the  annuitant  or 
tenant  for  life  or  limited  term  belongs;  but  in  ease  the  person  or  persons  to 
whom  such  estate  passes  at  the  termination  of  the  annuity,  or  tenancy  for  life 
or  limited  term,  are  in  a  class  liable  to  a  greater  tax  than  the  class  to  which  the 
annuitant,  or  tenant  for  life  or  limited  term  belongs,  the  difference  between  the 
tax  which  has  been  paid  on  such  estate  and  the  tax  at  the  greater  rate  provided 
for  the  class  to  which  the  remainderman  belongs  shall  be  paid  at  the  expiration 
of  the  term  of  such  estate  for  life  or  limited  term,  or  annuity;  and  in  case  the 
person  or  persons  to  whom  such  estate  passes  at  the  termination  of  the  annuity, 
or  tenancy  for  life  or  limited  term,  are  in  a  class  liable  to  a  less  tax  than  the 
class  to  which  the  annuitant,  or  tenant  for  life  or  limited  term  belongs,  the  state 
treasurer  shall  pay  to  the  person  or  persons  to  whom  the  remainder  passes,  the 
difference,  without  interest,  between  the  tax  so  paid  and  the  tax  at  the  less  rate 
provided  for  the  class  to  which  the  remainderman  belongs.  When  successive 
estates  for  life  or  for  limited  term,  or  annuities  are  given,  devised,  or  bequeathed 
to  persons  in  different  classes  the  tax  of  each  succeeding  tenant  for  life  or 
limited  term,  or  annuitant  shall  be  adjusted  and  payment  made  in  the  manner 
prescribed  in  this  section,  at  the  expiration  of  the  term  of  each  such  estate  or 
annuity;  and  the  tax  on  the  remainder  shall  be  in  like  manner  adjusted,  and 
payment  made  on  the  expiration  of  the  last  estate  for  life  or  limited  term,  or 
annuity;  when  tenants  for  life  or  for  limited  term,  or  annuitants  take  jointly 
or  concurrently  and  are  in  different  classes,  such  proportion  of  the  principal  sum 
so  given,  devised,  or  bequeathed  shall  be  treated  as  gifts,  devises,  and  bequests 
to  the  class  to  which  the  tenant  for  life  or  for  limited  term,  or  annuitant  belongs 
as  the  income  to  which  he  is  entitled  is  of  the  income  of  the  whole  sum.  When 
the  gift  over  at  the  expiration  of  any  annuity,  or  estate  for  life  or  limited  term 
is  exempt  under  section  1261,  then  the  tax  of  the  tenant  for  life  or  limited  term, 


864  THE  STATE  STATUTES 

or  annuitant  shall  be  paid  as  hereinbefore  provided,  and  at  the  expiration  of  such 
estate  for  life  or  limited  term,  or  annuity,  the  state  treasurer  shall  pay  the 
amount  of  the  tax  on  such  exempted  remainder  without  interest  to  the  person  or 
corporation  entitled  thereto.  All  taxes  referred  to  in  this  section  shall  be  paid 
out  of  the  principal  sum  given,  devised,  or  bequeathed,  or  from  the  fund  set 
aside  to  produce  an  annuity;  the  remaindermen  and  succeeding  tenants  for  life 
or  limited  term,  or  annuitants  shall  be  entitled  to  any  exemption  which  has  not 
been  exhausted  and  shall  not  be  liable  for  interest  if  the  additional  tax  for  which 
they  are  liable  is  paid  within  two  months  after  the  termination  of  the  preceding 
estate  for  life  or  limited  term,  or  annuity.  The  judge  of  the  court  of  probate 
having  jurisdiction  of  any  estate  so  given,  devised,  or  bequeathed  shall  certify 
to  the  state  treasurer  the  termination  of  any  annuity,  tenancy  for  life  or  for 
limited  term  within  ten  days  after  the  same  has  come  to  his  knowledge. 

Rate  of  interest  on  overdue  tax.    Final  account  not  to  be  accepted  until  tax  is 

paid. 

Sec.  1269.  Every  recipient  of  a  gift  to  take  effect  at  death,  and  every  executor, 
administrator,  or  trustee  shall  be  liable  for  interest  at  the  rate  of  nine  per 
centum  per  annum  on  the  amount  of  tax  ascertained  to  be  due  from  the  time 
when  such  tax  shall  become  payable  until  the  same  is  paid.  No  final  settlement 
of  the  account  of  any  executor  or  administrator  shall  be  accepted  or  allowed  by 
any  court  of  probate  unless  the  judge  of  such  court  shall  find  that  all  taxes 
imposed  under  the  provisions  of  this  chapter,  the  amount  of  which  can  then  be 
ascertained,  with  interest,  have  been  paid;  and  the  receipt  of  the  treasurer  of 
the  state  for  the  same  shall  be  proof  of  such  payment.  Whenever  the  compu- 
tation or  final  adjustment  of  any  part  of  the  tax  is  postponed,  the  property 
passing  to  any  remainderman  shall  remain  subject  to  any  unpaid  tax,  with 
interest  at  the  same  rate  from  the  time  when  such  tax  is  required  to  be  paid 
until  the  same  is  paid.  In  every  case  in  which  the  computation  of  the  tax  is 
extended  or  postponed,  the  tax  commissioner  may,  with  the  approval  of  the 
attorney-general,  effect  such  settlement  of  the  tax  as  may  be  for  the  best  interests 
of  the  state,  and  payment  of  any  sum  agreed  upon  shall  be  a  satisfaction  of  such 
tax,  and  a  certificate  thereof  signed  by  the  tax  commissioner  shall  be  recorded 
in  the  records  of  such  court. 

Testamentary  gifts,  defined. 

Sec.  1270.  All  gifts  of  real  or  personal  estate  by  deed,  grant,  or  other  convey- 
ance made  in  contemplation  of  death,  or  to  take  effect  in  possession  or  enjoyment 
upon  the  death  of  the  grantor  or  donor,  shall  be  testamentary  gifts  within  the 
meaning  of  this  chapter,  for  taxation  purposes,  and  all  property  conveyed  to  80 
take  effect  shall  be  subject  to  the  tax  imposed  by  the  provisions  of  this  chapter. 
Executors  and  administrators  shall  forthwith  inventory  such  property,  and  the 
computation  of  such  tax  shall  be  made  as  herein  provided.  No  executor,  adminis- 
trator, trustee,  or  bailee,  having  possession  of  property  so  conveyed  or  given, 
or  of  any  deed,  grant,  conveyance,  or  other  evidence  of  such  transfer,  gift,  or 
alienation  of  property  so  conveyed  or  given,  shall  deliver  the  same  until  such 
property  has  been  inventoried  and  appraised,  and  such  inventory  and  appraisal 
accepted  by  the  court.  If  no  person  interested  shall  apply  for  letters  of  adminis- 
tration within  thirty  days  after  the  death  of  any  intestate,  the  tax  commissioner 
may  apply  to  the  court  for  the  appointment  of  an  administrator,  and  after 
notice  and  hearing  such  court  may  appoint  an  administrator. 

Powers  of  appointment. 

Sec.  1271.  Whenever  any  person  shall  exercise  a  power  of  appointment  created 
by  a  will  admitted  to  probate  after  May  19,  1915,  or  shall  by  will  exercise  a 
power  of  appointment  derived  from  any  disposition  of  property,  whenever  made, 
such  appointment,  when  made,  shall  be  deemed  to  be  a  disposition  of  property 
by  the  person  exercising  the  power  taxable  under  the  provisions  of  this  chapter 
in  the  same  manner  as  though  the  property  to  which  such  appointment  relates 
belonged  absolutely  to  the  donee  of  such  power,  and  had  been  bequeathed  and 
devised  by  the  donee  by  will;  and  whenever  any  person  possessing  such  a  power 
of  appointment  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided 
therefor,  in  whole  or  in  part,  a  disposition  of  property  taxable  under  the  pro- 
visions of  this  chapter  shall  be  deemed  to  take  place  to  the  extent  of  such 
omission  or  failure  in  the  same  manner  as  though  the  persons  and  corporations 
thereby  becoming  entitled  to  the  possession  or  enjoyment  of  property  to  which 


CONNECTICUT  865 

§uch  power  related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power 
failing  to  exercise  the  same,  taking  effect  at  the  time  of  such  omission  or  failure. 

To  what  estates  applicable. 

Sec.  1272.  This  chapter  shall  apply  to  estate  of  all  persons  whose  death  occurred 
subsequent  to  May  19,  1915,  and  to  estates  vesting  by  exercise  of  any  power  of 
appointment  or  upon  the  death  of  any  grantor  or  donor  occurring  subsequent 
to  said  date. 

Continuing  in  force  former  statutes. 

Sec.  1273.  All  estates  not  within  the  provisions  of  section  1272  shall  be  and 
remain  subject  to  the  inheritance  tax  laws  theretofore  applicable  to  them,  and 
such  laws  are  continued  in  force  for  that  purpose. 

Will  proved  without  this  State,  how  proved  in  this  State. 

Sec.  4956.  When  a  will  conveying  property  situated  in  this  state  has  been  proved 
and  established  out  of  this  state  in  and  by  a  court  of  competent  jurisdiction, 
the  executor  of  such  will  or  any  person  interested  in  such  property  may  present 
to  the  court  of  probate  in  the  district  in  which  any  of  such  property  is  situated 
a  duly  authenticated  and  exemplified  copy  of  such  will  and  of  the  record  of  the 
proceedings  proving  and  establishing  the  same  and  request  that  such  copies  be 
filed  and  recorded.  Such  request  shall  be  accompanied  by  a  complete  statement 
in  writing  of  the  property  and  estate  of  the  decedent  in  this  state;  and  if, 
after  such  notice  to  the  tax  commissioner  and  other  parties  in  interest  as  the  court 
shall  order,  and  hearing,  no  sufficient  objection  being  shown,  such  court  shall 
order  such  copies  to  be  filed  and  recorded,  and  they  shall  thereupon  become  a 
part  of  the  files  and  records  of  such  court,  and  shall  have  the  same  effect  upon 
the  property  so  conveyed  as  if  such  will  had  been  originally  proved  and  established 
in  such  court  of  probate,  but  nothing  in  this  section  shall  give  effect  to  a  will 
made  in  this  state  by  an  inhabitant  thereof  which  is  not  executed  according  to 
the  laws  of  this  state.  All  property  so  passing  shall  be  subject  to  the  pro- 
visions of  this  act  relating  to  inheritances  and  succession  and  taxation  thereof. 

AMENDATORY  AND  SUPPLEMENTAL  ACTS  OF  1919. 

Chapter  152,  Public  Acts  of  1919. 
Notice  of  escheating  estate  to  be  given  tax  commissioner. 

Section  1.  When  an  application  is  made  to  a  court  of  probate  to  settle  the 
estate  of  a  decedent,  and  it  appears  to  the  court  that  such  estate  may  escheat  to 
the  state,  a  copy  of  the  application  to  probate  such  estate  and  order  of  notice  of 
the  hearing  on  such  application  shall  be  mailed  to  the  tax  commissioner  at  least 
seven  days  prior  to  such  hearing. 

Bank  deposits  not  to  be  transferred  without  consent  of  tax  commissioner. 

§  2.  No  bank  or  trust  company  in  this  state  shall  make  or  allow  any  transfer 
of  the  money  or  property  of  a  non-resident  or  alleged  non-resident  decedent  de- 
posited in  such  bank  or  trust  company  without  the  consent  of  the  tax  com- 
missioner. Any  bank  or  trust  company  making  such  consent  shall  be  liable  for 
the  amount  of  the  succession  tax,  if  any,  found  to  be  due  from  such  estate. 

Trust  instrument  to  be  filed  when  creator  dies. 

§  3.  The  trustee  of  any  property  created  by  an  instrument  under  which 
property  of  a  decedent  is  to  be  delivered  to  a  beneficiary  at  the  death  of  the 
decedent  or  continued  in  trust  after  the  death  of  such  decedent  shall  file  in  the 
probate  court  where  the  creator  of  such  trust  last  resided  a  list  of  such  property 
giving  the  name  of  the  decedent  and  of  the  persons  who  are  entitled  to  the 
same  upon  the  death  of  such  decedent  either  in  trust  or  for  a  limited  period 
or  absolutely.  The  probate  court  shall  determine,  upon  the  application  of  the 
tax  commissioner  or  any  interested  person,  whether  or  not  such  property  is  liable 
to  a  succession  tax.  If  such  court  finds  that  there  is  a  tax  due  from  such 
decedent's  estate  on  the  passing  of  such  property,  it  shall  be  subject  to  the 
provisions  of  chapter  66  of  the  general  statutes  and  an  inventory  and  appraisal 
of  the  same  shall  be  filed  in  said  court  in  accordance  with  the  provisions  of 
chapter  256  of  the  general  statutes. 

55 


866  THE  STATE  STATUTES 

Appointment  and  duties  of  first  assistant  tax  commissioner. 

§  4.  The  first  assistant  tax  commissioner  shall  be  an  attorney  at  law,  appointed 
by  the  tax  commissioner,  and  shall  be  the  attorney  in  charge  of  succession  taxes 
or  inheritances  for  the  tax  commissioner  and  shall  have  authority  to  act  as 
attorney  for  the  tax  commissioner  in  all  matters  relating  to  the  succession  or  in- 
heritance tax  and  in  all  matters  relating  to  the  chose  in  action  tax  imposed  by 
sections  1189  to  1195,  inclusive  of  the  general  statutes. 

§  5.  Amended  by  Sec.  4  of  Chapter  297  of  the  Public  Acts  of  1921. 

§  6.  Amended  by  Sec.  1  of  Chapter  297  of  the  Public  Acts  of  1921. 

Chapter  283,  Public  Acts  of  1919. 
Jurisdiction  in  Court  of  Probate  where  there  is  ancillary  administration. 

Section  1.  Amended  by  Sec.  1  of  Chapter  320  of  the  Public  Acts  of  1921. 

§  2.  Whenever  ancillary  administration  has  been  taken  out  in  this  state  on 
the  estate  of  any  nonresident  decedent  having  property  subject  to  said  tax  under 
the  provisions  of  section  one  of  this  act,  the  court  of  probate  having  jurisdiction 
shall  have  the  same  powers  in  relation  to  such  tax  and  shall  give  the  same  notice 
to  the  tax  commissioner  of  all  hearings  relating  thereto  as  is  required  in  the 
case  of  the  estates  of  resident  decedents,  and  with  the  same  right  of  appeal. 
The  provisions  of  this  act  concerning  notice  to  the  tax  commissioner  shall  not 
apply  to  cases  where  ancillary  administration  has  been  taken  out  in  this  state 
upon  estates  of  nonresident  decedents. 

Consent  of  tax  commissioner  to  transfer  necessary,  when. 

§  3.  Where  ancillary  administration  has  not  been  taken  out  in  this  state  on  the 
estate  of  a  nonresident  decedent,  including  any  property  within  the  provisions  of 
section  one  of  this  act,  no  executor,  administrator  or  trustee  appointed  under 
the  laws  of  any  other  jurisdiction  shall  assign,  transfer  or  take  possession  of  any 
such  property  standing  in  the  name  or  belonging  to  the  estate  of,  or  held  in 
trust  for,  such  decedent  until  the  tax  prescribed  in  section  one  of  this  act  shall 
have  been  paid  to  the  state  treasurer  or  retained  as  hereinafter  provided. 

Procedure  for  securing  consent  to  transfer. 

§  4.  No  corporation  or  person  in  this  state  having  possession  of  or  control 
over  any  such  property,  including  any  corporation  any  shares  of  the  capital  stock 
of  which  may  be  subject  to  said  tax,  shall  deliver  or  transfer  the  same  to  such  a 
foreign  executor,  administrator  or  trustee,  or  to  the  legal  representatives  of 
such  decedent,  or  upon  their  order  or  request ;  unless  notice  of  the  time  and 
place  of  such  intended  delivery  or  transfer  be  mailed  to  the  tax  commissioner  at 
least  ten  days  prior  to  said  delivery  or  transfer;  nor  shall  any  such  corporation 
make  any  such  delivery  or  transfer  without  retaining  a  sufficient  amount  of 
said  property  to  pay  any  such  tax  which  may  be  due  or  may  thereafter  become 
due  under  the  provisions  of  section  1264  of  the  general  statutes,  unless  said  tax 
commissioner  consents  thereto  in  writing.  Failure  to  mail  such  notice,  or  to  allow 
the  tax  commissioner  to  examine  said  property,  or  to  retain  a  sufficient  amount 
to  pay  such  tax  shall,  in  the  absence  of  the  written  consent  of  the  tax  com- 
missioner, render  such  corporation  or  person  liable  to  the  payment  of  a  penalty 
of  three  times  the  amount  of  such  tax,  which  payment  shall  be  enforced  in  an 
action  brought  in  the  name  of  the  state. 

Assessment  of  tax  and  provisions  for  judicial  review. 

§  5.  Said  tax  commissioner,  personally  or  by  his  representative,  may  examine 
such  property  at  the  time  of  such  delivery  or  transfer,  and  it  shall  be  his  duty,  as 
speedily  as  possible  after  receiving  notice  of  said  property  or  of  the  intended 
delivery  or  transfer  thereof,  to  fix  the  valuation  of  such  property  for  the  purpose 
of  assessing  such  tax;  and  he  shall  assess  the  tax,  and  the  amount  thereof,  pay- 
able on  such  property.  Wherever  a  tax  is  assessed  on  such  property  by  such 
tax  commissioner  he  shall  forthwith  lodge  with  the  state  treasurer  a  statement 
showing  such  valuation  with  the  amount  of  such  tax,  and  shall  give  notice 
thereof  to  the  person  or  corporation  having  possession  of  or  control  over  such 
property.  Any  administrator  or  executor  appointed  under  the  laws  of  any 
other  jurisdiction  who  is  aggrieved  by  the  valuation  or  assessment  affixed  as 
aforesaid  by  the  tax  commissioner,  may,  within  twenty  days  after  the  date  of 
the  filing  of  the  aforesaid  statement  with  the  treasurer,  apply  to  the  court  of 
probate  in  any  district  in  which  any  of  the  property  so  assessed  is  situated, 


CONNECTICUT  g(J7 

which  court  shall  have  power  to  cause  a  revaluation  of  all  property  so  assessed  and 
a  reassessment  of  the  tax  thereon,  to  be  made  in  the  manner  provided  by  law 
for  the  appraisal  of  and  the  assessment  of  the  succession  tax  on  estates  of 
resident  decedents,  and  subject  to  the  same  right  of  appeal. 

AMENDATORY  AND  SUPPLEMENTAL  ACTS  OF  1921. 

Chapter  56,  Public  Acts  of  1921. 
Citation  of  delinquent  judge  before  Superior  Court. 

Section  1.  The  judge  of  any  court  of  probate  who  shall  fail  to  deliver  or  cause 
to  be  delivered  to  the  tax  commissioner  any  certified  copy  or  other  document 
within  the  time  required  for  the  delivery  of  the  same  by  the  general  statutes  or 
public  acts,  on  application  of  the  tax  commissioner  to  the  superior  court  of  any 
county  wherein  such  judge  of  probate  resides,  or,  to  any  judge  of  the  superior 
court  when  the  same  is  not  in  session  in  such  county,  showing  such  failure,  may 
be  required  by  such  court  or  such  judge  to  deliver  the  same  within  such  time  as 
may  be  designated  by  such  superior  court  or  such  judge.  On  receipt  of  such 
application  the  court  or  judge,  as  the  case  may  be,  shall  designate  a  time  when 
and  place  where  a  hearing  thereon  will  be  had  and  shall  cite  the  judge  of  the 
court  of  probate  named  in  such  application  to  appear  at  the  time  and  place  so 
designated  to  show  cause,  if  any  he  has,  why  he  has  failed  to  cause  such  copy  or 
document  to  be  delivered  to  said  commissioner. 

Matters  concerning  which  inquiry  may  be  made. 

§  2.  At  such  hearing  inquiry  may  be  made  concerning  all  estates  in  which  orig- 
inal or  ancillary  administration  shall  have  been  taken  out  in  such  court  of  probate 
subsequent  to  May  19,  1915,  in  respect  to  the  following:  The  number  of  admin- 
istrations applied  for;  the  date  of  each  such  application;  the  name  and  address 
of  each  executor,  administrator  and  trustee  appointed  by  such  court;  the  date  of 
filing  of  the  inventory  and  appraisal  of  each  estate;  the  appraised  value  of  each 
such  estate;  the  reason  for  such  failure  to  furnish  any  document  or  information 
referred  to  in  section  one;  the  failure  of  such  judge  to  send  to  said  commissioner 
any  other  information  required  by  the  statutes  to  be  so  furnished  relating  to  the 
assessment  and  collection  of  any  tax  which  may  be  due  to  the  state. 

Issue  of  peremptory  mandamus,  when. 

§  3.  Upon  rinding  the  allegations  of  such  application  to  be  true  or  that  such 
judge  of  probate  has  been  delinquent  with  respect  to  the  filing  of  any  record  or 
document  relating  to  any  estate  required  by  law  to  be  filed  with  said  commis- 
sioner, such  superior  court  or  judge  may  issue  an  order  in  the  nature  of  a 
peremptory  mandamus  requiring  such  judge  of  probate  to  comply  with  the  pro- 
visions of  the  statutes  in  relation  thereto  which  provisions  shall  be  particularly 
mentioned  in  such  order,  and  shall  render  judgment  against  such  judge  of  probate, 
with  costs  as  in  mandamus  proceedings.  Any  judge  of  probate  who  shall  fail  to 
comply  with  any  order  issued  by  the  authority  of  the  provisions  of  this  act  shall 
be  in  contempt  and  the  court  or  judge  issuing  the  same  may  punish  therefor  as 
in  mandamus  proceedings.  Any  person  claiming  to  be  aggrieved  by  any  order 
issued  on  such  application  shall  have  the  same  right  to  review  by  the  supreme 
court  of  errors  as  in  case  of  mandamus  proceedings. 

§  4.  This  act  shall  take  effect  from  its  passage. 

Chapter  283,  Public  Acts  of  1921. 
Exemption  of  certain  gifts. 

All  property  given,  devised  or  bequeathed  to  any  religious,  educational,  literary, 
charitable,  missionary,  benevolent,  hospital  or  infirmary  corporation  incorporated 
under  the  laws  of  another  state  or  territory  of  the  United  States,  or  of  a  foreign 
country,  including  corporations  organized  exclusively  for  Bible  or  tract  purposes, 
and  corporations  organized  for  the  enforcement  of  laws  relating  to  children  or 
animals,  and  all  gifts,  devises  and  bequests  to  a  municipal  corporation  in  trust 
for  a  specific  public  purpose,  shall  be  exempt  from  the  tax  prescribed  by  chapter 
66  of  the  general  statutes  as  amended,  provided  the  laws  of  such  state,  territory 
or  foreign  country  exempt  from  inheritance  and  transfer  taxes,  or  do  not  impose 
such  taxes  upon,  property  given,  devised  or  bequeathed  by  a  resident  thereof  to 
any  such  corporation  incorporated  under  the  laws  of  this  state. 


868  THE  STATE  STATUTES 

Chapter  297,  Public  Acts  of  1921. 
Assessment  of  tax  and  judicial  review. 

Section  1.  Section  1262  of  the  general  statutes  as  amended  by  section  six  of 
chapter  152  of  the  public  acts  of  1919  is  amended  to  read  as  follows:  The  tax 
imposed  by  chapter  66  of  the  general  statutes  as  amended  shall  be  computed  and 
assessed  by  the  tax  commissioner,  subject  to  the  review  and  the  decree  of  the 
court  of  probate  having  either  principal  or  ancillary  jurisdiction  within  this  state 
of  the  settlement  of  any  estate,  with  the  same  provisions  for  appeal  as  other 
orders  and  decrees  of  the  courts  of  probate ;  and  in  proceedings  in  relation  thereto 
the  tax  commissioner  shall  represent  the  interests  of  the  state.  Nothing  in  this 
section  shall  be  construed  as  contrary  to  the  provisions  of  sections  three  to  five, 
inclusive,  of  chapter  283  of  the  public  acts  of  1919. 

Deductions  allowed  in  ascertaining  net  taxable  estate. 

§  2.  Section  1263  of  the  general  statutes  is  amended  to  read  as  follows:  The 
net  estate  for  taxation  purposes  of  a  resident  decedent  shall  be  ascertained  by 
adding  to  the  appraised  value  of  the  inventoried  estate  all  gains  made  in  reducing 
choses  in  action  to  possession,  except  income  accruing  after  death,  and  deducting 
therefrom  the  amount  of  claims  paid,  all  funeral  expenses  and  expenses  of  admin- 
istration, allowance  made  for  the  support  of  widow  and  family  of  the  decedent 
during  the  settlement  of  the  estate,  the  amount  at  death  of  all  unpaid  mortgages 
not  deducted  in  the  appraisal  of  property  mortgaged,  and  losses  incurred  during 
the  settlement  of  the  estate  in  the  reduction  of  choses  in  action  to  possession, 
provided  no  such  deduction  shall  be  made  for  allowance  for  support  of  widow 
and  family  beyond  the  date  upon  which  the  tax  hereby  imposed  becomes  payable. 
The  net  estate  in  this  state  of  a  nonresident  decedent,  for  taxation  purposes, 
shall  be  ascertained  by  adding  to  the  appraised  value  of  the  estate  all  gains 
made  in  reducing  choses  in  action  to  possession,  except  income  accruing  after 
death,  and  deducting  therefrom  funeral  expenses  if  the  decedent  is  buried  within 
the  state,  expenses  of  administration  within  the  state,  the  amount  at  death  of  all 
unpaid  mortgages  not  deducted  in  the  appraisal  of  mortgaged  property  within 
the  state,  and  losses  incurred  during  the  settlement  of  the  estate  in  reducing 
choses  in  action  to  possession.  No  deduction  shall  be  made  for  ante  mortem 
claims,  in  whole  or  in  part,  unless  the  estate  in  the  state  having  original  juris- 
diction shall  be  insolvent,  in  which  case  the  difference  between  the  amount  of 
claims  and  the  amount  of  estate  within  the  state  having  original  jurisdiction  shall 
be  deducted  from  the  estate  in  this  state. 

[Chapter  297,  sec.  2.  Federal  income,  foreign  state  inheritance  and  local  taxes 
deductible.  92  C.  116.  Expenses  of  administration  include  federal  estate  and 
foreign  state  inheritance  taxes.  92  C.  501.] 

Rates  of  taxation. 

§  3.  Section  1264  of  the  general  statutes  is  amended  to  read  as  follows: 
Class  A.  The  net  estate  of  any  resident  of  this  state  passing  to  any  parent, 
grandparent,  husband,  wife,  lineal  descendant,  adopted  child,  adoptive  parent 
and  lineal  descendant  of  any  adopted  child,  in  excess  of  ten  thousand  dollars  in 
value  to  and  including  twenty- five  thousand  dollars  in  value,  shall  be  liable  to  a 
tax  of  one  per  centum  thereof;  the  tax  on  the  amount  passing  to  relatives  of  this 
class  in  excess  of  twenty-five  thousand  dollars  to  and  including  one  hundred 
thousand  dollars  shall  be  two  per  centum  thereof;  on  the  amount  in  excess  of  one 
hundred  thousand  dollars  to  and  including  two  hundred  thousand  dollars,  three 
per  centum  thereof ;  and  on  the  amount  in  excess  of  two  hundred  thousand  dollars, 
four  per  centum  thereof.  Class  B.  The  net  estate  of  any  resident  of  this  state 
passing  to  the  husband  or  wife  of  any  child  of  such  resident,  to  any  stepchild, 
brother  or  sister  of  the  full  or  half  blood,  and  to  any  descendant  of  such  brother 
or  sister,  in  excess  of  three  thousand  dollars,  shall  be  subject  to  a  tax  of  two 
per  centum  to  and  including  twenty-five  thousand  dollars;  the  tax  on  the  amount 
passing  to  relatives  of  this  class  in  excess  of  twenty-five  thousand  dollars  to  and 
including  one  hundred  thousand  dollars,  three  per  centum  thereof ;  on  the  amount 
in  excess  of  one  hundred  thousand  dollars  to  and  including  two  hundred  thousand 
dollars,  four  per  centum  thereof ;  on  the  amount  in  excess  of  two  hundred  thousand 
dollars,  five  per  centum  thereof.  Class  C.  The  net  estate  of  any  resident  of  this 
state  passing  to  any  person,  corporation  or  association,  not  included  in  either 
Class  A  or  Class  B,  in  excess  of  five  hundred  dollars,  and  not  otherwise  exempt, 
shall  be  subject  to  a  tax  of  five  per  centum  to  and  including  twenty-five  thousand 


CONNECTICUT  869 

dollars;  the  tax  on  the  amount  passing  to  beneficiaries  in  this  class  in  excess  of 
twenty-five  thousand  dollars  to  and  including  one  hundred  thousand  dollars  shall 
be  six  per  centum  thereof;  on  the  amount  in  excess  of  one  hundred  thousand 
dollars  to  and  including  two  hundred  thousand  dollars,  seven  per  centum  thereof; 
and  on  the  amount  in  excess  of  two  hundred  thousand  dollars,  eight  per  centum 
thereof.  Only  one  exemption  as  provided  in  this  section  for  each  class  shall  apply 
to  the  net  estate  passing  to  all  beneficiaries  or  distributees  in  such  class. 

[Chapter  297,  sec.  3.  Classification  herein  is  valid  exercise  of  taxing  powers. 
76  C.  235.  Estate  to  a  class  not  to  be  taxed  at  highest  rate  applicable,  but  block 
by  block  at  progressive  rates.  92  C.  116.  Excess  over  exemption  only  to  be 
taxed  in  first  block.  Each  block  to  be  carved  out  of  estate  passing  to  class  not  to 
individual.  93  C.  648.] 

Propo'rtional  exemptions  to  nonresident  estates. 

§  4.  Section  1265  of  the  general  statutes  as  amended  by  section  five  of  chapter 
152  of  the  public  acts  of  1919  is  amended  to  read  as  follows:  When  any  property 
within  the  jurisdiction  of  this  state  belonging  to  any  nonresident  shall  pass  by 
gift,  devise  or  bequest  or  according  to  the  provisions  of  the  general  statutes 
relating  to  the  distribution  of  intestate  estates,  the  tax  commissioner  shall  assess 
on  the  final  appraised  inventory  value  of  such  estate  a  tax  of  eight  per  centum 
without  exemption,  except  as  hereinafter  provided.  If  the  executor  or  adminis- 
trator of  such  nonresident  estate  shall  file  with  the  probate  court  in  this  state 
having  jurisdiction,  and  with  the  tax  commissioner  at  his  office  in  Hartford,  a 
sworn  statement  in  detail  giving  the  total  amount  of  all  property  belonging  to 
such  nonresident  decedent,  wherever  situated,  and  the  total  amount,  wherever 
situated,  passing  to  each  of  the  three  classes  provided  for  in  section  1264  of  the 
general  statutes  as  amended,  within  six  months  from  the  filing  of  the  exemplified 
copy  of  the  will  and  proceedings  of  such  nonresident  decedent  or  from  the  grant- 
ing of  administration,  exemptions  shall  be  accorded  such  estate  which  shall  be 
such  percentage  of  the  exemptions  provided  for  in  section  1264  of  the  general 
statutes  as  amended,  as  the  net  estate  of  such  nonresident  in  this  state  is  of  the 
net  estate  everywhere  situated,  and  the  tax  commissioner  shall  ascertain  the  pro- 
portion of  the  estate  of  such  nonresident  decedent,  wherever  situated,  passing 
to  each  of  such  three  classes  and  shall  compute  such  tax  on  the  net  estate  at  the 
rates  provided  for  in  section  1264  of  the  general  statutes  as  amended,  as  if  the 
property  on  which  such  tax  is  based  passed  to  the  classes  referred  to  in  the  same 
proportion. 

Statement  when  to  be  filed.    Determination  of  tax. 

§  5.  Section  1267  of  the  general  statutes  is  amended  to  read  as  follows: 
Except  as  hereinafter  provided,  within  one  year  of  the  death  of  the  donor, 
grantor,  testator  or  intestate,  the  administrator,  executor  or  trustee  shall  file  with 
the  court  of  probate  and  with  the  tax  commissioner  a  statement  under  oath 
containing  all  items  necessary  to  the  correct  computation  and  assessment  of  the 
tax,  and  a  statement  containing  the  name  and  relationship  to  the  decedent  of  each 
beneficiary,  donee,  grantee,  heir  or  distributee  and  the  value  of  the  estate  passing 
to  each  such  beneficiary.  The  tax  commissioner,  within  four  weeks  of  his  receipt 
thereof,  shall  prepare  a  computation  of  the  tax  due  from  the  estate  and  file  a 
copy  thereof  with  the  court  of  probate  and  with  the  executor  or  administrator. 
Said  court  of  probate  shall  assign  a  time  and  place  for  a  hearing  upon  such 
computation  not  less  than  two  nor  more  than  four  weeks  after  its  receipt  thereof, 
and  shall  cause  a  copy  of  such  order  of  hearing  to  be  sent  to  the  tax  commis- 
sioner and  to  the  administrator,  executor  or  trustee  at  least  ten  days  before  the 
time  of  such  hearing.  Such  court  may  cause  notice  of  the  time  and  place  of  such 
hearing  to  be  given  to  other  persons  interested  in  such  manner  as  it  shall  direct. 
The  tax  commissioner  or  any  person  interested  may  appear  before  such  court  at 
such  hearing  and  be  heard  concerning  such  computation.  Such  court  shall  deter- 
mine the  amount  of  such  tax  and  shall  enter  upon  its  records  a  decree  for  such 
amount.  If  there  shall  be  no  appearance  on  behalf  of  the  tax  commissioner,  and 
it  shall  appear  to  the  court  that  such  computation  ought  to  be  modified,  such 
hearing  shall  be  adjourned  for  not  less  than  ten  days,  and  notice  of  the  time  and 
place  of  such  adjourned  hearing  and  of  the  changes  to  be  made  in  such  compu- 
tation shall  be  given  to  the  tax  commissioner,  who  may  appear  and  be  heard 
thereon.  At  such  adjourned  hearing,  the  court  shall  enter  a  final  decree  deter- 
mining the  amount  of  such  tax,  which  shall  be  conclusive  upon  the  state  and 
persons  interested  unless  appeals  shall  be  taken  as  provided  for  appeals  from 


870  THE  STATE  STATUTES 

other  decrees  and  orders  of  such  court,  and  shall  issue  a  certificate  to  the  state 
treasurer  of  the  amount  of  such  tax.     In  all  cases  where  such  court  modifies  the 
statement  prepared  by  the  tax  commissioner,  the  judge  of  such  court  shall  cause 
a  copy  of  the  final  decree  to  be  forwarded  to  the  tax  commissioner. 
Tax  when  to  be  paid  and  from  what  property. 

§  6.  Section  1268  of  the  general  statutes  is  amended  to  read  as  follows:  Such 
statement  under  oath  shall  be  filed  with  the  court  of  probate  and  the  tax  com- 
missioner within  twelve  months  after  the  death  of  the  donor,  grantor,  testator  or 
intestate  by  the  administrator,  executor  or  trustee,  provided  the  court  of  probate 
may,  after  hearing,  on  application  of  the  administrator,  executor  or  trustee  made 
and  filed  with  such  court  at  or  before  the  expiration  of  said  twelve  months, 
extend  the  time  for  filing  such  statement.  Such  application  shall  set  forth  the 
extension  desired  and  the  reasons  therefor,  and  a  copy  of  the  same  shall  be  mailed 
to  the  tax  commissioner  at  least  six  days  before  the  date  of  such  hearing.  Such 
court,  after  such  hearing,  shall  forthwith  send  to  the  tax  commissioner  a  copy  of 
any  order  extending  the  time  for  the  filing  of  such  account.  Such  tax  shall  be 
paid  to  the  state  treasurer  within  fourteen  months  after  the  death  of  the  donor, 
grantor,  testator  or  intestate,  by  the  administrator,  executor  or  trustee,  provided 
the  court  of  probate  may,  after  hearing,  on  the  application  of  the  administrator, 
executor  or  trustee,  made  and  filed  with  such  court  at  or  before  the  expiration 
of  said  fourteen  months,  extend  the  time  for  the  payment  of  such  tax  or  any 
part  thereof.  Such  application  shall  set  forth  the  extension  desired  and  the 
reasons  therefor,  and  a  copy  of  the  same  shall  be  mailed  to  the  tax  commissioner 
at  least  six  days  before  the  date  of  such  hearing.  Such  court,  after  such  hearing, 
shall  forthwith  send  to  the  tax  commissioner  a  copy  of  any  order  extending  the 
time  for  the  payment  of  such  tax  or  any  part  thereof.  Except  as  otherwise  pro- 
vided in  chapter  66  of  the  general  statutes,  or  by  the  provisions  of  a  will,  such 
tax  shall  be  paid  from  property  passing  to  the  donee,  beneficiary  or  distributee, 
unless  such  recipient  shall  pay  to  the  administrator,  executor  or  trustee  the  amount 
thereof.  Only  one  exemption  as  herein  provided  shall  be  allowed  to  each  class, 
and  each  beneficiary  or  distributee  of  the  same  class  shall  pay  such  percentage  of 
the  tax  on  property  passing  to  such  class  as  his  share  is  of  such  property.  The 
tax  to  be  paid  by 'a  tenant  for  life  or  limited  term,  or  annuitant  shall  be  such 
percentage  of  the  whole  tax  on  property  passing  to  persons  of  the  same  class  as 
the  portion  of  the  principal  of  the  estate  which  such  tenant  for  life  or  limited 
term,  or  annuitant  has  the  use  of,  is  of  the  net  taxable  estate  passing  to  such 
class.  Any  executor,  administrator  or  trustee  may  sell,  in  such  manner  as  the 
court  of  probate  shall  order,  such  portion  of  any  property  passing  to  any  bene- 
ficiary or  distributee  as  may  be  necessary  to  pay  such  tax  and  the  expenses  of  sale, 
unless  such  beneficiary  or  trustee  shall  pay  the  amount  of  such  tax  to  the 
administrator,  executor,  or  trustee. 

[Chapter  297,  sec.  6.  What  provision  in  a  will  is  sufficient  to  relieve  particular 
bequests  from  tax.  89  C.  193.] 

Chapter  320,  Public  Acts  of  1921. 
What  property  subject  to  tax. 

Section  1.  All  property  owned  by  a  resident  of  this  state  at  the  time  of  his 
decease,  and  all  real  estate  and  tangible  personal  property  including  moneys  on 
deposit,  within  this  state,  shares  of  the  capital  stock  or  registered  bonds  of  all 
corporations  organized  and  existing  under  the  laws  of  this  state,  and  all  other 
intangible  personal  property,  including  bonds,  securities,  shares  of  stock  and 
choses  in  action,  the  evidences  of  ownership  of  which  shall  be  actually  within 
this  state,  owned  by  a  nonresident  of  this  state  at  the  jtime  of  his  decease  which 
shall  pass  by  will  or  inheritance  under  the  laws  of  this  or  any  other  state  or 
country,  and  all  such  property  of  any  decedent  which  shall  pass  by  deed,  grant  or 
gift,  made  in  contemplation  of  the  death  of  the  grantor  or  donor,  or  intended 
to  take  effect  in  possession  or  enjoyment  at  the  death  of  such  grantor  or  donor, 
shall  be  subject  to  the  tax  prescribed  by  chapter  66  of  the  general  statutes  aa 
amended.  All  property  passing  to  or  in  trust  for  the  benefit  of  any  corporation 
or  institution  located  in  this  state  which  receives  state  aid,  or  for  the  use  of  a 
municipal  corporation  for  public  purposes  within  this  state,  and  all  gifts  of 
paintings,  pictures,  books,  engravings,  bronzes,  curios,  bric-a-brac,  arms  and 
armor,  and  collections  of  articles  of  public  interest,  passing  to  any  corporation 
or  institution  located  in  this  state  for  preservation  and  free  exhibition  and  any 
gift  to  any  association  or  corporation  in  trust  for  the  perpetual  care  of  cemetery 


CONNECTICUT  871 

plots  to  an  amount  not  exceeding  three  hundred  dollars,  shall  be  exempt  from 
such  tax.  The  provisions  of  this  act  shall  not  apply  to  real  estate  situated 
without  the  state. 

Transfers  prima  facie  in  contemplation  of  death. 

§  2.  All  transfers  of  real  or  personal  estate  by  gift,  deed,  grant  or  other 
conveyance  between  parties  related  by  blood  or  marriage,  either  by  a  direct  con- 
veyance or  by  conveyance  through  a  third  party,  made  and  completed  within  one 
year  next  prior  to  the  date  of  death  of  the  grantor  or  donor  shall  be  construed 
prima  facie  to  have  been  made  in  contemplation  of  death. 

Application  hereto   of  certain   sections. 

§  3.  The  provisions  of  sections  two,  three,  four  and  five  of  chapter  283  of  the 
public  acts  of  1919,  shall  apply  to  the  provisions  of  section  one  hereof. 

[Chapter  320.  Taxation  of  personal  property  of  resident  located  in  another 
state  considered  and  upheld.  76  C.  617;  id.  657. 

A  corporation  receives  "state  aid"  when  it  is  exempted  by  the  Legislature 
from  local  taxation.  82  C.  99.  Exemption  must  be  actual.  95  C.  50.] 

Chapter  323,  Public  Acts  of  1921. 

Inventories  of  estates. 

Section  4980  of  the  general  statutes  as  amended  by  chapter  36  of  the  public 
acts  of  1919  is  amended  to  read  as  follows:  An  inventory  of  all  the  property 
of  every  deceased  person  and  insolvent  debtor,  except  real  estate  situated  outside 
the  state,  duly  appraised,  shall  be  made  and  sworn  to  by  the  executor,  adminis- 
trator or  trustee  and  by  him  filed  in  the  probate  court  having  jurisdiction  of  the 
estate  of  such  deceased  person  or  insolvent  debtor  within  two  months  after  the 
acceptance  of  the  bond  or  other  qualification  of  such  fiduciary,  provided  the 
inventory  and  appraisal  of  the  estate  of  any  nonresident  shall  include  only  such 
interest  as  such  decedent  had  at  the  time  of  his  death  in  the  real  estate,  tangible 
personal  property,  situated  in  this  state,  and  intangible  personal  property  subject 
to  the  tax  imposed  by  chapter  66  of  the  general  statutes  as  amended.  Such  court 
may,  for  cause  shown,  extend  the  time  for  the  filing  of  such  inventory  to  not 
exceeding  four  months  from  the  qualification  of  the  fiduciary.  Such  inventoried 
property  shall  be  appraised  at  its  fair  market  value  by  two  or  more  disinterested 
persons  under  oath,  appointed  by  such  court.  When  the  estate  of  any  deceased 
person  consists  only  of  cash  on  hand  or  on  deposit  in  banks,  or  both,  no  appraisal 
thereof  need  be  made  and  the  fiduciary  shall  enter  in  the  inventory  the  amount 
of  such  cash  and  such  deposits  as  the  value  thereof.  If  the  estate  of  any  deceased 
person  shall  be  appraised  for  more  than  three  thousand  dollars,  or  if  the  estate 
of  any  deceased  person  is  appraised  for  less  than  three  thousand  dollars  when 
such  estate  contains  property  subject  to  the  provision  of  sections  1189  and  1195, 
inclusive,  of  the  general  statutes,  or  passing  to  members  of  Class  C  as  defined 
by  section  1264  of  the  general  statutes  as  amended,  the  court  of  probate  shall, 
within  ten  days  after  the  filing  in  such  court  of  such  inventory  or  appraisal,  cause 
a  certified  copy  of  the  same,  with  the  address  of  the  fiduciary  indorsed  thereon,  to 
be  delivered  to  the  tax  commissioner.  Within  sixty  days  after  the  receipt  of  such 
copy  by  the  tax  commissioner,  he  or  any  party  interested  may  file  in  such  court 
a  statement  in  writing  setting  forth  in  detail  such  objections  as  he  may  have  to 
the  acceptance  of  such  inventory  or  appraisal,  and  at  the  same  time  shall  sand 
a  copy  thereof  to  the  executor  or  administrator,  and  if  such  objection  be  filed 
by  the  executor,  administrator  or  interested  party,  a  copy  shall  at  the  same  time 
be  sent  to  the  tax  commissioner  by  the  person  filing  such  objection.  Upon  the 
filing  of  such  objection,  such  court  shall  order  a  hearing  on  the  acceptance  of 
such  inventory  and  appraisal  to  be  had  within  sixty  days  and  not  less  than  fifteen 
days  thereafter,  and  cause  notice  of  the  time  and  place  of  such  hearing  to  be 
forthwith  given  to  the  tax  commissioner  and  the  executor  or  administrator  of  the 
estate.  Such  court  upon  such  hearing  shall  hear  such  objections  and  determine  the 
fair  market  value  of  any  inventoried  property,  the  appraised  value  of  which  has 
been  objected  to,  and  may  order  such  executor,  administrator  or  trustee  to  amend 
such  inventory  or  appraisal  in  any  way  that  it  shall  find  proper,  and  may  accept 
the  same  as  amended.  If  no  objection  to  such  inventory  or  appraisal  be  filed  as 
aforesaid,  such  inventory  and  appraisal  may  thereupon  be  accepted  by  such 
court.  Such  court  may  tax  the  costs  incident  to  the  proceedings  on  the  filing  of 


872  THE  STATE  STATUTES 

such  objections,  whether  the  same  be  heard  or  withdrawn,  in  favor  of  the  prevail- 
ing party.  The  court  of  probate  shall,  within  ten  days  after  the  filing  of  the 
inventory  of  any  estate  of  the  appraised  value  of  more  than  three  thousand 
dollars,  or  of  any  estate  of  the  appraised  value  of  less  than  three  thousand  dollars, 
when  such  estate  contains  property  subject  to  the  provisions  of  sections  1189  to 
1195,  inclusive,  of  the  general  statutes,  or  passing  to  members  of  Class  C  as 
defined  by  section  1264  of  the  general  statutes  as  amended,  file  with  the  tax 
commissioner  a  certified  copy  of  the  application  for  administration  or  probate  of 
the  will  of  such  decedent,  with  a  certified  copy  of  the  will.  If,  in  the  opinion  of 
the  judge  of  said  court,  any  estate  is  not  subject  to  succession  or  inheritance 
tax,  he  shall  send  to  the  tax  commissioner  with  the  copy  of  the  inventory,  a 
certificate  to  that  effect,  setting  forth  his  reasons  therefor,  and  unless  the  tax 
commissioner  shall,  within  sixty  days  after  the  filing  of  such  certificate,  as  herein- 
before provided,  file  an  objection  to  such  certificate,  no  tax  shall  be  due  from 
the  estate  inventoried  as  aforesaid,  unless  the  appraised  value  of  any  item  of  the 
inventory  be  increased  or  additional  property  be  thereafter  discovered.  The 
court  of  probate  may,  at  any  time,  correct  an  error  or  mistake  in  such  certificate. 
The  value  of  the  estate  as  set  forth  in  the  accepted  inventory  of  an  estate  shall 
be  the  basis  for  computing  the  succession  or  inheritance  tax. 

[Chapter  323.  "Actual  value"  and  not  assessed  value  of  pr~operfy~T>asisOTfor 
appraisal.  91  C.  532.] 

TAX  ON  UNTAXED  PROPERTY  OF  DECEASED  PERSONS. 

General  Statutes,  Revision  of  1918. 
Affidavit  of  taxes  paid  to  accompany  inventory. 

Section  1189.  The  executor  of  every  will  and  the  administrator  of  every  estate, 
except  as  hereinafter  provided,  at  the  time  of  filing  the  inventory  and  appraisal 
of  such  estate  with  the  court  of  probate,  shall,  in  addition  thereto,  file  an  affidavit 
in  duplicate  setting  forth  the  items  included  in  such  inventory  on  which  a  tax 
has  been  assessed  by  any  town  or  city  during  the  last  completed  taxing  period, 
or  paid  to  the  state  during  the  year  next  preceding  the  date  of  the  death  of  the 
decedent,  the  assessed  value  of  each  item  and  the  place  of  assessment  or  payment 
of  the  tax  on  each  item,  and  the  judge  of  probate  shall  send  to  the  tax  commis- 
sioner, with  the  copy  of  each  inventory  required  to  be  sent  to  said  commissioner, 
a  copy  of  such  affidavit.  Each  judge  of  probate,  in  addition  to  the  copies  of 
other  inventories  required  to  be  filed  with  the  tax  commissioner,  shall  file  with 
said  commissioner  a  copy  of  the  inventory  and  appraisal  of  each  estate  in  process 
of  settlement  in  his  court  less  than  five  hundred  dollars  in  value,  which  includes 
taxable  property  upon  which  no  town  or  city  tax  has  been  assessed  during  the 
last  completed  taxing  period,  or  upon  which  no  state  tax  has  been  paid  during 
the  year  next  preceding  the  date  of  the  death  of  the  decedent.  The  term  "com- 
pleted taxing  period"  as  herein  used  means  the  time  allowed  for  the  assessors 
and  board  of  relief  to  complete  their  duties.  Any  estate,  the  appraised  value  of 
which  is  not  in  excess  of  two  thousand  dollars  and  any  portion  of  which  passes, 
by  will  or  pursuant  to  the  provisions  of  the  statutes  of  this  state  relating  to  the 
distribution  of  intestate  estates,  to  the  widow  or  minor  children,  shall  be  exempt 
from  the  provisions  of  this  section  and  section  1190. 

Rate  of  tax. 

§  1190.  All  taxable  property  of  any  estate  upon  which  no  town  or  city  tax 
has  been  assessed  as  provided  in  section  1189  or  upon  which  no  tax  has  been  paid 
to  the  state  during  the  year  preceding  the  date  of  the  death  of  the  decedent,  shall 
be  liable  to  a  tax  of  two  per  centum  per  annum  on  the  appraised  inventory  value 
of  such  property  for  the  five  years  next  preceding  the  date  of  the  death  of  such 
decedent,  provided  the  executor  or  administrator  of  any  estate  may,  by  furnish- 
ing evidence  to  the  satisfaction  of  the  tax  commissioner  that  a  state,  town  or 
city  tax  has  been  paid  on  any  of  such  property  for  a  portion  of  said  five  years 
or  that  the  ownership  of  such  property  has  not  been  in  the  decedent  for  a  portion 
of  said  period,  obtain  a  proportionate  deduction  from  the  tax  hereby  imposed, 
and  provided  the  administrator  or  executor  of  such  estate  may  furnish  evidence 
to  the  tax  commissioner  that  the  appraised  value  of  the  estate  is  not  in  excess  of 
two  thousand  dollars  and  a  portion  of  the  same  passes  by  will  or  pursuant  to  the 


CONNECTICUT  873 

provisions  of  the  statutes  of  this  state  relating  to  the  distribution  of  intestate 
estates,  to  the  widow  or  minor  children,  as  provided  in  section  1189. 

[Section  1190.  "Taxable  property"  includes  municipal  bonds  issued  prior 
to  April  1,  1917,  and  not  specially  exempted  by  a  legislative  act.  94  C.  543. 
Adjudged  constitutional  in  June,  1921,  in  Bankers  Trust  Co.  et  al.  vs.  State  of 
Connecticut.] 

Tax  commissioner  to  notify  state  treasurer  and  court  of  probate  when  any  tax 

is  due. 

§  1191.  Within  ninety  days  after  receipt  of  the  inventory  and  affidavit,  or 
corrected,  amended  or  supplemental  inventory  and  appraisal  of  an  estate,  the  tax 
commissioner  shall  file  with  the  state  treasurer  and  with  the  court  of  probate 
wherein  such  estate  is  in  course  of  settlement,  a  statement  of  the  name  of  any 
estate  which  is  liable  for  such  tax  and  the  amount  thereof.  The  tax  commissioner 
may,  at  any  time  within  ninety  days,  correct  such  statement  on  account  of  an 
error  or  omission  by  sending  a  corrected  statement  to  the  treasurer  and  judge  of 
probate,  showing  the  name  of  the  estate  and  the  amount  of  the  tax  as  corrected. 
Such  court  of  probate  shall,  within  ten  days  from  the  receipt  of  such  statement 
or  corrected  statement,  mail  a  copy  of  the  same  to  the  executor,  administrator 
or  representative  of  such  estate  at  his  last  known  address. 

Appeal  from  assessment  of  tax  commissioner  allowed. 

§  1192.  Any  executor,  administrator  or  representative  of  such  an  estate 
aggrieved  by  the  action  of  the  tax  commissioner  in  determining  such  tax,  if 
unable  to  agree  with  the  tax  commissioner  upon  the  amount  of  such  tax  as  pro- 
vided in  section  1190,  may,  within  ninety  days  from  the  time  of  the  filing  by  the 
tax  commissioner  of  such  statement  or  corrected  statement  with  the  judge  of 
probate,  make  application  in  the  nature  of  an  appeal  therefrom  to  the  superior 
court  of  the  county  in  which  such  probate  court  is  located  which  shall  be  accom- 
panied by  a  citation  to  said  tax  commissioner  to  appear  before  such  court.  Such 
citation  shall  be  signed  by  the  same  authority  and  such  appeal  shall  be  returnable 
at  the  same  time  and  served  and  returned  in  the  same  manner  as  is  required  in 
case  of  a  summons  in  a  civil  action.  The  authority  issuing  such  citation  shall  take 
from  the  applicant  a  bond  or  recognizance  in  the  sum  of  one  hundred  and  fifty 
dollars  to  said  tax  commissioner,  with  surety  to  prosecute  the  application  to  effect 
and  to  comply  with  the  orders  and  decrees  of  the  court  in  the  premises.  Such 
applications  shall  be  preferred  cases,  to  be  heard,  unless  cause  appear  to  the 
contrary,  at  the  first  session,  by  the  court  and  the  pendency  of  such  application 
shall,  subject  to  the  order  of  the  court,  suspend  action  upon  the  tax  against  the 
applicant.  Such  court  shall  have  power  to  grant  such  relief  as  the  law  allows, 
and  upon  such  applications  costs  may  be  taxed  at  the  discretion  of  the  court. 

Collection  of  tax  by  state  treasurer. 

§  1193.  If  no  appeal  shall  be  taken  by  any  executor,  administrator  or  other 
representative  as  provided  in  section  1192,  or,  if  taken,  and  a  tax  is  found  to  be 
due  the  state,  the  tax  shall  be  paid  to  the  state  treasurer  by  the  executor,  admin- 
istrator or  other  representative  of  the  estate,  and  the  treasurer  shall  collect  the 
same. 

Disposition  of  tax  by  state  treasurer. 

§  1194.  The  treasurer  shall  retain  a  portion  thereof  equivalent  to  a  tax  at  the 
rate  of  four  mills  per  annum  on  the  value  of  such  property  for  the  use  of  the 
state,  and  shall  pay  to  the  treasurer  of  the  town,  or  of  the  consolidated  town  and 
city  or  consolidated  town  and  borough  in  which  the  decedent  last  resided  the 
remainder  of  the  tax  so  collected. 

Final  account  not  to  be  approved  until  tax  is  paid. 

§  1195.  No  final  settlement  of  the  account  of  any  administrator  or  executor 
shall  be  allowed  by  any  court  of  probate  until  the  tax,  if  any,  required  by  the 
provisions  of  sections  1190,  1191  and  1193  shall  have  been  paid  and  a  certificate 
of  the  state  treasurer  to  that  effect  filed  with  such  court. 


874 


THE  STATE  STATUTES 


DELAWARE. 

Statute,  approved  March  24,  1917,  taxes  all  property  of  nonresidents  within 
the  State  except  stock  in  Delaware  corporations. 

From  March  26,  1909,  to  March  24,  1917,  taxed  all  property  of  nonresidents 
within  the  State  on  transfers  to  collaterals  and  strangers  only. 

TABLE  OF  RATES  AND  EXEMPTIONS  SUBSEQUENT  TO  MARCH  24,  1917 


CLASS  OB  RELATIONSHIP 

Exemp- 
tion 

RATES  o»  TAX 

Above 
exemp- 
tion to 
$30,000 

$30,000 
to 
$100,000 

$100,000 
to 
$200,000 

In  excesa 
of 
$200,000 

Parent,  grandparent,  husband,  wife, 
child  by  birth  or  legal  adoption, 
daughter-in-law,  son-in-law,  lineal 
descendant. 

$3,000 

1% 

2% 

3% 

4% 

Brother  or  sister,  either  of  the  whole 
or  half  blood  of  decedent,  or  oi 
decedent's  parent  or  grandparent, 
or  any  lineal  descendant  of  the  same. 

$1,000 

Above 
exemp- 
tion to 
$25,000 

$25,000 
to 
$100,000 

4% 

5% 

2% 

3% 

All  Bothers,  except  charitable,  educa- 
tional, historical  or  religious  so- 
cieties, or  institutions,  cities  or 
towns  for  public  improvement, 
school  districts  or  library  commis- 
sions. 

On  all 
up  to 
$25,000 

$25,000 
to 
$100,000 

7% 

8% 

5% 

6% 

The  present  act  approved  March  24,  1917. 

The  amendment  of  1917,  after  changing  the  title  of  the  prior  statutes  from 
"Collateral  Inheritance  Tax"  to  "Inheritance  Tax,"  provides: 

146.  §  109.  Property  subject  to;  rates;  exemptions.  All  property  within  the 
jurisdiction  of  this  State,  real  and  personal,  and  every  estate  and  interest  therein, 
whether  belonging  to  residents  or  nonresidents  of  this  State,  (except  shares  of 
the  capital  stock  of  corporations  created  under  the  laws  of  this  State  when  owned 
by  persons  without  this  State)  which  passes  by  will,  or  by  the  intestate  laws  of 
this  State,  or  by  deed,  grant,  gift,  or  settlement  (except  in  cases  of  a  bona  fide 
purchase  for  full  consideration  in  money  or  money's  worth)  made  in  contempla- 
tion of,  or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of 
the  grantor,  donor,  or  settlor,  to  any  person,  or  persons,  bodies  politic,  or  cor- 
porate, in  trust  or  otherwise,  shall  be  subject  to  taxation  as  follows: 

The  act  then  fixes  the  rates  and  exemptions  as  shown  in  the  foregoing  table. 

The  statute  then  provides  as  follows: 

"Any  transfer  of  a  material  part  of  the  property  of  a  decedent  in  the  nature 
of  a  final  disposition  or  distribution  thereof,  made  by  the  decedent  within  two 
years  prior  to  his  death  without  full  consideration  in  money  or  money's  worth, 
shall,  unless  shown  to  the  contrary,  be  deemed  to  have  been  made  in  contemplation 
of  death  within  the  meaning  of  this  chapter. 

§  2.  That  said  chapter  6  be  and  the  same  is  hereby  further  amended  by  repeal- 
ing "152,  Sec.  115"  thereof,  and  inserting  in  lieu  thereof  the  following  new 
"152,  Sec.  115": 

152.  §  115.  Register  of  wills;  returns  by  of  tax  collected,  to  State  Treasurer; 
accounting  by;  commissions  of;  liability  upon  bond  of;  removal  from  office, 
when.  It  shall  be  the  duty  of  the  several  registers  of  wills  in  the  State,  to  make 


DELAWARE 


875 


return,  under  oath  to  the  State  Treasurer,  on  the  first  days  of  January,  April, 
July  and  October,  in  each  year,  or  within  thirty  days  thereafter,  of  all  sums  of 
money  received  by  them  as  taxes  under  the  provisions  of  said  sections  109  to  115 
inclusive,  of  this  chapter,  and  to  pay  over  to  said  State  Treasurer  the  amounts  so 
by  them  received  respectively,  at  the  time  of  making  such  returns,  and  if  any 
register  of  wills  shall  fail  to  pay  over,  as  required  by  this  section,  the  State 
Treasurer  shall  give  notice  to  the  Attorney-General  of  the  State,  whose  duty  it 
shall  be  to  institute  suit  on  the  official  bond  of  such  register  of  wills,  for  the  use 
of  the  State,  to  recover  the  amount  due  from  such  register  of  wills,  and  in  such 
suit  the  amount  appearing  to  be  due,  with  interest  thereon,  and  costs,  shall  be 
recovered,  which  recovery  shall  be  evidence  of  misbehavior  in  office,  and  upon 
conviction  thereof  such  register  of  wills  shall  be  removed  from  office. 

THE  PRIOR  STATUTE. 
TABLE  OF  RATES  AND  EXEMPTIONS  FROM  MARCH  26,  1909,  TO  MARCH  24,  1917 


CLASS  OB  RELATIONSHIP 

Exemption 

Rate  of  tax 

Father,  mother,  grandfather,  grandmother,  wife,  husband, 
child  by  birth  or  legal  adoption  or  lineal  descendants. 

All 

No  tax. 

Brother,  sister  or  their  descendants  

500 

exemption. 

Brother  or  sister,  either  of  the  whole  or  half  blood  of  the 
decedent's  parents  or  their  descendants. 

500 

2%  on  all  in  excess  of 
exemption. 

Brother  or  sister  either  of  the  whole  or  half  blood  of  the 
decedent's  grandparents  or  their  descendants. 

500 

3%  on  all  in  excess  of 
exemption. 

All  others  except  charitable  corporations  specified  in  sec- 
tion 1. 

500 

5%  on  all  in  excess  of 
exemption. 

LAWS  OF  1909,  CHAPTER  225,  AS  AMENDED  BY  L.  1913,  BECAME  A  LAW 

MARCH  26,  1909. 

Section  1.  All  property  within  the  jurisdiction  of  this  State,  real  and  personal, 
and  every  estate  and  interest  therein,  whether  belonging  to  inhabitants  of  this 
State  or  not,  which  shall,  after  the  approval  of  this  act,  pass  by  will,  or  by  the 
intestate  laws  of  this  State,  or  by  deed,  grant  or  gift  (except  in  cases  of  a  "bona 
fide  purchase  for  full  consideration  in  money  or  money's  worth,  made  or  intended 
to  take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor  or  donor, 
to  any  person  or  persons,  bodies  politic  or  corporate,  in  trust  or  otherwise. 

[NOTE:  The  section  then  fixes  the  rates  and  exemptions  as  shown  in  the  above 
table.] 

The  section  concludes:  provided  further  that  nothing  in  this  act  shall  be  con- 
strued to  impose  any  tax  upon  any  property,  estate  or  interest  therein  passing 
to  or  for  the  use,  or  in  trust  for,  charitable,  educational  or  religious  societies  or 
institutions,  or  cities  or  towns  for  public  improvement,  or  to  school  districts  or 
library  commissions. 

§  2.  Requires  the  executor  or  administrator  to  pay  the  tax  before  he  pays  any 
pecuniary  legacy  or  distributive  share  within  thirteen  months  and  in  case  of 
failure  shall  not  be  allowed  any  commissions  and  make  him  liable  on  his  official 
bond. 

§  3.  The  estate  or  interest  of  every  person,  body  politic  or  corporate,  in  all 
real  and  personal  property,  taxable  under  the  provisions  of  section  1  of  this  act, 
whether  in  remainder,  reversion  or  otherwise,  or  in  trust  or  otherwise,  or  condi- 
tioned upon  the  happening  of  a  contingency  or  dependent  upon  the  exercise  of  a 
discretion,  or  subject  to  a  power  of  appointment,  or  otherwise,  and  all  annuities 
taxable  as  aforesaid,  shall  be  valued  by  the  register  of  wills  for  the  purpose  of 
determining  the  amount  of  tax  to  be  collected  from  such  person,  body  politic,  or 
corporate,  under  the  provisions  of  this  act.  Where  the  property  shall  pass  in 
trust  or  otherwise  to  one  or  more  persons,  bodies  politic  or  corporate,  for  a  term 
of  years  or  greater  estate  or  Interest,  and  with  remainder  or  reversion  to  one  or 
more  other  persons,  bodies  politic,  or  corporate,  the  estate  or  interest  of  each  bene- 


876  THE  STATE  STATUTES 

ficiary  shall  be  valued  separately.  The  register  of  wills  referred  to  in  this 
section  shall  be  the  register  of  wills  of  the  county  when  letters  testamentary  or 
of  administration  have  been  granted  on  the  estate  of  the  donor,  grantor,  devisor 
or  intestate  from  whom  the  property  aforesaid  shall  have  passed  as  set  forth  in 
section  1  of  this  act,  but  if  no  such  letters  have  been  granted  then  the  said 
register  shall  be  the  register  of  wills  of  the  county  in  which  such  property  is,  or 
is  situated.  Such  valuation  shall  be  made  within  thirteen  months  of  the  death 
of  the  donor,  grantor,  devisor  or  intestate  aforesaid.  The  register  shall  give  one 
week's  notice  to  the  parties  in  interest  by  posting  the  same  in  his  office  or  in 
some  other  manner  as  he  shall  deem  proper,  of  the  time  when  he  will  hear  any 
of  said  parties  relative  to  such  valuation.  The  said  register  shall  have  power  to 
summon  witnesses  and  take  testimony  relative  to  the  valuation  aforesaid. 

The  section  further  provides  for  an  appeal  from  the  appraisal  to  the  orphan's 
court,  the  decision  of  which  is  final.  It  makes  the  tax  a  lien  on  real  estate  and 
provides  for  the  collection  of  the  tax  by  an  executor  or  administrator  from  a 
specific  legatee  or  heir  to  distributive  share  of  specific  property.  In  failure  of 
the  beneficiary  to  pay  within  thirty  days  application  to  the  orphan's  court  is 
required  for  an  order  of  sale.  Where  the  legacy  is  made  a  charge  on  land  the 
holder  of  the  land  must  pay  the  tax  to  the  executor.  Trustees  must  pay  the  tax 
out  of  the  trust  property  to  the  executor  or  if  none  named  to  the  register  of  wills 
of  the  proper  county.  The  executor  or  administrator  must  file,  within  two  months 
of  appointment,  with  the  register  of  wills,  a  sworn  statement  of  all  real  estate 
of  the  decedent.  The  register  of  wills  must  keep  a  docket  of  such  statements 
and  note  therein  the  assessment  and  payment  of  the  tax.  The  State  Treasurer 
must  examine  this  docket  and  notify  the  Attorney-General  of  delinquents,  who 
must  proceed  to  collect  the  tax.  If  no  executor  or  administrator  appointed  a 
party  liable  may  pay  tax  to  register  of  wills. 

§  4.  Makes  the  bond  of  an  executor  or  administrator  liable  for  taxes. 

§  5.  Every  executor  or  administrator  collecting  the  tax  aforesaid  by  sale  of 
any  estate  or  interest  as  aforesaid,  shall  pay  the  tax  so  collected  to  the  register 
of  wills  of  the  proper  county. 

§  6.  Every  register  of  wills  receiving  any  tax  under  the  provisions  of  this 
act,  shall  give  the  person  paying  the  same,  duplicate  receipts  therefor,  one  of 
which  shall  be  forwarded  by  the  person  so  paying  as  aforesaid,  to  the  State 
Treasurer  to  be  by  him  preserved,  and  either  of  said  duplicate  receipts  shall 
be  evidence  in  suits  upon  the  bond  of  said  register  to  recover  the  taxes  so  by 
him  received. 

§  7.  Eequires  the  register  of  wills  to  make  quarterly  tax  returns  to  the  State 
Treasurer  and  makes  their  bondsmen  liable  in  default. 

Prior  Statutes:  L.  1869,  ch.  390;  L.  1871,  ch.  21;  L.  1871,  ch.  24;  L.  1877,  ch. 
337;  L.  1883,  ch.  8;  L.  1883,  ch.  11.  The  last  act  was  in  force  until  March  26, 
1909. 


DISTRICT  OF  COLUMBIA. 

Has  no  inheritance  tax. 


FLORIDA. 

Has  no  inheritance  tax. 


GEORGIA 


877 


GEORGIA. 

Taxes  property  of  nonresidents  within  the  State. 

TABLE    OF    RATES    UNDER    ACT    OF    1913 


CLASS  OR  RELATION-SHIP 

Amount 
of 
exemption 

Rate  of  tax 

Father,  mother,  husband,  wife,  child,  brother,  sister,  wife  or  widow 
of  a  son,  adopted  child  or  lineal  descendant  if  decedent. 

$5,000 

1%  on  all  in 
excess  _of 
exemption 

5% 

TABLE  OF  RATES  AND  EXEMPTIONS  UNDER  STATUTE  OF  1919  AS  AMENDED  BY 

ACT  OF  1921. 


CLASS  OR  RELATIONSHIP 

Exemp- 

exemption 
to 

$25,000 
to 

$50,000 
to 

$100,000 
to 

In  excess 
of 

$25,000 

$50,000 

$100,000 

$500,000 

$500,000 

Husband,  wife,  child,  adopted 
child,  son-in-law,  daughter- 

in-law. 

$5,000 

1% 

1^% 

2% 

2M% 

3% 

Lineal     ancestor     or     lineal 

descendant. 

$2,000 

Brother,      sister,      (including 

half  blood)  step  child. 

None 

3% 

4^% 

6% 

7H% 

9% 

Uncle,  aunt,  nephew  or  niece. 

None 

5% 

7y*% 

10% 

12M% 

15% 

After  relatives  and  strangers 

(except  charitable,  religious, 

educational  and  municipal 

corporations      which      are 

wholly  exempt). 

None 

7% 

10M% 

14% 

n\4% 

21% 

THE    INHERITANCE    TAX    LAW    OF    GEORGIA,    AS    AMENDED    BY    THE 
GENERAL  ASSEMBLY,  1919  AND  1921. 

Section  1.  Be  it  enacted  by  the  General  Assembly  of  the  State  of  Georgia,  and 
it  is  hereby  enacted  by  the  authority  aforesaid,  That  all  property,  real  and 
personal,  and  every  estate  and  interest  therein  belonging  to  the  inhabitants  of 
the  State,  and  all  real  estate  as  well  as  tangible  personal  property  within  the 
State  or  any  interest  therein,  belonging  to  persons  who  are  not  inhabitants  of 
the  commonwealth  which  shall  pass  on  the  death  of  the  decedent  by  will  or  by 
the  laws  regulating  descents  and  distributions,  or  by  deed,  grant,  of  gift,  except 
in  cases  of  a  bona  fide  purchase  for  a  full  consideration,  made  or  intended  to 
take  effect  in  possession  or  enjoyment,  after  the  death  of  the  grantor  or  donor, 
to  any  person  or  persons,  bodies  politic  or  corporate,  in  trust  or  otherwise,  shall 
be  subject  to  taxes,  and  shall  pay  the  following  tax  to  this  State: 

(1)  When  the  property  or  any  beneficial  interest  therein  passes  by  any  such 
transfer  where  the  amount  of  the  property  shall  exceed  in  value  the  exemption 
hereinafter  specified,  and  shall  not  exceed  in  value  twenty-five  thousand  ($25,000), 
the  tax  hereby  imposed  shall  be: 

(a)  Where  the  person  or  persons  entitled  to  any  beneficial  interest   in  such 
property  shall  be  the  wife,  husband,  child,  adopted  child,  son-in-law,  daughter- 
in-law,  lineal  descendant  or  lineal  ancestor  of  the  decedent,  at  the  rate  of  one 
per  centum   (1%)  of  the  market  value  of  such  interest  in  such  property. 

(b)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister,  or  step-child  of  the  decedent    (and  the 
term  brother  or  sister  shall  include  a  brother  or  sister  of  the  half-blood),  at  the 
rate  of  three  per  centum   (3%)    of  the  market  value  of  such  interest  in  such 
property. 


878  THE  STATE  STATUTES 

(c)  Where  the  person  or  persons  entitled  to   any  beneficial  interest  in   such 
property  shall  be  the  uncle,  aunt,  nephew,  or  niece  of  the  decedent,  at  the  rate  of 
five  per  centum  (5%)  of  the  market  value  of  such  interest  in  such  property. 

(d)  Where  the  person  or  persons  entitled  to   any  beneficial  interest  in   such 
property  shall  be  of  other  degree  of  relationship  than  those  named  above,  or  of 
no  relationship  to  the  decedent,  at  the  rate  of  seven  per  centum   (7%)   of  the 
market  value  of  such  interest  in  such  property. 

(2)  The  foregoing  rates  are  for  convenience  termed  the  primary  rate;  when 
the  amount  of  the  market  value  of  such  property  or  interest  exceeds  twenty-five 
thousand  dollars  ($25,000),  the  rate  of  tax  upon  such  excess  shall  be  as  follows: 

Upon  all  in  excess  of  twenty-five  ($25,000)  up  to  fifty  thousand  dollars 
($50,000),  one  and  one-half  times  the  primary  rate. 

Upon  all  in  excess  of  fifty  thousand  dollars  ($50,000)  and  up  to  one  hundred 
thousand  dollars  ($100,000),  two  times  the  primary  rate. 

Upon  all  in  excess  of  one  hundred  thousand  dollars  ($100,000)  and  up  to  five 
hundred  thousand  dollars  ($500,000),  two  and  one-half  times  the  primary  rate. 

Upon  all  in  excess  of  five  hundred  thousand  dollars  ($500,000),  three  times 
the  primary  rate. 

(3)  The  following  exemptions  from  the  tax  are  hereby  allowed: 

(a)  All  property  transferred  to  a  person  or  corporation,  in  trust  or  use  solely 
for   educational,   literary,   scientific,   religious   or   charitable   purposes,   or   to   the 
State  or  any  county  or  municipal  corporation  thereof  for  public  purposes,  shall 
be  exempt. 

(b)  Property  of  the  market  value   of  five  thousand   dollars    ($5,000),   trans- 
ferred or  passing  to  the  widow,  widower,   child,  son-in-law,  daughter-in-law,,  or 
an  adopted  child  of  the  decedent,  shall  be  exempt.     Property  of  the  market  value 
of  two  thousand   ($2,000)    dollars  transferred  to  any  other  person  described  in 
subdivision  (a)  of  paragraph  (1),  shall  be  exempt. 

§  2.  Be  it  further  enacted,  That  if  any  section  of  this  Act,  or  any  part  of  any 
section  of  this  Act  be  hereafter  declared  invalid,  the  remainder  of  said  Act 
shall  stand. 

§  3.  Be  it  further  enacted  by  the  authority  aforesaid,  That  the  taxes  imposed 
by  this  Act  shall  be  and  remain  a  lien  upon  the  property  subject  to  said  tax 
from  the  death  of  the  decedent,  and  that  all  taxes  imposed  by  this  Act,  unless 
otherwise  herein  provided  for,  shall  be  due  and  payable  at  the  death  of  the 
decedent. 

§  4.  Be  it  further  enacted  by  the  authority  aforesaid,  That  if  the  property 
passing  as  aforesaid  shall  be  divided  into  two  or  more  estates,  as  an  estate  for 
years  or  for  life  and  a  remainder,  then  said  tax  shall  be  levied  on  every  estate 
and  interest  separately,  according  to  the  value  of  the  same  at  the  death  of  the 
decedent;  that  the  value  of  the  remainder  in  said  property  so  limited  shall  be 
ascertained  by  deducting  the  value  of  the  life  estate,  term  of  years,  or  period 
of  limitation  from  the  fair  market  value  of  the  property  so  limited  and  the  tax 
on  the  several  estate  or  estates,  remainder  or  remainders  or  interest  shall  be 
immediately  due  and  payable  to  the  tax  collector  of  the  proper  county  and  said 
tax  shall  accrue  as  provided  in  section  three  of  this  Act ;  that  the  value  of  estates 
for  years,  estates  for  life,  remainders  and  annuities  shall  be  fixed  and  determined 
upon  mortality  tables  using  the  interest  rate  or  income  rate  of  six  per  cent. 

§  5.  Be  it  further  enacted  by  the  authority  aforesaid,  That  if  such  property 
subject  to  the  taxation  imposed  by  this  Act  be  in  the  form  of  money,  the  executor, 
administrator  or  trustee  shall  deduct  the  amount  of  the  tax  therefrom  before 
paying  it  to  the  party  entitled  thereto;  that  if  it  be  not  in  the  form  of  money 
he  shall  withhold  the  property  until  the  payment  by  such  party  of  the  amount 
of  the  tax;  in  any  case  the  person  to  whom  the  property  is  transferred,  the 
executors,  administrators  or  trustees  shall  be  personally  liable  for  the  amount 
of  the  taxes,  and  shall  have  the  right  in  case  of  neglect  or  refusal,  after  due 
notice,  of  the  party  entitled  to  the  property,  to  pay  such  amount,  to  sell  said 
property,  real  or  personal,  or  so  much  thereof  as  may  be  necessary,  in  the  same 
manner  as  he  might  by  law  be  entitled  to  do  for  the  payment  of  the  debts  of  the 
testator  or  intestate;  that  out  of  the  sum  realized  on  such  sale  the  executor, 
administrator  or  trustee  shall  deduct  the  amount  of  the  tax  and  the  expense  of 
the  sale,  and  shall  pay  the  balance  to  the  party  entitled  thereto. 

§  6.  Be  it  further  enacted  by  the  authority  aforesaid,  That  whenever  any 
legacy  subject  to  said  tax  shall  be  charged  upon  or  payable  out  of  real  estate, 


GEORGIA  879 

the  heir  or  devisee,  before  paying  the  legacy,  shall  deduct  the  amount  of  the  tax 
therefrom,  and  pay  the  amount  so  deducted  to  the  executor,  administrator  or 
trustee;  that  the  amount  of  the  tax  shall  remain  a  charge  on  such  real  estate 
until  paid  and  the  payment  thereof  shall  be  enforced  by  the  executor  or  trustee 
in  the  same  manner  as  the  payment  of  the  legacy  itself  could  be  enforced. 

§  7.  Be  it  further  enacted  by  the  authority  aforesaid,  That  every  executor, 
administrator  or  trustee  of  the  estate  of  the  decedent  leaving  property  subject 
to  taxation  under  this  Act,  whether  such  property  passes  by  will  or  by  the  laws 
of  descent,  or  otherwise,  shall,  within  three  months  after  his  appointment,  make 
and  file  an  inventory  thereof  in  the  Court  of  Ordinary  in  the  county  having 
jurisdiction  in  the  estate  of  the  decedent;  that  any  executor,  administrator  or 
trustee  refusing  or  neglecting  to  comply  with  the  provisions  of  this  section  shall 
be  liable  to  a  penalty  not  exceeding  $1,000.00  to  be  recovered  in  an  action  brought 
in  behalf  of  the  State  by  the  Solocitor-General  of  the  circuit  in  which  such 
county  having  jurisdiction  of  the  estate  is  located  upon  notice  from  the  ordinary 
of  said  county. 

§  8.  Be  it  further  enacted  by  the  authority  aforesaid,  That  if  upon  the  death 
of  any  person  leaving  an  estate  subject  to  a  tax  under  the  provisions  of  this 
Act,  a  will  disposing  of  such  estate  shall  not  be  offered  for  probate  or  an  appli- 
cation for  administration  is  not  made  within  three  months  from  the  time  of 
such  decease,  the  State  Tax  Commissioner  or  the  tax  collector  of  the  county  in 
which  the  Court  of  Ordinary  is  located,  having  jurisdiction  of  the  administration 
of  such  estate,  may,  at  any  time  thereafter,  make  application  to  the  proper 
Court  of  Ordinary,  setting  forth  such  fact,  and  praying  that  an  administrator 
may  be  appointed,  and  thereupon  such  Court  of  Ordinary  after  citation  and  due 
advertisement  thereof,  if  no  person  entitled  by  law  to  said  administration  shall 
apply  therefor,  shall  appoint  the  public  administrator  of  the  county,  or  if  there 
be  none  such,  then  the  clerk  of  the  Superior  Court  to  administer  upon  such  estate. 

§  9.  Be  it  further  enacted  by  the  authority  aforesaid,  That  if  for  any  reason 
administration  of  the  estate  of  a  decedent  leaving  property  subject  to  taxation 
under  this  Act  shall  not  be  necessary  in  this  State  except  in  order  to  carry  out 
the  provisions  of  this  Act  it  shall  be  in  the  discretion  of  the  Ordinary  upon  the 
filing  of  a  satisfactory  inventory  of  the  taxable  property  of  such  estate  by  the 
heirs  or  persons  entitled  to  inherit  the  same  to  dispense  with  the  appointment  of 
an  administrator;  that  upon  the  filing  of  such  inventory  the  appraisement  and 
other  proceedings  required  by  this  Act  shall  be  had  as  in  other  cases. 

§  10.  Be  it  further  enacted  by  the  authority  aforesaid,  That  when  property 
subject  to  this  tax  is  transferred  or  limited  in  trust  or  otherwise,  and  the  rights, 
interest  or  estate  of  the  transferees  or  beneficiaries  are  dependent  upon  con- 
tingencies or  conditions  whereby  each  may  be  wholly  or  in  part  created,  defeated, 
extended  or  abridged,  the  tax  so  imposed  on  such  property  shall  be  due  and  pay- 
able forthwith  by  the  executor  or  trustee  out  of  the  property  transferred,  that 
where  an  estate  for  life  or  for  years  can  be  divested  by  the  Act  or  omission  of 
the  legatee  or  devisee  it  shall  be  taxed  as  if  there  were  no  possibility  of  such 
divesting. 

§  11.  Be  it  further  enacted  by  the  authority  aforesaid,  That  the  Ordinary  of 
the  county  having  jurisdiction  of  the  administration  of  the  estate  of  the  decedent, 
shall  on  application  of  any  interested  party,  or  upon  his  own  motion,  and  when- 
ever occasion  may  require  appoint  three  disinterested  persons  as  appraisers  to 
fix  the  value  of  the  property  subject  to  said  tax;  that  the  appraisers,  being  first 
sworn,  shall  give  notice  to  all  persons  known  to  have  a  claim  in  the  property 
appraised,  including  the  executor,  administrator  or  trustee,  and  the  tax  collector 
of  the  county,  and  the  State  Tax  Commissioner,  of  the  time  and  place  when  they 
will  appraise  the  same,  such  notice  being  given  by  advertisement  in  some  news- 
paper having  general  circulation  in  the  county  which  has  jurisdiction  of  the 
administration  of  the  estate,  that  at  such  time  and  place  they  shall  appraise 
such  property  at  its  actual  or  market  value  at  the  time  of  the  death  of  the 
decedent,  and  shall  thereupon  make  report  thereof  in  writing  to  said  Ordinary; 
that  when  property  is  located  in  more  than  one  county  the  appraisers  appointed 
in  the  county  in  which  the  estate  is  being  administered  shall  appraise  the  whole 
estate;  that  each  appraiser  shall  be  paid  on  the  certificate  of  the  Ordinary  $5.00 
for  every  day  employed  in  such  appraisal,  together  with  his  actual  necessary 
expense  incurred  therein,  and  the  fees  of  such  appraisers  shall  be  taxable  as  a 
part  of  the  costs  of  the  administration  of  said  estate  by  the  Ordinary,  and  said 


880  THE  STATE  STATUTES 

fees  shall  be  paid  by  the  executor,  administrator  or  trustee,  or  by  the  heirs  at 
law  to  whom  such  property  descends  in  case  there  is  no  administration;  provided, 
however,  upon  the  agreement  of  the  parties  interested  to  dispense  with  the 
appointment  of  appraisers,  the  Ordinary  himself  shall  appraise  the  property, 
and  make  and  file  a  report  thereof,  subject  to  review  by  the  State  Tax  Com- 
missioner in  his  discretion;  that  for  his  service  in  connection  with  the  appoint- 
ment of  appraisers  for  any  estate  the  Ordinary  shall  receive  a  fee  of  $5.00,  and 
for  the  appraisement  of  any  estate  by  himself  the  Ordinary  shall  receive  a  fee 
of  $20.00,  which  fee  shall  be  taxable  as  a  part  of  the  cost  of  the  administration 
of  the  estate;  provided,  however,  that  it  shall  be  the  duty  of  said  Ordinary  to 
furnish  the  office  of  the  State  Tax  Commissioner  within  ten  days  of  the  filing 
of  the  same  with  a  copy  of  the  appraisement  in  every  instance,  whether  made  by 
himself  or  by  appraisers;  provided,  further,  that  any  appraisement  of  any  estate 
tinder  this  Act  shall  be  held  to  comply  with  the  present  requirement  as  to 
appraisement  of  eetates. 

§  11-a  (as  amended  Laws  1921).  The  State  Tax  Commission  shall  have  author- 
ity to  employ  an  agent  or  agents  to  investigate  inheritance  tax  matters  under  the 
direction  and  supervision  of  the  said  Tax  Commissioner,  and  to  furnish  detailed 
information  to  that  official  as  to  the  property  of  each  estate  examined  for  inherit- 
ance tajt  purposes.  Said  agents  shall  have  authority  to  require  the  production  of 
all  evidences  as  to  the  nature  and  amount  of  the  property  of  any  estate  so 
investigated  by  them,  and  to  demand  sworn  inventories  from  the  representatives 
of  such  estates  as  may  appear  to  be  subject  to  the  payment  of  inheritance  taxes. 

It  shall  be  the  duty  of  the  State  Tax  Commissioner  to  review  all  appraisements 
and  assessments  for  inheritance  tax  purposes  filed  with  him  by  the  Ordinaries  of 
the  several  counties  of  this  State;  and  when  any  such  appraisement  or  assess- 
ment may  appear  not  to  conform  to  the  law  he  is  authorized  to  require  such 
amendment  to  either  as  will  cause  the  same  to  comply  with  the  requirements  of 
this  Act;  and  his  judgment  in  such  matters  shall  be  conclusive  unless  reversed 
by  the  courts  upon  appeal  as  herein  provided  for. 

Any  legal  representative  of  an  estate  or  distributee  of  the  same  who  shall  be 
dissatisfied  with  the  appraisement  of  any  estate,  or  the  assessment  of  the  amount 
of  the  tax  to  be  paid  by  the  same  may  within  thirty  days  from  the  final  judg- 
ment of  the  Ordinary  approving  and  fixing  the  same,  enter  an  appeal  to  the 
Superior  Court  of  the  county  having  jurisdiction  of  said  estate  under  the  same 
rules  and  regulations  governing  appeals  from  the  Court  of  Ordinary  to  the 
Superior  Court,  as  provided  in  the  laws  of  this  State. 

The  compensation  allowed  agents  employed  by  the  State  Tax  Commissioner 
under  the  provision  of  this  section  shall  be  a  percentage  on  the  tax  collected 
from  the  estates  investigated  by  them,  which  percentage  shall  be  fixed  by  the 
State  Tax  Commissioner  in  accordance  with  the  amount  of  such  tax,  but  in  no 
case  shall  exceed  15  per  cent  of  the  same. 

Provided,  however,  no  commission  shall  be  paid  by  the  State  Tax  Commissioner 
to  any  such  agent  or  agents,  except  upon  such  estates  as  are  not  returned  to  the 
office  of  the  State  Tax  Commissioner  in  accordance  with  the  Inheritance  Tax 
Laws  of  Georgia  within  the  time  provided  by  law,  and  if  any  estate  has  been 
returned,  but  a  dispute  arises  between  the  representative  of  the  estate  and  the 
State  Tax  Commissioner  then  the  said  agent  or  any  of  them  may  be  compensated 
in  the  judgment  of  the  Commissioner,  for  the  services  rendered,  in  connection 
with  the  final  determination  of  the  sum  due  as  inheritance  taxes,  said  percentage 
not  to  exceed  the  percentage  already  provided  for,  but  no  commission  shall  in 
any  event  be  paid  on  any  sum  acknowledged  to  be  due  in  the  return  of  the  estate 
tendered  by  such  estate  or  its  representative  for  such  taxes. 

§  12.  That  immediately  upon  the  filing  of  the  report  of  the  appraisement  the 
Ordinary  shall  calculate  and  determine  the  amount  of  tax  due  on  such  property 
under  this  Act,  and  shall  in  writing  certify  such  amount  to  the  tax  collector,  the 
State  Tax  Commissioner,  the  executor,  administrator  or  trustee,  and  to  the  person 
for  whom  or  for  whose  use  the  property  passes,  and  for  such  services  the 
Ordinary  shall  receive  one-half  of  the  commissions  hereafter  allowed  for  the 
collection  of  such  tax.  That  said  tax  shall  be  a  lien  upon  such  property  from 
the  death  of  the  decedent  until  paid,  and  shall  bear  interest  from  such  death 
until  paid,  unless  payment  shall  be  made  within  twelve  months  after  such  death, 
in  which  no  interest  shall  be  charged.  Provided,  that  when  the  amount  of  such 
tax  cannot  be  determined  within  twelve  months  from  the  death  of  the  decedent 


HAWAII  881 

on  account  of  litigation  brought  to  determine  what  property  actually  composes 
the  estate  no  interest  shall  be  required  except  from  the  time  when  the  amount  of 
the  tax  has  been  fixed  and  determined. 

§  13.  Be  it  further  enacted  by  the  authority  aforesaid,  That  all  taxes  received 
under  this  Act  by  any  executor,  administrator  or  trustee,  shall  be  paid  by  him 
within  thirty  days  thereafter  to  the  tax  collector  of  the  county  whose  Court  of 
Ordinary  has  jurisdiction  of  the  estate  of  the  decedent;  that  upon  such  payment 
the  tax  collector  shall  make  duplicate  receipts  thereof;  that  he  shall  deliver  one 
to  the  party  making  payment,  the  other  he  shall  send  to  the  Comptroller  General 
of  the  State,  who  shall  charge  the  tax  collector  with  the  amount  thereof,  and 
shall  countersign  such  receipt  and  transmit  same  to  the  party  making  payment. 

§  14.  But  it  further  enacted  by  the  authority  aforesaid,  That  the  tax  collector 
of  each  county  shall,  on  or  before  the  fifteenth  of  each  month,  pay  to  the  Comp- 
troller General  all  taxes  received  by  him  under  this  Act  before  the  first  day  of 
that  month,  deducting  therefrom  his  fees,  which  shall  be  the  same  as  his  fees 
on  digest  taxes,  and  these  fees  shall  be  equally  divided  between  the  tax  collector 
and  the  Ordinary  of  the  county. 

§  15.  But  it  further  enacted  by  the  authority  aforesaid,  That  no  final  account 
of  an  executor,  administrator  or  trustee  shall  be  allowed  by  the  Court  of  Ordinary 
unless  such  account  shows  and  the  Ordinary  so  finds,  that  all  taxes  imposed  under 
this  Act  or  any  property  or  interest  passing  through  his  hands  as  such  have  been 
paid ;  that  the  receipt  of  the  tax  collector  for  such  taxes  shall  be  the  proper 
voucher  for  such  payment. 

§  16.  Be  it  further  enacted  by  the  authority  aforesaid,  That  when  the  taxes 
imposed  by  this  Act  have  not  been  paid  within  twelve  months  from  the  date  of 
the  filing  of  the  amount  of  said  tax  by  the  Ordinary  in  the  office  of  the  tax 
collector  to  whom  said  tax  is  payable,  the  said  tax  collector  shall  issue  executions 
against  the  persons  and  property  liable  for  said  tax,  and  proceed  in  every  way 
for  the  enforcement  and  payment  of  said  tax  in  like  manner  that  he  may  now 
proceed  by  execution,  and  for  the  enforcement  and  payment  of  direct  taxes  on 
property  against  delinquent  taxpayers.  That  the  State  Tax  Commissioner  is 
hereby  authorized  to  prescribe  necessary  official  forms  to  be  used  in  assessing 
inheritance  taxes,  and  to  have  said  forms  printed  and  distributed  to  the  Ordi- 
naries of  the  several  counties  of  the  State  for  use  in  assessing  and  collecting 
inheritance  taxes. 

§  17.  Be  it  further  enacted  by  the  authority  aforesaid,  That  all  laws  or  parts 
of  laws  in  conflict  herewith  be  and  the  same  are  hereby  repealed. 


HAWAII. 

Taxes  all  property  of  nonresidents  within  the  territory. 

By  act  223,  effective  July  1,  1917,  the  rates  and  exemptions  as  to  estates  of 
persons  dying  after  that  date  are:  Father,  mother,  husband,  wife,  child,  adopted 
child,  grandchild,  $5,000  exempt;  1%%  $5,000  up  to  $20,000;  2%  $20,000  up  to 
$50,000;  2%%  $50,000  to  $100,000;  3%  $100,000  to  $250,000;  over  $250,000 
3^%.  As  to  all  others  except  aliens  and  nonresidents  of  the  United  States,  the 
exemption  is  $500,  and  the  tax  is  3%  from  $500  to  $5,000;  5%  $5,000  to  $20,000; 
5%%  $20,000  to  $50,000;  6%  $50,000  to  $100,000,  and  6%%  over  $100,000. 
Aliens  and  nonresidents  have  an  exemption  of  $500  and  pay  10%  on  all  in  excess 
of  that  sum. 

Prior  to  July  1,  1917,  the  rate  was  2%  on  all  above  the  exemption  of  $5,000 
as  to  the  first  class,  and  5%  on  all  above  $500,  as  to  the  second,  and  there  was  no 
discrimination  against  aliens. 

LAWS    1909,    CHAPTER    102,   AS   AMENDED    BY    CHAPTERS    66    AND    147, 
LAWS  1909,  AND  CHAPTER  130,  LAWS  1911. 

Section  1.  All  property  which  shall  pass  by  will  or  by  the  intestate  laws  of 
this  territory,  from  any  person  who  may  die  seized  or  possessed  of  the  same 
while  a  resident  of  this  territory,  or  which  being  within  this  territory  shall  pass 
whether  by  the  laws  of  this  territory  or  otherwise,  from  any  person  who  may  die 
while  not  a  resident  of  this  territory,  or  which,  or  an  interest  in  or  income  from 

56 


882  THE  STATE  STATUTES 

which  shall  be  transferred  by  deed,  grant,  sale,  or  gift  made  in  contemplation  of 
the  death  of  the  grantor,  vendor,  or  bargainer  or  intended  to  take  effect  in  pos- 
session or  enjoyment  after  such  death  to  any  person  or  persons,  or  to  any  body 
politic  or  corporate,  in  trust  or  otherwise,  or  by  reason  whereof  any  person  or 
body  politic  or  corporate  shall  become  beneficially  entitled,  in  possession  or 
expectancy  to  any  property,  or  to  the  income  thereof,  shall  be  and  is  subject  to 
a  tax  hereinafter  provided  for,  to  be  paid  to  the  treasurer  of  the  territory  of 
Hawaii  as  hereinafter  directed,  for  the  use  of  the  territory;  and  such  tax  shall 
be  and  remain  a  lien  upon  the  property  passed  or  transferred  until  paid  and  all 
administrators,  executors  and  trustees  of  every  estate  so  transferred  and  the 
person  to  which  the  property  passes  or  is  transferred  or  passed  shall  be  liable 
for  any  and  all  such  taxes  until  the  same  shall  have  been  paid  as  hereinafter 
directed.  The  tax  so  imposed  shall  be  upon  the  market  value  of  such  property 
at  the  rates  hereinafter  prescribed  and  only  upon  the  excess  over  the  exceptions 
hereinafter  granted. 

Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived  from  any  disposition  of  property  made  either  before  or  after  the  passage 
of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer  taxable  under 
the  provisions  of  this  act  in  the  same  manner  as  though  the  property  to  which 
such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power  and 
had  been  bequeathed  or  devised  by  such  donee  by  will ;  and  whenever  any  person 
or  corporation  possessing  such  power  of  appointment  so  derived  shall  omit  or 
fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or  in  part, 
a  transfer  taxable  under  the  provisions  of  this  act  shall  be  deemed  to  take  place 
to  the  extent  of  such  omissions  or  failure  in  the  same  manner  as  though  the 
persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoyment 
of  the  property  to  which  such  power  related  had  succeeded  thereto  by  a  will  of 
the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time 
of  the  omission  or  failure. 

The  rest  of  the  section  and  section  2  prescribe  the  rates  and  exemptions  of  the 
foregoing  table. 

§  3.  Provides  that  remaindermen  who  elect  not  to  pay  the  tax  until  they 
come  into  possession  may  file  a  bond  and  inventory  within  one  year  in  twice  the 
amount  of  the  tax  and  renew  the  bond  every  five  years. 

|  4.  Taxes  the  excess  over  reasonable  services  of  bequests  to  executors  in  lieu 
of  commissions. 

§  5.  Makes  taxes  due  at  death,  no  interest  due  until  after  eighteen  months, 
when  10%  charged  from  time  of  accrual,  allows  a  discount  of  5%  if  paid  within 
one  year.  After  eighteen  months  executor  or  administrator  must  give  a  bond  if 
the  tax  is  not  paid. 

§  6.  Provides  that  the  penalty  may  be  reduced  to  7%  from  expiration  of 
eighteen  months  in  case  of  unavoidable  delay. 

§  7.  Eequires  the  executor  or  administrator  to  deduct  the  tax  or  collect  it 
from  the  beneficiary  to  whom  he  may  not  deliver  the  property  until  the  tax  is 
paid. 

§  8.  Gives  power  of  sale  to  pay  the  tax  as  in  case  of  debts. 

§  9.  Provides  for  receipts  which  must  be  produced  before  any  final  accounting 
can  be  had. 

§  10.  Provides  for  proportionate  refund  when  debts  are  proved  against  the 
estate  after  distribution. 

§  11.  Eequires  the  payment  of  the  tax  by  a  foreign  executor  or  administrator 
before  transferring  property  and  makes  the  usual  regulations  as  to  securities 
deposited  with  banks  and  trust  companies  which  must  notify  the  treasurer  and 
permit  an  examination. 

§  12.  Provides  for  appraisal  of  life  estates  and  remainders  to  be  valued  on 
American  Experience  Tables  on  the  5%  basis. 

The  remaining  sections  make  the  usual  provisions  as  to  procedure  and  the 
collection  of  delinquent  taxes. 


IDAHO 


883 


IDAHO. 

Taxes  all  property  of  nonresidents  within  the  State,  including  stock  in  domestic 
corporations. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASSIFICATION  OB  INDICATION 
or  RELATIONSHIP 

Property 
exemption 

Application  of  rates  to  value  of  inheritance  or 
bequests 

On  excess 
after 
deduction 
of  exemp- 
tion from 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

$100,000 
to 
$500,000 

In  excess 
of 
$500,000 

Husband,  wife,  lineal  issue,  lineal 
ancestor,  adopted  or  mutually 
acknowledged  child. 

Widow  or 
minor  child, 
$10,000; 
Others,  $4,- 
000. 

1% 

«% 

2% 

21% 

3<7c 

Brother,  sister,  or  descendant  of 
either,  wife  or  widow  of  a  Bon, 
husband  of  a  daughter. 

$2,000 

11% 

2i% 

3% 

3i% 

41% 

Uncle,  aunt,  or  descendant  of 
either. 

$1,500 

3% 

41% 

6% 

7J% 

9% 

Grand  uncle,  grand  aunt,  or 
descendant  of  either. 

$1,000 

4% 

6% 

8% 

10% 

12% 

Other  degree  of  collateral  con- 
sanguinity, stranger  in  blood, 
body  politic  or  corporate?  ex- 
cept charitable  corporations, 
exempted  by  section  1877. 

$500 

5% 

71% 

10% 

121% 

15% 

LAWS  OF  1907,  CHAPTER  78,  BECAME  A  LAW  MARCH  16,  1907. 

(Codified  -Idaho  Revised  Code  [1908],  Title  10,  Chap.  5.) 
§  1873.  All  property  which  shall  pass,  by  will  or  by  the  intestate  laws  of  this 
State,  from  any  person  who  may  die  seized  or  possessed  of  the  same  while  a 
resident  of  this  State,  or  if  such  decedent  was  not  a  resident  of  this  State  at  the 
time  of  death,  which  property  or  any  part  thereof,  shall  be  within  this  State,  or 
any  interest  therein,  or  income  therefrom,  which  shall  be  transferred  by  deed, 
grant,  sale  or  gift,  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or 
bargainer,  or  intended  to  take  effect  in  possession  or  enjoyment  after  such  death, 
to  any  person  or  persons,  or  to  any  body  politic  or  corporate,  in  trust  or  other- 
wise, or  by  reason  whereof  any  person  or  body  politic  or  corporate  shall  become 
beneficially  entitled,  in  possession  or  expectancy,  to  any  property,  or  to  the  income 
thereof,  shall  be  and  is  subject  to  a  tax  hereinafter  provided  for,  to  be  paid  to 
the  treasurer  of  the  proper  county,  as  hereinafter  directed  for  the  benefit  of  the 
general  fund  of  this  State  to  be  used  for  all  the  purposes  for  which  said  fund  is 
available.  And  the  county  treasurer  shall,  upon  receipt  of  said  tax,  pay  the 
same  to  the  State  Treasurer  and  take  duplicate  receipts  therefor,  one  of  which 
the  county  treasurer  shall  retain,  and  transmit  the  other  to  the  State  Auditor 
and  receive  from  him  credit  for  the  amount  thereof  on  his  account ;  and  such 
tax  shall  be  and  remain  a  lien  upon  the  property  passed  or  transferred  until  paid, 
and  the  person  to  whom  the  property  passes  or  is  transferred,  and  all  adminis- 
trators, executors  and  trustees  of  every  estate  so  transferred  or  passed,  shall  be 
liable  for  any  and  all  such  taxes  until  the  same  shall  have  been  paid  as  herein- 
after directed.  The  tax  so  imposed  shall  be  upon  the  market  value  of  such 
property  at  the  rates  hereinafter  prescribed,  and  only  upon  the  excess  over  the 
exemptions  hereinafter  granted. 

§  1874.  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  chapter,  such  appointment,  when  made,  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  chapter  in  the  same  manner  as  though  the 


884  THE  STATE  STATUTES 

property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of 
such  power,  and  had  been  bequeathed  or  devised  by  such  donee  by  will;  and 
whenever  any  person  or  corporation  possessing  such  a  power  of  appointment  so 
derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor, 
in  whole  or  in  part,  a  transfer  taxable  under  the  provisions  of  this  chapter  shall 
be  deemed  to  take  place  to  the  extent  of  such  omission  or  failure,  in  the  same 
manner  as  though  the  person  or  corporations  thereby  becoming  entitled  to  the 
possession  or  enjoyment  of  the  property  to  which  such  power  related  had  suc- 
ceeded thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  power, 
taking  effect  at  the  time  of  such  omission  or  failure. 

Sections  1875  and  1876  fix  the  rate  of  tax  as  given  in  the  foregoing  table. 

§  1877.  The  following  exemptions  from  the  tax  are  hereby  allowed: 

1.  All  property  transferred  to  societies,  corporations  and  institutions  now  or 
hereafter  exempted  by  law  from  taxation  or  to  any  public  corporations,  or  to 
any  society,  corporation,  institution  or  association  of  persons  engaged  in  or 
devoted  to  any  charitable,  benevolent,  educational,  public  or  other  like  work 
(pecuniary  profit  not  being  its  object  or  purpose),  or  to  any  person,  society, 
corporation,  institution  or  association  of  persons  in  trust  for  or  to  be  devoted 
to  any  charitable,  benevolent,  educational  or  public  purpose,  by  reason  whereof 
any  such  person  or  corporation  shall  become  beneficially  entitled,  in  possession 
or  expectancy,  to  any  such  property  or  to  the  income  thereof  shall  be  exempt. 

The  rest  of  the  section  gives  the  exemptions  as  shown  in  the  table. 

[NOTE:  The  rest  of  the  statute  is  substantially  a  copy  of  that  of  California 
prior  to  1917  and  will  therefore  be  briefly  summarized.] 

§  1878.  Provides  for  the  immediate  appraisal  of  life  estates  and  remainders. 
If  the  remainderman  elect  not  to  pay  the  tax  until  the  remainder  falls  in  he  may 
file  a  bond  in  twice  the  amount  of  the  tax. 

§  1879.  A  bequest  to  executor  in  lieu  of  commissions  is  taxed  on  the  excess 
over  reasonable  compensation. 

§  1880.  Taxes  due  at  death.  If  paid  within  six  months  5%  discount  allowed. 
No  interest  charged  until  after  one  year.  After  that  10%,  but  if  unavoidable 
delay  court  may  extend  time  of  payment  and  reduce  interest  to  6%. 

§  1881.  Provides  for  the  collection  of  the  tax  by  the  executor  or  administrator 
from  the  beneficiary. 

§  1882.  Gives  power  to  sell  chattels  or  real  estate  to  pay  tax. 

§  1883.  Provides  for  payment  of  tax  by  executor  or  administrator  to  county 
treasurer  and  must  produce  receipt  before  entitled  to  final  accounting. 

§  1884.  Provides  for  refund  of  proportion  of  tax  where  debts  are  proved 
against  estate  after  distribution. 

§  1885.  Requires  payment  of  tax  by  foreign  executors  and  administrators 
before  transferring  property  within  the  State  and  requires  trust  and  safe  deposit 
companies,  banks,  etc.,  to  hold  assets  open  to  inspection  and  to  retain  enough 
to  pay  the  tax  before  delivery  to  executor  or  administrator  under  a  penalty  of 
twice  the  tax. 

§  1886.  Provides  for  the  appointment  of  an  appraiser,  the  appraisal,  and 
the  valuation  of  life  estates  and  remainders  actuaries'  combined  tables  on  a 
basis  of  5%. 

§  1887.  Forbids  the  appraiser  to  accept  a  bribe  under  penalty  of  fine  and 
imprisonment. 

§  1888.  Gives  jurisdiction  to  the  probate  court  in  which  the  property  is  situ- 
ated in  case  of  nonresidents. 

§.  1889.  The  words  "estate"  and  "property"  as  used  in  this  chapter  shall 
be  taken  to  mean  the  real  and  personal  property  or  interest  therein  of  the 
testator,  intestate,  grantor,  bargainer,  vendor  or  donor  passing  or  transferred 
to  individual  legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees,  vendees  or 
successors,  and  shall  include  all  personal  property  within  or  without  the  State. 
The  word  "transfer"  as  used  in  this  chapter  shall  be  taken  to  include  the 
passing  of  property  or  any  interest  therein,  in  possession  or  enjoyment,  present 
or  future,  by  inheritance,  descent,  devise,  succession,  bequest,  grant,  deed,  bargain, 
sale,  gift  or  appointment  in  the  manner  herein  described.  The  word  "decedent" 
as  used  in  this  chapter  shall  include  the  testator,  intestate,  grantor,  bargainor, 
vendor  or  donor. 

NOTE:     The  rest  of  the  statute  concerns  the  collection  of  delinquent  taxes. 

Prior  Statutes:     None. 


ILLINOIS 


885 


ILLINOIS. 

Taxes  all  property  of  non-residents  within  the  State. 

TABLE  OF  RATES  AND  EXEMPTIONS   PREVAILING  FROM  1009  TO  1919. 


CLASS  OB  RELATIONSHIP 

Exemp- 
tion 

Rates  of  tax 

Father,  mother,  husband,  wife,  child, 
brother,  Bister,  wife  or  widow  of 
son,  daughter's  husband,  adopted 
or  mutually  acknowledged  child, 
or  lawful  lineal  descendant  of  de- 
cedent. 

$20,000 

Excess  of  exemption  up  to 
$100,000,  1% 

All   in   excess   of 
$100,000,  2%. 

A-  it,  uncle,  niece,  nephew  or  lineal 
ciescendanta  of  same. 

$2,000 

Excess  of  exemption  up  to 
$20,000,2%. 

All   in   excess   of 
$20,000    above 
exemption,  4%. 

Up  to 
$10,000 

$10,000 
to 
$20,000 

$20,000 
to 
$50,000 

$50,000 
to 
S100.000 

All  in 
escesa 
of 
$100,000 

Ai!  others,  excepting  charitable  be- 
quests exempted  by  section  28. 

Less  than 
$500  not 
taxed. 

3/o 

4% 

5% 

6% 

10% 

TABLE  OF   RATES  AND  EXEMPTIONS  AS  TO   DECEDENTS   DYING  AFTER  JULY   1,   1919. 


Class  or  Relationship 

£  ° 

§7! 

°1 

8  a! 

g 

g 

£ 

r-H 

Father,    mother,    lineal    ancestor,    hus- 
band,    wife,     child,     daughter-in-law, 

a 

B3 

|| 

8* 

ll 

f-H    H 
•93-3 

4J    —  1 

son-in-law,    adopted   or   mutually   ac- 
knowledged child  or  ita  descendants, 

K 

|l 

1 

V 

55 

or    any    lawful    lineal    descendant    of 

$°0  000 

1  of 

f)Qf 

3% 

5% 

7% 

Brother  or  sister  

$10,000 

,0 

* 

o 

S8 

|| 

8 

fg" 

O   0) 

|| 

§ 

H  Q 

£?•" 

S*w 

^ 

^.'  -* 

«3    ^ 

o 

o.2 

tj  °* 

£ 

Q 

i 

a 

lineal  descendants  

$500         3%         4%         6%         8% 

,  | 

o.2 

0  I 

o  2 

0   0 

| 

P*?" 

°  'Q 

°  tj 

8tJ 

*«. 

o  2 

§2 

§2 

H.  g 

go 
*  -u 

1 

If" 

s"1" 

JS 

o  o 

4j 

-g 

41 

H 

ti 

5 

o 

Sj 

Sz; 

o 

quests  exempted  by  section  28  

$100         5%         6%         8%       10%       12%        16% 

886  THE  STATE  STATUTES 

TABLE  OF  RATES  AND  EXEMPTIONS  IN  EFFECT  JULY  1,  1921. 


Above 

On 

On 

On 

CLASS  OB  RELATIONSHIP 

Exemp- 
tion 

exemp- 
tion to 
$50,000 

the 
next 
$100,000 

the 
next 
$100,000 

the 
next 
$250,000 

On 
the 
balance 

Father,    mother,    lineal    acenstor, 

husband,    wife,    child,    son-in- 

law,    daughter-in-law,    adopted 

or  duly  mutually  acknowledged 

child   or   any   legitimate  lineal 

descendant. 

.$20,000 

2% 

4% 

6% 

10% 

14% 

Brother  or  Sister. 

$10,000 

2% 

4% 

6% 

10% 

14% 

Above 

On 

On 

exemp- 

the 

the 

tion  to 
$20,000 

next 
$50,000 

next 
$100,000 

balance 

Aunt,  uncle,  niece,  nephew  or  any 

lineal  descendant  of  same. 

$500 

6% 

8% 

12% 

16% 

Above 

On 

On 

On 

On 

exemp- 

the 

the 

the 

the 

tion  to 
$20,000 

next 
$30,000 

next 
$50,000 

next 
$50,000 

next 
$100,000 

balance 

In      all      other      cases,      except 

charitable,    religious     etc.    cor- 

porations, vide  Sec.  28. 

$100 

10% 

12% 

16% 

20% 

24% 

30% 

THE  STATUTE. 

[NOTE:  Section  1  was  radically  amended  by  Act  in  force  July  1,  1921.  The 
rest  of  the  statute  stands  unamended  since  1919.] 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any 
property,  real,  personal,  or  mixed,  or  of  any  interest  therein  or  income  therefrom, 
in  trust  or  otherwise,  to  persons,  institutions  or  corporations,  not  hereinafter 
exempted,  in  the  following  cases: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  State,  from 
any  person  dying,  seized  or  possessed  of  the  property  while  a  resident  of  the  State. 

2.  When  the  transfer  is  by  will  or  intestate  laws  of  property  within  the  State, 
and  the  decedent  was  a  non-resident  of  the  State  at  the  time  of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a  resident,  or  by  a  non-resident 
when  such  non-resident's  property  is  within  this  State,  by  deed,  grant,  bargain, 
sale  or  gift,  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor, 
or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 
When  any  such  person,  institution  or  corporation  becomes  beneficially  entitled  in 
possession    or    expectancy  '  to    any   property   or    income    therefrom    by    any   such 
transfer,  whether  made  before  or  after  the  passage  of  this  Act. 

4.  Whenever  any  person,  institution  or  corporation  shall  exercise  a  power  of 
appointment  derived   from  any   disposition   of   property  made   either   before   or 
after  the  passage  of  this  Act,  such  appointment,  when  made,  shall  be  deemed  a 
taxable  transfer  under  the  provisions  of  this  Act,  in  the  same  manner  as  though 
the  property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee 
of  such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will;   and 
whenever  any  person  or  corporation  possessing  such  a  power  of  appointment  so 
derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor, 
in  whole  or  in  part,  a  transfer  taxable  under  the  provisions  of  this  Act  shall  be 
deemed  to  take  place  to  the  extent  of  such  omission   or  failure,  in  the   same 
manner  as  though  the  persons  or  corporations  thereby  becoming  entitled  to  the 
possession  or  enjoyment  of  the  property  to  which  such  power  related  had  suc- 
ceeded thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  power, 
taking  effect  at  the  time  of  such  omission  or  failure. 

5.  Whenever  property,  real  or  personal,  is  held  in  the  joint  names  of  two  or 
more  persons,  or  is  deposited  in  banks  or  other  institutions  or  depositors  in  the 
joint  names  of  two  or  more  persons  and  payable  to  either  or  the  survivor,  upon 


ILLINOIS  887 

the  death  of  one  of  such  persons  the  right  of  the  surviving  joint  tenant  or  joint 
tenants,  person  or  persons,  to  the  immediate  ownership  or  possession  and  enjoy- 
ment of  such  property  shall  be  deemed  a  transfer  taxable  under  the  provisions 
of  this  Act  in  the  same  manner  as  though  the  whole  property  to  which  such 
transfer  relates  was  owned  by  said  parties  as  tenants  in  common  and  had  been 
bequeathed  to  the  surviving  joint  tenant  or  joint  tenants,  person  or  persons,  by 
such  deceased  joint  tenant  or  joint  depositor  by  will. 

When  the  beneficial  interests  to  any  property  or  income  therefrom  shall  pass 
to  or  for  the  use  of  any  father,  mother,  lineal  ancestor  of  decedent,  husband, 
wife,  child,  brother  or  sister,  wife  or  widow  of  the  son  or  the  husband  of  the 
daughter,  or  any  child  or  children  legally  adopted,  or  to  any  person  to  whom  the 
deceased,  for  not  less  than  ten  years  prior  to  death,  stood  in  the  acknowledged 
relation  of  a  parent:  Provided,  however,  such  relationship  began  at  or  before 
said  person's  fifteenth  birthday  and  was  continuous  for  said  ten  years  thereafter: 
And,  provided,  also,  that  one  of  the  parents  of  such  person  so  standing  in  such 
relation  shall  be  deceased  when  such  relationship  commenced,  or  to  any  lineal 
descendant  of  such  decedent  born  in  lawful  wedlock.  In  every  such  case  the  rate 
of  tax  shall  be: 

Two  per  cent  on  any  amount  up  to  and  including  the  sum  of  fifty  thousand 
dollars  in  excess  of  the  exemption. 

Four  per  cent  on  the  next  one  hundred  thousand  dollars  or  any  part  thereof. 

Six  per  cent  on  the  next  one  hundred  thousand  dollars  or  any  part  thereof. 

Ten  per  cent  on  the  next  two  hundred  and  fifty  thousand  dollars  or  any  part 
thereof. 

Fourteen  per  cent  on  the  amount  representing  the  balance  of  each  individual 
transfer,  provided,  that  any  gift,  legacy,  inheritance,  transfer,  appointment  or 
interest  passing  to  a  father,  mother,  lineal  ancestor  of  decedent,  husband,  wife, 
child,  wife  or  widow  of  the  son  or  the  husband  of  the  daughter,  or  any  child  or 
children  legally  adopted  or  to  any  person  to  whom  the  deceased  for  not  less 
than  ten  years  prior  to  death,  stood  in  the  acknowledged  relation  of  a  parent  as 
above  provided,  or  to  any  lineal  descendant  of  such  decedent  born  in  lawful 
wedlock,  which  may  be  valued  at  a  less  sum  than  twenty  thousand  dollars  shall 
not  be  subject  to  any  such  duty  or  taxes  and  the  taxes  to  be  levied  in  such  cases 
only  upon  the  excess  of  twenty  thousand  dollars  received  by  each  person.  And, 
provided,  further,  that  any  gift,  legacy,  inheritance,  transfer,  appointment  or 
interest  passing  to  a  brother  or  sister,  which  may  be  valued  at  a  less  sum  than 
ten  thousand  dollars  shall  not  be  subject  to  any  such  duty  or  taxes  and  the  tax 
is  to  be  levied  in  such  cases  only  upon  the  excess  of  ten  thousand  dollars  received 
by  each  person. 

When  the  beneficial  interests  to  any  property  or  income  therefrom  shall  pass  to 
or  for  the  use  of  any  uncle,  aunt,  niece,  nephew  or  any  lineal  descendant  of 
such  uncle,  aunt,  niece  or  nephew,  the  rate  of  tax  shall  be: 

Six  per  cent  on  any  amount  up  to  and  including  the  sum  of  twenty  thousand 
dollars,  in  excess  of  the  exemption: 

Eight  per  cent  on  the  next  fifty  thousand  dollars  or  any  part  thereof: 

Twelve  per  cent  on  the  next  one  hundred  thousand  dollars  or  any  part  thereof: 

Sixteen  per  cent  on  the  amount  representing  the  balance  of  each  individual 
transfer:  Provided,  that  any  gift,  legacy,  inheritance,  transfer  appointment  or 
interest  passing  to  an  uncle,  aunt,  niece,  nephew  or  any  lineal  descendant  of 
such  uncle,  aunt,  niece  or  nephew  which  may  be  valued  at  a  less  sum  than  five 
hundred  dollars  shall  not  be  subject  to  any  such  duty  or  taxes  and  the  tax  is  to 
be  levied  in  such  case  only  upon  the  excess  of  five  hundred  dollars  received  by 
such  uncle,  aunt,  niece,  nephew  or  any  lineal  descendant  of  such  uncle,  aunt, 
niece,  or  nephew. 

In  all  other  cases  the  rate  of  tax  shall  be  as  follows: 

Ten  per  cent  on  any  amount  up  to  and  including  the  sum  of  twenty  thousand 
dollars  in  excess  of  the  exemption. 

Twelve  per  cent  on  the  next  thirty  thousand  dollars  or  any  part  thereof : 

Sixteen  per  cent  on  the  next  fifty  thousand  dollars  or  any  part  thereof: 

Twenty  per  cent  on  the  next  fifty  thousand  dollars  or  any  "parts  thereof : 

Twenty-four  per  cent  on  the  next  hundred  thousand  dollars  or  any  part 
thereof : 

Thirty  per  cent  on  the  amount  representing  the  balance  of  each  individual 
transfer:  Provided,  that  any  gift,  legacy,  inheritance,  transfer,  appointment  or 


888  THE  STATE  STATUTES 

interest  passing  to  such  persons  which  may  be  valued  at  a  less  sum  than  one 
hundred  dollars  shall  not  be  subject  to  any  such  duty  or  taxes  and  the  tax  is  to 
be  levied  in  such  cases  only  upon  the  excess  of  one  hundred  dollars  received  by 
each  person. 

The  tax  imposed  hereby  shall  be  upon  the  clear  market  value  of  such  property, 
at  the  rates  hereinabove  prescribed. 

2.  Life  estate,  appraisement,  lien,  bond,  renewal. 

§  2.  When  any  property  or  interest  therein  or  income  therefrom  shall  pass 
or  be  limited  for  the  life  of  another,  or  for  a  term  of  years,  or  to  determine  on 
the  expiration  of  a  certain  period  the  property  of  the  decedent  so  passing  shall 
be  appraised  immediately  after  the  death  of  the  decedent,  and  the  value  of  the 
said  life  estate,  term  of  years  or  period  of  limitation  shall  be  fixed  upon 
mortality  tables,  using  the  interest  rate  or  income  rate  of  five  per  cent ;  and 
the  value  of  the  remainder  in  said  property  so  limited  shall  be  ascertained  by 
deducting  the  value  of  the  life  estate,  term  of  years  or  period  of  limitation 
from  the  fair  market  value  of  the  property  so  limited,  and  the  tax  on  the 
several  estate  or  estates,  remainder  or  remainders,  or  interests  shall  be  imme- 
diately due  and  payable  to  the  treasurer  of  the  proper  county,  together  with 
interest  thereon,  and  said  tax  shall  accrue  as  provided  in  section  three  (3)  of 
this  act,  and  remain  a  lien  upon  the  entire  property  limit  until  paid:  Provided, 
that  the  person  or  persons,  body  politic  or  corporate,  beneficially  interested  in 
property  chargeable  with  said  tax,  elect  not  to  pay  the  same  until  they  shall 
come  into  actual  possession  or  enjoyment  of  such  property,  then  in  that  case 
said  person  or  persons,  or  body  politic  or  corporate,  shall  give  bond  to  the 
People  of  the  State  of  Illinois  in  a  penal  sum  three  times  the  amount  of  the 
tax  arising  from  such  property,  limited  with  such  sureties  as  the  county  judge 
may  approve,  conditioned  for  the  payment  of  the  said  tax  and  interest  thereon 
at  such  time  or  period  as  they  or  their  representatives  may  come  into  the 
actual  possession  or  enjoyment  of  said  property;  which  bond  shall  be  filed  in 
the  office  of  the  county  clerk  of  the  proper  county:  Provided,  further,  that 
sv.ch  person  or  persons,  body  politic  or  corporate,  shall  make  a  full  verified 
return  of  said  property  to  said  county  judge  and  file  the  same  in  his  office 
within  one  year  from  the  death  of  the  decedent,  with  the  bond  and  sureties  as 
above  provided;  and,  further,  said  person  or  persons,  body  politic  or  corporate 
shall  renew  said  bond  every  five  years  after  the  date  of  the  death  of  decedent. 

3.  Inheritance  tax,  due  and  payable,  interest,  discount,  bond. 

§  3.  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for, 
shall  be  due  and  payable,  at  the  death  of  the  decedent,  and  interest  at  the  rate 
of  six  per  cent  per  annum  shall  be  charged  and  collected  thereon  for  such  time 
as  said  taxes  are  not  paid:  Provided,  that  if  said  tax  is  paid  within  six 
months  from  the  accruing  thereof,  interest  shall  not  be  charged  or  collected 
thereon,  but  a  discount  of  five  per  cent  shall  be  allowed  and  deducted  from  said 
tax;  and  in  all  cases  where  the  executors,  administrators  or  trustees  do  not 
pay  such  tax  within  one  year  from  the  death  of  the  decedent,  they  shall  be 
required  to  give  a  bond  in  the  form  and  to  the  effect  prescribed  in  section  2  of 
this  act,  for  the  payment  of  said  tax,  together  with  interest. 

4.  Legacies,  deductions  and  retention  of  tax,  apportionment,  application. 

§  4.  Any  administrator,  executor  or  trustee  having  any  charge  or  trust  in 
legacies  or  property  for  distribution  subject  to  the  said  tax  shall  deduct  the 
tax  therefrom,  or  if  the  legacy  or  property  be  not  money  he  shall  collect  a  tax 
thereon  upon  the  appraised  value  thereof  from  the  legatee  or  person  entitled  to 
such  property,  and  he  shall  not  deliver  or  be  compelled  to  deliver  any  specific 
legacy  or  property  subject  to  tax  to  any  person  until  he  shall  have  collected 
the  tax  thereon ;  and  whenever  any  such  legacy  shall  be  charged  upon  or 
payable  out  of  real  estate  the  heir  or  devisee  before  paying  the  same  shall 
deduct  said  tax  therefrom,  and  pay  the  same  to  the  executor,  administrator  or 
trustee,  and  the  same  shall  remain  a  charge  on  such  real  estate  until  paid,  and 
the  payment  thereof  shall  be  enforced  by  the  executor,  administrator  or  trustee 
in  the  same  manner  that  the  said  payment  of  said  legacies  might  be  enforced, 
if,  however,  such  legacy  be  given  in  money  to  any  person  for  a  limited  period, 


ILLINOIS  889 

he  shall  retain  the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money  he 
shall  make  application  to  the  court  having  jurisdiction  of  his  accounts,  to 
make  an  apportionment  if  the  case  requires  it  of  the  sum  to  be  paid  into  his 
hands  by  such  legatees,  and  for  such  further  order  relative  thereof  as  the  case 
may  require. 

5.  Executors,  administrators  and  trustees,  powers  and  liability. 

§  5.  All  executors,  administrators  and  trustees  shall  be  personally  liable  for 
the  payment  of  taxes  and  interest,  and  where  proceedings  for  collection  of 
taxes  assessed  be  had,  said  executors,  administrators  and  trustees  shall  be  per- 
sonally liable  for  the  expenses,  costs  and  fees  of  collection.  They  shall  have 
full  power  to  sell  so  much  of  the  property  of  the  decedent  as  will  enable  them 
to  pay  said  tax,  in  the  same  manner  as  they  may  be  enabled  to  do  by  law,  for 
the  payment  of  duties  of  their  testators  and  intestates,  and  the  amount  of  said 
tax  shall  be  paid  as  hereinafter  directed. 

6.  County  treasurer,  payment  to,  receipt,  accounts. 

§  6.  Every  sum  of  money  retained  by  any  executor,  administrator  or  trustee 
or  paid  into  his  hands  for  any  tax  on  any  property,  shall  be  paid  by  him 
within  thirty  days  thereafter  to  the  treasurer  of  the  proper  county,  and  the  said 
treasurer  or  treasurers  shall  give,  and  every  executor,  administrator  or  trustee 
shall  take,  duplicate  receipts  from  him  of  said  payments,  one  of  which  receipts 
he  shall  immediately  send  to  the  State  Treasurer,  whose  duty  it  shall  be  to 
charge  the  treasurer  so  receiving  the  tax  with  the  amount  thereof,  and  shall  seal 
said  receipt  with  the  seal  of  his  office  and  countersign  the  same  and  return  it  to 
the  executor,  administrator  or  trustee,  whereupon  it  shall  be  a  proper  voucher 
in  the  settlement  of  his  accounts;  but  the  executor,  administrator  or  trustee 
shall  not  be  entitled  to  credit  in  his  accounts  or  be  discharged  from  liability 
for  such  tax  unless  he  shall  purchase  a  receipt  so  sealed  and  countersigned  by 
the  treasurer  and  a  copy  thereof  certified  by  him. 

7.  Information,  furnishing. 

§  7.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  politic  or  corporate,  or  to  any  person  or  persons,  or  in 
trust  for  them,  it  shall  be  the  duty  of  the  executor,  administrator  or  trustee 
of  such  decedent  to  give  information  thereof  in  writing  to  the  treasurer  of  the 
county  where  said  real  estate  is  situated,  within  six  months  after  they  under- 
take the  execution  of  their  expected  duties,  or  if  the  fact  be  not  known  to  them 
within  that  period,  then  within  one  month  after  the  same  shall  have  come  to 
their  knowledge. 

8.  Refunds  and  repayment. 

§  8.  Whenever  debts  shall  be  proved  against  the  estate  of  the  decedent  after 
distribution  of  legacies  from  which  the  inheritance  tax  has  been  deducted  in 
compliance  with  this  act,  and  the  legatee  is  required  to  refund  any  portion  of 
the  legacy,  a  proportion  of  the  said  tax  shall  be  repaid  to  him  by  the  executor 
or  administrator  if  the  said  tax  has  not  been  paid  into  the  State  or  county 
treasury,  or  by  the  county  treasurer  if  it  has  been  so  paid. 

9.  Foreign   assignment    of    securities,    safe    deposit    or    trust    company,    notice. 

retention  of  tax,  examination  of  securities,  penalty. 

§  9.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer  any 
stock  or  obligation  in  this  State  standing  in  the  name  of  the  decedent,  or 
in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the 
treasurer  of  the  proper  county  on  the  transfer  thereof.  No  safe  deposit  com- 
pany, trust  company,  corporation,  bank  or  other  institution,  person  or  persons 
having  in  possession  or  under  control  securities,  deposits,  or  other  assets 
belonging  to  or  standing  in  the  name  of  a  decedent  who  was  a  resident  or  non- 
resident, or  belonging  to,  or  standing  in  the  joint  names  of  such  decedent 
and  one  or  more  persons,  including  the  shares  of  the  capital  stock  of,  or  other 
interests  in,  the  safe  deposit  company,  trust  company,  corporation,  bank  or 
other  institution  making  the  delivery  or  transfer  herein  provided,  shall  delive 


890  THE  STATE  STATUTES 

or  transfer  the  same  to  the  executors,  administrators  or  legal  representatives  of 
said  decedent,  or  to  the  survivor  or  survivors  when  held  in  the  joint  names  of  a 
decedent  and  one  or  more  persons,  or  upon  their  order  or  request,  unless  notice 
of  the  time  and  place  of  such  intended  delivery  or  transfer  be  served  upon  the 
State  Treasurer  and  Attorney  General  at  least  ten  days  prior  to  said  delivery 
or  transfer;  nor  shall  any  such  safe  deposit  company,  trust  company,  corpora- 
tion, bank  or  other  institution,  person  or  persons  deliver  or  transfer  any  securi- 
ties, deposits  or  other  assets  belonging  to  or  standing  in  the  name  of  a  decedent, 
or  belonging  to,  or  standing  in  the  joint  names  of  a  decedent  and  one  or  more 
persons,  including  the  shares  of  the  capital  stock  of,  or  other  interests  in,  the 
safe  deposit  company,  trust  company,  corporation,  bank  or  other  institution 
making  the  delivery  or  transfer,  without  retaining  a  sufficient  portion  or  amount 
thereof  to  pay  any  tax  or  interest  which  may  thereafter  be  assessed  on  account 
of  the  delivery  or  transfer  of  such  securities,  deposits  or  other  assets,  including 
the  shares  of  the  capital  stock  of,  or  other  interests  in,  the  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution  making  the  delivery  or 
transfer,  under  the  provisions  of  this  article,  unless  the  State  Treasurer  and 
Attorney  General  consent  thereto  in  writing.  And  it  shall  be  lawful  for  the  State 
Treasurer,  together  with  the  Attorney  General,  personally  or  by  representatives, 
to  examine  said  securities,  deposits  or  assets  at  the  time  of  such  delivery  or 
transfer.  Failure  to  serve  such  notice  or  failure  to  allow  such  examination,  or 
failure  to  retain  a  sufficient  portion  or  amount  to  pay  such  tax  and  interest  aa 
herein  provided  shall  render  said  safe  deposit  company,  trust  company,  corpora- 
tion, bank  or  other  institution,  person  or  persons  liable  to  the  payment  of  the 
amount  of  the  tax  and  interest  due  or  thereafter  to  become  due  upon  said 
securities,  deposits  or  other  assets,  including  the  shares  of  the  capital  stock  of, 
or  other  interests  in,  the  safe  deposit  company,  trust  company,  corporation,  bank 
or  other  institution  making  the  delivery  or  transfer,  and  in  addition  thereto,  a 
penalty  of  one  thousand  dollars;  and  the  payment  of  such  tax  and  interest 
thereon,  or  of  the  penalty  above  prescribed,  or  both,  may  be  enforced  in  an 
action  brought  by  the  State  Treasurer  in  any  court  of  competent  jurisdiction. 

10.  Refunds  by  State  Treasurer,  application,  limitation. 

§  10.  When  any  amount  of  said  tax  shall  have  been  paid  erroneously  to  the 
State  Treasurer,  it  shall  be  lawful  for  him  on  satisfactory  proof  rendered  to 
him  by  said  county  treasurer  of  said  erroneous  payments  to  refund  and  pay 
to  the  executor,  administrator  or  trustee,  person  or  persons  who  have  paid  any 
such  tax  in  error  the  amount  of  such  tax  so  paid:  Provided,  that  all  applica- 
tions for  the  repayment  of  said  tax  shall  be  made  within  two  years  from  the 
date  of  said  payment. 

11.  County  judges'  powers  and  duties;    appraisers,   appointment,  expenses   and 

compensation;  notice,  hearing,  evidence  and  witnesses;  report,  order  or 
judgment,  appeal,  Attorney  General's  supervision  and  State's  Attorney's 
duties. 

§  11.  It  shall  be  the  duty  of  the  county  judge  to  ascertain  whether  any 
transfer  of  any  property  be  subject  to  an  inheritance  tax  under  the  provisions 
of  this  act,  and,  if  it  be  subject  to  such  inheritance  tax,  to  assess  and  fix  the 
then  cash  value  of  all  estates,  annuities  and  life  estates  of  terms  of  years 
growing  out  of  said  estates  and  the  tax  to  which  the  same  is  liable.  The  county 
judge,  upon  the  application  of  any  interested  party,  including  the  Attorney 
General,  or  upon  his  own  motion  as  often  as,  or  whenever  occasion  may  require, 
may  hear  evidence  and  determine  the  fair  cash  value  of  such  estate  and  the 
amount  of  inheritance  tax  to  which  the  same  is  liable  or  the  county  judge  may, 
in  such  case,  in  his  discretion,  where  the  facts  are  complicated  and  evidence  is 
voluminous,  appoint  some  competent  person  as  appraiser  to  appraise  the  fair 
cash  value  at  the  time  the  transfer  thereof  of  the  property  of  persons  whose 
estates  shall  be  subject  to  the  payment  of  any  inheritance  tax  imposed  by  this 
act.  Whether  the  fair  cash  value  of  such  estate  shall  be  ascertained  and 
determined  by  the  appraiser  appointed  by  the  county  judge  or  by  the  County 
Judge,  (Court)  notice  shall,  in  each  case,  be  given  by  mail  to  all  persons 
known  to  have  a  claim  an  (or)  interest  in  such  property,  including  the  Attorney 
General,  and  to  such  persons  as  the  county  judge  by  order  directs,  of  the  time 


ILLINOIS  891 

and  place  he  will  appraise  such  property:  Provided,  that  in  counties  of  the 
third  class,  because  of  the  volume  of  general  business  transacted  in  the  County 
Courts  of  such  counties,  the  county  judge  in  such  counties  of  the  third  class 
may,  in  his  direction,  appoint  appraisers  in  any  and  all  cases.  In  case  an 
appeal  is  taken  to  the  County  Court,  it  shall  be  the  duty  of  the  county  clerk, 
within  two  days  after  such  appeal  shall  have  been  perfected,  to  notify  in 
writing  the  Attorney  General  and  county  treasurer.  Within  five  days  after 
the  judgment  of  the  County  Court  shall  be  entered  on  appeal,  it  shall  be  the 
duty  of  the  county  clerk  to  make  and  transmit  a  certified  copy  of  such  judg- 
ment to  the  Attorney  General  and  county  treasurer.  Persons  of  full  age  and 
sui  juris  may,  in  writing,  waive  such  notice,  and  consent  to  an  immediate  hearing 
by  the  county  judge  or  the  appraiser,  as  the  case  may  be. 

Both  the  appraiser  and  the  county  judge  are  hereby  authorized  and  em- 
powered to  use  subpoenas  for  and  to  compel  the  attendance  of  witnesses  before 
them,  respectively,  and  to  take  the  evidence  of  such  witnesses  under  oath. 
Any  person  who  shall  be  served  with  a  subpoena  to  appear  and  testify  or  to 
produce  books  and  papers,  issued  either  by  the  county  judge  or  by  the  appraiser, 
and  who  shall  refuse  or  neglect  to  appear  or  testify  or  to  produce  books  and 
papers  relevant  to  such  assessment,  as  commanded  in  such  subpoena,  shall  be 
deemed  guilty  of  a  misdemeanor,  and  shall,  on  conviction,  be  punished  by  a 
fine  of  not  less  than  ten  dollars  nor  more  than  twenty-five  dollars  for  each 
offense.  Any  Circuit  Court  or  judge  thereof,  either  in  term  time  or  vacation, 
upon  application  of  the  county  judge  or  appraiser,  as  the  case  may  be,  may, 
in  its  or  his  discretion,  compel  the  attendance  of  witnesses,  the  production  of 
books  and  papers,  and  giving  of  testimony  before  such  county  judge  or 
appraiser,  as  the  case  may  be,  by  attachment  for  contempt  or  otherwise  in  the 
same  manner  as  the  production  of  evidence  may  be  compelled  before  said 
court.  When  the  evidence  is  taken  by  an  appraiser,  he  shall  make  a  report 
thereof  and  of  such  value  in  writing  to  said  county  judge,  with  the  depositions 
of  the  witnesses  examined  and  such  other  facts  in  relation  thereto,  and  to  said 
matters  as  said  county  judge  may  by  order  require.  The  order  of  the  county 
judge  assessing  and  fixing  an  inheritance  tax,  together  with  the  report,  if  any, 
of  appraiser  appointed  by  such  county  judge,  shall  be  filed  in  the  office  of  the 
county  clerk.  It  shall  be  the  duty  of  the  county  clerk,  within  five  days  after 
the  filing  of  such  order  assessing  and  fixing  the  inheritance  tax,  to  make  and 
transmit  a  certified  copy  of  such  order  to  the  Attorney  General  and  to  the 
county  treasurer  of  the  county  in  which  such  assessment  is  had,  and,  also,  to 
give  notice  by  mail  to  all  parties  known  to  be  interested  in  such  estate,  sub- 
stantially in  such  form  as  may  be  prescribed  and  furnished  to  the  county  clerk 
by  the  Attorney  General. 

Any  person  or  persons,  including  the  Attorney  General,  dissatisfied  with  the 
appraisement  or  assessment,  may  appeal  therefrom  to  the  County  Court  of  the 
proper  county  within  sixty  days  after  the  making  and  filing  of  such  assessment 
order  on  paying  or  giving  to  the  county  judge  security  satisfactory  to  pay  all 
costs,  together  with  whatever  taxes  shall  be  fixed  by  the  court:  Provided,  no 
bond  or  'security  shall  be  required  of  the  Attorney  General. 

The  said  appraiser  shall  be  paid  by  the  county  treasurer  out  of  any  funds 
he  may  have  in  his  hands  on  account  of  the  inheritance  tax  collected  in  said 
appraisement,  as  by  law  provided,  on  the  certificate  of  the  county  judge,  such 
compensation  as  such  judge  may  deem  just  for  said  appraiser's  service  as  such 
appraiser,  not  to  exceed  ten  dollars  ($10)  per  day  for  each  [day]  actually 
and  necessarily  employed  in  such  appraisement  and  not  to  exceed  fifteen  per 
cent  of  the  aggregate  amount  of  tax  levied  and  assessed  by  the  county  judge: 
Provided,  such  appraiser  shall  in  no  case  receive  less  than  ten  dollars  ($10). 

Such  appraiser  shall,  also,  be  entitled  to  receive  his  actual  and  necessary 
traveling  expenses  and  disbursements,  including  witness  fees  paid  by  him,  if 
any,  such  expenses  and  disbursements  to  be  paid  by  the  county  treasurer  on 
the  order  of  the  county  judge,  out  of  the  inheritance  tax  collected  in  such 
appraisement. 

It  shall  be  the  duty  of  the  Attorney  General  to  exercise  general  supervision 
over  the  assessment  and  collection  of  the  inheritance  tax  provided  in  this  act, 
and  in  the  discharge  of  such  duty,  the  Attorney  General  may  institute  and 
prosecute  such  suits  and  proceedings  as  may  be  necessary  and  proper,  appearing 
therein  for  such  purpose;  and  it  shall  be  the  duty  of  the  several  State's 


892  THE  STATE  STATUTES 

Attorneys  to  render  assistance  therein  when  requested  by  the  Attorney  General  so 
to  do.  [Amended  by  Act  approved  June  28,  in  force  July  1,  1913.  Laws 
1913,  p.  513.] 

12.  County  Clerks'  fees,  Assistants  Attorney  General,  salaries. 

§  12.  The  fees  of  the  clerk  of  the  County  Court  in  inheritance  tax  matters 
in  the  respective  counties  of  this  State,  as  classified  in  the  act  concerning  fees 
and  salaries,  shall  be  as  follows: 

In  counties  of  the  first  and  second  class,  for  services  in  all  proceedings  m 
each  estate  before  the  county  judge  the  clerk  shall  receive  a  fee  of  five  dollars. 
In  all  such  proceedings  in  counties  of  the  third  class,  the  clerk  shall  receive  a 
fee  of  ten  dollars.  Such  fees  shall  be  paid  by  the  county  treasurer,  on  the 
certificate  of  the  county  judge,  out  of  any  money  in  his  hands,  on  account  of 
said  tax.  In  counties  of  the  third  class,  the  Attorney  General  shall  designate 
an  assistant  or  assistants  Attorney  General,  whose  special  duty  it  shall  be  to 
attend'  to  all  matters  pertaining  to  the  enforcement  of  this  act  in  respect  to 
the  appraisement,  assessment  and  collection  of  the  inheritance  tax  in  such 
counties.  The  salaries  of  such  assistants  shall  be  as  follows:  One  Assistant 
Attorney  General,  whose  salary  for  the  month  of  January,  1916,  shall  be 
twenty-nine  hundred  sixteen  dollars  and  sixty-six  cents,  and  thereafter  five  thou- 
sand dollars  per  annum  payable  in  monthly  installments;  the  salary  of  each  of 
two  Assistants  Attorney  General,  for  the  month  of  January,  1916,  shall  be  twenty- 
three  hundred  thirty-three  dollars  and  thirty-three  cents,  and  thereafter  four 
thousand  dollars  per  annum  payable  in  monthly  installments;  the  salary  of  one 
Assistant  Attorney  General  for  the  month  of  January,  1916,  shall  be  twenty 
hundred  forty-one  dollars  and  sixty-two  cents,  and  thereafter  thirty-five  hundred 
dollars  per  annum  payable  in  monthly  installments.  In  counties  of  the  third  class, 
the  clerk  of  the  County  Court  may  appoint  a  clerk  in  the  office  of  the  clerk  of  said 
court,  to  be  known  as  the  "inheritance  tax  clerk,"  whose  compensation  shall  be 
fixed  by  the  county  judge,  not  to  exceed  fifteen  hundred  dollars  per  year,  and  not 
to  exceed  the  fee  earned  in  said  office  in  inheritance  tax  matters,  the  surplus  of 
such  fees  over  said  compensation  so  fixed  to  be  turned  into  the  county  treasury. 
In  addition  to  the  above,  the  clerk  of  the  County  Court  shall  be  entitled,  in  all 
suits  brought  for  the  collection  of  delinquent  inheritance  tax,  and  all  contested 
inheritance  tax  cases  appealed  from  the  county  judge  to  the  County  Court,  and  in 
all  appeals  from  the  County  Court  to  the  Supreme  Court,  the  same  fees  as  are 
now,  or  which  may  hereafter  be,  allowed  by  law  in  suits  at  law,  or  in  the  matter 
of  appeals  at  law,  to  or  from  the  County  Court,  which  fees  shall  be  taxed  as  costs 
and  paid  as  in  other  cases  at  law ;  and  in  all  cases  arising  under  this  act,  including 
certified  copies  of  documents  or  records  in  his  office,  for  which  no  specific  fees 
are  provided,  the  clerk  of  the  County  Court  shall  charge  against  and  collect  from 
the  persons  applying  for,  or  entitled  to  such  services,  or  certified  copies,  the  same 
fees  as  are  now,  or  which  may  hereafter  be,  allowed  for  similar  services  or  certified 
copies  in  said  court,  and  for  recording  inheritance  tax  receipts  required  to  be 
recorded  in  his  office,  he  shall  receive  the  same  fees  which  are  now  or  hereafter 
may  be  allowed  by  law  to  the  recorder  of  deeds  for  recording  similar  instruments. 
[Amended  by  Act  approved  and  in  force  December  3,  1915.  Spl.  Sess.  Laws 
1915,  p.  35.] 

13.  Bribe,  penalty. 

§  13.  Any  appraiser  appointed  by  this  act,  who  shall  take  any  fee  or  reward 
from  any  executor,  administrator,  trustee,  legatee,  next  of  kin  or  heir  of  any 
decedent,  or  from  any  other  persons  liable  to  pay  said  tax  or  any  portion  thereof, 
shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  in  any  court  having  juris- 
diction of  misdemeanors,  he  shall  be  fined  not  less  than  two  hundred  and  fifty 
dollars  nor  more  than  five  hundred  dollars  and  imprisoned  not  exceeding  ninety 
days ;  and  in  addition  thereto  the  county  judge  shall  dismiss  him  from  such  service. 

14.  County  Court,  jurisdiction. 

§  14.  The  County  Court  in  the  county  in  which  the  property  is  situated  of  the 
decedent,  who  was  not  a  resident  of  the  State  or  in  the  county  of  which  the 
deceased  was  a  resident  at  the  time  of  his  death,  shall  have  jurisdiction  to  hear 
and  determine  all  questions  in  relation  to  the  tax  arising  under  the  provisions  of 


ILLINOIS  893 

this  act,  and  the  County  Court  first  acquiring  jurisdiction  hereunder  shall  retain 
the  same  to  the  exclusion  of  every  other. 

15.  Unpaid  tax,  summons  or  citation  to  show  cause,  practice,  costs. 

§  15.  If  it  shall  appear  to  the  County  Court  that  any  tax  accruing  under  this 
act  has  not  been  paid  according  to  law,  it  shall  issue  a  summons  summoning  the 
persons  interested  in  the  property  liable  to  the  tax  to  appear  before  the  court 
on  a  day  certain,  not  more  than  three  months  after  the  date  of  such  summons,  to 
show  cause  why  said  tax  should  not  be  paid.  The  process,  practice  and  pleadings, 
and  the  hearing  and  determination  thereof,  and  the  judgment  in  said  court  in 
such  cases  shall  be  the  same  as  those  now  provided,  or  which  may  hereafter  be 
provided  in  probate  cases  in  the  County  Court  in  this  State,  and  the  fees  and  costs 
in  such  cases  shall  be  the  same  as  in  probate  cases  in  the  County  Courts  of  this 
State. 

16.  Unpaid  tax,  collection,  bill  and  assumpsit. 

§  16.  Whenever  it  appears  that  any  tax  is  due  and  unpaid  under  this  act,  and 
the  persons,  institutions  or  corporations  liable  for  said  tax  have  refused  or 
neglected  to  pay  the  same,  it  shall  be  the  duty  of  the  Attorney  General,  if  he  has 
proper  cause  to  believe  a  tax  is  due  and  unpaid,  to  prosecute  the  collection  of  the 
same  by  a  bill  in  chancery,  filed  in  the  name  of  the  People  of  the  State  of  Illinois, 
to  enforce  the  lien  of  inheritance  tax,  or,  if  there  be  grounds  for  the  same,  to 
secure  an  injunction  against  the  transfer  and  delivery  or  other  disposition  of  prop- 
erty subject  to  the  lien  for  the  payment  of  the  inheritance  tax,  and  the  County 
Courts  are  invested  with  full  jurisdiction  to  hear  and  determine  such  suits.  The 
process,  practice  and  proceedings  shall  be  the  same  as  in  cases  of  chancery,  except 
that  the  answer  of  the  defendant  need  not  be  under  oath. 

In  addition  to  the  remedy  hereinabove  provided,  any  inheritance  tax  due  and 
unpaid  may  be  recovered  in  an  action  of  assumpsit  brought  by  the  Attorney 
General,  in  the  name  of  the  People  of  the  State  of  Illinois,  against  any  person 
liable  for  such  tax  and  the  Attorney  General  is  hereby  authorized  to  bring  such 
action  in  any  court  having  jurisdiction.  [Amended  by  Act  approved  June  2'8,  in 
force  July  1,  1913.  Laws  1913,  p.  513.] 

17.  Information,  statement  of  taxes  assessed. 

§  17.  The  county  judge  and  county  clerk  of  each  county  shall,  every  three 
months,  make  a  statement,  in  writing,  to  the  county  treasurer  of  the  county  of  the 
property  from  which  or  the  party  from  whom  he  has  reason  to  believe  a  tax 
under  this  Act  is  due  and  unpaid. 

It  shall  be  the  duty  of  the  county  treasurer  on  the  first  day  of  January,  April, 
July  and  October  of  each  year  to  make  and  transmit  to  the  Attorney  General  a 
statement  of  the  inheritance  tax  due  and  unpaid  in  all  estates  in  which  the  county 
judge,  or  County  Court,  as  the  case  may  be,  has  levied  and  assessed  such  tax  as 
the  same  appears  from  the  certified  copy  of  the  orders  of  the  county  judge,  or 
the  certified  copy  of  the  judgment  of  the  County  Court  assessing  and  fixing  such 
tax  on  file  in  his  office:  Provided,  in  case  an  appeal  shall  be  taken  from  the 
county  judge  to  the  County  Court  in  any  case,  such  statement  shall  not  include 
the  estate  in  which  such  appeal  is  pending  and  undisposed  of.  [Amended  by  act 
above.] 

§  18.  [Eepealed.] 

18.  Inheritance  tax  records,  inspection. 

§  19.  The  Treasurer  of  the  State  shall  furnish  to  each  county  judge  a  book,  in 
which  he  shall  enter  the  returns  made  by  appraisers,  the  cash  value  of  annuities, 
life  estates  and  terms  of  years  and  other  property  fixed  by  him,  and  the  tax 
assessed  thereon  and  the  amounts  of  any  receipts  for  payments  thereof  filed  with 
him,  which  books  shall  be  kept  in  the  office  of  the  county  judge  as  a  public  record. 

19.  County  treasurer,  transmission  of  taxes,  report,  penalty,  sureties'  liability. 

action,  State  Treasurer's  duty. 

§  20.  The  treasurer  of  each  county  shall  collect  all  such  taxes  and  on  the  first 
day  of  each  and  every  month  transmit  all  such  taxes  so  collected  prior  thereto, 


894  THE  STATE  STATUTES 

and  not  yet  transmitted,  to  the  State  Treasurer,  who  shall  give  him  a  receipt 
therefor,  of  which  collection  and  payment  he  shall  make  report  under  oath  to  the 
Auditor  of  Public  Accounts,  on  the  first  day  of  each  and  every  month,  stating 
for  what  estate  paid,  and  in  such  form  and  containing  such  particulars,  as  the 
Auditor  may  prescribe.  If  any  county  treasurer  shall  fail  to  pay  to  the  State 
Treasurer  all  taxes  that  may  be  due  and  payable  under  this  act,  as  prescribed 
herein,  such  county  treasurer  shall  pay  to  the  State,  as  a  penalty  for  such  failure, 
a  sum  of  money  equal  to  the  interest  on  such  taxes  at  the  rate  of  one-tenth  of  one 
per  cent  per  day  from  the  time  such  taxes  are  collected  by  said  county  treasurer 
until  such  taxes  are  paid.  The  sureties  upon  the  official  bond  of  such  county 
treasurer  shall  be  security  for  the  payment  of  such  penalaty.  The  penalty  in  this 
section  provided  may  be  recovered  in  an  action  of  debt  against  such  county 
treasurer  and  his  sureties  aforesaid,  in  the  name  of  the  People  of  the  State  of 
Illinois,  in  any  court  of  competent  jurisdiction  within  the  county  wherein  such 
county  treasurer  is  resident;  and  such  penalty,  when  recovered,  shall  be  paid  into 
the  State  treasury.  Such  action  shall  be  brought  by  the  State  Treasurer  within 
ten  days  after  the  failure  of 'such  county  treasurer  to  pay  to  the  State  Treasurer 
any  taxes  collected  by  him,  at  the  time  required  by  this  act.  Failure  to  bring 
suit  within  such  time  shall  not  prevent  the  bringing  of  such  suit  thereafter.  And 
it  is  hereby  made  the  duty  of  the  State  Treasurer  to  make  necessary  and  proper 
investigations  to  determine  what  inheritance  tax  should  be  paid;  Provided,  how- 
ever, that  this  section  shall  not  invalidate  or  increase  the  liability  upon  the  bond 
of  any  county  treasurer  in  force  prior  to  the  passage  of  this  act,  and  that  to  such 
extent  as  its  application  to  any  such  existing  bond  would  result  in  invalidating 
such  bond  or  increasing  the  liability  thereon,  this  section  shall  be  inapplicable 
thereto.  [Amended  by  Act  filed  May  7,  in  force  July  1,  1917.  Laws  1917,  p.  656.] 

20.  Collection  expenses,  retention  by  county. 

§  21.  The  treasurer  of  each  county  shall  retain  and  pay  into  the  county  treasury 
two  per  cent  (2%)  on  all  taxes  paid  and  accounted  for  by  him  under  this  act,  in 
full  for  all  services  and  expenses  rendered,  incurred  or  paid  by  the  county  or  any 
of  its  officers,  agents,  or  employees,  in  collecting  and  paying  the  same.  [Amended 
by  Act  approved  June  25,  in  force  July  1,  1915.  Laws  1915,  p.  572.] 

21.  Inheritance   tax   receipts. 

§  22.  Any  person  or  body  politic  or  corporate  shall,  upon  the  payment  of  the 
sum  of  fifty  cents,  be  entitled  to  a  receipt  from  the  county  treasurer  of  any 
county  or  the  copy  of  the  receipt  at  his  opinion  that  may  have  been  given  by  said 
treasurer  for  the  payment  of  any  tax  under  this  act,  to  be  sealed  with  the  seal  of 
his  office  which  receipt  shall  designate  on  what  real  property,  if  any,  of  which 
any  deceased  may  have  died  seized,  said  tax  has  been  paid  and  by  whom  paid,  and 
whether  or  not  it  is  in  full  of  said  tax ;  and  said  receipt  may  be  recorded  in  the 
clerk's  office  of  said  county  in  which  the  property  may  be  situated,  in  a  book  to 
be  kept  by  said  clerk  for  such  purpose. 

22.  Petition  contesting  liability,  parties,  judgment,  appeal,  costs. 

§  23.  When  any  person  interested  in  any  property  in  this  State,  which  shall 
have  been  transferred  within  the  meaning  of  this  act  shall  deem  the  same  not 
subject  to  any  tax  under  this  act,  he  may  file  his  petition  in  the  County  Court 
of  the  proper  county  to  determine  whether  said  property  is  subject  to  the  tax 
herein  provided,  in  which  petition  the  county  treasurer  and  all  persons  known 
to  have  or  claim  any  interest  in  said  property  shall  be  made  parties.  The 
County  Court  may  hear  the  said  clause  upon  the  relation  of  the  parties  and  the 
testimony  of  witnesses,  and  evidence  produced  in  open  court,  and,  if  the  court 
shall  find  said  property  is  not  subject  to  any  tax,  as  herein  provided,  the  court 
shall,  by  order,  so  determine;  but  if  it  shall  appear  that  said  property,  or  any 
part  thereof,  is  subject  to  any  such  tax,  the  same  shall  be  appraised  and  taxed 
as  in  other  cases.  An  adjudication  by  the  County  Court,  as  herein  provided, 
shall  be  conclusive  as  to  the  lien  of  the  tax  herein  provided  upon  said  property, 
subject  to  appeal  to  the  Supreme  Court  of  the  State  by  the  county  treasurer,  or 
Attorney  General  of  the  State,  in  behalf  of  the  people,  or  by  any  party  having  an 


ILLINOIS 

interest  in  said  property.  The  fees  and  costs  in  all  cases  arising  under  this  section 
shall  be  the  same  as  are  now  or  may  hereafter  be  allowed  by  law  in  cases  at  law 
in  the  County  Court. 

23.  Lien,  limitation. 

§  24.  The  lien  of  the  collateral  inheritance  tax  shall  continue  until  the  said  tax 
is  settled  and  satisfied:  Provided,  that  said  lien  shall  be  limited  to  the  property 
chargeable  therewith:  And,  provided,  further,  that  all  inheritance  taxes  shall  be 
sued  for  within  five  years  after  they  are  due  and  legally  demandable,  otherwise 
they  shall  be  presumed  to  be  paid  and  cease  to  be  a  lien  as  against  any  purchaser 
of  real  estate. 

24.  Contingent   remainders,    estate    in    expectancy,    appraisement,    refunds,    life 

estates. 

§  25.  When  property  is  transferred  or  limited  in  trust  or  otherwise,  and  the 
rights,  interest  or  estates  of  the  transferees  or  beneficiaries  are  dependent  upon 
contingencies  or  conditions  whereby  they  may  be  wholly  or  in  part  created, 
defeated,  extended  or  abridged,  a  tax  shall  be  imposed  upon  said  transfer  at  the 
highest  rate  which,  on  the  happening  of  the  said  contingencies  or  conditions, 
would  be  possible  under  the  provisions  of  this  article,  and  such  tax  so  imposed 
shall  be  due  and  payable  forthwith  by  the  executors  or  trustees  out  of  the  property 
transferred:  Provided,  however,  that  on  the  happening  of  any  contingency 
whereby  the  said  property,  or  any  part  thereof  is  transferred  to  a  person,  cor- 
poration or  institution  exempt  from  taxation  under  the  provisions  of  the  inherit- 
ance tax  laws  of  this  State,  or  to  any  person,  corporation  or  institution  taxable 
at  a  rate  less  than  the  rate  imposed  and  paid,  such  person,  corporation  or  institu- 
tion shall  be  entitled  to  a  return  of  so  much  of  the  tax  imposed  and  paid  as  is 
the  difference  between  the  amount  paid  and  the  amount  which  said  person,  cor- 
poration or  institution  should  pay  under  the  inheritance  tax  laws,  with  interest 
thereon  at  the  rate  of  three  per  centum  per  annum  from  the  time  of  payment. 
Such  return  of  over-payment  shall  be  made  in  the  manner  provided  for  refunds 
under  section  eight. 

Estates  or  interests  in  expectancy  which  are  contingent  or  defeasible  and  in 
which  proceedings  for  the  determination  of  the  tax  have  not  been  taken  or  where 
the  taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their  full, 
undiminished  value  when  the  persons  entitled  thereto  shall  come  into  the  bene- 
ficial enjoyment  or  possession  thereof,  without  diminution  for  or  account  of  any 
valuation  theretofore  made  of  the  particular  estates  for  the  purposes  of  taxation, 
upon  which  said  estates  or  interests  in  expectancy  may  have  been  limited. 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission 
of  the  legatee  or  devisee  it  shall  be  taxed  as  if  there  were  no  possibility  of  such 
divesting. 

25.  Compositions  or   settlements,  authority,  execution. 

§  26.  The  State  Treasurer,  by  and  with  the  consent  of  the  Attorney  General 
expressed  in  writing  is  hereby  empowered  and  authorized  to  enter  into  an  agree- 
ment with  the  trustees  of  any  estate  in  which  remainders  or  expectant  estates 
have  been  of  such  a  nature,  or  so  disposed  and  circumstanced  that  the  taxes 
therein  were  held  not  presently  payable,  or  where  the  interests  of  the  legatees  or 
devisees  were  not  ascertainable  under  an  act  to  tax  gifts,  legacies,  and  inherit- 
ances, etc.,  in  force  July  1,  1885,  [1895]  and  amendments  thereto;  and  to  com- 
pound such  taxes  upon  such  terms  as  may  be  deemed  equitable  and  expedient; 
and  to  grant  discharge  to  said  trustees  upon  the  payment  of  the  taxes  provided 
for  in  such  composition:  Provided,  however,  that  no  such  composition  shall  be 
conclusive,  in  favor  of  said  trustees  as  against  the  interests  of  such  cestuis  que 
trust  as  may  possess  either  present  rights  of  enjoyment,  or  fixed,  absolute  or 
indefeasible  rights  of  future  enjoyment,  or  of  such  as  would  possess  such  rights 
in  the  event  of  the  immediate  termination  of  particular  estates,  unless  they  con- 
sent thereto,  either  personally,  when  competent,  or  by  guardian.  Composition  or 
settlement  made  or  effected  under  the  provisions  of  this  section  shall  be  executed 
in  triplicate,  and  one  copy  filed  in  the  office  of  the  State  Treasurer,  one  copy  in 
the  office  of  the  clerk  of  the  County  Court  wherein  the  appraisement  was  had  or 


896  THE  STATE  STATUTES 

the  tax  was  paid,   and  one  copy  delivered  to  the  executors,   administrators   or 
trustees  who  shall  be  parties  thereto. 

26.  Guardian,  appointment. 

§  27.  If  it  appears  at  any  stage  of  an  inheritance  tax  proceeding  that  any 
person  known  to  be  interested  therein  is  an  infant  or  person  under  disability,  the 
county  judge  may  appoint  a  special  guardian  of  such  infant  or  person  under 
disability. 

27.  Exemptions. 

§  28.  When  the  beneficial  interests  of  any  property  or  income  therefrom  shall 
pass  to  or  for  the  use  of  any  hospital,  religious,  charitable,  Bible,  missionary, 
tract,  scientific,  benevolent  or  charitable  purpose,  or  to  any  trustee,  bishop  or 
minister  of  any  church  or  religious  denomination,  held  and  used  exclusively  for 
the  religious,  educational  or  charitable  uses  and  purposes  of  such  church  or 
religious  denomination,  institution  or  corporation,  by  grant,  gift,  bequest  or 
otherwise,  the  same  shall  not  be  subject  to  any  such  duty  or  tax,  but  this  provision 
shall  not  apply  to  any  corporation  which  has  the  right  to  make  dividends  or 
distribute  profits  or  assets  among  its  members. 

28.  Transfer  defined. 

§  29.  When  property,  or  any  interest  therein  or  income  therefrom,  shall  pass 
to  or  for  the  use  of  any  person,  institution  or  corporation  by  the  death  of  another, 
by  deed,  instrument  or  memoranda,  such  passing  shall  be  deemed  a  transfer  within 
the  meaning  of  this  act,  and  taxable  at  the  same  rates,  and  be  appraised  in  the 
same  manner  and  subjected  to  the  same  duties  and  liabilities  as  any  other  form 
of  transfer  provided  in  this  act. 

29.  Records,  certified  copies,  fees. 

§  30.  On  the  written  request  of  the  county  treasurer  or  county  judge,  in  the 
county  wherein  an  appraisement  has  been  initiated,  the  clerk  of  the  County  Court 
and  in  counties  having  a  Probate  Court,  the  clerk  of  the  Probate  Court  and  the 
recorder  of  deeds,  shall  furnish  certified  copies  of  all  papers  within  their  care  or 
custody,  or  records  material  in  the  particular  appraisement,  and  the  said  clerk 
and  recorder  shall  receive  the  same  fee  or  compensation  for  such  certified  copies 
as  they  would  be  entitled  by  law  in  other  cases,  which  shall  be  paid  to  them  by 
the  county  treasurer  of  the  proper  county,  out  of  moneys  in  his  hands  on  account 
of  inheritance  tax  collections,  on  the  presentation  of  itemized  bills  therefor, 
approved  by  the  county  judge  of  the  proper  county. 

30.  Repeal. 

§  31.  That  "An  Act  to  tax  gifts,  legacies  and  inheritances  in  certain  cases, 
and  to  provide  for  the  collection  of  the  same,"  approved  June  15,  1895,  in  force 
July  1,  1895,  as  amended  by  act  approved  May  10,  1901,  in  force  July  1,  1901, 
and  all  laws  or  parts  of  laws  inconsistent  herewith  be  and  the  same  are  hereby 
repealed :  Provided,  however,  that  such  repeal  shall  in  no  wise  affect  any  suit, 
prosecution  or  court  proceeding  pending  at  the  time  this  act  shall  take  effect,  or 
any  right  which  the  State  of  Illinois  may  have  at  the  time  of  taking  effect  of 
this  act,  to  claim  a  tax  upon  any  property  under  the  provisions  of  the  act  or  acts 
hereby  repealed,  for  which  no  proceeding  has  been  commenced;  and  all  appeals 
and  rights  of  appeal  in  all  suits  pending,  or  appeals  from  assessments  of  tax 
made  by  appraisers'  reports,  orders  fixing  tax  or  otherwise  existing  in  this  State 
at  the  time  of  the  taking  effect  of  this  act. 

[NOTE:     The  amendment  of  1919  affected  only  the  rates  and  exemptions.] 
[Prior  Statutes:     1887,  p.  183;  1891,  p.  137;  1895,  p.  301;  1901,  p.  268.] 


INDIANA 


897 


INDIANA. 

Taxes  all  property  of  nonresidents  within  the  State. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OB  RELATIONSHIP 

Amount 
of  exemp- 
tion 

Rates  of  tax 

Above 
exemp- 
tion 
up  to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

$100,000 
to 
$500,000 

In 
excess  of 
$500,000 

Husband,  wife,  lineal  issue,  lineal  an- 
cestor of  decedent,  adopted  or 
mutually  acknowledged  child,  or 
issue  of  same. 

Widow, 
$10,000, 
all 
others, 
$2,000. 

1% 

11% 

2% 

21% 

3% 

Brother  or  sister  or  their  descndants 
wife  or  widow  of  Bon,  husband  of 
daughter. 

$500 

11% 

2i% 

3% 

3i% 

41% 

Aunt,  uncle  or  their  descendants  .... 

$250 

3% 

41% 

6% 

71% 

9% 

Brother  or  sister  of  grandparents  or 
their  descendants. 

$150 

4% 

6% 

8% 

10% 

12% 

All  others,  except  charitable  bequests, 
exempted  by  section  4. 

$100 

5% 

7i% 

10% 

121% 

15% 

- 

SCHEDULE  OF  RATES  AND  EXEMPTIONS  IN  EFFECT  AFTER  5  P.  M.  MAY   31,  1921. 


RELATIONSHIP 

Exemption 

On  excess 
above 
exemption 
to  $25,  000 

On  excess 
of  $25,000 
to  $50,  000 

On  excess  of 
$50,000  to 
$300,000 

On  excess  of 
$300,000 

Wife  

$15  000 

2  000 

Child  of  decedent  under  18.  .  . 

5,000 
2  000 

1% 

2% 

3% 

4<y 

Lineal  ancestor   

2  000 

Acknowledged  or  adopted  child 

2,000 
2  000 

500 

Sister  

500 

Descendant  of  same  

500 

2% 

4% 

6% 

8% 

Son-in-law  

500 

Daughter-in-law  

500 

Uncle  

250 

} 

Aunt  

250 

\          3% 

6% 

9% 

12% 

Descendant  of  same  

250 

Great  uncle  

150 

] 

Great  aunt  

150 

I          4% 

8% 

12% 

16% 

Descendant  of  same  

150 

All  others  

100 

5% 

10% 

15% 

20% 

LAWS  OF  1913  AS  AMENDED  BY  LAWS  OF  1915,  1917,  1919  AND  1921. 

NOTE:  Read  parts  set  in  italics  for  the  law  in  effect  prior  to  5:00  p.  m., 
May  31,  1921,  and  parts  in  bold  face  for  law  as  amended  and  in  force 
from  and  after  that  time. 

I.     Inheritances  and  transfers  taxed. 

A  tax  shall  be  imposed  upon  any  transfer  of  property,  real,  personal  or  mixed, 
or  any  interest  therein  or  income  therefrom  in  trust  or  otherwise  to  any  person, 

57 


898  THE  STATE  STATUTES 

association  or  corporation,  except  county,  town  or  municipal  corporations  for 
strictly  county,  town,  or  municipal  purposes,  or  to  the  bishop,  rector,  pastor, 
trustee,  board  of  trustees,  or  governing  body  of  any  educational  or  religious 
institution,  who  shall  use  the  property  so  transferred  solely  for  religious,  char- 
itable, or  educational  purposes,  within  the  State,  and  corporations  of  this  State 
organized  under'  its  laws  solely  for  religious,  charitable  or  educational  purposes, 
which  shall  use  the  property  so  transferred  exclusively  for  the  purposes  of  their 
organization,  within  the  State,  in  the  following  cases: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  State  of  any 
intangible  property,  or  of  tangible  property  within  the  this  State,  from  any  person 
dying  seized  or  possessed  thereof  while  a  resident  of  the  State. 

2.  When   the  transfer  is  by  will   or   intestate  law,   of  tangible   or  intangible 
property  within  the  jurisdiction  of  this  State,  and  the  decedent  was  a  non-resi- 
dent of  the  State  at  the  time  of  his  death. 

3.  Whenever    the    property    of    a    resident    decedent,    or    the    property    of    a 
non-resident  decedent  within  the  jurisdiction  of  this  State,  transferred  by  will 
is  not  specifically  bequeathed  or  devised,  such  property  shall,  for  the  purposes  of 
this  article,  be  deemed  to  be  transferred  proportionally  to  and  divided  pro  rata 
among   all   the   general   legatees    and    devisees   named   in    said    decedent's    will, 
including  all  transfers  under  a  residuary  clause  of  such  will. 

4.  When  the  transfer  is  of  intangible  property  or  of  tangible  property  within 
the  State,  made  by  a  resident,  or  of  tangible  property  within  the  State  made  by 
a  non-resident,  by  deed,  grant,  bargain,  sale  or  gift,  made  without  valuable  and 
adequate  consideration  in  money  or  money's  worth  to   the   full  value   of   the 
property  transferred  in  contemplation  of  the  death  of  the  grantor,  vendor,  or 
donor,  or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such 
death;  Provided:  That  any  conveyance,  gift  or  transfer  made  within  two  years 
of  the  death  of  any  decedent,  without  such  consideration,  save  and  except  love 
and   affection,   shall,   unless    shown   to   the    contrary,   be    conclusively   presumed 
deemed  to  have  been  made  in  contemplation  of  death. 

5.  When  any  such  person  or  corporation  becomes  beneficially  entitled,  in  pos- 
session or  expectancy,  to  any  property  or  the  income  thereof,  by  any  such  transfer 
whether  made  before  or  after  the  passage  of  this  act. 

6.  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived  from  any  disposition  of  property  made  either  before  or  after  the  passage 
of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer  taxable 
under  the  provisions  of  this  act  in  the  same  manner  as  though  the  property  to 
which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power 
and  had  been  bequeathed  or  devised  by  such  donee  by  will. 

7.  Whenever  property  is  held  in  the  joint  names  of  two  or  more  persons,  or 
is  deposited  in  banks,  or  other  institutions  or  depositaries  in  the  joint  names  of 
two  or  more  persons  and  payable  to  either  or  the  survivor,  upon  the  death  of  one 
of  such  persons,  the  exercise  of  the  right  of  the  surviving  person  or  persons  to 
the  immediate  ownership  or  possession  and  enjoyment  of  such  property  shall  be 
deemed  a  transfer  taxable  under  the  provisions  of  this  act  in  the  same  manner 
as  though  the  whole  property  to  which  such  transfer  relates  belonged  to  the 
deceased  joint  owner  or  joint  depositor  and  had  been  devised  or  bequeathed  tc 
the  surviving  person  or  persons,  by  such  deceased  joint  owner  or  joint  depositor 
by  will,  excepting  therefrom  such  part  thereof  as  may  be  proved  by  the  sur- 
viving joint  owner  or  joint  o'wners  to  have  originally  belonged  to  him  or  them 
and  never  to  have  belonged  to  the  decedent. 

8.  The  tax  so  imposed  shall  be  upon  the  market  value  of  such  property  at  the 
rates  hereinafter  prescribed,  and  only  upon  the  excess  of  the  exemptions  herein- 
after granted.     (Sup.  1918,  Burns  R.  S.  1914,  Sec.  10143a  and  Acts  1921,  Chap. 
275.) 

II.    Classification  of  persons  and  primary  rates. 

When  the  property  or  any  beneficial  interest  therein  passes  by  any  such  transfer 
where  the  amount  of  the  property  shall  exceed  in  value  the  exemption  hereinafter 
specified,  and  shall  not  exceed  in  value  twenty-five  thousand  dollars,  the  tax 
hereby  imposed  shall  be : 

1.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  husband,  wife,  lineal  issue,  lineal  ancestor  of  the  decedent 
•r  any  child  adopted  as  such  in  conformity  with  the  laws  of  this  State  at  least 


INDIANA  £99 

ten  years  prior  to  such  transfer  or  any  child  to  whom  such  decedent  for  not  less 
than  ten  years  prior  to  such  transfer  stood  in  the  mutually  acknowledged  relation 
of  a  parent :  Provided,  however,  Such  relationship  began  at  or  before  the  child 's 
fifteenth  birthday,  and  was  continuous  for  said  ten  years  thereafter,  or  any  lineal 
issue  of  such  adopted  or  mutually  acknowledged  child,  at  the  rate  of  one  per 
centum  of  the  clear  market  value  of  such  interest  in  such  property. 

2.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such  prop- 
erty shall  be  the  brother  or  sister  or  a  descendant  of  a  brother  or  sister  of  the 
decedent,  a  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of  the  decedent, 
at  the  rate  of  one  and  one-half  two  per  centum  of  the  clear  market  value  of  such 
interest  in  such  property. 

3.  Where   the   person   or   persons   entitled   to   any   beneficial   interest   in    such 
property  shall  be  the  brother  or   sister   of   the  father   or  mother   of  or  a   de- 
scendant of  a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the 
rate  of  three  per  centum  of  the  clear  market  value   of  such  interest  in  such 
property. 

4.  Where   the  person   or  persons    entitled   to    any   beneficial   interest   in    such 
property  shall  be  the  brother  or  sister  of  the  grandfather  or  grandmother  of  or 
a  descedant  of  the  brother  or  sister  of  the  grandfather  or  grandmother  of  the 
decedent,  at  the  rate  of  four  per  centum  of  the  clear  market  value  of  such  interest 
in  such  property. 

5.  Where  the   person   or   persons   entitled    to   any   beneficial   interest    in   such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a  body 
politic  or  corporate,  at  the  rate  of  five  per  centum  of  the  clear  market  value  of 
such  interest   in  such  property.      (Burns   R.    S.    1914,    10143b,   and   Acts    1921, 
Chap.  275.) 

III.  Rates  on  excess. 

The  foregoing  rates  in  section  2  are  for  convenience  termed  the  primary  rates. 
When  the  amount  of  the  clear  market  value  of  such  property  or  interest  to  which 
any  such  person  becomes  beneficially  entitled  exceeds  twenty-five  thousand  dollars, 
the  rates  of  tax  upon  such  excess  shall  be  as  follows: 

1.  Upon  all  in  excess  of  twenty-five  thousand  dollars  and  up  to  fifty  thousand 
dollars,  one  and  one-half  two  times  the  primary  rates. 

2.  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  three  hundred 
thousand  dollars,  two  three  times  the  primary  rates. 

3.  Upon  all  in  excess  of  one  three  hundred  thousand  dollars  and  up  to  five 
hundred  thousand  dollars,  two  and  one-half  four  times  the  primary  rates. 

4.  Upon  all  in  excess  of  five  hundred  thousand  dollars,  three  times  the  primary 
rates.     (Burns  R.  S.  1914,  Sec.  10142c,  and  Acts  1921,  Chap.  275.) 

IV.  Exemptions. 

The  following  exemptions  from  the  tax,  said  exemptions  to  be  taken  out  of  the 
first  twenty-five  thousand  dollars  of  each  beneficial  interest  in  the  estate,  are 
hereby  allowed: 

1.  All   property  transferred  to   municipal    corporations   within    the    State   for 
strictly  county,   town  or  municipal   purposes,   or   to   the  bishop,   rector,   pastor, 
trustee,  board  of  trustees,  or  governing  body  of  any  educational  or  religious  insti- 
tution, who  shall  use  the  property,  so  transferred  solely  for  religious,  charitable  or 
educational  purposes,  within  the  State  or  to  corporations  of  this  State  organized 
under  its  laws  solely  for  religious,  charitable  or  educational  purposes,  which  shall 
use  the  property  so  transferred,  exclusively  for  the  purpose  of  their  organizations, 
within  the  state,  shall  be  exempt. 

2.  Property  of  the  clear  market  value  of  ten  fifteen  thousand  dollars  trans- 
ferred to  the  widow  of  the  decedent,  five  thousand  dollars  transferred  to  each 
of  decedent's  children  under  eighteen  years  of  age,  and  two   thousand   dollars 
transferred  to  each  of  the   other   persons   described   in   the  first   subdivision   of 
section  2  shall  be  exempt. 

3.  Property  of  the  clear  market  value  of  five  hundred  dollars  transferred  to 
each  of  the  persons  described  in  the  second  subdivision  of  section  2  shall  be 
exempt. 

4.  Property  of  the  clear  market  value  of  two  hundred  and  fifty  dollars  trans- 


900  THE  STATE  STATUTES 

f  erred  to  each  of  the  persons  described  in  the  third  subdivision  of  section  2  shall 
be  exempt. 

5.  Property  of  the  clear  market  value  of  one  hundred  and  fifty  dollars  trans- 
ferred to  each  of  the  persons  described  in  the  fourth  subdivision  of  section  2 
shall  be  exempt. 

6.  Property  of  the  clear  market  value  of  one  hundred  dollars  transferred  to 
each  of  the  persons  and  corporations  described  in  the  fifth  subdivision  of  section  2 
shall  be  exempt.     (Sup.  1918,  Burns  E.  S.   1914,  Sec.   10143d,  and  Acts   1921, 
Chap.  275.) 


Soldiers'  exemption. 

The  taxes  provided  for  by  the  inheritance  tax  law,  approved  February  28,  1913, 
and  in  all  acts  supplementary  thereto,  shall  not  apply  to  the  transfer  of  the  estate 
of  any  decedent  leaving  an  estate  of  less  than  twenty-five  thousand  dollars 
($25,000)  dying  or  who  has  died  while  serving  in  the  military  or  naval  forces  of 
the  United  States  during  the  continuance  of  the  war  in  which  the  United  States 
is  now,  or  has  been  engaged  or  if  death  results  from  injuries  received  or  disease 
contracted  in  such  service,  within  one  (1)  year  after  the  termination  of  such 
war;  but  that  such  tax  shall  be  remitted  by  the  State.  For  the  purpose  of  this 
law  the  termination  of  the  war  shall  be  evidenced  by  the  proclamation  of  the 
president  of  the  United  States. 

§  2.  Whereas  an  emergency  exists  for  the  immediate  taking  effect  of  this  act, 
the  same  shall  be  in  full  force  and  effect  from  and  after  its  passage  and  shall 
apply  to  all  such  estates  now  pending.  (Approved  March  15,  1919,  Acts  1919, 
p.  823.) 

V.     Lien  of  tax  payments,  where  made. 

Every  such  tax  shall  be  and  remain  a  lien  upon  the  property  transferred  until 
paid  and  the  person  to  whom  the  property  is  so  transferred  and  the  administrators, 
executors,  and  or  trustees  of  every  state  so  transferred,  shall  be  personally  liable 
for  such  tax  until  its  the  payment  o'f  such  tax. 

The  tax  shall  be  paid  to  the  treasurer  of  the  county  in  which  the  circuit  court 
is  situated  having  jurisdiction  as  herein  provided;  and  said  treasurer  shall  give 
and  every  executor,  administrator,  or  trustee  shall  take  duplicate  receipts  from  him 
of  such  payment,  one  of  which  issue  receipt  in  duplicate.  One  copy  thereof  he 
shall  deliver  to  the  person  paying  such  tax,  and  the  original  thereof  he  shall 
immediately  send  to  the  Auditor  of  State,  whose  duty  it  shall  be  to  charge  the 
treasurer  so  receiving  the  tax  with  the  amount  thereof,  and  to  seal  said  receipt 
with  the  seal  of  his  office  and  countersign  the  same  and  return  it  to  the  executor, 
administrator  or  trustee,  whereupon  it  shall  be  a  proper  voucher  in  the  settlement 
of  his  accounts  ;  but  no  said  person  paying  such  tax.  No  executor,  administrator 
or  trustee  shall  be  entitled  to  a  final  accounting  of  an  estate,  nor  be  discharged 
from  liability  for  such  tax  in  an  estate,  in  settlement  of  which  a  tax  is  due 
under  the  provisions  of  this  act  unless  lie  shall  produce  a  receipt  so  sealed  and 
countersigned  by  the  Auditor  of  State,  or  a  copy  thereof  certified  by  him, 
shall  have  been  exhibited,  or  unless  a  bond  shall  have  been  filed,  as  prescribed  by 
section  9  of  this  act. 

All  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the  time  of  the 
transfer,  except  as  hereina/ier  provided. 

Taxes  upon  the  transfer  of  any  estate,  property  or  interest  therein  limited, 
conditioned,  dependent  or  determinable  upon  the  happening  of  any  contingency  or 
future  event  by  reason  of  which  the  fair  market  value  thereof  cannot  be  ascer- 
tained at  the  time  of  the  transfer,  as  herein  provided,  shall  accrue  and  become 
due  and  payable  when  the  beneficiary  shall  come  into  actual  possession  or 
enjoyment  thereof.  (Burns  1914,  Sec.  10143e,  and  Acts  1921,  Chap.  275.) 

VI.     Interest  and  discount. 

If  such  tax  is  paid  within  one  year  from  the  accruing  thereof,  a  discount 
of  five  per  centum  shall  be  allowed  and  deducted  therefrom.  If  such  tax 
is  not  paid  within  eighteen  months  from  the  accruing  thereof,  interest  shall 
be  charged  and  collected  thereon  at  the  rate  of  ten  per  centum  per  annum 
from  the  time  the  tax  accrued,  unless  by  reason  of  claims  made  upon  the  estate, 
necessary  litigation  or  other  unavoidable  cause  or  delay,  such  tax  shall  not  be 


INDIANA  901 

determined  and  paid  as  herein  provided,  in  which  case  interest  at  the  rate  of 
six  per  centum  per  annum  shall  be  charged  upon  such  tax  from  accrual  thereof 
until  the  cause  of  such  delay  is  removed,  after  which  ten  per  centum  shall  be 
charged. 

In  all  cases  when  a  bond  shall  be  given  under  the  provisions  of  Section  9  of 
this  act,  interest  shall  be  charged  at  the  rate  of  six  per  centum  from  the  accrual 
of  the  tax,  until  the  date  of  payment  thereof.  (Burns  E.  S.  1914,  Sec.  10143f.) 

VII.  Payment  by  executor  or  administrator. 

Every  executor,  administrator  or  trustee  shall  have  full  power  to  sell  so 
much  of  the  property  of  the  decedent  as  will  enable  him  to  pay  such  tax  in  the 
same  manner  as  he  might  be  entitled  by  law  to  do  for  the  payment  of  the  debts 
of  the  testator  or  intestate. 

Any  such  administrator,  executor  or  trustee  having  in  charge  or  in  trust  any 
legacy  or  property  for  distribution  subject  to  such  tax  shall  deduct  the  tax 
therefrom,  and  within  thirty  days  therefrom  shall  pay  over  the  same  to  the 
county  treasurer  as  herein  provided. 

If  such  legacy  or  property  be  not  in  money  he  shall  collect  the  tax  thereon 
upon  the  appraised  value  thereof  from  the  person  entitled  thereto. 

He  shall  not  deliver  or  be  compelled  to  deliver  any  specific  legacy  or  property 
subject  to  tax  under  this  act,  to  any  person  until  he  shall  have  collected  the 
tax  thereon.  If  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real 
property,  the  heir  or  devisee  shall  deduct  such  tax  therefrom  and  pay  it  to  the 
administrator,  executor  or  trustee  and  the  tax  shall  remain  a  lien  or  charge 
on  such  real  property  until  paid,  and  the  payment  thereof  shall  be  enforced 
by  the  executor,  administrator  or  trustee  in  the  same  manner  that  payment  of 
the  legacy  might  be  enforced,  or  by  the  prosecuting  attorney  under  Section  16  of 
this  act. 

If  any  such  legacy  be  given  in  money  to  any  such  person  for  a  limited  period, 
the  administrator,  executor  or  trustee  shall  retain  the  tax  on  the  whole  amount, 
but  if  it  be  not  in  money  he  shall  make  application  to  the  court  having  juris- 
diction of  an  accounting  by  him  to  make  an  apportionment  if  the  case  require  it, 
of  the  sum  to  be  paid  into  his  hands  by  such  legatees,  and  for  such  further  order 
relative  thereto  as  the  case  may  require.  (Burns  E.  S.  1914,  section  10143g.) 

VIII.  Refund  of  erroneous  tax  paid. 

If  any  debt  shall  be  proved  against  the  estate  of  the  decedent  after  the  payment 
of  the  legacy,  or  distributive  share  thereof,  from  which  any  such  tax  has  been 
deducted,  or  upon  which  it  has  been  paid  by  the  person  entitled  to  such  legacy 
or  distributive  share,  and  such  person  is  required  by  the  order  of  the  circuit 
court  having  jurisdiction  thereof  on  notice  to  the  Auditor  of  State  to  refund 
the  amount  of  such  debts  or  any  part  thereof,  an  equitable  proportion  of  the  tax 
shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee  if  the  tax  has 
not  been  paid  to  him.  When  any  amount  of  said  tax  shall  have  been  paid 
erroneously  into  the  state  treasury  it  shall  be  lawful  for  the  Auditor  of  State, 
upon  satisfactory  proofs  presented  to  him  of  the  facts,  to  require  the  amount  of 
such  erroneous  or  illegal  payment  to  be  refunded  to  the  executor,  administrator, 
trustee,  person  or  persons  who  have  paid  any  such  tax  in  error  from  the  treasury; 
or  the  said  Auditor  of  State  may  order,  direct  and  allow  the  treasurer  of  any 
county  to  refund  the  amount  of  any  illegal  or  erroneous  payment  of  such  tax 
out  of  the  funds  in  his  hands  or  custody  to  the  credit  of  such  taxes,  and  credit 
him  with  the  same  in  his  quarterly  account  rendered  to  the  Auditor  of  State  under 
this  act :  Provided,  however.  That  all  applications  for  such  refunding  of  erroneous 
taxes  shall  be  made  within  one  year  from  the  payment  thereof,  or  within  one 
year  after  the  reversal  or  modification  of  the  order  fixing  such  tax.  (Burns  E.  S. 
1914,  section  1043h.) 

IX.  Bond  for  tax. 

Any  beneficiary  of  any  property  chargeable  with  a  tax  under  this  act  and 
any  executors,  administrators  and  trustees  thereof  may  elecet  within  eighteen 
months  from  the  date  of  the  transfer  thereof  as  herein  provided  not  to  pay  such 
tax  until  the  person  or  persons  beneficially  interested  therein  shall  come  into  the 
actual  possession  or  enjoyment  thereof.  The  person  or  persons  so  elected  shall 


902  THE  STATE  STATUTES 

give  a  bond  to  the  State  in  a  penalty  of  three  times  the  amount  of  any  such  tax, 
with  such  sureties  as  the  circuit  court  of  the  proper  county  may  approve, 
conditioned  for  the  payment  of  such  tax  and  interest  thereon,  at  such  time  or 
period  as  the  person  or  persons  beneficially  interested  therein  may  come  into 
the  actual  possession  or  enjoyment  of  such  property,  which  bond  shall  be  filed 
in  the  circuit  court.  Such  bond  must  be  executed  and  filed  and  a  full  return  of 
such  property  upon  oath  made  to  the  circuit  court  within  one  year  from  the  date 
of  such  transfer  thereof  as  herein  provided,  and  such  bond  must  be  renewed  every 
five  years.  (Burns  R.  S.  1914,  Section  10143i.) 

X.  Tax  on  Excess  Executor's  Fee. 

Whenever  a  decedent  appoints  one  or  more  executors  or  trustees  and  in  lieu 
of  their  allowance  makes  a  devise  or  bequest  of  money  or  property  to  them 
which  would  otherwise  be  liable  to  said  tax,  or  appoints  them  his  residuary, 
legatees,  and  said  devises  or  bequests,  or  residuary  legacies,  exceed  what  would  be 
a  reasonable  compensation  for  their  services,  such  excess  shall  be  liable  to  such 
tax,  and  the  court  having  jurisdiction  of  their  accounts  shall  fix  the  amount  of 
their  compensation.  (Burns  R.  S.  1914,  Section  10143J.) 

XI.  Stocks,  joint  property,  notice   of  transfer. 

If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer  any 
stock  or  obligation  in  this  State  standing  in  the  name  of  a  decedent  liable  to 
any  such  tax,  the  tax  shall  be  paid  to  the  Treasurer  of  the  proper  county  on  the 
transfer  thereof.  No  safe  deposit  company,  bank  or  other  institution,  person 
or  persons  holding  securities  or  assets  of  a  decedent  or  of  a  decedent  and  another 
or  others  jointly,  shall  deliver  or  transfer  the  same  to  the  executors,  administra- 
tors or  legal  representatives  of  said  decedent,  or  to  a  surviving  joint  owner,  or 
upon  their  order  or  request  unless  notice  of  the  time  and  place  of  such  intended 
transfer  be  served  upon  the  Auditor  of  State  and  county  treasurer  at  least  ten 
days  prior  to  said  transfer;  nor  shall  any  such  safe  deposit  company,  bank  or 
other  institution,  person  or  persons  deliver  or  transfer  any  securities  or  assets 
of  the  estate  of  a  non-resident  decedent  without  restraining  a  sufficient  portion 
or  amount  thereof  to  pay  any  tax  which  may  thereafter  be  assessed  on  account 
of  the  transfer  of  such  securities  or  assets  under  the  provisions  of  this  act  unless 
the  Auditor  of  State  consents  thereto  in  writing;  and  it  shall  be  lawful  for  the 
said  county  treasurer  or  Auditor  of  State  personally,  or  by  representative,  to 
examine  all  securities  or  assets  at  the  time  of  such  delivery  or  transfer. 

Failure  to  serve  such  notice  or  to  allow  such  examination  or  to  retain  a  suffi- 
cient portion  or  amount  to  pay  such  tax  as  herein  provided,  shall  render  said 
safe  deposit  company,  trust  company,  bank  or  other  institution,  person  or 
persons  liable  to  the  payment  of  a  sum  equal  to  twice  the  amount  of  the  tax 
due  upon  the  transfer  of  said  securities  or  assets  in  pursuance  of  the  provisions 
of  this  act.  Such  liability  may  be  enforced  by  action  in  the  name  of  the  State 
in  any  court  of  competent  jurisdiction. 

No  corporation  organized  under  the  laws  of  the  state  of  Indiana  shall 
transfer  on  its  books  any  shares  of  its  capital  stock  standing  in  the  name  of  a 
non-resident  decedent,  or  in  trust  for  a  non-resident  decedent,  without  the 
consent  of  the  Auditor  of  State  first  procured  as  herein  provided  for.  Any  cor- 
poration violating  the  provisions  of  this  section  shall  be  liable  to  the  state  for 
the  amount  of  any  tax  due  to  the  state  on  a  transfer  of  any  such  shares  of  stock, 
and  in  addition  thereto  a  penalty  equal  to  ten  per  cent  of  the  amount  of  such 
tax;  to  be  recovered  in  a  civil  action  in  the  name  of  and  for  the  benefit  of  the 
state.  (Burns  R.  S.  1914,  Section  10143K,  and  Acts  1921,  Chap.  275.) 

XII.  Jurisdiction  of  courts,  ancillary  administration. 

The  circuit  Any  court  of  every  county  of  the  State  having  jurisdiction  to 
grant  letters  testamentary  or  of  administration  upon  the  estate  of  a  decedent 
the  transfer  of  whose  property  is  chargeable  with  any  tax  under  this  act,  or 
to  appoint  a  trustee  of  such  estate  or  any  part  thereof,  or  to  give  ancillary 
letters  thereon  shall  have  jurisdiction  to  hear  and  determine  all  questions  arising 
under  the  provisions  of  this  act,  and  to  do  any  act  in  relation  thereto  authorized 
by  law  to  be  done  by  a  circuit  court  in  other  matters  or  proceedings  coming 
within  its  jurisdiction ;  and  if  two  or  more  courts  in  any  county  shall  be  entitled 


INDIANA  903 

to  exercise  such  jurisdiction,  the  circuit  court  first  acquiring  jurisdiction  here- 
under  shall  retain  the  same  to  the  exclusion  of  every  other  court.  Every  petition 
for  ancillary  letters  testamentary  or  ancillary  letters  of  administration  made  in 
pursuance  of  the  laws  governing  probate  practice  of  shall  set  forth  the  name  of 
the  Auditor  of  State  as  a  person  to  be  cited,  as  therein  prescribed,  and  a  true 
and  correct  statement  of  all  the  decedent's  property  in  this  State  and  the  value 
thereof,  and  Upon  presentation  of  such  petition,  thereof  the  circuit  court  shall 
issue  a  citation  directed  to  such  county  treasurer  the  Auditor  of  State;  and 
upon  the  return  of  the  citation,  the  circuit  court  shall  determine  the  amount  of 
the  tax  which  may  be  or  become  due  under  the  provisions  of  this  act,  and  its 
decree  awarding  the  letters  may  contain  any  provisions  for  the  payment  of  such 
tax  or  the  giving  of  security  therefor  which  might  be  made  by  such  circuit  court, 
if  the  county  treasurer  State  of  Indiana  were  a  creditor  of  deceased.  (Burns 
R.  S.  Sec.  1914,  10143L,  and  cts  1921,  Chap.  275.) 

XIII.     Appraisers,  appointment,  duties,  contingent  estates. 

1.  The   cvrouit   cowt   upon   the   application   of   any   interested   party,   includ- 
ing the  Auditor  of  State,  State  Board  of  Tax  Commissioners,  county  treasurer, 
or  upon  its  own  motion,  shall  order  the  county  assessor  of  the  county  where  said 
court  is  sitting,  or  the  inheritance  tax  appraiser,  as  the  case  may  be,  to  fix  the 
fair  market  value  at  the  time  of  the  transfer  thereof  of  the  property  of  persons 
whose  estate  shall  be  subject  to  the  payment  of  any  tax  imposed  by  this  act; 
and  the  executors,  administrators  or  trustees  of  said  estates  shall,  withm  thirty 
days  of  the  making  of  said  order  by  the  court,  file  with  said  appraiser,  a  complete 
schedule  of  all  the  property,  both  real  and  personal,  of  tvhich  the  decedent  died 
seised,  or  possessed,  and  all  property,  both  real  and  personal,  which  said  decedent 
transferred  or  conveyed  within  two  years  of  his  death,   without   valuable   con- 
sideration,   together   with   an   itemised   statement    of   the   indebtedness   of   said 
decedent;  Provided,  That  if  said  county  assessor  be  related  to  the  decedent  or 
any    beneficiary    by    consanguinity    or    affinity,    within    the    third    degree,    said 
county  assessor  shall  thereby  be  disqualified  to  appraise  said  property  and  said 
court  shall  appoint  a  competent  and  qualified  person  to  appraise  said  property. 
(Sup.  1918  Burns  1914,  10143m.) 

2.  In  counties  having  a  population  of  less  than  two  hundred  thousand  according 
to  the  last  preceding  United  States  census,  the  judge  of  each  court  having  probate 
jurisdiction  may  appoint  the  county  assessor  of  his  county  appraiser  of  estates 
provided  for  in  law  for  the  appraisement  and  collection  of  taxes  in  the  State  of 
Indiana  on  gifts,  inheritances,  bequests,  legacies,  devises  and  successions,  and  if 
so  appointed  and  acting  said  county  assessor  shall  receive  such  compensation  for 
said  service  in  addition  to  his  salary  as  may  be  fixed  by  the  court  to  be  paid 
him  as  now  provided  by  law;  or  the  court  may  determine  the  a/mount  of  said 
inheritance  tax  without  the  reference  thereof  to  the  county  assessor  for  appraise- 
ment:   Provided,  however,  That  if  said  county  assessor  be  a  beneficiary  of  any 
estate  to  be  appraised  as  provided  by  the  last  said  named  act,  or  related  by 
affinity   or  consanguinity   to   any   beneficiary   of  such   estate,   then   said   county 
assessor  shall  not  be  the  appraiser  of  said  estate:    Provided,  further,  That  in  all 
counties    in    this    State    containing    a    population   of  more   than   two   hundred 
thousand  according  to  the  last  preceding  United  States  census,  the  Governor  of 
the  State  of  Indiana  shall  appoint  a  competent  person  to  be  "known  as  the  in- 
heritance tax  appraiser  of  such  county,  whose  duties  shall  be  to  appraise  each 
and  every  estate  that  may  be  subject  to  tax  imposed  by  the  last  above  entitled 
act,  and  to  perform  each  and  every  duty  required  by  the  inheritance   tax  ap- 
praiser in  such  as  provided  for,  who  shall  receive  a  salary  of  twenty-four  hun- 
dred dollars  per  annum,   payable  monthly,   out   of   the   county   treasury,   which 
shall  be  a  part  of  the  expense  of  collecting  such  tax  and  who  shall  hold  office 
during  the  term  of  four  years.  Such  appraiser  last  mentioned  shall  appoint   a 
competent  stenographic  cleric  to  assist  him  at  a  salary  of  nine  hundred  dollars 
per  annum,  to  be  paid  monthly  out  of  the  county  treasury,  as  a  part  of  the  ex- 
penses of  collecting  such  inheritance   tax.    Such   county  shall  furnish  such  in- 
heritance tax  appraiser  with  an  office,  and  he  shall  be  allowed  his  actual  and 
necessary  expenses  for  office  furniture,  fixtures,  files,  records,  maps,  platbooks, 
and  other  articles  necessary  for  the  proper  conduct  of  the  business,  to  be  paid 
out  of  the  county  treasury  as  a  part  of  the  expenses  of  collecting  the  tax.    (Acts 
1919,  Chap.  59,  Sec.  160,  p.  286.) 


904  THE  STATE  STATUTES 

1.  The  court  upon  application  of  any  interested  party,  including  the  auditor 
of  state,  state  board  of  tax  commissioners,  county  treasurer,  or  upon  its  own 
motion,  may  appoint  the  county  assessor   of  the   county  where   said   court   is 
sitting,  or  the  inheritance  tax  appraiser  as  the  case  may  be,  to  fix  the  fail- 
market  value  at  the  time  of  the  transfer  thereof  of  the  property  of  persons 
whose  estates  shall  be  subject  to  the  payment  of  any  tax  imposed  by  this  act. 
In  counties  having  a  population  of  less  than  two  hundred  thousand  according 
to  the  last  preceding  United  States  census,  the  court  may  appoint  the  county 
assessor  as  appraiser  of  such  estates,  and  if  so  appointed  and  acting  said  county 
assessor  shall  receive  such  compensation  for  said  service  in  addition  to  his  salary 
as  may  be  fixed  by  the  court,  to  be  paid  him  as  now  provided  by  law,  or  the 
court  may  determine  the  amount  of  said  inheritance  tax  without  reference  to 
an  appraiser.     In  all  counties  in  this   state  containing  a  population  of  more 
than  two  hundred  thousand  according  to  the  last  preceding  United  States  census, 
the  governor  of  the  State  of  Indiana  shall  appoint  a  competent  person  to  be 
known  as  the  inheritance  tax  appraiser  of  such  county,  whose  duties  shall  be 
to  appraise  each  and  every  estate  that  may  be  subject  to  the  tax  imposed  by 
this  act,  and  to  perform  each  and  every  duty  required  by  the  inheritance  tax 
appraiser,    who    shall    receive    a    salary    of    twenty-four    hundred    dollars    per 
annum,  payable  monthly,  out  of  the  county  treasury,  which  shall  be  a  part 
of  the  expense  of  collecting  such  tax  and  who  shall  hold  office  during  the  term 
of    four    years.      Such    appraiser    last    mentioned    shall    appoint    a    competent 
stenographic   clerk  to   assist   him  at   a   salary   of  twelve   hundred   dollars   per 
annum,  to  be  paid  monthly  out  of  the  county  treasury,  as  a  part  of  the  expenses 
of  collecting  such  inheritance  tax.     Such  county  shall  furnish  such  inheritance 
tax  appraiser  with  an  office,  and  he  shall  be  allowed  his  actual  and  necessary 
expenses  for  office  furniture,  fixtures,  files,  records,  maps,  platbooks,  and  other 
articles  necessary  for  the  proper  conduct  of  the  business  to  be  paid  out  of  the 
county  treasury  as  a  part  of  the  expenses  of  collecting  the  tax:  Provided,  That 
if  said  county  assessor  or  inheritance  tax  appraiser  be  related  to  the  decedent 
or  any  beneficiary  by  consanguinity  or  affinity,  within  the  third  degree,  he  shall 
thereby  be  disqualified  to  appraise  said  property  and  said  court  shall  appoint  a 
competent    and    qualified    person    to    appraise    said    property.      The    executors, 
administrators   or  trustees    of   said   estates    shall,   within   thirty   days    of   the 
making  of  said  order  by  the  court,  file  with  said  appraiser  or  in  said  court  a 
complete   schedule  of  all  the  property,  both   real  and  personal,   of  which   the 
decedent   died  seized,   or  possessed,  and  all  property,  both   real  and  personal, 
which   said   decedent  transferred '  or  conveyed  within  two  years   of  his   death, 
without   valuable   consideration,   together   with   an   itemized    statement   of   the 
indebtedness   of   said   decedent. 

2.  Whenever  a  transfer  of  property  is  made  upon  which  there  is,  or  in  any 
contingency  there  may  be,  a  tax  imposed,  such  property  shall  be  appraised  at 
its  clear  market  value  immediately  upon  the  transfer  or  as  soon  thereafter  as 
practicable.     The  value  of  every  future  or  limited  estate,  income,  interest   or 
annuity  dependent  upon  any  life  or  lives  in  being,  shall  be  determined  by  the 
rule,  method  and  standard  of  mortality,  and  value  employed  by  the  auditor  of 
state  in  ascertaining  the  value  of  policies  of  life  insurance   companies  except 
that  the  rate  of  interest  for  making  such  computation  shall  be  five  per  centum 
per  annum. 

3.  In   estimating   the   value    of   any   estate   or   interest   in   property   to   the 
beneficial   enjoyment   or  possession  whereof  there   are  persons   or  corporations 
presently  entitled  thereto,  no  allowance  shall  be  made  in  respect  of  any  con- 
tingent encumbrance  thereon,  nor  in  any  respect  of  any  contingency  upon  the 
happening  of  which  the  estate  or  property  or  some  part  thereof,  or   interest 
therein,  might  be  abridged,  defeated  or  diminished:     Provided,  however,  That 
in  the  event  of  such  incumbrance  taking  effect  as  an  actual  burden  upon  the 
interest  of  the  beneficiary,  or  in  the  event  of  abridgement,  defeat  or  diminution 
of  such  estate  or  property  or  interest  therein  as  aforesaid,  a  return  shall  be 
made  to  the  person  properly  entitled  thereto  of  a  proportionate  amount  of  such 
tax  in  respect  of  the  amount  of  value  of  the  incumbrance  when  taking  effect  or 
so  much  as  will  reduce  the  same  to  the  amount  which  would  have  been  assessed 
in  respect  of  the  actual  duration  or  extent  of  the  estate  or  interest  enjoyed. 
Such   return   of  tax   shall  be   made   in   the   manner   provided   in   section   8   of 
this  act. 


INDIANA  9Q5 

4.  Where  any  property  shall  after  the   passage   of  this  act  be   transferred 
subject  to   any  charge,  estate   or  interest   determinable   by  the   death   of   any 
person  or  at  any  period  ascertainable  only  by  reference  to  death,  the  increase  of 
benefit  accruing  to  any  person  or  corporation  upon  extinction  or  determination 
of  such  charge,  estate  or  interest  shall  be  deemed  a  transfer  of  property  taxable 
under  the  provisions  of  this  act  in  the  same  manner  as  though  the  person  or 
corporation   beneficially   entitled    thereto   had   then   acquired    such   increase    or 
benefit   from  the  person  from  whom  the  title   to   their   respective   estates    or 
interests  is  derived. 

5.  When  property  is  transferred  in  trust  or  otherwise,  and  the  rights,  interests 
or  estates  of  the  transferees  are   dependent  upon   contingencies  or   conditions 
whereby  they  may  be  wholly  or  in  part  created,  defeated,  extended  or  abridged, 
a  tax  shall  be  imposed  upon  such  transfer  at  the  highest  rate  which,  on  the 
happening  of  any  of  the  said  contingencies  or  conditions  would  be  possible  under 
the  provisions  of  this  act,  and  such  tax  so  imposed  shall  be  due  and  payable 
forthwith  out  of  the  property  transferred:     Provided,  however,  That  on  the 
happening  of  any  contingency  whereby  the  said  property  or  any  part  thereof 
is  transferred  to  a  person  or  corporation  exempt  from  taxation  under  the  pro- 
visions of  this  act  or  to  a  person  taxable  at  a  less  rate  than  the  rate  imposed 
and  paid  such  person  or  corporation  shall  be  entitled  to  a  return  of  so  much  of 
the  tax  imposed  and  paid  as  is  the  difference  between  the  amount  paid  and  the 
amount  which  said  person  or  corporation  should  pay  under  the  provisions  of 
this  act  with  legal  interest  from  the  time  of  payment.     Such  return  of  over- 
payment shall  be  made  in  the  manner  provided  by  section  8  of  this  act. 

6.  Estates   in  expectancy  which   are   contingent   or   defeasible   and  in   which 
proceedings  for  the  determination  of  the  tax  have  not  been  taken  or  where  the 
taxation  thereof  has  been  held  in  abeyance   shall  be  appraised  at  their  full, 
undiminished,  clear  market  value  when  the  person  entitled  thereto  shall  come 
into  the  beneficial  enjoyment  or  possession  thereof  without  diminution  for  or 
on  account   of  any  valuation  theretofore  made   of  the  particular  estates   for 
purposes  of  taxation  upon  which   said   estates  in  expectancy  may   have  been 
limited.     Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  of 
omission  of  the  legatee  or  devisee,  it  shall  be  taxed  as  if  there  were  no  possibility 
of  such  divesting. 

XIV.     Appraisements,  notice,  appraisers'  fees. 

Every  such  appraiser  shall  forthwith  give  notice  by  mail  to  all  persons  known 
to  have  a  claim  or  interest  in  the  property  to  be  appraised,  including  the  Auditor 
of  State  and  county  treasurer,  and  to  such  persons  as  the  circuit  court  may  by 
order  direct,  of  the  time  and  place  when  he  will  appraise  such  property.  He  shall, 
at  such  time  and  place,  appraise  the  same  at  its  true  market  value,  as  herein 
prescribed,  and  for  that  purpose  the  said  appraiser  is  authorized  to  issue  sub- 
poenas and  to  compel  the  attendance  of  witnesses  before  him  and  to  take  the 
evidence  of  such  witnesses  under  oath,  concerning  such  property  and  the  value 
thereof;  and  he  shall  make  report  thereof  and  of  such  value  in  writing,  to  the 
said  circuit  court,  together  with  the  depositions  of  the  witnesses  examined,  and 
such  other  facts  in  relation  thereto,  and  to  the  said  matter  as  the  said  circuit 
court  may  order  and  require.  Except  in  counties  having  an  inheritance  tax 
appraiser  receiving  an  annual  salary  provided  for  by  law,  every  appraiser  shall 
be  paid  on  the  certificate  of  the  circuit  court  shall  determine  the  appraiser's  fee 
and  certify  the  amount  in  the  order  fixing  the  amount  of  tax  in  any  estate 
together  with  at  the!  rate  of  three  dollars  per  day  for  every  day  actually  and 
necessarily  employed  in  such  appraisal,  and  his  actual  and  necessary  traveling 
expenses  and  the  fees  paid  such  witnesses,  which  fees  shall  be  the  same  as  those 
now  paid  to  witnesses  subpoenaed  to  attend  in  court  of  record.  The  fees  and 
expenses  so  allowed  shall  be  paid  by  the  county  treasurer  out  of  any  funds  he 
may  have  in  his  hands  on  account  of  any  tax  imposed  under  the  provisions  of 
this  act:  Provided,  That  no  in  estates  in  which  there  is  no  transfer  subject  to 
any  tax  the  appraisement  cost  shall  not  be  which  are  not  subject  to  an  in- 
heritance tax  shall  be  appraised  at  the  expense  of  the  state,  and  provided  further, 
That  all  claims  against  the  inheritance  tax  for  appraiser's  fees  and  expenses  shall 
be  approved  by  the  inheritance  tax  investigator  before  the  same  can  be  allowed 
by  the  court. 


906  THE  STATE  STATUTES 

XV.     Appraisers'  reports,  hearing,  rehearing. 

The  report  of  the  appraiser  shall  be  made  in  duplicate,  one  of  which  duplicates 
shall  be  filed  in  the  circuit  court  and  the  other  in  the  office  of  the  Auditor  of  State. 
Upon  filing  such  report  in  the  circuit  court,  the  circuit  court  shall  forthwith  give 
twenty  days'  notice  by  mail  to  all  persons  known  to  be  interested  in  the  estate, 
including  the  Auditor  of  State  and  county  treasurer,  of  the  time  and  place  for 
the  hearing  in  the  matter  of  such  report  and  the  circuit  court  from  such  report 
and  other  proofs  relating  to  any  such  estate  shall  forthwith  at  the  time  so 
fixed,  determine  the  cash  value  of  such  estate  and  the  amount  of  tax  to  which 
the  same  is  liable,  or  the  circuit  court,  without  appointing  an  appraiser  upon 
giving  twenty  days'  notice  by  mail  to  all  persons  known  to  be  interested  in  the 
estate,  including  the  Auditor  of  State  and  county  treasurer,  of  the  time  and 
place  of  hearing,  may  at  the  time  so  fixed  hear  evidence  and  determine  the  cash 
value  of  such  estate  and  the  amount  of  tax  to  which  the  same  is  liable.  If  the 
residence  or  post-office  address  of  any  person  interested  in  any  estate  is  unknown 
to  the  executor,  administrator  or  trustee,  notice  of  the  hearing  in  the  matter  of 
the  report  of  the  appraiser  or  notice  that  the  circuit  court  without  appointing 
an  appraiser  will  determine  the  cash  value  of  an  estate  shall  be  given  to  all 
such  persons  by  publication  of  such  notice  not  less  than  three  successive  weeks 
prior  to  the  time  fixed  for  such  hearing  or  determination  in  such  newspaper  pub- 
lished within  the  county  as  the  court  shall  direct. 

2.  The  Auditor  of  State  shall  on  application  of  any  circuit  court  determine 
the  value  of  any  such  future  or  contingent  estates,  income  or  interests  therein, 
limited,   contingent,   dependent   or   determinable   upon   the   life   or   lives   of   the 
person  or  persons  in  being  upon  the  facts  contained  in  such  appraiser's  report 
or  upon  the  facts  contained  in  the  circuit  court's  finding  and  determination  and 
certify  the  same  to  the  circuit  court,  and  his  certificate  shall  be  presumptive  evi- 
dence that  the  method  of  computation  adopted  therein  is  correct. 

3.  The  Auditor  of  State,  county  treasurer,  or  any  person  dissatisfied  with  the 
appraisement   or  assessment   and   determination   of   such   tax  may   apply   for   a 
rehearing  thereof  before  the  circuit  within  sixty  days  from  the  fixing,  assessing 
and  determination  of  the  tax  by  the  circuit  court  as  herein  provided  on  filing  a 
written  notice  which  shall  state  the  grounds  of  the  application  for  a  rehearing. 
The  rehearing  shall  be  upon  the  records,  proceedings  and  proofs  had  and  taken 
on  the  hearings  as  herein  provided  and  a  new  trial  shall  not  be  had  or  granted 
unless  specially  ordered  by  the  circuit  court. 

4.  The  circuit  court  shall  immediately  give  notice  by  mail  upon  the  determina- 
tion by  it  as  to  the  value  of  any  estate  which  is  taxable  under  this  act  and  of  the 
tax  to  which  it  is  liable  to  all  parties  known  to  be  interested  therein,  including 
the  Auditor  of  State  and  county  treasurer.   If,  however,  it  appears  at  this  or  any 
stage  of  the  proceedings  that  any  such  parties  known  to  be  interested  in  the 
estate  is  an  infant  or  an  incompetent,  the  circuit  court  shall,  if  the  interest  of 
such  infant  or  incompetent  is  presently  involved  and  is  adverse  to  that  of  the 
other  persons  interested  therein,  appoint  a  special  guardian  of  such  infant,  but 
nothing  in  this  provision  shall  affect  the  right  of  an  infant  over  fourteen  years  of 
age  or  any  one  on  behalf  of  an  infant  under  fourteen  years  of  age  to  nominate 
and  apply  for  the  appointment  of  a  special  guardian  of  such  infant  at  any  stage 
of  the  proceedings. 

5.  Within  two  years  after  the  entry  of  an  order  or  decree  of  the  circuit  court 
determining  the  value  of  an  estate  and  assessing  the  tax  thereon,  the  Auditor 
of  State  may,  if  he  believes  that  such  appraisal,  assessment  or  determination  has 
been  fraudulently,  collusively  or  erroneously  made,  make  application  to  the  circuit 
judge  of  the  judicial  circuit  in  which  the  former  owner  of  such  estate  resided 
for  a  reappraisal  thereof.     The  circuit  judge  to  whom  such  application  is  made 
may  thereupon  appoint  a  competent  person  to  reappraise  such  estate.     Such  ap- 
praiser shall  possess  the  power,  be  subject  to  the  duties,  shall  give  the  notice, 
and  receive  the  compensation  provided  by  sections  13  and  14  of  this  act.     Such 
compensation  shall  be  payable  by  the  county  treasurer  out  of  any  funds  he  may 
have  on  account  of  any  tax  imposed  under  the  provisions  of  this  act  upon  the 
certificate  of  the  circuit  judge  appointing  him.    The  report  of  such  appraiser  shall 
be  filed  in  the  circuit  court  for  which  he  was  appointed  and  thereafter  the  same 
proceedings  shall  be  taken  and  had  by  and  before  such  circuit  court  as  herein 
provided  to  be  taken  and  had  by  and  before  the  circuit  court  at  the  first  appraisal. 


INDIANA  907 

The  determination  and  assessment  of  such  circuit  court  shall  supersede  the 
determination  and  assessment  of  the  circuit  court  on  the  first  appraisal  and  shall 
be  filed  by  such  circuit  court  in  the  office  of  the  Auditor  of  State  and  a  certified 
copy  thereof  filed  with  the  clerk  of  the  circuit  court.  (Burns  E.  S.  1914,  Section 
10143o.) 

XVI.  Unpaid   taxes,  collection. 

If  the  treasurer  of  any  county  shall  have  reason  to  believe  that  any  tax  is  due 
and  unpaid  under  this  act  after  the  refusal  or  neglect  of  any  person  liable 
therefor  to  pay  the  same,  he  shall  notify  the  prosecuting  attorney  for  the  county 
in  writing  of  such  failure  or  neglect  and  such  prosecuting  attorney,  if  he  have 
probable  cause  to  believe  that  such  tax  is  due  and  unpaid,  shall  apply  to  the 
circuit  court  for  a  citation  citing  the  person  liable  to  pay  such  tax  to  appear 
before  the  court  on  the  day  specified  not  more  than  three  months  from  the  date 
of  such  citation  and  show  cause  why  the  tax  should  not  be  paid.  The  judge  of 
the  circuit  court  upon  such  application  and  whenever  it  shall  appear  to  him  that 
any  such  tax,  accruing  under  this  act,  has  not  been  paid  as  required  by  law,  shall 
issue  such  citation  and  the  service  of  such  citation  and  the  time,  manner  and 
proof  thereof,  and  the  hearing  and  determination  thereof,  shall  conform  as  near 
as  may  be  to  the  provisions  of  the  law  governing  probate  practice  in  this  State, 
and  whenever  it  snail  appear  that  any  such  tax  is  due  and  payable  and  the 
payment  thereof  can  not  be  enforced  under  the  provisions  of  this  act  in  said 
circuit  court  the  person  or  corporation  from  whgm  the  same  is  due  is  hereby  made 
liable  to  the  county  having  jurisdiction  over  such  estate  or  property  for  the  amount 
of  such  tax  and  it  shall  be  the  duty  of  the  prosecuting  attorney  of  said  county  in 
the  name  of  such  county  to  sue  for  and  enforce  the  collection  of  such  tax,  and  it 
is  made  the  duty  of  said  prosecuting  attorney  to  appear  for  and  act  on  behalf 
of  any  county  treasurer  who  shall  be  cited  to  appear  before  any  circuit  court 
under  the  provisions  of  this  act.  (Burns  R.  S.  1914,  Section  10143p.) 

XVII.  Reco'rds,  forms. 

The  Auditor  of  State  shall  furnish  to  the  clerk  of  each  circuit  court  a  book 
which  shall  be  a  public  record  and  in  which  shall  be  entered  the  name  of  every 
decedent  whose  estate  is  or  may  become  liable  for  such  tax,  and  upon  whose  estate 
an  application  has  been  made  for  the  issue  of  letters  of  administration,  or  letters 
testamentary,  or  ancillary  letters,  the  date  and  place  of  death  of  such  decedent, 
the  estimated  value  of  the  property  of  such  decedent,  the  name,  places,  residence 
and  relationship  to  him  of  his  heirs  at  law,  the  names  and  places  of  residence  of 
the  legatees  and  devisees  in  any  will  of  any  such  decedent,  the  amount  of  each 
legacy  and  the  estimated  value  of  any  property  devised  therein,  and  to  whom 
devised.  These  entries  shall  be  made  from  the  data  contained  in  the  papers  filed 
on  any  such  application  or  in  any  proceeding  relating  to  the  estate  of  the  decedent. 
The  circuit  court  shall  also  cause  to  be  entered  in  such  book  the  amount  of  the 
personal  property  of  any  such  decedent  as  shown  by  the  inventory  thereof,  when 
made  and  filed  in  such  court,  and  the  returns  made  by  any  appraiser  appointed 
by  it  under  this  act,  and  the  value  of  annuities,  life  estates,  terms  of  years  and 
other  property  of  any  such  decedent  or  given  by  him  in  his  will  or  otherwise,  as 
fixed  by  the  circuit  court,  and  the  tax  assessed  thereon,  and  the  amounts  of  any 
receipts  for  payment  of  any  tax  on  the  estate  of  such  decedent  under  this  act 
filed  in  such  court.  The  Auditor  of  State  shall  also  furnish  to  each  county,  forms 
for  the  reports  to  be  made  by  the  clerk  of  the  circuit  court,  which  shall  correspond 
with  the  entries  to  be  made  in  such  books.  (Burns  E.  S.  1914,  Section  10143q. 

XVIII.  Reports  by  clerks. 

Each  clerk  of  a  circuit  court  shall  on  the  first  day  of  January,  April,  July  and 
October,  of  each  year,  make  a  report  in  duplicate,  upon  the  forms  furnished  by 
the  Auditor  of  State,  containing  all  the  data  and  matters  required  to  be  entered 
in  such  books,  one  of  which  shall  be  immediately  delivered  to  the  county  treasurer 
and  the  other  transmitted  to  the  Auditor  of  State.  (Burns  E.  S.  1914,  Section 
10143r.) 

XIX.  Treasurers'  reports. 

Each  county  treasurer  shall  make  a  report,  under  oath,  to  the  Auditor  of  State 
on  the  first  day  of  January,  April,  July  and  October,  of  each  year,  of  all  taxes 


908  THE  STATE  STATUTES 

received  by  him  under  this  act  and  credited  to  the  State  of  Indiana,  stating  for 
what  estate  and  by  whom  and  when  paid.  The  form  of  such  report  may  be  pre- 
scribed by  the  Auditor  of  State.  At  the  same  time  the  county  auditor  shall 
issue  his  warrant  payable  to  the  Treasurer  of  State  for  the  amount  of  taxes  so 
received  by  the  county  treasurer  under  this  act,  which  warrant  shall  be  stamped 
and  countersigned  by  the  county  treasurer  as  required  by  law  and  transmitted^  to 
the  Treasurer  of  State  with  his  said  report.  For  all  such  taxes  collected  by  a 
county  treasurer  and  not  paid  into  the  state  treasury  within  thirty  days  from 
the  time  herein  required,  he  shall  pay  interest  at  the  rate  of  ten  per  centum  per 
annum,  for  which  he  shall  be  personally  liable.  (Burns  E.  S.  1914,  Section  10143s.) 

XX.  Compounding  taxes. 

The  county  treasurer,  with  the  consent  of  the  Auditor  of  State  and  the  Attor- 
ney-General, expressed  in  writing,  is  authorized  to  enter  an  agreement  with  the 
executor,  administrator  or  trustee  of  any  estate  therein  situate  in  which  remainders 
or  expectant  estates  have  been  of  such  a  nature  or  so  disposed  and  circumstanced 
that  the  taxes  therein  were  held  not  presently  payable  or  where  the  interests  of 
the  legatees  or  devisees  are  not  ascertainable  under  the  provisions  of  this  act, 
and  to  compound  such  taxes  upon  such  terms  as  may  be  deemed  equitable  and 
expedient  and  to  grant  discharges  to  said  executors,  administrators  or  trustees 
upon  the  payment  of  the  taxes  provided  for  in  such  composition:  Provided, 
however,  That  no  such  composition  shall  be  conclusive  in  favor  of  said  executors, 
administrators  or  trustees  as  against  the  interests  of  cestui  que  trust  as  may 
possess  either  present  rights  of  enjoyment  or  fixed  absolute  or  indefeasible  rights 
of  future  enjoyment,  or  of  such  as  would  possess  such  rights  in  the  event  of  the 
immediate  termination  of  particular  estates,  unless  they  consent  thereto  either 
personally  when  competent  or  by  guardian.  Composition  or  settlement  made  or 
effected  under  the  provisions  of  this  section  shall  be  executed  in  triplicate  and 
one  copy  shall  be  filed  in  the  office  of  the  Auditor  of  State;  one  copy  in  the 
office  of  the  clerk  of  the  circuit  court  of  the  county  in  which  the  tax  is  paid  and 
one  copy  to  be  delivered  to  the  executors,  administrators  or  trustees,  who  shall  be 
parties  thereto.  (Burns  E.  S.  1914,  Section  10143t.) 

XXI.  Duplicate  receipts,  recording  receipts. 

Any  person  shall  be  entitled  to  a  receipt  from  the  county  treasurer  of  any 
county,  or  the  Auditor  of  State,  or  at  his  option  to  a  copy  of  a  receipt  that  may 
have  been  given  by  such  treasurer  or  Auditor  of  State  for  the  payment  of  any 
tax  under  this  act,  under  the  official  seal  of  such  treasurer  or  Auditor  of  State, 
which  receipt  shall  designate  upon  what  real  property,  if  any,  of  which  any 
decedent  may  have  died  seized,  such  tax  shall  have  been  paid,  by  whom,  and 
whether  in  full  of  such  tax.  Such  receipt  may  be  recorded  in  the  office  of  the 
recorder  of  the  county  in  which  such  property  is  situate  in  a  book  to  be  kept  by 
him  for  that  purpose,  which  shall -be  labeled  "transfer  tax."  (Sup.  1918,  Burns 
E.  S.  1914,  Section  10143u.) 

XXII.  State  Tax  Commissioners'  duties. 

It  shall  be  the  duty  of  the  State  Board  of  Tax  Commissioners  to  investigate, 
or  cause  to  be  investigated,  the  administration  of  the  inheritance  tax  laws,  and 
such  particular  estate  to  which  the  inheritance  tax  laws  apply,  throughout  the 
various  counties  of  the  State,  and  to  cause  to  be  made  and  filed  in  its  offices 
reports  of  such  investigation  together  with  specific  information  and  facts  as  to 
particular  estates  that  may  seem  to  require  especial  consideration  and  attention 
by  the  legal  department  of  the  State.  (Burns  E.  S.  1914,  Section  10143v.) 

XXIII.  Inheritance  tax  investigator,   duties. 

Upon  the  recommendation  of  the  State  Board  of  Tax  Commissioners  the  Gov- 
ernor may  appoint  and  fix  the  compensation,  at  a  sum  not  exceeding  two  thousand 
dollars  annually  and  necessary  expenses,  of  an  inheritance  tax  investigator  who 
shall  have  charge  of  all  inheritance  tax  work  under  the  supervision  of  the  com- 
mission, and  who  shall  be  provided  with  such  further  assistance  from  time  to 
time  as  the  board  may  deem  to  be  necessary  and  expedient.  Such  inheritance 
tax  investigator  shall  devote  his  time  to  the  work  of  inheritance  tax  investigations, 
and  he  shall  personally  make  such  investigations  at  the  different  county  courts 


INDIANA  90g 

from  time  to  time  as  deemed  advisable.  He  shall  file  with  the  boa.rd  triplicate 
reports  on  the  first  day  of  January,  April,  July  and  October,  of  each  year, 
together  with  such  additional  triplicate  reports  of  particular  estates  from  time 
to  time  as  seem  to  require  the  special  attention  of  the  legal  department.  Two 
copies  of  such  reports  shall  be  filed  with  the  board,  one  of  which  shall  be  submitted 
by  the  board  to  the  Attorney-General  with  such  recommendation  thereon  as  it 
may  deem  advisable  for  the  due  administration  of  the  inheritance  tax  laws,  and 
one  copy  may  in  the  discretion  of  the  board  be  submitted  by  it  to  the  circuit  judge 
of  the  county  reported  on  with  such  recommendation  as  the  board  may  deem  wise 
and  expedient.  (Burns  E.  S.  1914,  Section  10143w.) 

XXIV.  Tax  Commissioners'  powers,  reports. 

The  State  Board  of  Tax  Commissioners  and  its  inheritance  tax  investigator, 
in  the  conduct  of  inheritance  tax  affairs,  shall  have  the  same  and  similar  powers 
and  authority  for  gathering  information  and  making  investigations  as  is  con- 
ferred by  law  on  the  board  in  the  performance  of  its  other  duties.  The  board 
shall  biennially  report  to  the  general  assembly,  at  the  opening  of  each  session, 
the  general  result  of  its  labors  and  investigations  in  inheritance  tax  matters 
during  the  previous  biennial  period,  together  with  specific  reports  of  the  several 
counties  where  the  administration  of  the  inheritance  tax  law  has  been  lax  and 
unsatisfactory,  with  such  recommendations  for  action  thereon  by  the  general 
assembly  as  may  be  deemed  advisable  and  proper.  (Burns  R.  S.  1914,  Section 
10143x.) 

XXV.  Investigation  of  non-residents'   estates. 

The  State  Board  of  Tax  Commissioners  and  its  inheritance  tax  investigator 
shall  also  gather  information  and  make  investigations  and  reports  concerning 
the  estates  of  non-resident  decedents  within  the  provisions  of  the  inheritance  tax 
laws,  and  shall  especially  investigate  the  probate  and  other  records  for  such 
probable  estates  without  the  State  and  report  thereon  from  time  to  time  -to  the 
Auditor  of  State.  (Burns  E.  S.  1914,  Section  10143y.) 

XXVI.  Definition  of  terms. 

1.  The  words  ' '  estate ' '  and  ' '  property, ' '  as  used  in  this  act,  shall  be  taken  to 
mean  the  property  or  interest  therein  passing  or  transferred  to  individual  or  cor- 
porate legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees,  or  vendees,  and  not 
as  the  property  or  interest  therein  of  the  decedent,  grantor,  donor  or  vendor,  and 
shall  include  all  property  or  interest  therein,  whether  situated  within  or  without 
this  State. 

2.  The  words  "tangible  property,"  as  used  in  this  act,  shall  be  taken  to  mean 
corporeal  property  such  as  real  estate  and  goods,  wares  and  merchandise,  and 
shall  not  be  taken  to  mean  money,  deposits  in  bank,  shares  of  stock,  bonds,  notes, 
credits,  or  evidences  of  an  interest  in  property  or  evidences  of  debt. 

3.  The  words  "intangible  property,"  as  used  in  this  act,  shall  be  taken  to 
mean  incorporeal  property,  including  money,  deposits  in  'banks,  shares  of  stock, 
bonds,  notes,  credits,  evidences  of  an  interest  in  property  and  evidences  of  debt. 

4.  The  word  "  transfer,"  as  used  in  this  act,  shall  be  taken  to  include  the 
passing  of  property  or  any  interest  therein  in  possession  or  enjoyment,  present 
or  future,  by  inheritance,  descent,  devise,  bequest,  grant,  deed,  bargain,  sale  or 
gift,  in  the  manner  herein  described  or  the  exercise  of  the  right  of  survivorship 
in  cases  of  or  joint  ownership. 

5.  The  words  "the  intestate  laws  of  this  State,"  as  used  in  this  act,  shall  be 
taken  to  refer  to  all  transfers  of  property,  or  any  beneficial  interest  therein, 
effected   by  the   statute  of   descent   and   distribution   and   the  transfer   of   any 
property,  or  any  beneficial  interest  therein,  effected  by  operation  of  law  upon 
the  death  of  a  person  omitting  to  make  a  valid  disposition  thereof.     (Burns  E.  S. 
1914,  Sec.  10143z.) 

6.  The  words  "intangible  property  within  the  jurisdiction  of  this  State."  as 
used  in  this  act,  shall  be  taken  to  include  shares  of  stock  of  corporations  of  this 
State,  and  of  national  banking  institutions  located  in  this  state.     (Acts  1921, 
Chap.  275.) 


910  THE  STATE  STATUTES 

XXVII.  Taxes  for  state  use,  highway  funds. 

All  taxes  levied  and  collected  under  this  act,  less  any  expenses  of  collection, 
shall  be  paid  into  the  treasury  of  the  State  for  the  use  of  the  State,  and  shall  be 
applicable  to  the  expenses  of  the  state  government,  and  to  such  other  purposes 
as  the  legislature  may  by  law  direct;  Provided,  That  the  sum  of  five  ($5)  dollars 
may  be  allowed  to  prosecuting  attorneys  in  each  case  wherein  they  are  required 
to  appear  on  behalf  of  the  State  under  the  provisions  of  section  16  of  this  act, 
said  fees  to  be  taxed  as  a  part  of  the  costs  in  the  case  and  to  be  paid  by  the 
person  or  corporation  from  whom  the  tax  is  due.  (Sup.  1918,  Burns,  1914, 
Section  10143al.) 

The  Highway  Commission  Act,  approved  March  10,  1919,  provided  that  the 
proceeds  of  the  inheritance  tax  paid  into  the  treasury  shall  go  to  the  state 
highway  fund.  (Acts  1919,  Chapter  53,  Sec.  31b.) 

XXVIII.  Powers  of  courts. 

Whenever  a  power  is  conferred  by  this  act  upon  the  circuit  court  the  same 
power  shall  be  deemed  to  be  conferred  upon  the  probate  and  superior  courts  in 
those  counties  which  have  a  probate  or  superior  court  as  a  court  of  record  with 
jurisdiction  in  probate  matters.  (Burns  R.  S.  1914,  Section  10142bl.) 

XXIX.  Repealing  clause. 

All  acts  and  parts  of  acts  in  conflict  herewith  are  hereby  repealed:  Provided, 
however,  That  this  act  shall  not  operate  to  release  or  waive  or  otherwise  alter 
any  tax  or  taxes  which  may  have  accrued  under  the  provisions  of  any  prior  acts. 
(Acts  1921,  Sec.  275.) 


IOWA 


911 


-  O     " 
D+=O 

35     "f 


* 


N 

5  aoc 
•aS~< 


BS 


3! 


her, 
ted  c 


.•I 

S  >,-§ 
i^S 


usband, 
descend 
imate 


912  THE  STATE  STATUTES 

TABLE  OF  RATES  AND  EXEMPTIONS  UNDER  CHAP.  69,  L.  1911 


CLASS  OR  RELATIONSHIP 

Exemptions 

Rates 

Husband,  wife,  father,  mother,  lineal  descendant,  adopted  child  or  lineal 
descendant  of  such  child. 

All 

None 

Religious  and  educational  societies,  public  libraries  and  art  galleries, 
public  hospitals,  charitable  and  cemetery  associations. 

All 

None 

^lien  non-resident  of  United  States,  brother  or  sister  

If  less  than 

10% 

$1,000. 

All  other  aliens  not  residents  of  the  United  States  

If  less  than 

20% 

$1,000. 

If  leea  than 

6% 

«1,000. 

LAWS  1913  AS  AMENDED  BY  CH.  38,  LAWS  1921. 

Section  1481a.  The  estates  of  all  deceased  persons  in  any  property  whether 
the  decedents  be  inhabitants  of  this  state  or  not,  and  whether  such  estates  con- 
sist of  real,  personal  or  mixed  property,  tangible  or  intangible,  and  any  interest 
in,  or  income  from  any  such  estate  or  property  which  estate  or  property  is,  at 
the  death  of  the  decedent  owner  within  this  state,  or  is  subject  to  the  jurisdiction 
of  the  courts  of  this  state,  or  thereafter  is  brought  within  this  state  and  becomes 
subject  to  the  jurisdiction  of  the  courts  of  this  state;  or  the  propery  of  any 
decedent,  domiciled  within  this  state  at  the  time  of  the  death  of  such  decedent, 
even  though  the  property  of  such  decedent  so  domiciled  was  situated  outaide 
of  the  state,  except  real  estate  located  outside  of  the  state,  passing  in  fee  from 
the  decedent  owner,  which  shall  pass  in  any  manner  herein  described  shall  be 
subject  to  tax  as  herein  provided. 

The  tax  hereby  imposed  shall  be  collected  upon  the  net  market  value  and  shall 
go  into  the  general  fund  of  the  state  to  be  determined  as  herein  provided,  of  any 
property  passing: 

(a)  By  will  or  under  the  statutes  of  inheritance  of  this  or  any  other  state  or 
country. 

(b)  By  deed,  grant,  sale,  gift,  or  transfer  made  in  contemplation  of  the  death 
of  the  grantor  or  donor,  or  any  such  deed,  grant,  sale,  gift,  or  transfer  made  or 
intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor 
or  donor. 

(c)  Under  power  of  appointment  hereafter  exercised  whether  the  power  was 
created  before  or  after  the  taking  effect  of  thfs  act. 

(d)  Property  which  is. held  jointly  or  as  tenants  in  the  entirety  by  the  decedent 
and  any  other  person  or  persons  or  any  deposit  in  banks,  or  other  institution  in 
their  joint  names  and  payable  to  either  or  to  the  survivor,  except  such  part  as 
may  be  proven  to  have  belonged  to  the  survivor,  or  any  interest  of  a  decedent  in 
property  owned  by  a  joint  stock  or  other  corporate  body  whereby  the  survivor  or 
survivors  become  beneficially  entitled  to  the  decedent's  interest  upon  the  death 
of  a  shareholder.     The  tax  imposed  upon  the  passing  of  property  under  the  pro- 
visions of  this  paragraph  shall  apply  to  property  held  under  all  such  contracts 
or  agreements  whether  made  before  or  after  the  taking  effect  of  this  act. 

(e)  When  the  decedent  shall  have  disposed  of  his  estate  in  any  manner  to  take 
effect  at  his  death  with  a  request  secret  or  otherwise  that  the  beneficiary  give, 
pay  to,  or  share  the  property  or  any  interest  therein  received  from  the  decedent, 
with  other  person  or  persons,  or  to  so  dispose  of  beneficial  interests  conferred  by 
the  decedent  upon  the  beneficiaries  as  that  the  property  so  passing  would  be  tax- 
able under  the  provisions  of  this  act  if  passing  directly  by  will  or  deed  from 
the  decedent  owner  to  those  to  receive  the  gift  from  the  beneficiary,  compliance 


IOWA  913 

with  such  request  shall  constitute  a  transfer  taxable  under  the  provisions  of  this 
act,  at  the  highest  rate  possible  in  like  cases  of  transfers  by  will  or  deed. 

Any  person  becoming  beneficially  entitled  to  any  property  or  interest  therein 
by  any  method  of  transfer  as  herein  specified,  and  all  administrators,  executors, 
referees,  and  trustees  of  estates  or  transfers  taxable  under  the  provisions  of  this 
act,  shall  be  respectively  liable  for  all  such  taxes  to  be  paid  by  them  respectively. 

The  tax  hereby  imposed  shall  be  for  the  use  of  the  state,  shall  accrue  at  the 
death  of  the  decedent  owner,  and  said  tax  shall  be  paid  to  the  treasurer  of  state 
within  eighteen  (18)  months  after  the  death  of  the  decedent  owner  except  when 
otherwise  provided  in  this  act.  Provided,  however,  that  when  in  the  opinion  of 
the  treasurer  of  state  additional  time  should  be  granted  for  payment  to  avoid 
hardship,  said  treasurer  may  extend  the  period  to  a  date  not  exceeding  three 
years  from  date  of  death  of  decedent,  but  in  case  of  any  such  extension  the  tax 
shall  bear  six  per  cent  (6%)  interest  from  the  expiration  of  eighteen  (18) 
months  from  decedent's  death. 

The  tax  shall  be  and  remain  a  legal  charge  against  and  a  lien  upon  such  estate, 
and  any  and  all  the  property  thereof  from  the  death  of  the  decedent  owner  until 
paid,  provided,  however,  that  said  lien  shall  not  continue  longer  than  five  years 
from  the  date  such  tax  becomes  due  and  payable;  provided,  further,  such  five- 
year  limitation  shall  not  apply  to  estates  or  beneficiaries  embraced  in  paragraph 
(b)  of  section  four  (4)  of  this  act,  in  cases  where  decedent  died  prior  to  the 
taking  effect  of  this  act. 

If  the  decedent  makes  a  transfer  of,  or  creates  a  trust  with  respect  to,  any 
property  in  contemplation  of  his  death,  or  intended  to  take  effect  after  his  death 
(except  in  the  case  of  a  bona  fide  sale  for  a  fair  consideration  in  money  or 
money's  worth),  and  if  the  tax  in  respect  thereto  is  not  paid  when  due,  the 
transferee  or  trustee  shall  be  personally  liable  for  such  tax,  and  such  property, 
to  the  extent  of  the  decedent's  interest  therein  at  the  time  of  his  death,  shall  be 
subject  to  a  lien  for  the  payment  of  such  tax. 

§  1481al.  The  tax  imposed  by  this  act  shall  not  be  collected: 

(a)  When  the  net  value  of  the  estate  of  decedent  passing  to  the  beneficiaries 
named  in  class  "b"  of  section  four  (4)   of  this  act,  after  deducting  the  debts 
as  defined  herein,  does  not  exceed  the  sum  of  one  thousand  dollars  ($1,000),  pro- 
vided, however,  that  where  such  net  value  of  such  estate  exceeds  one  thousand 
dollars   ($1,000)  then  the  whole  of  said  net  estate  shall  be  subject  to  said  tax. 

(b)  When  the  property  passes   to   societies   or   institutions   within  this   state 
incorporated  for  educational  or  religious  purposes,  or  to  cemetery  associations  or 
societies  within  this  state  organized  for  purposes   of  public   charity,  including 
humane  societies. 

(c)  When  the  property  passes  to  public  libraries  or  public  art  galleries  within 
this  state,  open  to  the  use  of  the  public  and  not  operated  for  gain,  or  to  hospitals 
within  this  state,  or  to  municipal  corporations  for  purely  public  purposes. 

(d)  Bequests  for  the  care  and  maintenance  of  the  cemetery  or  burial  lot  of 
the   decedent   or   his   family,   and   bequests   not   to   exceed   five   hundred    dollars 
($500.00)  in  any  estate  of  a  decedent  for  the  performance  of  a  religious  service 
or  services  by  some  person  regularly  ordained,  authorized  or  licensed  by  some 
religious  society  to  perform  such  service,  which  service  or  services  are  to  performed 
for  or  in  behalf  of  the  testator  or  some  person  named  in  his  last  will. 

The  property,  or  any  interest  therein  or  income  therefrom  subject  to  the 
provisions  of  this  act  shall  be  taxed  as  herein  provided. 

(a)  When  such  property,  interest  or  income  passes  to  the  wife  or  the  husband 
of  the  deceased,  in  excess  of  the  distributive  share  of  such  surviving  spouse, 
grantor,  donor  or  vendor,  or  to  the  father  or  mother  or  to  any  child  or  lineal 
descendant  of  such  decedent,  grantor  or  vendor,  including  a  legally  adopted 
child  or  illegitimate  child  entitled  to  inherit  under  the  laws  of  this  state  the  tax 
imposed  shall  be  on  the  individual  share  so  passing,  and  shall  be  as  follows: 

One  per  centum  on  any  amount  in  excess  of  fifteen  thousand  dollars  ($15,000) 
and  up  to  thirty  thousand  dollars  ($30,000). 

One  and  one-half  per  centum  on  any  amount  in  excess  of  thirty  thousand 
dollars  ($30,000)  and  up  to  forty-five  thousand  dollars  ($45,000). 

Two  per  centum  on  any  amount  in  excess  of  forty-five  thousand  dollars 
($45,000)  and  up  to  sixty  thousand  dollars  ($60,000). 

58 


914  THE  STATE  STATUTES 

Two  and  one-half  per  centum  on  any  amount  in  excess  of  sixty  thousand 
dollars  ($60,000)  and  up  to  ninety  thousand  dollars  ($90,000). 

Three  per  centum  on  any  amount  in  excess  of  ninety  thousand  dollars  ($90,000) 
and  up  to  one  hundred  twenty  thousand  dollars  ($120,000). 

Four  per  centum  on  any  amount  in  excess  of  one  hundred  twenty  thousand 
dollars  ($120,000)  and  up  to  one  hundred  eighty  thousand  dollars  ($180,000). 

Five  per  centum  on  any  amount  in  excess  of  one  hundred  eighty  thousand 
dollars  ($180,000)  and  up  to  two  hundred  forty  thousand  dollars  ($240,000). 

Six  per  centum  on  any  amount  in  excess  of  two  hundred  forty  thousand 
dollars  ($240,000)  and  up  to  three  hundred  thousand  dollars  ($300,000). 

Seven  per  centum  on  all  sums  in  excess  of  three  hundred  thousand  dollars 
($300,000). 

Provided,  that  in  case  any  such  child  does  not  survive  the  decedent,  grantor, 
donor  or  vendor,  or,  for  any  reason,  sufficient  property,  interest  or  income  of 
such  decedent  does  not  pass  to  such  child  to  equal  the  amount  of  the  exemption 
to  which  such  child  would  be  entitled  under  the  provisions  of  this  section,  but 
property,  interest  or  income  passes  to  the  spouse  or  any  lineal  descendant  of  such 
child,  the  amount  so  passing  to  such  child,  if  any,  and  the  amount  passing  to 
such  spouse  or  lineal  descendant  shall  be  treated  collectively  as  one  inheritance 
and  the  persons  receiving  such  collective  inheritance  shall  collectively  be  entitled 
to  the  same  exemption,  pro  rated  according  to  the  amount  passing  to  each  of 
such  persons  as  if  such  inheritance  had  passed  entirely  to  such  child. 

When  the  property  or  any  interest  therein  or  income  therefrom  taxable  under 
the  provisions  of  this  act  passes  to: 

(b)  Any  person,  firm,  corporation  or  society  other  than  those  designated  in 
paragraph  ''a"  of  this  section  the  rate  of  tax  imposed  shall  be  as  follows: 

Five  per  centum  (5%)  on  any  amount  up  to  one  hundred  thousand  dollars 
($100,000). 

Six  per  centum  (6%)  on  any  amount  in  excess  of  one  hundred  thousand 
dollars  ($100,000)  up  to  two  hundred  thousand  dollars  ($200,000). 

Seven  per  centum  (7%)  on  all  amounts  in  excess  of  two  hundred  thousand 
dollars  ($200,000). 

Provided,  however,  that  when  property  or  any  interest  therein  shall  pass  to 
heirs,  devisees  or  other  beneficiaries  subject  to  the  tax  imposed  by  this  chapter, 
who  are  aliens,  nonresidents  of  the  United  States,  the  same  shall  be  subject  to  a 
tax  of  twenty  per  centum  of  its  true  value  except  when  such  foreign  beneficiaries 
are  brothers  or  sisters  of  the  decedent  owner  or  are  within  the  class  described 
in  paragraph  "a"  of  this  section,  when  the  rate  of  tax  to  be  assessed  and 
collected  therefrom  shall  be  ten  per  centum  of  the  value  of  the  property  or 
interest  so  passing. 

In  determining  the  inheritance  tax  due  from  the  estate  of  any  decedent  under 
this  act,  the  rates  provided  in  this  section  shall  be  applied  upon  the  aggregate 
value  of  the  property  making  up  said  estate  after  deducting  the  exemptions 
herein  provided.  Where  part  of  said  property  passes  to  the  class  described  in 
paragraph  "a"  hereof,  and  part  to  the  class  described  in  paragraph  "b,"  the 
tax  applying  to  each  of  said  classes  shall  be  computed  as  if  the  same  were  a 
separate  estate. 

§  1481a2.  There  shall  be  deducted  from  the  gross  value  of  the  estate  as  fixed  by 
the  inheritance  tax  appraisers  appointed  under  the  provisions  of  this  act,  or  as 
fixed  by  the  court,  the  debts  defined  as  follows: 

(a)  From  the  estate  of  such  decedent  who  at  the  time  of  his  death  was 
domiciled  within  this  state,  there  shall  be  deducted  the  debts  owing  by  the 
decedent  at  the  time  of  his  death,  the  local  and  state  taxes  due  from  the  estate 
in  January  of  the  year  of  his  death,  and  federal  taxes,  a  reasonable  sum  for 
funeral  expenses,  temporary  allowance  for  the  widow  and  children  under  fifteen 
(15)  years  of  age  as  granted  by  the  probate  court  or  judge  thereof,  court  costs, 
the  costs  of  appraisement  made  for  the  purpose  of  assessing  the  inheritance  tax, 
the  statutory  fee  of  executors,  administrators,  or  trustees  estimated  upon  the 
appraised  value  of  the  property,  the  amount  paid  by  the  executor  or  adminis- 
trator for  a  bond,  the  attorney  fee  in  a  reasonable  amount  to  be  approved  by  the 
court  for  the  ordinary  probate  proceedings  in  said  estate,  and  no  other  sum; 
provided,  however,  that  the  debt  of  such  decedent  owing  for  or  secured  by 
property  outside  of  this  state,  shall  not  be  deducted  from  estimating  the  tax, 


IOWA  915 

except  when  the  property  for  which  the  debt  is  owing  or  by  which  it  is  secured, 
is  subject  to  the  tax  imposed  by  this  act,  or  when  the  foreign  debt  axceeda  the 
value  of  the  property  securing  it  or  for  which  it  was  contracted,  when  the  excess 
may  be  deducted  provided  that  satisfactory  proof  of  the  value  of  the  foreign 
property  and  the  amount  of  such  debt  is  furnished  to  the  treasurer  of  state. 

Said  debts  shall  not  be  deducted  unless  the  same  are  approved  and  allowed  by 
the  court  within  eighteen  (18)  months  from  the  death  of  the  decedent,  unlesa 
otherwise  ordered  by  the  judge  or  court  of  the  proper  county. 

(b)  From  the  estate  of  such  decedent  who  at  the  time  of  his  death  is  domiciled 
outside  of  this  state,  the  state  treasurer  shall  deduct  such  debts  and  expenses  as 
are  chargeable  to  the  property  under  the  laws  of  this  state,  provided  that  in  the 
event  that  the  executor,  administrator,  or  trustee  of   such  foreign   estate  files 
with  the  clerk  of  the  court  having  ancillary  jurisdiction  and  with  the  treasurer 
of  state,  or  with  the  treasurer  of  state  in  case  there  is  no  administration  of  the 
estate  within  this  state,  a  duly  certified  statement  exhibiting  the  true  market 
value  of  the  entire  estate  of  the  decedent  owner,  and  the  indebtedness  for  which 
the  said  estate  has  been  adjudged  liable,  which  statement  shall  be  duly  attested 
by  the  judge  of  the  court  having  original  jurisdiction,  the  beneficiaries  of  the 
said  estate  shall  then  be  entitled  to  have  deducted  such  proportion  of  the  said 
indebtedness  of  the  decedent  from  the  value  of  the  property  as  the  value  of  the 
property  within  this  state  bears  to  the  value  of  the  entire  estate. 

(c)  An  amount  equal  to  the  value  at  the  time  of  the  decedent's  death  of  any 
property,  real,  personal  or  mixed,  which  can  be  identified  as  having  been  received 
by  the  decedent  as  a  share  in  the  estate  of  any  person  who  died  within  two 
years  prior  to  the  death  of  the  decedent,  or  which  can  be  identified  as  having 
been  acquired  by  the  decedent  in  exchange  for  property  so  received,  if  an  estate 
tax  under  this  act  was  collected  from  such  estate,  and  if  such  property  is  included 
in  decedent's  gross  estate. 

[NOTE:  Various  sections  as  to  procedure  are  amended  by  the  Act  of  1921 
so  as  to  apply  to  direct  as  well  as  collateral  heirs.  Section  17  of  the  Act  of  1921 
taxed  life  insurance  policies  of  $40,000  or  upward  payable  to  beneficiaries  but 
this  was  repealed  by  Act  of  April  8,  1921,  adopted  at  the  same  session.] 

These  new  procedure  sections  are  added  by  the  Act  of  1921: 

§  14.  In  the  construction  of  this  act  the  word  "person"  shall  include  a  plural 
as  well  as  singular,  and  artificial  as  well  as  natural  persons.  This  act  shall  not  be 
construed  to  confer  upon  a  county  attorney  authority  to  represent  the  state  in 
any  case,  and  he  shall  represent  the  treasurer  of  state  only  when  especially 
authorized  by  him  to  do  so. 

§  15.  The  treasurer  of  state  is  hereby  authorized  and  empowered  to  issue  a 
citation  to  any  person  whom  he  may  believe  or  have  reason  to  believe  has  any 
knowledge  or  information  concerning  any  property  which  he  believes  or  has 
reason  to  believe  has  been  transferred  by  any  person  and  as  to  which  there  is  or 
may  be  a  tax  due  to  the  state  under  the  provisions  of  the  inheritance  tax  laws 
of  this  state,  and  by  such  citation  require  such  person  to  appear  before  him  or 
anyone  designated  by  him  at  the  county  seat  of  the  county  where  said  person 
resides  and  at  a  time  to  be  designated  in  such  citation,  and  testify  under  oath 
as  to  any  fact  or  information  within  his  knowledge  touching  the  quantity,  value 
and  description  of  any  such  property  and  the  disposition  thereof  which  may  have 
been  made  by  any  person,  and  to  produce  and  submit  to  the  inspection  of  the 
treasurer  of  state,  any  books,  records,  accounts  or  documents  in  the  possession 
of  or  under  the  control  of  any  person  so  cited.  The  treasurer  of  state  shall 
also  have  the  power  to  inspect  and  examine  the  books,  records  and  accounts  of 
any  person,  firm  or  corporation,  including  the  stock  transfer  books  of  any  cor- 
poration, for  the  purpose  of  acquiring  any  information  deemed  necessary  or 
desirable  by  him  for  the  proper  enforcement  of  the  inheritance  tax  laws  of  this 
state,  and  the  collection  of  the  full  amount  of  the  tax  which  may  be  due  to  the 
state  thereunder.  Any  and  all  information  acquired  by  the  treasurer  of  state 
under  and  by  virtue  of  the  means  and  methods  provided  for  by  this  section 
shall  be  deemed  and  held  by  him  as  confidential  and  shall  not  be  disclosed  by  him 
except  so  far  as  the  same  may  be  necessary  for  the  enforcement  and  collection  of 
the  inheritance  tax  provided  for  by  the  laws  of  this  state. 

Refusal  of  any  person  to  attend  before  the  treasurer  of  state  in  obedience  to 
any  such  citation,  or  to  testify,  or  produce  any  books,  accounts,  records  or  docu- 


916  THE  STATE  STATUTES 

ments  in  his  possession  or  under  his  control  and  submit  the  same  to  inspection 
of  the  treasurer  of  state  when  so  required,  may,  upon  application  of  the  treasurer 
of  state,  be  punished  by  any  district  court  in  the  same  manner  as  if  the 
proceedings  were  pending  in  such  court. 

Witnesses  so  cited  before  the  treasurer  of  state,  and  any  sheriff  or  other 
officer  serving  such  citation  shall  receive  the  same  fees  as  are  allowed  in  civil 
actions;  to  be  paid  upon  the  certificate  of  the  treasurer  of  state  and  audited  by 
the  board  of  audit,  out  of  funds  not  otherwise  appropriated. 

§  16.  As  to  estates  of  decedents  passing  to  beneficiaries  named  in  paragraph 
"a"  of  section  four  (4)  hereof,  this  act  shall  apply  only  where  decedent  dies 
after  the  taking  effect  of  this  act,  and  as  to  estate  of  decedents  passing  to  bene- 
ficiaries named  in  paragraph  "b"  of  section  four  (4)  of  this  act,  the  rate  of 
tax  shall  be  five  per  cent  (5%)  as  to  all  persons  dying  before  this  act  takes  effect 


KANSAS 


917 


KANSAS. 

Taxes  all  property  of  nonresident  decedents  within  the  State,  including  stock 
of  domestic  corporations,  but  not  their  bonds. 

The  original  enactment  was  chapter  248,  Laws  of  1909,  which  became  effective 
by  publication  March  16,  1909.  On  January  25,  1913,  the  chapter  was  repealed 
without  any  substitution  by  chapter  330,  Laws  of  1913,  and  for  two  years  Kansas 
had  no  law.  Note,  however,  that  on  account  of  the  general  saving  clause  in  the 
Kansas  statute  the  obligations  of  the  law,  notwithstanding  its  repeal,  continue 
as  to  all  estates  of  decedents  who  died  during  the  four  years  the  law  was  upon 
the  statute  book.  (State  v.  A.,  T.  &  S.  E.  E.  Co.,  99  Kan.  831,  163  Pac.  157; 
Ee  Mosely,  100  Kan.  495;  State  v.  U.  S.  Trust  Co.,  99  Kan.  841.) 

The  Legislature  of  1915  enacted  chapter  357,  Session  Laws  of  that  year  which 
became  effective  by  publication  on  April  10,  1915.  This,  however,  was  a  collateral 
law. 

The  Legislature  of  1917  enacted  chapter  319,  amending  the  law  in  some 
particulars,  but  not  in  respect  of  beneficiaries,  exemptions  or  rates. 

The  Legislature  of  1919,  enacted  chapter  305,  which  restores  the  tax  upon 
direct  successions,  but  in  a  way  which  really  recognizes  only  the  principle  of 
such  taxation  as  being  correct.  The  exemptions  are  so  large  as  to  appear  almost 
farcical.  The  law  became  effective  March  29,  1919. 

By  reason  of  one  of  the  amendments  made  as  aforesaid  by  the  Legislature  of 
1917  property  passing  by  power  of  appointment  has  been  subject  to  the  law  since 
March  26,  1917. 


SCHEDULES  OF  RATES  APPLICABLE  IN  THE  TAXATION  OF  LEGACIES  AND  SUCCESSIONS 
AS  PROVIDED  IN  SECTION  1,  CHAPTER  248,  LAWS  OF  1900. 


Indication  of 
Relationship. 

Rates  Applicable 

On  amounts 
up  to  and 
including 
$25,000. 

On  amounts 
from 
$25,000 
to  $50,000. 

On  amounts 
from 
$50,000 
to  $100,000. 

On  amounts 
from 
$100,000 
to  $500,000. 

On  amount* 
in  excess 
of 
$500,000. 

Per  cent. 

Class  A. 

Per  cent. 

Per  cent. 

Per  cent. 

Per  cent. 

Husband,  wife,  lineal  ances- 
tor, lineal  descendant, 
adopted  child,  lineal  de- 
scendant of  any  adopted 
child,  wife  or  widow  of 
a  son,  or  husband  of  a 
daughter. 

1 

2 

3 

4 

5 

Class  B. 

Brother,  sister,  nephew,  or 
niece. 

3 

5 

** 

10 

12% 

Class  C. 

Persons  in  other  degrees  of 
collateral  consanguinity, 
strangers  or  others  not  in- 
cluded in  Class  A  and  B. 

5 

10 

12% 

15 

NOTES. 

1.  As  to  Class  A,  the  law  does  not  become  operative  until  the  legacy  or  succession  exceede 

$5,000,    when  the  legatee,   devisee  or  beneficiary  is  the  husband,   wife,    father,    mother, 
child  or  adopted  child  of  the  deceased. 

2.  As  to  Class  B,  the  law  does  not  become  operative  until  the  legacy  or  succession  exceeds 

$1,000. 

8.    As  to  all  persons  not  included  in  the  exceptions  stated  in  Note  1  and  Note  2  above,   the 
law  becomes  operative  as  to  all  legacies  and  successions,  no  matter  how  small. 


918 


SCHEDULE   OF   RATES   APPLICABLE   IN    THE   TAXATION    OF    LEGACIES   AND» 
SUCCESSIONS,    1915. 


Rates  Applicable 

Indication  of 
Relationship. 

On  amounts 
up  to  and 

On  amounts 
from 

On  amounts 
from 

On  amounts 
from 

On  amount* 
in  excess 

including 

$25,000 

$50,000 

$100,000 

of 

$25,000. 

to  $50,000. 

to  $100,000. 

to  $500,000. 

$500,000. 

Class  A. 

Per  cent. 

Per  cent. 

Per  cent. 

Per  cent. 

Per  cent. 

Husband,  wife,  lineal  ances- 

None. 

None. 

None. 

None. 

None. 

tor,      lineal      descendant, 

adopted  child,   lineal   de- 

scendant of   any   adopted 

child,    wife  or  widow  of 

a   son,    or   husband   of   a 

daughter. 

Class  B. 

Brothers  and  sisters. 

3 

5 

7%. 

10 

12% 

Class  C. 

Persons  in  other  degrees  of 

5 

7% 

10 

12% 

15 

collateral     consanguinity, 

strangers  or  others  not  in- 

cluded in  Class  A  and  B. 

NOTE. 

1.  The  members  of  Class  A  incur  no  tax  liability  under  the  law,  the  full  amount  of  their  shares 

being  exempt. 

2.  The  members  of  Cass  B  have  an  exemption  of  $5,000,  and  if  the  amount  above  $5,000  is  lees 

than  $200,  no  tax  is  charged. 

8.    No  exemptions  are  allowed  to  members  of  Class  C;  but  if  the  amount  is  less  than  $200,  no 
tax  is  chargeable. 


SCHEDULE  OF  RATES  APPLICABLE  IN  THE  TAXATION  OF  LEGACIES  AND  SUCCESSIONS 
AS  PROVIDED  BY  HOUSE  BILL  NO.   415,  ENACTED  BY  THE  LEGIS- 
LATURE OF  1919,  EFFECTIVE  MARCH  29,  1919. 


Rates  Applicable 


Indication  of 

Relationship. 

On  amounts 

On  amounts 

On  amounts 

On  amounts 

On  amount* 

up  to  and 

from 

from 

from 

in  excess 

including 

$25,000 

$50,000 

$100,000 

of 

$25,000. 

to  $50,000. 

to  $100,000. 

to  $500,000. 

$500,000. 

Class  A. 

Per  cent. 

Per  cent. 

Per  cent. 

Per  cent. 

Per  cent. 

Wife. 

% 

1 

1% 

2 

v& 

Husband,     lineal     ancestor, 
lineal  descendant,  adopted 

1 

2 

3 

4 

5 

child,  lineal  descendant  of 

any  adopted  child,  wife  or 

widow  of  a  son,  or  hus- 

band of  a  daughter. 

Class  B. 

Brothers  and  sisters. 

3 

6 

7% 

10 

11% 

Class  C. 

Persons  in  other  degrees  of 

5 

7% 

10 

12% 

15 

collateral     consanguinity, 

strangers  or  others  not  in- 

cluded in  Classes  A  and  B. 

NOTE. 

1.  Exemptions  are  allowed  as  follows:  To  the  wife,  $75,000;  to  each  other  member  of  Class  A, 

$15,000;  to  each   member  of  Class  B,  $5,000;  members  of  Class  C  have  no  exemption. 

2.  The  rates  above  named  are  charged  only  on  amounts  in  excess  of  the  exemption*  allowed; 

when  the  share  is  less  than  $200  in  excess  of  the  exemption  no  tax  is  charged. 


KANSAS  91 J) 

LAWS   1915,   CHAPTER  357,  BECAME  A  LAW  APRIL   10,    1915. 

(Amended  as  to  procedure  by  Chapter  319,  L.  1917,  and  a#  to  rates  by 
Chapter  305,  L.  1919.) 

Section  1.  All  property,  corporeal  or  incorporeal,  and  any  interest  therein, 
within  the  jurisdiction  of  the  State,  whether  belonging  to  the  inhabitants  of  the 
State  or  not,  which  shall  pass  by  will  or  by  the  laws  regulating  intestate  succes- 
sion, or  by  deed,  grant  or  gift  made  in  contemplation  of  death,  or  made  or 
intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor, 
to  any  person,  absolutely  or  in  trust — except  in  case  of  a  bona  fide  purchase  for 
full  consideration  in  money  or  money's  worth;  and  except  property  to  or  for  the 
use  of  literary,  educational,  scientific,  religious,  benevolent  and  charitable  socie- 
ties or  institutions:  Provided,  such  use  entitles  the  property  so  passing  to  be 
exempt  from  taxation;  and  except  property  to  or  for  the  use  of  the  State,  a 
county  or  a  municipality  for  public  purposes;  shall  be  taxed  as  herein  provided. 

The  section  then  prescribes  the  rates  and  exemptions  as  shown  in  the  foregoing 
table. 

§  2.  Provides  that  the  tax  shall  be  due  within  one  year  of  death,  or,  if  a  gift 
in  contemplation  of  death,  at  the  time  of  the  transfer,  makes  the  tax  a  lien  but 
provides  that  the  lien  on  personal  property  is  satisfied  if  it  is  sold  for  value  by 
an  executor  or  administrator  and,  in  case  of  real  estate,  if  a  bond  to  pay  the 
tax  is  filed. 

§  3.  Provides  that  remaindermen  may  defer  payment  of  tax  until  remainder 
falls  in  by  filing  a  sufficient  bond  and  renewing  it  every  five  years. 

§  4.  Provides  for  the  valuation  of  life  estates  and  remainders  on  American 
experience  tables  on  the  basis  of  5%  and  makes  further  provision  for  the  filing 
of  a  bond  by  remaindermen  in  three  times  the  amount  of  the  tax  if  payment  is 
elected  to  be  deferred. 

§  5.  Provides  for  payment  of  tax  on  contingent  remainders  when  they  accrue 
at  their  full  value  undiminished  by  the  life  estate  and  for  compromise  of  tax 
in  such  cases  on  consent  of  the  Attorney-General. 

§  6.  Kequires  the  executor  or  administrator  to  deduct  the  tax  from  money 
legacy  or  distributive  share  or  to  collect  it  from  beneficiary  before  delivery  of 
property. 

§  7.  Eequires  the  heir  to  deduct  the  tax  before  paying  legacy  when  it  is  a 
charge  on  real  estate. 

§  8.  Provides  that  where  the  will  directs  payment  of  the  tax  out  of  a  fund  no 
tax  shall  be  charged  against  the  amount  so  appropriated. 

§  9.  Provides  that  the  probate  court  may  authorize  the  sale  of  real  estate  to 
pay  the  tax  as  in  case  of  debts. 

§  10.  An  inventory  and  appraisal  under  oath  of  every  estate  shall  be  filed  in 
the  probate  court  by  the  executor,  administrator  or  trustee  within  three  months 
after  his  appointment.  If  he  neglects  or  refuses  to  file  such  inventory  and 
appraisal  he  shall  be  liable  to  a  penalty  of  not  more  than  five  thousand  dollars, 
which  shall  be  recovered  in  the  proper  district  court  by  the  Attorney-General  or 
county  attorney  of  the  proper  county  at  the  instance  of  the  tax  commission,  in 
the  name  of  the  State,  for  the  use  of  the  State ;  and  the  probate  judge  shall  notify 
the  tax  commission  within  thirty  days  after  the  expiration  of  said  three  months 
of  the  failure  of  any  executor,  administrator  or  trustee  to  file  an  inventory  and 
appraisal  in  his  office. 

§  11.  The  probate  judge  shall  record  the  inventory  and  appraisal  of  every 
estate  which  is  filed  in  his  office,  and  he  shall,  within  thirty  days  after  the  same 
has  been  filed,  send  by  mail  to  the  tax  commission  such  inventory  and  appraisal 
or  a  copy  thereof.  The  probate  judge  shall  also,  within  the  same  period,  send  by 
mail  to  the  tax  commission  a  copy  of  the  will  of  the  decedent,  if  such  has  been 
allowed  by  the  probate  court.  The  probate  judge  shall  also  furnish  such  copies 
of  papers  in  his  office  as  the  tax  commission  shall  require,  and  shall  furnish 
information  as  to  the  records  and  files  in  his  office  in  such  form  as  the  tax  com- 
mission may  require.  The  tax  commission  shall  excuse  the  probate  court  from 
filing  inventories  or  copies  of  inventories  and  of  wills  of  estates  no  part  of  which 
appears  to  be  subject  to  a  tax  under  the  provisions  of  this  chapter. 

§  12.  Provides  that  where  it  is  made  to  appear  by  petition  of  any  party  in 
interest  that  administration  is  not  necessary  except  to  determine  the  tax,  if  any, 
the  tax  proceedings  may  be  had  on  such  petition.  If  no  will  has  been  offered  or 


THE  STATE  STATUTES 

administration  had  within  three  months  the  tax  commission  may  proceed  in  the 
same  way. 

§  13.  If  a  foreign  executor,  administrator  or  trustee  assigns  or  transfers  any 
stock  in  any  national  bank  located  in  this  State  or  in  any  corporation  organized 
under  the  laws  of  this  State  owned  by  a  deceased  nonresident  at  the  date  of  his 
death  and  liable  to  a  tax  under  the  provisions  of  this  act,  the  tax  shall  be  paid  to 
the  county  treasurer  of  the  proper  county  at  the  time  of  such  assignment  or 
transfer;  and  if  it  is  not  paid  when  due,  such  executor,  administrator  or  trustee 
shall  be  personally  liable  therefor  until  it  is  paid.  A  bank  located  in  this  State 
or  a  corporation  organized  under  the  laws  of  this  State  which  shall  record  a 
transfer  of  any  share  of  its  stock  made  by  a  foreign  executor,  administrator  or 
trustee,  or  issue  a  new  certificate  for  a  share  of  its  stock  at  the  instance  of  a 
foreign  executor,  administrator  or  trustee,  before,  all  taxes  imposed  thereon  by  the 
provisions  of  this  act  have  been  paid,  shall  be  liable  for  such  tax  in  an  action  of 
contract  brought  by  the  county  attorney  of  the  proper  county  or  the  Attorney- 
General  in  the  name  of  the  State  and  at  the  instance  of  either  the  probate  court 
or  the  tax  commission. 

§  14.  Securities  or  assets  belonging  to  the  estate  of  a  deceased  nonresident 
shall  not  be  delivered  or  transferred  to  a  foreign  executor,  administrator  or  legal 
representative  of  said  decedent  without  serving  notice  upon  the  tax  commission 
of  the  time  and  place  of  such  intended  delivery  or  transfer  seven  days  at  least 
before  the  time  of  such  delivery  or  transfer.  The  tax  commission,  by  any  member 
or  by  representative,  may  examine  such  securities  or  assets  prior  to  the  time  of 
such  delivery  or  transfer.  Failure  to  serve  such  notice  or  to  allow  such  examina- 
tion shall  render  the  person  or  corporation  making  the  delivery  or  transfer  liable 
to  the  payment  of  the  tax  due  upon  said  securities  or  assets,  in  an  action  brought 
by  the  county  attorney  of  the  proper  county  or  the  Attorney-General  in  the  name 
of  the  State. 

§  15.  If  a  person  who  has  paid  such  tax  afterward  refunds  a  portion  of  the 
property  on  which  it  was  paid,  or  if  it  is  judicially  determined  that  the  whole  or 
any  part  of  such  tax  ought  not  to  have  been  paid,  such  tax,  or  the  due  proportion 
thereof,  shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee. 

§  16.  The  value  of  the  property  upon  which  the  tax  is  computed  shall  be 
determined  by  the  tax  commission  and  notified  by  it  to  the  person  or  persons  by 
whom  the  tax  is  payable  and  to  the  probate  court  and  county  treasurer  of  the 
proper  county,  and  such  determination  shall  be  final  unless  the  value  so  deter- 
mined shall  be  reduced  by  proceedings  as  herein  provided.  At  any  time  within 
three  months  after  such  determination  the  probate  court  shall,  upon  the  applica- 
tion of  any  party  interested  in  the  succession,  or  on  application  of  the  executor, 
administrator  or  trustee,  appoint  three  disinterested  appraisers,  who,  first  being 
sworn,  shall  appraise  such  property  at  its  actual  value  in  money  as  of  the  day  of 
the  death  of  the  decedent,  and  shall  make  return  thereof  to  said  court.  Such 
return,  when  accepted  by  said  court,  shall  be  final:  Provided,  that  any  party 
aggrieved  by  such  appraisal  shall  have  an  appeal  upon  matters  of  law.  One-half 
of  the  fees  of  said  appraisers,  as  determined  by  the  judge  of  said  court,  shall 
be  paid  by  the  county  treasurer,  and  one-half  of  said  fees  shall  be  paid  by  the 
other  party  or  parties  to  said  proceedings. 

The  remaining  sections  16  to  27  relate  to  procedure  in  collecting  the  tax  which 
are  largely  repealed  by  the  1917  amendment. 

AMENDMENT    OF    1917. 
CHAPTER  319. 

Relating  to  the  Taxation  of  Legacies  and  Successions;  State  Tax  Commission 

Made  Inheritance  Tax  Commission. 

An  Act  relating  to  the  assessment  and  taxation  of  legacies  and  successions,  creat- 
ing an  Inheritance  Tax  Commission  and  amending  sections  11219  and  11221 
of  the  General  Statutes,  1915,  and  defining  certain  terms  in  sections  11203, 
11219  and  11221. 
Be  it  enacted  by  the  Legislature  of  the  State  of  Kansas: 

Section  1.  From  and  after  the  passage  of  this  act  the  Tax  Commission  shall 
constitute  the  Inheritance  Tax  Commission  of  the  State  of  Kansas,  and  shall, 
as  such,  be  charged  with  the  duty  of  administering  all  laws  providing  for  the 
assessment  and  taxation  of  legacies  and  successions  within  this  State,  and  all 


KANSAS  921 

duties  relative  to  legacy  and  succession  taxes  and  assessment  now  imposed  by 
law  upon  the  Tax  Commission  shall  be  performed  by  said  Inheritance  Tax  Com- 
mission. The  member  of  said  commission  who  has  served  longest  as  member  of 
the  Tax  Commission  shall  be  chairman,  and  the  secretary  of  the  Tax  Commission 
secretary  of  said  Inheritance  Tax  Commission.  The  words  "Tax  Commission" 
whenever  and  wherever  used  in  chapter  357,  Laws  of  1915,  and  in  acts  amendatory 
thereof  and  supplemental  thereto,  shall  be  taken  and  held  to  mean  Inheritance 
Tax  Commission. 

§  2.  That  section  11219  of  the  General  Statutes  of  1915  be  and  the  same  is 
hereby  amended  so  as  to  read  as  follows:  Sec.  11219.  The  Inheritance  Tax 
Commission  shall  determine  the  amount  of  tax  due  and  payable  upon  any  estate 
or  upon  any  part  thereof,  and  shall  certify  the  amount  so  due  and  payable  to  the 
probate  court  and  to  the  county  treasurer  and  to  the  person  or  persons  by  whom 
the  tax  is  payable;  but  in  the  determination  of  the  amount  of  any  tax  said 
Inheritance  Tax  Commission  shall  not  be  required  to  consider  any  payments  on 
account  of  debts  or  expenses  of  administration  which  have  not  been  allowed  by 
the  probate  court  having  jurisdiction  of  the  estate.  Payment  of  the  amount  so 
certified  shall  be  a  discharge  of  the  tax.  Any  executor,  administrator,  trustee  or 
grantee  who  is  aggrieved  by  any  determination  of  said  Inheritance  Tax  Commis- 
sion may,  at  any  time  before  said  estate  shall  be  finally  closed,  and  after  the 
payment  of  such  tax  to  the  county  treasurer,  apply  by  petition  to  said  Inheritance 
Tax  Commission  for  the  abatement  of  said  tax  or  any  part  thereof,  and  if  said 
commission  adjudge  that  said  tax  or  any  part  thereof  was  wrongfully  exacted 
it  shall  order  an  abatement  of  such  portion  of  said  tax  as  was  assessed  without 
authority  of  law.  Upon  final  decision  ordering  an  abatement  of  any  portion  of 
said  tax  the  county  treasurer  shall  refund,  from  any  legacy  and  succession  taxes 
in  his  hands,  the  amount  adjudged  to  have  been  illegally  exacted,  with  interest 
at  the  legal  rate,  without  any  further  act  or  resolve  making  appropriation 
therefor;  provided,  however,  that  any  such  executor,  administrator,  trustee  or 
grantee  may  apply  to  any  district  court  of  competent  jurisdiction  for  a  review 
of  any  such  order,  and  until  final  decision  shall  be  entered  by  any  such  court 
such  money  shall  not  be  refunded  by  said  county  treasurer. 

§  3.  That  section  11221  of  the  General  Statutes  of  1915  be  and  the  same  is 
hereby  amended  so  as  to  read  as  follows:  Sec.  11221.  The  Inheritance  Tax 
Commission,  subject  to  the  right  of  any  party  interested  to  apply  to  any  district 
court  of  competent  jurisdiction  for  review,  shall  hear  and  determine  all  questions 
relative  to  said  tax,  and  the  Attorney-General,  at  the  request  of  the  Inheritance 
Tax  Commission  or  of  the  county  treasurer,  shall  represent  the  State  in  any 
proceedings  brought  to  review  any  action  of  said  Inheritance  Tax  Commission. 
If  any  probate  court  shall  find  that  any  such  tax  remains  due  and  that  proper 
proceedings  have  not  been  taken  before  said  Inheritance  Tax  Commission  for 
abatement  thereof,  it  shall  order  the  executor,  administrator,  or  trustee  to  pay 
the  same,  with  interest,  and  costs,  and  no  question  regarding  the  validity  of  such 
tax  shall  be  heard  in  such  court.  And  if  it  appears  that  there  are  no  such  goods 
or  assets  of  the  estate  in  his  hands,  the  court  may  assess  the  amount  of  the  tax 
against  the  executor,  administrator,  or  trustee,  as  if  for  his  own  debt,  and  may 
enforce  compliance  with  such  order  by  proper  procedure,  as  now  authorized  by 
probate  practice;  but  the  administrators,  executors,  trustees  and  grantees  herein- 
before mentioned  shall  be  personally  liable  only  for  such  taxes  as  shall  be  payable 
while  they  continue  in  the  said  offices  or  have  title  as  such  grantees,  respectively. 
In  the  cases  where  the  tax  is  due  and  payable  by  and  collectible  from  the  bene- 
ficiary, all  actions  shall  be  prosecuted  by  the  Attorney-General  or  the  county 
attorney  of  the  proper  county  in  the  name  of  the  State,  and  such  actions  may  be 
brought  in  the  same  courts  as  other  actions  for  money. 

§  4.  Whenever  any  person  shall  exercise  a  power  of  appointment  derived  from 
any  disposition  of  property,  such  appointment  when  made  shall  be  deemed  to 
be  a  disposition  of  property  by  the  person  exercising  such  power,  taxable  under 
the  provisions  of  chapter  357,  Laws  of  1915,  and  of  all  acts  and  amendments 
thereof  and  in  addition  thereto,  in  the  same  manner  as  though  the  property  to 
which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power, 
and  had  been  bequeathed  or  devised  by  the  donee  by  will;  and  whenever  any 
person  possessing  such  power  of  appointment  so  derived  shall  omit  or  fail  to 
exercise  the  same  within  the  time  provided  therefor,  in  whole  or  in  part,  a 
disposition  of  property  taxable  under  the  provisions  of  sections  11219  and  11221 


922  THE  STATE  STATUTES 

of  the  General  Statutes  of  1915,  and  all  acts  and  amendments  thereof,  and  in 
addition  thereto  shall  be  deemed  to  take  place  to  the  extent  of  such  omissions 
or  failure  in  the  same  manner  as  though  the  persons  or  corporations  thereby 
becoming  entitled  to  the  possession  or  enjoyment  of  the  property  to  which  such 
power  related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing 
to  exercise  such  power  taking  effect  at  the  time  of  such  omission  or  failure. 

§  5.  That  original  sections  11219  and  11221  of  the  General  Statutes  of  1915  be 
and  the  same  are  hereby  repealed. 

§  6.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  publication 
in  the  official  State  paper. 

Approved  March  13,  1917. 

Published  in  official  State  paper  March  26,  1917. 

AMENDMENT    OF    1919. 

CHAPTEE  305. 

Section  1.  That  section  11203  of  the  General  Statutes  of  1915  is  hereby  amended 
to  read  as  follows:  Sec.  11203.  All  property,  corporeal  or  incorporeal,  and  any 
interest  therein,  within  the  jurisdiction  of  the  State,  whether  belonging  to  the 
inhabitants  of  the  State  or  not,  which  shall  pass  by  will  or  by  the  laws  regulating 
intestate  succession,  or  by  deed,  grant  or  gift  made  in  contemplation  of  death, 
or  made  or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of 
the  grantor,  to  any  person,  absolutely  or  in  trust,  except  in  case  of  a  bona  fide 
purchase  for  full  consideration  in  money  or  money's  worth;  and  except  property 
to  or  for  the  use  of  literary,  educational,  scientific,  religious,  benevolent  and 
charitable  societies  or  institutions:  Provided,  such  use  entitle  the  property  so 
passing  to  be  exempt  from  taxation;  and  except  property  to  or  for  the  use  of 
the  State,  a  county  or  a  municipality  for  public  purposes,  shall  be  taxed  as  herein 
provided.  Distributees  of  estates,  whether  they  succeed  to  the  ownership  of  their 
respective  shares  by  reason  of  the  provisions  of  a  will  or  under  the  law  of 
descents  and  distributions,  or  by  deed,  grant  or  gift  made  in  contemplation  of 
death,  shall  be  classified  as  follows:  Class  A  shall  consist  of  the  surviving 
husband  or  wife,  the  lineal  ancestors,  lineal  descendants,  adopted  child  or  children, 
lineal  descendants  of  any  adopted  child,  the  wife  or  widow  of  a  son,  or  the 
husband  of  a  daughter  of  the  decedent.  Class  B  shall  consist  of  the  brothers 
and  sisters  of  the  decedent.  Class  C  shall  consist  of  relatives  of  all  degrees  of 
consanguinity,  except  those  included  in  classes  A  and  B,  and  shall  include  also 
strangers  in  the  blood  of  the  decedent.  From  the  value  of  the  shares,  as  ascer- 
tained under  the  provisions  of  this  act  and  succeeded  to  by  the  several  distributees, 
exemptions  shall  be  allowed  as  follows:  To  the  surviving  wife,  $75,000;  to  each 
other  member  of  class  A,  $15,000;  to  each  member  of  class  B,  $5,000;  and  the 
tax  herein  provided  for  shall  be  charged  only  upon  the  excess  value  of  the  shares 
over  and  above  the  exemption  herein  declared:  Provided,  that  when  one  or  more 
of  the  shares  of  an  estate  shall  consist  of  property  within  and  property  without 
the  State  only  such  percentage  of  the  exemptions  above  named  shall  be  allowed  as 
is  the  percentage  within  the  State  of  the  total  value  of  the  shares :  And  provided 
further,  that  any  gift,  legacy,  inheritance,  transfer,  appointment  or  interest 
which  shall  be  valued,  for  the  purposes  of  this  act,  after  exemptions  are  allowed, 
at  a  less  sum  than  $200,  shall  not  be  subject  to  the  tax  hereby  imposed. 

Upon  the  value  of  shares  succeeded  to  by  members  of  class  A  in  excess  of  the 
exemptions  herein  declared,  the  following  rates  of  tax  are  hereby  imposed:  On 
the  first  $25,000,  or  fraction  thereof,  1% ;  on  the  second  $25,000,  or  fraction 
thereof,  2%;  on  the  next  $50,000,  or  fraction  thereof,  3%;  on  the  next  $400,000, 
or  fraction  thereof,  4%;  on  all  over  $500,000,  5%:  Provided,  that  upon  the 
share  of  the  estate  passing  to  the  wife,  only  one-half  of  the  foregoing  rates  shall 
be  charged.  Upon  the  value  of  shares  succeeded  to  by  members  of  class  B  in 
excess  of  the  exemptions  herein  declared,  the  following  rates  of  tax  are  hereby 
imposed:  On  the  first  $25,000,  or  fraction  thereof,  3%;  on  the  second  $25,000, 
or  fraction  thereof,  5%;  on  the  next  $50,000,  or  fraction  thereof,  7%%;  on  the 
next  $400,000,  or  fraction  thereof,  10%;  on  all  over  $500,000,  12%%.  Upon 
the  value  of  shares  succeeded  to  by  members  of  class  C,  the  following  rates  of 
taxes  are  hereby  imposed:  On  the  first  $25,000,  or  fraction  thereof,  5%;  on 
the  next  $25,000,  or  fraction  thereof,  7*£%;  on  the  next  $50,000,  or  fraction 
thereof,  10%;  on  the  next  $400,000,  or  fraction  thereof,  12!V&%;  on  all  over 


KANSAS  923 

$500,000,  15%.  All  taxes  herein  provided  for  shall  be  for  the  use  of  the  State; 
and  administrators,  executors  and  trustees,  and  any  grantees  under  any  such 
conveyance  made  during  the  grantor's  life  shall  be  liable  for  such  taxes,  with 
interest  at  the  legal  rate  until  the  same  shall  have  been  paid.  Property  shall  be 
deemed  to  have  been  transferred  by  grant  or  gift  in  contemplation  of  death  under 
this  act  when  such  grant  or  gift  shall  have  been  executed  within  90  days  prior 
to  the  death  of  the  grantor  or  donor. 

§  2.  That  original  section  11203  of  the  General  Statutes  of  1915  be  and  the 
same  is  hereby  repealed. 

$  3.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  publication 
in  the  official  State  paper. 


924 


THE  STATE  STATUTES 


KENTUCKY. 

Taxes  all  property  of  nonresidents  within  the  State. 


Above  ex- 

CLASS OF 

emption 

$25,000 

$50,000 

$100,000 

RELATIONSHIP 

Exemptions 

to 

to 

to 

to 

Over 

$25,000 

$50,000 

$100,000 

$500,000 

$500,000 

Husband,     wife,     lineal 

per  cent 

per  cent 

per  cent 

per  cent 

per  cent 

issue,  lineal  ancestor, 

Widow  or  minor 

child  $10,000 

Others  $5,000 

1 

1% 

2 

2Ms 

S 

Brother,  sister,  their  de- 

scendants,    daughter- 

in-law,  son-in-law    .  . 

$2,000 

VA 

214 

3 

3% 

*H 

Aunt    and    uncle    and 

their  descendants  .  .  . 

$1,600 

3 

tii 

6 

»H 

9 

Great     aunt    or    uncle 

and  their  descendants 

$1,000 

4 

e 

8 

10 

12 

All  others,  except  pub- 

lic     and      charitable 

corporations  

$500 

5 

IV* 

10 

12& 

15 

LAWS  OF  1906,  CHAPTER  22,  AS  AMENDED  BY  CHAPTER  36,  LAWS  OF 
1910,  AND  CHAPTER  26,  LAWS  OF  1916.  PRIOR  TO  1916  KENTUCKY 
TAXED  ONLY  COLLATERAL  INHERITANCES. 

Subsection  1.  Transfers  Subject  to  Tax. — All  property  which  shall  pass,  by 
will  or  by  the  intestate  laws  of  this  State,  from  any  person  who  may  die  seized 
or  possessed  of  the  same  while  a  resident  of  this  State,  or  if  such  decedent  waa 
not  a  resident  of  this  State  at  the  time  of  death,  which  property,  or  any  part 
thereof,  shall  be  within  this  State,  or  any  interest  therein,  or  income  therefrom, 
which  shall  be  transferred  by  deed,  grant,  sale  or  gift,  made  in  contemplation  of 
the  death  of  the  grantor  or  bargainer,  or  intended  to  take  effect  in  possession 
or  enjoyment  after  such  death,  to  any  person  or  persons  or  to  any  body-politic 
or  corporate,  in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  body- 
politic  or  corporate,  shall  become  beneficially  entitled  in  possession  or  expectancy, 
to  any  property,  or  to  the  income  thereof,  shall  be  and  is  subject  to  a  tax  for 
the  general  use  of  the  Commonwealth,  upon  the  fair  cash  value  of  such  property 
in  excess  of  the  exemptions  hereinafter  granted  and  at  the  rates  hereinafter 
prescribed. 

Such  tax  shall  be  imposed  when  any  such  person  or  corporation  becomes  bene- 
ficially entitled,  in  possession  or  expectancy,  to  any  property  or  the  income  thereof, 
by  any  such  transfer  whether  made  before  or  after  passage  of  this  act,  provided 
that  property  or  estates  which  have  vested  in  such  persons  or  corporations  before 
this  act  takes  effect  shall  not  be  subject  to  the  tax. 

Subsection  2.  Primary  Rates  of  Taxation. — When  the  property  or  any  bene- 
ficial interest  therein  passes  by  any  such  transfer,  where  the  amount  of  the 
property  shall  exceed  in  value  the  exemption  hereinafter  specified  and  shall  not 
exceed  in  value  twenty- five  thousand  dollars  the  tax  hereby  imposed  shall  be: 

Where  the  person  entitled  to  the  beneficial  interest  in  any  such  property  shall 
be  one  of  Class  A  (i.  e.,  the  husband,  wife,  lineal  issue,  lineal  ancestor  of  the 
decedent,  any  child  adopted  as  such  in  conformity  with  the  laws  of  this  Common- 
wealth, any  child  to  whom  such  decedent  for  not  less  than  ten  years  prior  to 
such  transfer  stood  in  the  mutually  acknowledged  relation  of  a  parent,  provided 
such  relationship  began  at  or  before  the  child's  fifteenth  birthday  and  was  con- 
tinuous for  said  ten  years  thereafter,  or  any  lineal  issue  of  such  adopted  or 
mutually  acknowledged  child)  at  the  rate  of  1%  of  the  fair  market  value  of  such 
interest. 

Where  the  person  entitled  to  the  beneficial  interest  shall  be  one  of  Class  B 
(i.  e.,  the  brother,  sister,  descendant  of  a  brother  or  sister,  or  widow  of  a  son, 
or  the  husband  of  a  daughter  of  the  decedent)  at  the  rate  of 


KENTUCKY  925 

Where  the  person  shall  be  one  of  Class  C  (i.  e.,  the  brother  or  sister  of  the 
father  or  mother,  or  the  descendant  of  a  brother  or  sister  of  the  father  or  mother 
of  the  decedent)  at  the  rate  of  3%. 

Where  the  person  is  one  of  Class  D  (i.  e.,  the  brother  or  sister  of  the  grand- 
father or  grandmother  or  the  descendant  of  a  brother  or  sister  of  the  grandfather 
or  grandmother  of  the  decedent)  at  the  rate  of  4%. 

Where  the  person  is  one  of  Class  E  (i.  e.,  a  person  related  in  any  other  degree 
of  collateral  consanguinity  than  is  mentioned  in  one  of  the  preceding  classes,  a 
stranger  in  blood,  or  body-politic  or  corporate)  at  the  rate  of  5%. 

The  foregoing  rates  are  for  convenience  termed  primary  rates. 

Subsection  3.  Other  rates  of  taxation. 

When  the  fair  cash  value  of  such  legacy,  distributive  shares,  or  interest  exceeds 
$25,000  the  rates  of  tax  upon  such  excess  shall  be  as  follows: 

Upon  the  excess  over  $25,000  and  up  to  $50,000,  one  and  one-half  times  the 
primary  rates. 

Upon  the  excess  over  $50,000  and  up  to  $100,000,  two  times  the  primary  rates. 

Upon  the  excess  over  $100,000  and  up  to  $500,000,  two  and  one-half  times  the 
primary  rates. 

Upon  the  excess  over  $500,000,  three  times  the  primary  rates. 

Subsection  4.  Exemptions  From  Tax. — The  following  exemptions  are  allowed, 
to  be  taken  out  of  the  first  $25,000 : 

To  the  widow  of  the  decedent  and  to  each  minor  child  of  the  decedent,  $10,000. 

To  each  other  person  in  Class  A,  $5,000. 

To  each  person  in  Class  B,  $2,000. 

To  each  person  in  Class  C,  $1,500. 

To  each  person  in  Class  D,  $1,000. 

To  each  person  in  Class  E,  $500. 

Property  of  any  amount  bequeathed  or  transferred  to  any  municipal  corpora- 
tion within  this  State  for  public  purposes,  to  institutions  of  purely  public  charity, 
to  institutions  of  education  not  used  or  employed  for  gain  by  any  person  or 
corporation  and  the  income  of  which  is  devoted  solely  to  the  cause  of  education, 
to  public  libraries,  or  to  any  person  or  persons,  society,  corporation,  institution 
or  association  in  trust  for  any  of  the  purposes  above  mentioned,  shall  be  exempt 
from  such  tax. 

§  2.  When  any  grant,  gift,  devise,  legacy  or  succession  upon  which  a  tax  is 
imposed  by  section  1  of  this  article  shall  be  an  estate,  income  or  interest  for  a 
term  of  years  or  for  life,  or  determinable  upon  any  future  or  contingent  event, 
or  shall  be  a  remainder,  reversion  of  other  expectancy,  real  or  personal,  the 
entire  property  or  fund  by  which  such  estate,  income  or  interest  is  supported, 
or  of  which  it  is  a  part,  shall  be  appraised  immediately  after  the  death  of  the 
decedent,  and  the  fair  cash  value  thereof,  estimated  at  the  price  it  would  bring 
at  a  fair  voluntary  sale,  determined  in  the  manner  provided  in  section  11  of  this 
article  and  the  tax  prescribed  shall  be  immediately  due  and  payable  to  the  sheriff 
or  collector  of  the  proper  county,  and,  together  with  the  interest  thereon,  shall 
be  and  remain  a  lien  on  said  property  until  the  same  is  paid:  Provided,  that  the 
person  or  persons,  or  body  politic  or  corporate,  beneficially  interested  in  the 
property  chargeable  with  said  tax,  may  elect  not  to  pay  the  same  until  they  shall 
come  into  the  actual  possession  or  enjoyment  of  such  property,  and  in  that  case 
such  person  or  persons  or  body  politic  or  corporate,  shall  execute  a  bond  to  the 
Commonwealth  of  Kentucky,  in  a  sum  of  twice  the  amount  of  the  tax  arising 
upon  personal  estate,  with  such  sureties  as  the  county  court  may  approve,  con- 
ditioned for  the  payment  of  said  tax  and  interest  thereon,  at  such  time  or  period 
as  they  or  their  representatives  may  come  into  the  actual  possession  or  enjoyment 
of  such  property,  which  bond  shall  be  filed  in  the  office  of  the  county  clerk  of  the 
proper  county:  Provided,  further,  that  such  person  shall  make  a  full  and 
verified  return  of  such  property  to  said  court,  and  file  the  same  in  the  office  of 
the  county  clerk  within  one  year  of  the  death  of  the  decedent,  and  within  that 
period  enter  into  such  surety  and  renew  the  same  every  five  years. 

§  3.  Taxes  bequests  to  executors  in  lieu  of  commissions  at  all  in  excess  of 
reasonable  value  of  services. 

§  4.  Provides  that  all  taxes  are  due  at  death.  No  interest  for  eighteen 
months,  after  that  10%.  If  paid  within  nine  months,  discount  of  5%.  If  not 
paid  within  eighteen  months,  executor  or  administrator  is  required  to  give  a  bond. 


926  THE  STATE  STATUTES 

§  5.  In  case  of  necessary  litigation  or  unavoidable  delay  interest  may  be 
reduced  to  6%. 

§  6.  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any 
legacy  or  property  for  distribution  subject  to  the  said  tax,  shall  deduct  the  tax 
therefrom,  or  if  the  legacy  or  property  be  not  money,  he  shall  collect  the  tax 
thereon  upon  the  fair  cash  value  thereof,  from  the  legatee  or  person  entitled  to 
such  property,  and  he  shall  not  deliver,  or  be  compelled  to  deliver,  any  specific 
legacy  or  property  subject  to  tax  to  any  person  until  he  shall  have  collected  the 
tax  thereon  and  whenever  any  such  legacy  shall  be  charged  upon  or  payable  out 
of  real  estate,  the  executor,  administrator  or  trustee  shall  collect  said  tax  from 
the  distributee  thereof,  and  the  same  shall  remain  a  charge  on  such  real  estate 
until  paid ;  if,  however,  such  legacy  be  given  in  money  to  any  person  for  a  limited 
period,  the  executor,  administrator  or  trustee  shall  retain  the  tax  upon  the  whole 
amount;  but  if  it  be  not  in  money,  he  shall  make  application  to  the  county  court 
to  make  an  apportionment  if  the  case  require  it,  of  the  sum  to  be  paid  into  his 
hands  by  such  legatees,  and  for  such  further  orders  relative  thereto  as  the  case 
may  require. 

§  7.  Gives  power  of  sale  of  real  estate  to  pay  tax  as  in  case  of  debts. 

§  8.  Provides  for  tax  receipts  which  must  be  produced  by  executor  or  admin- 
istrator to  secure  final  accounting. 

§  9.  Provides  for  proportionate  refund  of  tax  where  debts  have  been  proved 
after  distribution. 

§  10.  Requires  foreign  executors  to  pay  tax  before  assigning  or  transferring 
stock  or  loans  within  the  State,  makes  the  corporation  permitting  it  without 
payment  of  the  tax  liable. 

§  11.  Provides  for  appraisal  at  fair  market  value  and  computation  of  life 
estates  and  remainders  on  mortality  tables  at  5%  basis. 

§  12.  Makes  it  a  misdemeanor  for  an  appraiser  to  accept  any  fee  or  reward. 

§  13.  Gives  the  county  court  of  the  resident  of  decedent  or  situs  of  the 
property  jurisdiction  in  transfer  tax  proceedings. 

§§  14-18.  Provide  for  the  collection  of  delinquent  taxes. 

§  19.  Repeals  former  statutes. 

NOTE:  The  only  amendments  to  the  Kentucky  statute  since  the  second  edition 
of  this  work  were  chapters  44  and  47,  Laws  of  1920,  relating  to  incidents  of 
collection. 

Prior  Statute:     L.  1906,  ch.  22. 


LOUISIANA 


927 


LOUISIANA. 

The  courts  having  held  that  the  act  of  1912  did  not  apply  to  nonresident 
property,  the  statute  was  amended  in  1918  so  as  to  impose  the  tax  upon  all 
property  of  nonresident  decedents  within  the  State,  which  includes  stock  of 
domestic  corporations. 

TABLE  OF  RATES  AND  EXEMPTIONS. 


Class  or  Relationship. 

Exemption. 

Rate  of  Tax. 

Ascendants  or  descendants.  Surviving  wife  or  hus- 
band. (Held  to  include  adopted  child.) 

If  under  $10,000 
no  tax. 

If  over  $10,000 
2%  on  all. 

Collaterals  and  strangers,  except  religious,  charitable 
and  educational  institutions  and  property  which 
hae  borne  its  just  proportion  of  taxation. 

None. 

5%  on  all. 

THE  STATUTE. 

LAWS  OF  1906,  CHAPTER  109,  AS  AMENDED  BY  CHAPTER  42,  LAWS 
1912;  CHAPTER  301,  LAWS  1914,  AND  CHAPTER  51,  LAWS  1918 

Section  1.  Prescribes  above  rates  on  all  "inheritances,  legacies  and  other 
donations  mortis  causa,"  and  provides: 

"That  the  said  tax  shall  not  be  imposed  in  the  following  eases: 

"  (a)  On  any  inheritance  legacy  or  other  donation  mortis  causa  to  or  in  favor 
of  any  ascendant  or  descendant  or  surviving  wife  or  husband  of  the  decedent 
below  $10,000  in  amount  or  value. 

"  (b)  On  any  legacy  or  other  donation  mortis  causa  to  or  in  favor  of  any 
educational,  religious  or  charitable  institution. 

"  (c)  When  the  property  inherited,  bequeathed  or  donated  shall  have  borne 
its  just  proportion  of  taxes  prior  to  the  time  of  such  bequest,  donation  or 
inheritance. 

"But  said  tax  shall  be  imposed  on  all  property  physically  in  the  State  of 
Louisiana,  whether  owned  by  a  resident  or  nonresident,  and  whether  inherited 
under  the  law  of  this  State  or  of  any  other  State  or  country,  and  said  tax  shall  be 
imposed  on  all  personal  property  owned  by  residents  of  the  State  of  Louisiana 
wherever  situate;  unless  in  any  and  all  such  cases  such  property  shall  be  included 
in  the  exemptions  set  forth  in  paragraphs  (a),  (b)  and  (c),  as  amended  by 
chapter  51,  L.  1918." 

§  2.  Makes  it  unlawful  for  beneficiary  to  be  in,  or  take  possession  without 
court  order.  In  case  he  does  he  may  not  renounce  and  remain  personally  liable 
if  he  disposes  of  the  property. 

§  3.  Eequires  executor  or  administrator  after  paying  debts  to  proceed  before 
the  court  having  jurisdiction  of  the  probate  to  have  the  tax  fixed. 

§  5.  Requires  the  executor  or  administrator  to  pay  the  tax  out  of  funds  in  his 
hands  if  sufficient,  if  not  to  collect  from  beneficiary  or  apply  to  the  court  for 
sale  of  the  property. 

§  6.  Forbids  delivery  to  beneficiary  until  tax  has  been  fixed  and  paid,  other- 
wise executor  or  administrator  and  bond  personally  liable.  May  not  have  dis- 
charge until  tax  paid  or  decree  that  none  is  due. 

§  7.  Requires  personal  representatives  to  file  inventory. 

§  8.  Requires  the  heir  to  pay  tax  on  legacy  charged  on  real  estate. 

§  9.  Or  must  sell  it  to  pay  the  tax. 

§  10.  Forbids  delivery  of  legacy  until  tax  is  paid.  If  delivered  by  heir  he  ia 
personally  liable. 

§  11.  The  tax  collector  within  six  months  may  bring  proceedings  and  have  a 
search  for  will. 

§  12.  Should  the  will  be  found  the  tax  collector  may  have  it  proved. 

§  13.  If  no  will  is  found  the  tax  collector  must  bring  proceedings  to  fix  the  tax. 

§  14.  Permits  similar  proceedings  by  beneficiary. 

§  15.  Preserves  the  rights  of  creditors  of  deceased. 


928  THE  STATE  STATUTES 

§  16.  (As  amended  in  1920)  Be  it  further  enacted,  etc.,  Each  inheritance  or 
legacy  is  indivisible,  and  must  be  accepted  or  renounced  for  the  whole;  and  the 
heir  or  legatee  shall  not  be  entitled  to  be  placed  in  possession  of  the  same,  and 
shall  be  without  right  or  capacity  to  alienate  any  part  thereof,  except  subject 
to  the  tax,  until  the  inheritance  tax  on  the  whole  shall  have  been  fixed  and  paid, 
or  until  it  shall  have  been  judicially  determined,  in  the  manner  herein  provided, 
that  no  part  of  the  same  is  subject  to  the  tax  imposed  by  this  Act;  provided 
that  when  a  possessor  under  transfer  of  title  is  subject,  he  shall  recover  from 
the  person  who  originally  sold  the  property  subject  to  the  tax,  the  amount  of  the 
tax  and  the  interest  so  required  to  be  paid  by  him,  and  all  expenses  and  costs 
attendant  thereon. 

§  17.  Be  it  further  enacted,  etc.,  "No  bank,  banker,  trust  company,  ware- 
houseman, or  other  depositary  and  no  person  or  corporation  or  partnership  having 
on  deposit  or  in  possession  or  control  any  moneys,  credits,  goods  or  other  things 
or  interest  rights  of  value  for  a  person  deceased,  or  in  which  he  had  any  interest 
and  no  corporation  the  stock  or  registered  bonds  of  which  are  owned  by  a  person 
deceased  shall  deliver  or  transfer  such  moneys,  credits,  stock,  bonds  or  other 
things  or  rights  of  value  to  any  heir  or  legatee  of  such  deceased  person,  unless 
the  tax  due  thereon  under  this  act  shall  have  been  paid,  or  unless  it  be  judicially 
determined  in  the  manner  herein  prescribed  that  no  tax  is  due  by  such  heir  or 
legatee.  Otherwise  the  person  or  corporation  so  making  delivery  or  transfer 
shall  be  liable  for  the  said  tax,  but  the  order  of  a  court  of  competent  jurisdiction, 
directing  such  delivery  or  transfer,  shall  be  full  authority  for  the  same." 

This  section  was  amended  by  chapter  51,  L.  1918,  to  require  three  days'  notice 
to  the  Comptroller  before  the  executor  or  administrator  can  secure  access  to  the 
safe  deposit  box  of  the  deceased. 

18.  "The  burden  of  proving  facts  establishing  exemption  from  the  tax 
imposed  by  this  act  is  upon  the  person  claiming  exemption. ' ' 

Chapter  51,  L.  1918,  adds  the  following  to  this  section: 

"All  donations  or  transfers  of  property  for  inadequate  consideration  within 
ninety  days  prior  to  the  death  of  the  owner  thereof  shall  be  presumed  to  have 
been  made  in  avoidance  of  the  tax  herein  levied  and,  unless  such  presumption 
shall  be  overcome  by  sufficient  evidence,  such  property  shall  be  deemed  a  part 
of  the  succession  of  the  person  who  has  so  donated  or  alienated  said  property 
for  purposes  of  computing  the  inheritance  tax  due  by  the  succession,  legatees  or 
heirs  of  such  person." 

§  19.  Gives  jurisdiction  to  the  district  court  of  the  last  domicile  of  decedent 
or  where  the  property  of  a  nonresident  is  located. 

§  20.  Provides  for  representation  of  unknown  heirs  and  nonresidents. 

§  21.  Fixes  the  fees  of  tax  collectors. 

§  22.  Provides  for  the  appointment  of  attorneys  to  collect  the  tax. 

§  23.  Be  it  further  enacted,  etc.,  In  fixing  the  value  of  any  legacy  or  donation 
mortis  causa  which  consists  in  whole  or  in  part  of  an  annuity  or  usufruct  or  right 
of  use  or  habitation,  the  court  shall  consider  the  expectancy  of  life  of  the  legatee 
or  donee  according  to  the  table  known  as  the  American  experience  table  of 
mortality,  at  6%  per  annum  compound  interest. 

§  24.  Be  it  further  enacted,  etc.,  The  taxes  hereby  levied  shall  bear  interest 
at  the  rate  of  2%  per  month,  beginning  six  months  after  the  death  of  the 
decedent;  saving  to  any  heir,  legatee  or  donee  the  right  to  stop  the  running  of 
interest  against  him  by  paying  the  amount  of  his  tax  with  accrued  interest,  or 
by  tendering  the  same  to  the  tax  collector  in  the  manner  prescribed  by  the  general 
law;  provided,  however,  that  in  cases  in  which  the  settlement  of  the  succession  is 
not  unduly  delayed,  or  in  which  the  right  of  any  party  to  receive  an  inheritance 
or  legacy  is  contested,  and  in  all  cases  in  which  the  failure  to  pay  tax  on  any 
legacy  or  inheritance  within  the  period  aforesaid  is  not  imputable  to  the  laches 
of  the  heir  or  legatee,  the  court  may,  in  its  discretion,  remit  such  interest. 

§  25.  Be  it  further  enacted,  etc.,  The  costs  of  all  proceedings  under  this  act 
shall  be  borne  by  the  mass  of  the  succession;  provided,  that  in  cases  in  which 
it  seems  to  him  equitable  to  do  so  the  judge  may  have  power  to  apportion  the 
costs  among  the  several  parties,  or  allow  any  party  to  retain  his  costs  out  of  any 
sum  found  to  be  due  by  him  for  tax  hereunder.  Provided,  the  provisions  of  this 
act  shall  affect  all  successions  not  finally  closed,  or  in  which  the  final  account  has 
not  been  filed. 

Prior  Statutes:  There  have  been  collateral  inheritance  taxes  since  1828.  Those 
of  recent  years  are  L.  1888,  ch.  109;  L.  1894,  ch.  130;  L.  1904,  ch.  45. 


LOUISIANA  929 

Constitutional  Provision. 

Article  235,  Constitution  of  1913.  The  Legislature  shall  have  power  to  levy, 
solely  for  the  support  of  the  public  schools,  a  tax  upon  all  inheritances,  legacies, 
and  donations;  provided,  no  direct  inheritance,  or  donation,  to  an  ascendant  or 
descendant,  below  ten  thousand  dollars  in  amount  or  value  shall  be  so  taxed; 
provided  further,  that  no  such  tax  shall  exceed  three  per  cent  for  direct  inherit- 
ances and  donations  to  ascendants  or  descendants,  and  ten  per  cent  for  collateral 
inheritances  and  donations  to  collaterals  or  strangers;  provided,  bequests  to 
educational,  religious,  or  charitable  institutions  shall  be  exempt  from  this  tax. 

[NOTE:    A  proposed  amendment  to  the  above  is  now  pending.] 

59 


930 


THE  STATE  STATUTES 


MAINE. 
Taxes  all  property  of  nonresidents  within  the  State. 

TABLE  OF  RATES— 1917  and  1919 


1 

Rates  of 

tax  above 

$50,000 

In  excess 

RELATIONSHIP 

Exemption 

exemption 

to 

of 

up  to 

$100,000 

$100,000 

$50,000 

Father,   mother,   son,   daughter,   husband,   wife, 

$10,000 

1% 

11% 

2% 

adopted  child  or  adoptive  parent. 

Grand  parents  and  other  lineal  ancestors  of  remoter 
degrees,  grandchildren  and  other  lineal  descend- 
ants of  remoter  degrees,  wife  or  widow  or  son,  or 
husband  or  widower  of  daughter. 

500 

1% 

11% 

2% 

Brother,  Bister,  uncle,  aunt,  nephew,  niece,  or 

500 

4% 

4i% 

5% 

cousin. 

All  other  heirs  or   legatees  except  educational, 

domestic,  charitable,  benevolent  or  religious 

institutions. 

500 

5% 

6% 

7% 

CHAPTER  69,  L.   1919,  AS  AMENDED  BY  CHAPTER   175,  L.   1921. 

Assessment  and  Collection. 

Sec.  1.  Property  subject  to  inheritance  tax;  exemption  of  personal  property  of 
non-residents.  C.  266,  §  1.  P.  L.  1917.  R.  S.  c.  8,  §  69.  1909,  c.  186.  1911, 
c.  163,  §  1.  1913,  c.  190,  §  3.  1917,  c.  266.  1919,  c.  187.  All  property  within 
the  jurisdiction  of  this  state,  and  any  interest  therein,  whether  belonging  to 
inhabitants  of  this  state  or  not,  and  whether  tangible  or  intangible,  which  shall 
pass  by  will,  by  the  intestate  laws  of  this  state,  by  allowance  of  a  judge  of  pro- 
bate to  a  widow  or  child,  by  deed,  grant,  sale  or  gift,  except  in  cases  of  a  bona 
fide  purchase  for  full  consideration  in  money  or  money's  worth,  and  except  as 
herein  otherwise  provided,  made  or  intended  to  take  effect  in  possession  or  enjoy- 
ment after  the  death  of  the  grantor,  to  any  person  in  trust  or  otherwise,  except 
to  or  for  the  use  of  any  educational,  charitable,  religious  or  benevolent  institution 
in  this  state,  shall  be  subject  to  an  inheritance  tax  for  the  use  of  the  state  as 
hereinafter  provided.  Property  which  shall  so  pass  to  or  for  the  use  of  (Class  A) 
the  husband,  wife,  lineal  ancestor,  lineal  descendant,  adopted  child,  the  adoptive 
parent,  the  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of  a  decedent, 
shall  be  subjective  to  a  tax  upon  the  value  of  such  bequest,  devise  or  distributive 
share,  in  excess  of  the  exemption  hereafter  provided,  of  one  per  cent  if  such 
value  does  not  exceed  fifty  thousand  dollars,  one  and  one-half  per  cent  if  such 
value  exceeds  fifty  thousand  dollars  and  does  not  exceed  one  hundred  thousand 
dollars,  and  two  per  cent  if  such  value  exceeds  one  hundred  thousand  dollars ; 
the  value  exempt  from  taxation  to  or  for  the  use  of  a  husband,  wife,  father, 
mother,  child,  adopted  child  or  adoptive  parent  shall  in  each  case  be  ten  thousand 
dollars,  and  the  value  exempt  from  taxation  to  or  for  the  use  of  any  other 
member  of  (Class  A)  shall  in  each  case  be  five  hundred  dollars.  Property  which 
shall  so  pass  to  or  for  the  use  of  (Class  B)  a  brother,  sister,  uncle,  aunt,  nephew, 
niece  or  cousin  of  a  decedent,  shall  be  subject  to  a  tax  upon  the  value  of  each 
bequest,  devise  or  distributive  share  in  excess  of  five  hundred  dollars,  and  the  tax 
of  this  class  shall  be  four  per  cent  of  its  value  for  the  use  of  the  state  if  such 
value  does  not  exceed  fifty  thousand  dollars,  four  and  one-half  per  cent  if  its 
value  exceeds  fifty  thousand  dollars  and  does  not  exceed  one  hundred  thousand 
dollars.  Property  which  shall  pass  to  or  for  the  use  of  any  others  than  members 
of  Class  A,  Class  B  and  the  institutions  excepted  in  the  first  sentence  of  this 
section,  shall  be  subject  to  a  tax  upon  the  value  of  each  bequest,  devise  or 
distributive  share  in  excess  of  five  hundred  dollars,  and  the  tax  of  this  class  shall 
be  five  per  cent  of  its  value  for  the  use  of  the  state  if  such  value  does  not  exceed 
fifty  thousand  dollars,  six  per  cent  of  its  value  exceeds  fifty  thousand  and  does  not 
exceed  one  hundred  thousand  dollars  and  seven  per  cent  if  its  value  exceeds  one 


MAINE  931 

hundred    thousand    dollars.      Administrators,    executors    and    trustees,    and    any 
grantees  under  such  conveyances  made  during  the  grantor's  life  shall  be  liable 
for  such  taxes,  with  interest,  until  the  same  have  been  paid. 
86  Me.  495;  88  Me.  587;  108  Me.  389. 

Sec.  2.  (As  amended  July  9,  1921.)  Whenever  property  shall  descend  by 
devise,  descent,  bequest  or  grant  to  a  person  for  life  or  for  a  term  of  years  and 
the  remainder  to  another,  except  to  or  for  the  use  of  any  educational,  charitable, 
religious  or  benevolent  institution  in  this  state,  the  value  of  the  prior  estate  shall 
be  determined  by  the  Actuaries'  Combined  Experience  Tables  at  four  per  cent 
compound  interest  and  a  tax  imposed  at  the  rate  prescribed  in  the  preceding  sec- 
tion for  the  class  to  which  the  devisee,  legatee  or  grantee  of  such  estate  belongs 
and  a  tax  shall  be  imposed  at  the  same  time  upon  the  remaining  value  of  such 
property  at  the  rate  prescribed  in  said  section  for  the  class  to  which  the  devisee, 
legatee  or  grantee  of  such  remainder  belongs,  subject  to  the  exemptions  provided 
in  the  preceding  section. 

In  every  case  in  which  it  is  impossible  to  compute  the  present  value  of  any 
interest,  by  reason  of  such  interest  being  conditioned  upon  the  happening  of  a 
contingency  or  dependent  upon  the  exercise  of  a  discretion  or  subject  to  a  power 
of  appointment  or  otherwise,  the  attorney  general  may  effect  such  settlement  of 
the  tax  as  he  shall  deem  for  the  best  interest  of  the  state  and  payment  of  the 
sum  so  agreed  upon  shall  be  a  full  satisfaction  of  such  tax.  The  executor,  admin- 
istrator, or  trustee  of  a  resident  or  non-resident  estate  coming  within  the  pro- 
visions of  this  statute  is  hereby  authorized  and  empowered  to  compromise  the 
amount  of  tax  due  to  the  state  under  this  chapter  with  the  attorney  general. 

Sec.  3.  Excess  of  reasonable  compensation  to  executors  shall  be  taxed.  R.  S. 
c.  8,  §  71.  Whenever  a  decedent  appoints  one  or  more  executors  or  trustees, 
and  in  lieu  of  their  allowance  makes  a  bequest  or  devise  of  property  to  them 
which  would  otherwise  be  liable  to  said  tax,  or  appoints  them  his  residuary 
legatees,  and  said  bequests,  devises,  or  residuary  legacies  exceed  a  reasonable 
compensation  for  their  services,  such  excess  shall  be  liable  to  such  tax,  and  the 
court  of  probate  having  jurisdiction  of  their  accounts  shall  determine  the  amount 
of  such  reasonable  compensation. 

Sec.  4.  Property  of  a  deceased  resident  of  this  state  subject  to  taxation  in 
another  state  not  liable  to  taxation  in  this  state.  1909,  c.  187,  §  7.  1913,  c.  190, 
§  1.  Property  belonging  to  a  deceased  resident  of  this  state  which  shall  be 
distributed  by  order  of  the  probate  court  subsequent  to  the  second  day  of  July, 
nineteen  hundred  and  nine,  and  which  is  not  therein  at  the  time  of  his  death, 
shall  not  be  taxable  under  the  provisions  of  this  chapter  if  legally  subject  in 
another  state  or  country  to  a  tax  of  like  character  and  amount  to  that  imposed 
by  section  one,  and  if  such  tax  be  actually  paid  or  guaranteed  or  secured  in 
accordance  with  the  law  of  such  other  state  or  country;  if  legally  subject  in 
another  state  or  country  to  a  tax  of  like  character,  but  of  less  amount  than  that 
imposed  by  section  one  and  such  tax  be  actually  paid,  guaranteed  or  secured  as 
aforesaid,  such  property  shall  be  taxable  under  the  provisions  of  section  one  to 
the  extent  of  the  difference  between  the  tax  thus  actually  paid,  guaranteed  or 
secured,  and  the  amount  for  which  such  property  would  otherwise  be  liable  under 
this  chapter. 

Sec.  5.  Courts  of  probate  shall  have  jursidiction  to  determine  all  questions 
relating  to  tax.  R.  S.  c.  8,  §  83.  1909,  c.  187,  §  5.  The  court  of  probate, 
having  either  principal  or  ancillary  jurisdiction  of  the  settlement  of  the  estate 
of  the  decedent,  shall  have  jurisdiction  to  hear  and  determine  all  questions  in 
relation  to  the  taxes  imposed  by  this  chapter  that  may  arise  hereunder  affecting 
any  devise,  legacy  or  inheritance,  subject  to  appeal  as  in  other  cases,  and  the 
attorney-general  shall  represent  the  interests  of  the  state  in  any  such  proceedings. 
The  judge  of  probate,  having  jurisdiction  as  aforesaid,  shall  fix  the  time  and 
place  for  hearing  and  determining  such  questions  and  shall  give  public  notice 
thereof  and  personal  notice  to  the  executor,  administrator  or  trustee.  Appeals  in 
behalf  of  the  estate  shall  be  taken  in  the  name  of  the  executor,  administrator  or 
trustee  and  service  upon  the  attorney- general  shall  be  sufficient.  When  appeals 
are  taken  by  the  state,  service  shall  be  made  upon  the  executor,  administrator  or 
trustee. 

86  Me.  507. 


932  THE  STATE  STATUTES 

Sec.  6.  Registers  of  probate  shall  annually  deliver  to  attorney-general  list  of 
estates  appearing  to  be  liable  to  inheritance  tax;  duties  of  attorney-general; 
costs.  1905,  c.  124.  1909,  c.  187,  §  1.  The  registers  of  probate  in  the  several 
counties  shall  deliver  to  the  attorney-general,  on  or  before  the  first  day  of  June 
in  each  year,  a  list  of  all  estates  in  which  it  appears  from  the  record  'that  some 
part  of  said  estate  may  be  liable  to  an  inheritance  tax,  and  in  which  a  will  has 
been  offered  for  probate  or  administration  granted  for  more  than  one  year  prior 
to  the  time  of  filing  such  list,  and  in  which  no  inheritance  tax  has  been  assessed 
or  paid.  Said  list  shall  contain  the  name  of  the  deceased,  the  date  of  the  adminis- 
tration granted,  and  the  name  and  residence  of  the  administrator  or  executor. 
The  attorney-general  shall  promptly  investigate  all  cases  so  reported,  by  notifying 
the  executor,  administrator,  trustee,  heir  or  devisee,  and  in  such  other  manner  as 
he  may  determine,  and  if  it  appears  to  him  that  in  any  such  case  an  inheritance 
tax  is  due  and  has  not  been  paid  to  the  state,  he  shall,  unless  said  tax  is  paid, 
within  thirty  days  after  notice  from  him  to  the  executor,  administrator,  trustee, 
heir  or  devisee  that  the  same  is  due,  cite  the  executor,  administrator,  trustee,  heir 
or  devisee,  whose  duty  it  is  to  pay  said  tax,  before  the  proper  probate  court  in 
such  manner  as  is  provided  for  the  citation  of  trust  officers  in  probate  proceed- 
ings, and  shall  take  all  other  action  necessary  to  secure  the  payment  of  said  tax. 
In  such  proceedings  the  attorney-general  shall  recover  costs  to  be  fixed  and 
determined  by  the  judge  of  probate  in  his  discretion,  which  costs  may  be  retained 
by  said  attorney-general  for  his  own  use  and  shall  be  additional  to  any  salary 
allowed  to  him  by  law. 

108  Me.  389. 

Sec.  7.  Copy  of  inventory  of  any  estate  subject  to  tax,  shall  be  furnished 
attorney-general.  R.  S.  c.  8,  §  79.  1909,  c.  187,  §  3.  A  copy  of  the  inventory 
of  every  estate,  any  part  of  which  may  be  subject  to  a  tax  under  the  provisions 
of  section  one,  or  if  the  same  can  be  conveniently  separated,  then  a  copy  of  such 
part  of  such  inventory  with  the  appraisal  thereof,  shall  be  sent  by  mail  by  the 
register  of  the  court  of  probate  in  which  such  inventory  is  filed,  to  the  attorney- 
general  within  ten  days  after  the  same  is  filed.  The  fees  for  such  copy  shall  be 
paid  by  the  executor,  administrator  or  trustee,  and  allowed  in  his  account. 

Sec.  8.  Valuation  of  property.    R.  S.  c.  8,  §  82.     1909,  c.  187,  §  4.     The  value 

of  such  property  as  may  be  subject  to  said  tax  shall  be  its  actual  market  value 
as  found  by  the  judge  of  probate,  after  public  notice  or  personal  notice  to  the 
attorney-general  and  all  persons  interested  in  the  succession  to  said  property,  or 
the  attorney-general  or  any  of  said  persons  interested  may  apply  to  the  judge  of 
probate  having  jurisdiction  of  the  estate  and  on  such  application  the  judge  shall 
appoint  three  disinterested  persons,  who,  being  first  sworn,  shall  view  and  appraise 
such  property  at  its  actual  market  value  for  the  purposes  of  said  tax,  and  shall 
make  return  thereof  to  said  probate  court,  which  return  may  be  accepted  by  said 
court  in  the  same  manner  as  the  original  inventory  of  such  estate  is  accepted, 
and  if  so  accepted  it  shall  be  binding  upon  the  person  by  whom  such  tax  is  to  be 
paid,  and  upon  the  state.  And  the  fees  of  the  appraisers  shall  be  fixed  by  the 
judge  of  probate  and  paid  by  the  executor,  administrator  or  trustee. 
85  Me.  507. 

Sec.  9.  When  and  to  whom  taxes  shall  be  paid;  duty  of  personal  representative 
of  deceased;  register  of  probate  shall  send  copy  of  petition  to  attorney-general. 
R.  S.  c.  8,  §  72.  1909,  c.  187,  §  2.  1911,  c.  163,  §  2.  All  taxes  imposed  by  section 
one  upon  the  estates  of  deceased  residents  of  this  state  shall  be  payable  to  the 
treasurer  of  state,  and  all  taxes  imposed  by  said  section  one  upon  the  estates  of 
non-resident  decedents,  to  the  attorney-general,  by  the  executors,  administrators 
or  trustees  at  the  expiration  of  two  years  after  the  granting  of  letters  testa- 
mentary or  of  administration;  but  if  legacies  or  distributive  shares  are  paid 
within  two  years,  the  tax  thereon  shall  be  payable  at  the  same  time;  and  if  the 
same  are  not  so  paid,  interest  at  the  rate  of  six  per  cent  a  year  shall  be  charged 
and  collected  from  the  time  the  same  became  payable;  but  no  such  tax  upon 
estates  of  residents  or  inhabitants  of  this  state  shall  be  accepted  except  upon 
presentation  of  a  certificate  from  a  probate  court  showing  the  amount  of  such 
tax  due.  It  shall  be  the  duty  of  the  personal  representative  of  said  deceased  to 
petition  the  probate  court  having  jurisdiction  to  assess  such  taxes  before  the 
payment  of  any  such  legacies  or  distributive  shares,  and  before  the  expiration  of 
two  years  after  the  granting  of  letters  aforesaid.  The  register  of  probate  shall 


MAINE  933 

send  by  mail,  a  copy  of  such  petition  to  the  attorney-general  at  least  seven  days 
before  the  hearing  thereon  unless  the  attorney-general  in  writing  waives  the  same. 

Sec.  10.  Petition  of  attorney-general;   lien  on  real  estate.     1911,  c.   163,  §  2. 

If  no  such  petition  is  filed  within  the  time  limited,  the  attorney-general  may  file 
a  similar  petition,  of  which,  unless  notice  is  waived,  at  least  fourteen  days' 
notice  shall  be  given  such  personal  representative  or  his  agent.  In  either  case 
the  attorney-general  may  appear  and  be  heard  upon  the  assessment  of  such  tax 
and  an  appeal  may  be  had  from  the  decree  of  the  judge  of  probate  by  either 
party.  Real  estate  of  which  the  decedent  died,  seized  or  possessed,  subject  to 
taxes  as  aforesaid,  shall  be  charged  with  a  lien  for  all  such  taxes  and  interest, 
which  lien  may  be  discharged  by  the  payment  of  all  taxes  due  and  to  become  due 
upon  said  real  estate  or  separate  parcel  thereof,  or  by  an  order  or  decree  of  the 
probate  court  discharging  said  lien,  granted  upon  the  deposit  with  said  court  of 
a  sum  of  money  or  a  bond,  sufficient  to  secure  to  the  state  the  payment  of  any 
tax  due  or  to  become  due  on  said  real  estate.  Orders  or  decrees  discharging  such 
lien  may  be  recorded  in  the  registry  of  deeds  in  the  county  where  said  real  estate 
is  located. 

Sec.  11.  Failure  to  pay  tax  renders  administrator  liable;  action  of  debt  may 
be  maintained  for  tax.  R.  S.  c.  8,  §  73.  After  failure  to  pay  such  tax,  as 
provided  in  section  nine,  such  an  administrator,  executor  or  trustee  is  liable  to 
the  state  on  his  administration  bond  for  such  tax  and  interest,  and  an  action  shall 
lie  thereon  without  the  authority  of  the  judge  of  probate;  or  an  action  of  debt 
may  be  maintained  in  the  name  of  the  state  against  any  such  administrator, 
executor  or  trustee,  or  any  such  grantee,  for  such  tax  and  interest.  But  if  such 
administrator,  executor  or  trustee,  after  being  duly  cited  therefor,  refuses  or 
neglects  to  i^turn  his  inventory  or  to  settle  an  account,  by  reason  whereof  the 
judge  of  probate  cannot  determine  the  amount  of  such  tax,  such  administrator, 
executor  or  trustee  shall  be  liable  to  the  state  on  his  administration  bond  for  all 
damages  occasioned  thereby. 

Sec.  12.  Proceedings  when  estate  liable  to  pay  inheritance  tax  is  not  before 
court.  1905,  c.  124.  1909,  c.  187,  §  1.  If,  upon  the  decease  of  a  person  leaving 
an  estate  liable  to  pay  an  inheritance  tax,  a  will  disposing  of  such  estate  is  not 
offered  for  probate,  or  an  application  for  administration  made  within  six  months 
after  such  decease,  the  proper  probate  court  upon  application  by  the  attorney- 
general,  shall  appoint  an  administrator  for  such  estate;  whenever  such  a  ease  is 
brought  to  the  attention  of  the  attorney-general,  he  shall  petition  for  administra- 
tion on  such  estate  and  the  judge  may  appoint  such  attorney-general  or  other 
suitable  person  as  such  administrator;  the  attorney-general  shall  be  entitled  to 
costs  as  in  other  probate  proceedings. 

108  Me.  389. 

Sec.  13.  Proceedings  for  recovery  of  taxes  by  attorney-general.  1911,  c.  163, 
§  4.  The  attorney-general  shall  promptly  commence  proceedings  for  the  recovery 
of  any  of  said  taxes  within  six  months  after  the  same  become  payable;  and  shall 
commence  the  same  when  the  judge  of  a  probate  court  certifies  to  him  that  the 
final  account  of  an  executor,  administrator  or  trustee  has  been  filed  in  such  court, 
and  that  the  settlement  of  the  estate  is  delayed  because  of  the  non-payment  of 
said  tax.  The  judge  of  the  probate  court  shall  so  certify  upon  the  application  of 
any  heir,  legatee  or  other  person  interested  therein,  and  may  extend  the  time  of 
payment  of  said  tax  whenever  the  circumstances  of  the  case  require.  All  moneys 
received  by  the  attorney-general  as  taxes  collected  under  the  provisions  of  this 
chapter  shall  be  by  him  forthwith  paid  to  the  treasurer  of  state. 

Duties  of  Executors  and  Administrators. 

Sec.  14.  Property  shall  not  be  delivered  to  legatee  until  tax  is  paid.  R.  S. 
c.  8,  §  74.  Any  administrator,  executor  or  trustee,  having  in  charge  or  trust 
any  property  subject  to  such  tax,  shall  deduct  the  tax  therefrom,  or  shall  collect 
the  tax  thereon,  and  interest  chargeable  under  section  nine  from  the  legatee  or 
person  entitled  to  said  property,  and  he  shall  not  deliver  any  specific  legacy  or 
property  subject  to  said  tax  to  any  person  until  he  has  collected  the  tax  thereon. 

Sec.  15.  All  taxes  payable  upon  real  estate  shall  remain  a  charge  thereon 
until  paid.  R.  S.  c.  8,  §  75.  Whenever  any  legacies  subject  to  said  tax  shall 
be  charged  upon  or  payable  out  of  any  real  estate,  the  heir  or  devisee,  before 


934  THE  STATE  STATUTES 

paying  the  same,  shall  deduct  said  tax  therefrom  and  pay  it  to  the  executor, 
administrator  or  trustee,  and  the  same  shall  remain  a  charge  upon  said  real  estate 
until  it  is  paid;  and  payment  thereof  shall  be  enforced  by  the  executor,  adminis- 
trator or  trustee,  in  the  same  manner  as  the  payment  of  the  legacy  itself  could  be 
enforced. 

Sec.  16.  When  legacy  is  for  a  limited  period,  executor  shall  retain  tax  on 
whole  amount.  R.  S.  c.  8,  §  76.  If  any  such  legacy  be  given  in  money  to  any 
person  for  a  limited  period,  such  administrator,  executor  or  trustee  shall  retain 
the  tax  on  the  whole  amount;  but  if  it  be  not  in  money,  he  shall  make  an  appli- 
cation to  the  judge  of  probate  having  jurisdiction  of  his  accounts  to  make  an 
apportionment,  if  the  case  requires  it,  of  the  sum  to  be  paid  into  his  hands  by 
such  legatee  on  account  of  said  tax  and  for  such  further  order  as  the  case  may 
require. 

Sec.  17.  Sale  of  real  estate  to  pay  tax.  R.  S.  c.  8,  §  77.  Administrators, 
executors  and  trustees  may  sell  so  much  of  the  estate  of  the  deceased  as  will 
enable  them  to  pay  said  tax  in  the  same  manner  as  they  may  be  empowered  to  do 
for  the  payment  of  his  debts. 

See  c.  76,  §  1. 

Sec.  18.  Notice  to  attorney-general  of  descent  of  real  estate.  R.  S.  c.  8,  §  80. 
Whenever  any  of  the  real  estate  of  a  decedent  shall  so  pass  to  another  person  as 
to  become  subject  to  said  tax,  the  executor,  administrator  or  trustee  of  the 
decedent  shall  inform  the  attorney-general  thereof  within  six  months  after  he 
has  assumed  the  duties  of  his  trust,  or  if  the  fact  is  not  known  to  him  within 
that  time,  then  within  one  month  after  it  does  become  so  known  to  him. 

Sec.  19.  Whenever  any  property  shall  be  refunded  by  legatee,  tax  shall  be 
paid  back.  R.  S.  c.  8,  §  81.  Whenever  for  any  reason  the  devisee,  legatee  or 
heir  who  has  paid  any  such  tax  shall  refund  any  portion  of  the  property  on  which 
it  was  paid,  or  it  shall  be  judicially  determined  that  the  whole  or  any  part  of 
such  tax  ought  not  to  have  been  paid,  said  tax,  or  the  due  proportional  part  of 
said  tax,  shall  be  paid  back  to  him  by  the  executor,  administrator  or  trustee. 

Sec.  20.  Penalty  for  neglect  or  refusal  to  file  inventory  of  estate.  1909,  c.  187, 
§  7.  1911,  c.  163,  §  3.  If  any  executor,  administrator  or  trustee  neglects  or 
refuses  to  file  an  inventory  of  the  estate  under  his  charge  within  three  months 
from  the  date  of  the  warrant  of  appraisal,  unless  such  time  be  extended  by  the 
judge  of  probate  and  if  he  neglects  or  refuses  to  file  such  inventory  within  sixty 
days  thereafter,  he  shall  be  liable  to  a  penalty  of  not  more  than  five  hundred 
dollars  which  shall  be  recovered  in  an  action  of  debt  by  the  attorney-general  for 
the  use  of  the  state,  and  the  register  of  probate  shall  notify  the  attorney-general 
of  the  failure  of  any  executor,  administrator  or  trustee  to  file  an  inventory  as 
above  provided. 

Sec.  21.  No  final  settlement  of  accounts  shall  be  allowed,  until  all  taxes  have 
been  paid.  R.  S.  c.  8,  §  78.  No  final  settlement  of  the  account  of  any  executor, 
administrator  or  trustee  shall  be  accepted  or  allowed  by  any  judge  of  probate 
unless  it  shall  show,  on  oath  or  affirmation  of  the  accountant,  and  the  judge  of 
said  court  shall  find,  that  all  taxes,  imposed  by  the  provisions  of  section  one, 
upon  any  property  or  interest  therein  belonging  to  the  estate  to  be  settled  by  said 
account,  shall  have  been  paid,  and  the  receipt  of  the  treasurer  of  state  for  such 
tax  shall  be  the  proper  voucher  for  such  payment. 

Estates  of  Non-Residents. 

Sec.  22.  Property  of  non-resident  decedent,  how  taxed;  when  there  is  more 
than  one  heir,  proportion  to  be  received  by  each;  exemption.  C.  266,  §  2,  P.  L. 
1917.  1909,  c.  187,  §  7.  1913,  c.  190,  §  1.  1917,  c.  266,  §  2.  Where  a  non-resident 
decedent  has  more  than  one  heir  or  his  property  is  divided  among  more  than  one 
legatee,  each  heir,  or  in  case  of  a  will,  each  legatee  shall  be  held  to  receive  such 
proportion  of  the  property  within  the  jurisdiction  of  this  state  as  the  amount  of 
all  property  received  by  him  as  such  heir  or  legatee  bears  to  all  the  property  of 
which  said  decedent  died  possessed.  The  amount  of  property  of  the  estate  of  a 
non-resident  which  shall  be  exempt  from  the  payment  of  an  inheritance  tax 
under  section  one  shall  be  only  such  proportion  of  the  whole  exempted  amount 
which  is  provided  therein  for  the  estates  of  resident  decedents,  as  the  amount 


MAINE  935 

of  the  estate  of  the  non-resident  actually  or  constructively  in  this  state  bears  to 
the  total  value  of  the  non-resident  decedent's  estate  wherever  situated. 

Sec.  23.  When  estate  consists  of  interstate  railroad,  telegraph  or  telephone 
shares.  1911,  c.  163,  §  4.  When  the  personal  estate  passing  from  any  person, 
not  an  inhabitant  or  resident  of  this  state,  as  provided  in  section  one,  shall  con- 
sist in  whole  or  in  part  of  shares  of  any  railroad,  or  street  railroad  company  or 
telegraph  or  telephone  company  incorporated  under  the  laws  of  this  state  and 
also  of  some  other  state  or  country,  so  much  only  of  each  share  as  is  proportional 
to  the  part  of  such  company's  lines  lying  within  this  state  shall  be  considered  as 
property  of  such  person  within  the  jurisdiction  of  this  state  for  the  purposes  of 
this  chapter. 

Chap.  69,  Sec.  24,  repealed  by  P.  L.  Chap.  266,  1917. 

Sec.  25.  Transfer  of  bank  stock,  or  of  corporation  stock  of  deceased  non-resi- 
dents subject  to  tax;  when  banks  are  liable  for  tax.  1911,  c.  163,  §  4.  Subject 
to  the  provisions  of  the  preceding  section  if  a  foreign  executor,  administrator  or 
trustee  assigns  or  transfers  any  stock  in  any  national  bank  located  in  this  state 
or  in  any  corporation  organized  under  the  laws  of  this  state,  owned  by  a  deceased 
non-resident  at  the  date  of  his  death  and  liable  to  a  tax  under  the  provisions  of 
this  chapter,  the  tax  shall  be  paid  to  the  attorney-general  at  the  time  of  such 
assignment  or  transfer;  and  if  it  is  not  paid  when  due,  such  executor,  adminis- 
trator or  trustee  shall  be  personally  liable  therefor  until  it  is  paid.  Subject  to 
the  provisions  of  said  section  a  bank  located  in  this  state  or  a  corporation 
organized  under  the  laws  of  this  state  which  shall  record  a  transfer  of  any  share 
of  its  stock  made  by  a  foreign  executor,  administrator  or  trustee,  or  issue  a  new 
certificate  for  a  share  of  its  stock  at  the  instance  of  a  foreign  executor,  adminis- 
trator or  trustee  before  all  taxes  imposed  thereon  by  the  provisions  of  this  chapter 
have  been  paid,  shall  be  liable  for  such  tax  in  an  action  of  debt  brought  by  the 
attorney-general. 

Sec.  26.  Transfer  of  securities  or  assets  of  estate  of  non-resident.  1911,  c.  163, 
§  4.  Subject  to  th'e  provisions  of  section  twenty-four  no  person  or  corporation 
shall  deliver  or  transfer  any  securities  or  assets  belonging  to  the  estate  of  a  non- 
resident decedent  to  anyone  unless  authority  to  receive  the  same  shall  have  been 
given  by  a  probate  court  of  this  state,  upon  satisfactory  evidence  that  all  inherit- 
ance taxes  provided  for  by  this  chapter  have  been  paid,  guaranteed  or  secured  as 
hereinbefore  provided.  Any  person  or  corporation  that  delivers  or  transfers 
any  securities  or  assets  in  violation  of  the  provisions  of  this  section  shall  be  liable 
for  such  tax  in  an  action  of  debt  brought  by  the  attorney-general. 

General   Provisions. 

Sec.  27.  Duties  of  town  and  city  clerks.     1911,  c.  163,  §  4.     1913,  c.  190,  §  2. 

Clerks  of  cities  and  towns  shall  report  to  the  treasurer  of  state  the  names  of  all 
persons  dying  within  their  respective  municipalities  who  in  the  judgment  of  said 
clerks  leave  estates  the  value  whereof  exceeds  five  hundred  dollars,  together  with 
the  names  of  husband,  wife  and  next  of  kin  so  far  as  known  to  him;  such  report 
shall  be  mailed  to  the  treasurer  of  state  within  ten  days  of  the  time  when  the 
certificate  of  death  is  filed  with  such  clerk.  The  treasurer  of  state  shall  prepare 
and  furnish  blanks  for  such  returns. 

Sec.  28.  Fees  of  judges  and  registers  of  probate.  R.  S.  c.  8,  §  84.  The  fees 
of  judges  or  registers  of  probate  for  the  duties  required  of  them  by  this  chapter 
shall  be,  for  each  order,  appointment,  decree,  judgment,  or  approval  of  appraisal 
or  report  required  hereunder,  fifty  cents,  and  for  copies  of  records,  the  fees  that 
are  now  allowed  by  law  for  the  same.  And  the  administrators,  executors,  trustees 
or  other  persons  paying  said  tax  shall  be  entitled  to  deduct  the  amount  of  all 
such  fees  paid  to  the  judge  or  register  of  probate  from  the  amount  of  said  tax  to 
be  paid  to  the  treasurer  of  state. 

Sec.  29.  Construction  of  words.     R.  S.  c.  9,  §  85.     1909,  c.  187,  §  6.     In  the 

foregoing  sections  relating  to  inheritances  the  word  "person"  shall  be  construed 
to  include  bodies  corporate  as  well  as  natural  persons;  the  word  "property" 
shall  be  construed  to  include  both  real  and  personal  estate,  and  any  form  of 
interest  therein  whatsoever,  including  annuities. 


936 


THE  STATE  STATUTES 


MARYLAND. 

Taxes  collaterals  and  strangers  only. 

Taxes  personal  property  within  the  State  of  nonresident  collaterals  and 
strangers. 

Does  not  tax  transfers  of  nonresident  stock  in  domestic  corporations  except  as 
to  the  commissions  of  executors  and  administrators  thereon. 

TABLE  OF  RATES 


CLASS  OB  RELATIONSHIP 

Exemption 

Rates 

Father,  mother, 

husband,  wife,  children  and  lineal  descendants  

All 

No  tnx 

All  others  

$500 

If  over  $500 

5%  on  all 

PUBLIC  GENERAL  LAWS  OF  MARYLAND,  1904,  ARTICLE  81,  SECTION  117. 
AS  AMENDED  BY  LAWS  1908,  CHAPTER  695. 

Section  117.  All  estates,  real,  personal  and  mixed,  money,  public  and  private 
securities  for  money  of  every  kind  passing  from  any  person  who  may  die  seized 
and  possessed  thereof,  being  in  this  State,  or  any  part  of  such  estate  or  estates, 
money  or  securities,  or  interest  therein,  transferred  by  deed,  will,  grant,  bargain, 
gift  or  sale,  made  or  intended  to  take  effect  in  possession  after  the  death  of  the 
grantor,  bargainer,  devisor  or  donor,  to  any  person  or  persons,  bodies  politic  or 
corporate,  in  trust  or  otherwise,  other  than  to  or.  for  the  use  of  the  father,  mother, 
husband,  wife,  children  and  lineal  descendants  of  the  grantor,  bargainer  or 
testator,  donor  or  intestate,  shall  be  subject  to  a  tax  of  five  per  centum  in  every 
hundred  dollars  of  the  clear  value  of  such  estates,  money  or  securities;  and  all 
executors  and  administrators  shall  only  be  discharged  from  liability  for  the 
amount  of  such  tax,  the  payment  of  which  they  be  charged  with,  by  paying  the 
same  for  the  use  in  this  State,  as  hereinafter  directed ;  provided,  that  no  estate 
which  may  be  valued  at  a  less  sum  than  five  hundred  dollars  shall  be  subject  to 
the  tax  imposed  by  this  section. 

§  118.  Requires  executors  and  administrators  to  pay  the  tax. 

§  119.  Gives  them  power  of  sale. 

§  120.  Tax  must  be  paid  within  thirteen  months  or  executor  or  administrator 
forfeits  his  commissions. 

§  121.  The  same  persons  who  appraise  the  personal  property  must  also  value 
the  real  estate. 

§  122.  Prescribes  oath  of  appraisers. 

§  123.  Where  property  is  in  two  counties  permits  appointment  of  additional 
appraiser. 

§§  124  to  129.  Prescribe  duties  of  appraisers,  make  the  tax  a  lien  on  real 
estate  for  four  years  and  provide  for  its  sale  if  necessary  to  pay  the  tax. 

§  130.  Whenever  any  estate,  real,  personal  or  mixed,  of  a  decedent  shall  be 
subject  to  the  tax  mentioned  in  the  thirteen  preceding  sections,  and  there  be  a 
life  estate  or  interest  for  a  term  of  years,  or  a  contingent  interest,  given  to  one 
party  and  the  remainder  or  reversionary  interest,  to  another  party,  the  orphans' 
court  of  the  county  or  city  in  which  administration  is  granted  shall  determine  in 
its  discretion  and  at  such  time  as  it  shall  think  proper  what  proportion  the  party 
entitled  to  said  life  estate,  or  interest  for  a  term  of  years,  or  contingent  interest, 
shall  pay  of  said  tax,  and  the  judgment  of  said  court  shall  be  final  and  conclusive, 
and  the  party  entitled  to  said  life  estate  or  interest  for  a  term  of  years,  or  other 
contingent  interest,  shall  within  thirty  days  after  the  date  of  such  determination 
pay  to  the  register  of  wills  his  proportion  of  said  tax;  and  thereafter  the  said 
court  shall  from  time  to  time  after  the  determination  of  the  preceding  estate 
and  as  the  remainder  of  said  estate  shall  vest  in  the  party  or  parties  entitled  in 
remainder  or  reversion  determine  in  its  discretion  what  proportion  of  the  residue 
of  said  tax  shall  be  paid  by  the  party  or  parties  in  whom  the  estate  shall  so  vest ; 


MARYLAND  937 

and  the  judgment  of  the  said  court  shall  be  final  and  each  of  the  parties  succes- 
sively entitled  in  remainder  or  reversion  shall  pay  his  proportion  of  said  tax  to 
the  register  of  wills  within  thirty  days  after  the  date  of  such  determination  as 
to  him;  and  the  proportion  of  the  tax  so  determined  to  be  paid  by  the  party 
entitled  to  the  life  interest  or  estate  shall  be  and  remain  a  lien  upon  such  interest 
or  estate  for  the  period  of  four  years  after  the  date  of  the  death  of  the  decedent, 
who  shall  have  died  seized  and  possessed  of  the  property;  and  the  proportion  of 
the  tax  so  determined  to  be  paid  by  the  persons  respectively  entitled  to  the 
remainder,  or  reversionary  interest,  shall  be  a  lien  on  such  interest  for  the  period 
of  four  years  from  the  date  of  which  such  interest  shall  vest  in  possession. 

§  131.  Whenever  an  interest  in  any  estate,  real,  personal  or  mixed,  less  than  an 
absolute  interest,  shall  be  devised  or  bequeathed  to  or  for  the  use  and  benefit  of 
any  person  or  object  not  exempted  from  the  tax  under  section  117,  then  only  such 
interest  so  devised  or  bequeathed  shall  be  liable  for  said  tax;  and  it  shall  be  the 
duty  of  the  orphans'  court  of  the  county  or  city  in  which  administration  is 
granted,  or  any  other  court  assuming  jurisdiction  over  such  administration,  to 
determine  as  soon  after  administration  is  granted  as  possible,  on  application  of 
such  person  or  object,  the  value  of  such  interest  liable  for  said  tax,  by  deducting 
from  the  whole  value  of  the  estate  so  much  thereof  as  shall  be  the  value  of  the 
interest  therein,  of  any  person  who  under  said  section  117,  is  exempt  from  said 
tax,  and  the  residue  thereof  shall  be  the  value  of  said  interest  upon  which  said 
tax  is  payable;  and  said  tax  so  ascertained  shall  be  paid  by  such  person  or  object 
within  ninety  days  from  such  ascertainment,  with  interest  thereon  at  6%  per 
annum,  after  the  expiration  of  twelve  (12)  months  from  the  date  of  the  death  of 
the  decedent,  under  whose  will  or  by  whose  intestacy  said  interest  is  acquired,  if 
said  tax  has  not  sooner  been  paid,  or  within  ninety  days  from  the  time  that  it 
shall  be  ascertained  that  such  person  or  object  shall  be  entitled  to  any  such 
interest  in  any  estate;  but  such  tax  shall  bear  interest  at  the  rate  of  6%  per 
annum  from  the  expiration  of  twelve  (12)  months  from  said  death;  but  if  such 
person  or  object  shall  fail  to  pay  said  tax,  as  above  provided,  then  such  person  or 
object  shall  at  the  time  when  he,  she  or  it  comes  into  possession  of  such  estate,  pay 
a  tax  as  provided  for  in  said  section  117,  on  the  whole  value  thereof. 

§  132.  Provides  for  sale  of  property  within  thirty  days  after  decree  if  tax  is 
not  paid. 

§  133.  Makes  bond  of  executors  and  administrators  liable  for  tax. 

§  134.  Provides  that  letters  of  delinquent  executor  or  administrator  may  be 
revoked  and  his  bondsmen  held  liable. 

§§  136  to  141.  Provide  for  the  collection  of  delinquent  taxes,  reports,  receipts 
and  fees. 

Prior  Statutes:  Maryland  has  taxed  collateral  inheritance  since  1844.  Those 
prior  to  1904  for  the  last  twenty  years  are  as  follows :  L.  1890,  ch.  249 ;  L.  1892, 
ch.  473  and  564;  L.  1894,  ch.  493. 

TRANSFERS  OF  STOCK  IN  MARYLAND  CORPORATIONS. 

The  Attorney-General  of  Maryland  has  courteously  furnished  the  following 
codification  of  the  law  of  that  State  as  to  the  transfer  of  stock  of  non-resident 
decedents  in  Maryland  corporations: 

ANNOTATED  CODE  OF  MARYLAND  (BAGBY'S  EDITION),  VOL.  11   (1912), 

ARTICLE  93. 

§  77.  If  any  person  being  a  resident  of  any  other  state,  district  or  territory 
of  the  United  States,  or  of  any  foreign  country,  shall  die  possessed  of  or  entitled 
to  any  of  the  public  stocks  or  debts  created  or  issued  upon  the  credit  of  this 
State,  or  of  the  stock  or  debt  created  or  issued  upon  the  credit  of  the  City  of 
Baltimore,  or  of  the  capital  stock  of  any  joint  stock  company  incorporated  by 
the  authority  of  this  State,  or  of  any  national  bank  in  this  State,  his  right  or 
title  thereto  shall  devolve  on  his  executor  or  administrator,  duly  constituted  and 
appointed  as  such  by  the  law  of  the  state,  district,  territory  or  country  wherein 
he  may  have  resided  at  the  time  of  his  death,  in  the  same  manner  as  if  the  said 
executor  or  administrator  had  been  duly  constituted  and  appointed  as  such  by  the 
proper  authority  in  this  State. 

§  78.  Nothing  contained  in  the  preceding  section  shall  deprive  the  courts  of 
this  State  of  their  authority  to  grant  administration  on  the  estate  of  such 


938  THE  STATE  STATUTES 

deceased  person,  and  the  right  of  a  person  so  appointed  shall  be  preferred  to 
the  right  of  the  foreign  executor  or  administrator ;  provided,  notice  of  the  claim 
of  the  domestic  executor  or  administrator  to  such  stock  be  given  to  the  proper 
officer  having  charge  of  the  stock  book  wherein  such  stock  is  entered,  and  having 
authority  to  make  or  allow  a  transfer  thereof  before  any  sale  or  transfer  thereof 
has  actually  been  made  by  the  foreign  executor  or  administrator;  and  provided 
further,  that  administration  shall  not  be  granted  to  any  one  in  this  State,  except 
the  next  of  kin,  residuary  legatee,  or  a  creditor  who  shall  make  oath  to  and 
exhibit  the  vouchers  of  his  claim  before  obtaining  administration. 

§  79.  No  such  foreign  executor  or  administrator  shall  be  authorized  to  transfer 
any  such  stock  until  after  he  shall  have  given  at  least  one  month's  notice  by 
advertisement  once  a  week  for  four  weeks  in  one  daily  newspaper  of  the  City  of 
Baltimore,  stating  therein  the  death  of  his  testator  or  intestate  and  the  amount 
and  description  of  stock  intended  to  be  transferred. 

[NOTE:  This  section  is  as  amended  by  the  act  of  1912,  ch.  148,  and  is  codified 
in  Vol.  Ill  (1914)  of  the  Code.] 

§  80.  The  provisions  of  this  code  imposing  a  tax  on  commissions  of  domestic 
executors  and  administrators  shall  extend  to  such  foreign  executors  or  admin- 
istrators; and  the  Orphans'  Court  of  the  county  or  city  in  which  the  stock  trans- 
ferred is  situated  shall  fix  the  commissions  of  such  foreign  executor  or  admin- 
istrator, who  shall  thereupon  pay  the  tax  thereon  to  the  register  of  such  county 
or  city.  Any  officer  of  the  State  of  Maryland  or  of  the  City  of  Baltimore,  and 
any  corporation  incorporated  under  the  laws  of  this  State,  and  any  national  bank 
in  this  State,  who  or  which  transfers  or  permits  to  be  transferred  any  stocks  or 
debts  by  foreign  executors  or  administrators  in  violation  of  the  provisions  of  this 
Article  shall  be  subject  to  a  penalty  of  not  less  than  $50.00,  to  be  recovered  by 
the  State  for  its  own  use. 

[NOTE:  This  section  is  as  amended  by  the  act  of  1918,  ch.  31,  effective  June  1, 
1918,  and  is  codified  in  Vol.  IV  (1918)  of  the  Code. 

[NOTE:  Neither  the  Attorney-General  nor  any  State  officer  has  anything  to  do 
in  connection  with  the  requirements  of  the  above  statutes.  The  duty  of  comply- 
ing with  them  is  entirely  the  duty  of  the  nonresident  executor  or  administrator, 
for  whose  information  and  convenience  the  following  outline  of  the  procedure  is 
given.] 

The  form  of  advertisement  usually  followed  is: 

Transfer  of  Stock. 

Notice  is  hereby  given  that  the  undersigned,  in  conformity  with  Art.  93, 
Sections  77-80,  of  the  Annotated  Code  of  Maryland,  will,  at  the  expiration  of 

one  month  from  date,  transfer shares  of  the  Capital  stock  of  the 

Company,   a  corporation  of   the   State   of   Maryland,   now 

standing  on  the  books  thereof  in  the  name  of   ,  who 

is  deceased,  late  of  City. 


Executors-Administrators. 

After  the  expiration  of  the  above  notice,  a  copy  of  it,  with  publisher's  certifi- 
cate attached,  must  be  filed  with  the  Orphans'  Court  of  Baltimore  City,  and  that 
court  must  then  allow  the  foreign  executor  or  administrator  commissions  upon  the 
market  value  of  the  stock  to  be  transferred,  out  of  which  the  executor  or  admin- 
istrator must  pay  the  Maryland  State  tax  upon  such  commissions.  This  tax  is 
1%  on  the  first  $20,000  of  value  of  the  stock  to  be  transferred,  and  one-fifth  of 
1%  upon  the  balance.  This  tax  is  due  whether  the  executor  or  administrator 
waives  his  commissions  or  not,  and  commissions  must  always  be  allowed  at  least 
equal  to  the  amount  of  the  tax.  (Act  1916,  chap.  559.) 

The  Orphans'  Court  will  then  pass  an  order  directing  the  stock  to  be  trans- 
ferred, and  the  Maryland  corporation  will  transfer  the  stock  upon  the  delivery 
of  the  endorsed  certificate,  with  duly  certified  copy  of  the  order  of  court  attached. 


MASSACHUSETTS 


939 


MASSACHUSETTS. 

TABLE  OF  RATES  UNDER  CHAPTER  347,  LAWS,   1922,  APPROVED  MAY  22,  1922. 


RELATIONSHIP  OF  BBNEFICIABY 
TO  DECEASED 

RATE  PER  CENTUM  OF  TAX  ON  VALUE  OF 
PROPERTY  OR  INTEREST 

1 
o 

V   b 

•  | 

0* 

•* 

0*> 

«~   . 

• 
o 

<ss" 

<S*i 

£*> 

1° 

£ed 

03       O 

O 

On  excess  abo 
$500,000,  nt 
over  $750,000. 

o°8 

a     °- 
O 

i 
jl. 

ig 

o 

i 

ss 

o 

«o® 

ICQ 
»9«2 

O 

s°"i 

O 

CLASS  A 
Husband,    wife,    father,    mother;    child, 
adopted  child,  adoptive  parent,  grand- 
child. 

1% 

1% 

2% 

4% 

5% 

5^% 

6% 

7% 

CLASS  B 
Lineal  ancestor,  except  father  or  mother; 
lineal    descendant,    except    child    or 
grandchild;      lineal      descendant      of 
adopted  child;  lineal  ancestor  of  adop- 
tive parent;  wife  or  window  of  a  son; 
husband  of  a  daughter. 

1% 

2% 

4% 

5% 

6% 

7% 

8% 

9% 

CLASS  C 
Brother,  sister,  half  brother,  half  sister, 
nephew,  niece,  step-child  or  step-parent. 

3% 

5% 

7% 

8% 

9% 

10% 

11% 

12% 

CLASS  D 
All  others. 

5% 

6% 

7% 

8% 

9% 

10% 

11% 

12% 

NOTE. — Educational,  religious  and  charitable  corporations  wholly  exempt  as  in  other  tables. 


940 


THE  STATE  STATUTES 


TABLE    OF    RATES 

Rate  of  Succession  Tax  under  Acts  of  1912,  Chapter  678.     In  Effect  upon  the  Estates  of  Persons 
Dying  on  or  after  May  29,  1912 


Ex- 
emption 

Rate  of  tax 

Class  or  Relationship 

Over 

Over 

Over 

Over 

Over 

$1,000 

$10,,COO 

$25,000 

$50,000 

$250,000 

$1,000 

but  not 

but  not 

but  not 

but  not 

but  not 

under 

$10,000 

$25,000 

$50,000 

$250,0^0 

$1,000,000 

$1,000,000 

1.  Charitable,       educa- 

No tax 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

tional     or     religious 

societies    or    institu- 

tions   exempt     from 

local  taxation;  trusts 

for    charitable    pur- 

poses  to    be    carried 

out  within  Massachu- 

setts; city  or  town  in 

Massachusetts       for 

public  purposes. 

2.  Class    A.     Husband, 

No  tax 

No  tax 

1% 

1% 

2% 

3% 

4% 

wife,  father,  mother, 

child,  adopted  child, 

adoptive  parent. 

3.  Class  A.   Lineal  an- 

No tax 

1% 

1% 

1% 

2% 

3% 

4% 

cestor,   except  father 

or  mother;  lineal  de- 

scendant,    except 

child  ;       lineal      de- 

scendant  of   adopted 

child;    lineal    ances- 

tor of  adoptive  par- 

ent;  wife   or  widow 

of  a  son;  husband  of 

a  daughter. 

4.  Class     B.      Brother, 

No  tax 

2% 

3% 

5% 

6% 

r% 

8% 

sister,    half    brother, 

half   sister,    nephew, 

niece. 

6.  All    others    (includ- 

No tax 

5% 

5% 

5% 

6% 

7% 

8% 

ing  step-children). 

MASSACHUSETTS 


941 


RATES  PRIOR  TO  MAY  29,  1912 

RATE  or  SUCCESSION  TAX  UNDER  ACTS  OP  1907,  CHAPTER  563,  AS  CODIFIED  AND  AMENDED  BY 
ACTS  OF  1909,  CHAPTER  490,  PART  IV.,  AND  ACTS  OF  1909,  CHAPTERS  268  AND  527.  IN  EFFECT 
UPON  THE  ESTATES  OF  PERSONS  DYING  ON  OH  AFTER  SEPT.  1,  1907,  AND  PRIOR  TO  MAY  29,  1912. 


Exemp- 

Rate of  tax 

tion 

Over 

Over 

Over 

Over 

CLASS  OB  RELATIONSHIP 

$1,000 

$10,000 

$25,000 

$50,000 

$1,000 

but  not 

but  not 

but  not 

but  not 

Over 

or  under 

over 

over 

over 

over 

$100,000 

$10,000 

$25,000 

$50,000 

$100,000 

1.  Charitable,  educational  or  religious 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

societies  or  institutions  exempt_from 

local  taxation;  trusts  for  charitable 

purposes   to   be   carried   out   within 

Machusetts;  city  or  town  in  Massa- 

chusetts for  public  purposes. 

2.  Class    A.      Husband,    wife,    father, 

No  tax 

No  tax 

1% 

1% 

11% 

2% 

mother,  child,  adopted  child,  adoptive 

parent. 

3.  Class  A.     Lineal   ancestor,   except 

father  or  mother;  lineal  descendant, 

No  tax 

1% 

1% 

1% 

11% 

2% 

except    child;    lineal   descendant   of 

adopted  child;  lineal  ancestor  of  adop- 

tive parent;  wife  or  widow  of  a  son; 

husband  of  a  daughter. 

4.  Class  B.   Brother,  sister,  half  brother, 

No  tax 

3% 

3% 

4% 

4% 

5% 

half  sister,  nephew,  niece. 

0.  AJ1  others  (including  step-children)  .  . 

No  tax 

5% 

5% 

5% 

5% 

5% 

In  no  event  is  the  tax  to  reduce  the  share  below  the  exempted  amount. 


RATE  OF  SUCCESSION  TAX  UNDER  ACTS  OF  1916.  CHAPTER  268.  IN 
EFFECT  UPON  THE  ESTATES  OF  PERSONS  DYING  ON  OR  AFTER  MAY  26, 
1916.  TO  MAY  22,  1922. 


Value  of  Share 

Beneficiary 

Over 

Over 

Over 

Over 

Over 

$1,000 

$10,000 

$25,000 

$50,000 

$-290,000 

$1,000 

but  not 

but  not 

but  not 

but  not 

but  not 

or 

over 

over 

over 

over 

over 

Over 

under 

$10,000 

$25,000 

$50,000 

$250,000 

$1,000,000 

fl,000,OOC 

Charitable,      educational 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

or  religious  societies  or 

institutions  exempt 

from     local    taxation  ; 

trusts     for     charitable 

purposes  to  be  carried 

out    within    Massachu- 

setts; city  or  town  in 

Massachusetts  for  pub- 

lic purposes. 

Class  A.  Husband,  wife, 

No  tax 

No  tax 

1% 

2%  on 

4%  on 

5%  on 

6%  on 

father,    mother,    child, 

excess 

exoeaa 

excess 

excess 

adopted    child,    adopt- 

ive parent. 

Grandchild. 

No  tax 

1% 

1% 

2%  on 

4%  on 

5%  on 

6%  on 

excess 

excess 

excess 

exces 

*  Note. — Additional  tax  of  25%  imposed  on  estates  of  persons  dying  between  May  3, 
1918,  and  December  1,  1920. 


942 


THE  STATE  STATUTES 


Value  of  Share 

Beneficiary 

Over 

Over 

Over 

Over 

Over 

$1,000 

$10,000 

$25,000 

$50,000 

$290,000 

$1,«X) 

but  not 

but  not 

but  not 

but  not 

but  not 

or 

over 

over 

over 

over 

over 

Over 

under 

$10,000 

$25,000 

$50,000 

$250,000 

$1,000,000 

$1,000,000 

Class  B.   Lineal  ancestor, 

No  tax 

1% 

2%  on 

4%  on 

5%  on 

6%  on 

7%  on 

except      father      or 

excess 

excess 

excess 

excess 

excess 

mother;  lineal  descend- 

ant,   except    child    or 

grandchild  ;    lineal   de- 

scendant    of     adopted 

child  ;    lineal    ancestor 

of     adoptive      parent  ; 

wife  or  widow  of  a  son  ; 

husband  of  a  daughter. 

Class  O.   Brother,  sister, 

No  tax 

3% 

5%  on 

7%  on 

8%  on 

9%  on 

10%  on 

half-brother  half-sister, 

excess 

excess 

excess 

excess 

excess 

nephew,     niece,     step- 

child or  step-parent. 

Class  D.     All  others. 

No  tax 

5% 

6%  on 

7%  on 

8%  on 

9%  on 

10%  on 

excess 

excess 

excess 

excess 

excess 

As  to  discount,  see  amendment  by  Ch.  14,  L.  1918,  p.  905. 

No  tax  is  payable  on  account  of  the  interest  of  any.  beneficiary  who  does  not 
take  in  excess  of  $1,000. 

No  tax  is  payable  on  account  of  property  passing  to  the  husband,  wife,  father, 
mother,  child  or  adopted  child  of  deceased  unless  his  or  her  total  beneficial  interest 
exceeds  $10,000. 

If  the  value  of  all  property  passing  to  any  one  of  such  beneficiaries  exceeds 
$10,000,  the  tax  attaches  to  the  whole  amount. 

In  no  event  is  the  tax  to  reduce  the  share  below  the  excepted  amount. 

THE  STATUTE. 

LAWS  OF  1909,  CHAPTER  490,  AS  AMENDED  BY  LAWS   1912,  CHAPTER 
678,  AND   OTHER   STATUTES   TO  JAN.   1,    1916. 

[NOTE:  Amendments  of  1918  to  1922  are  given  at  end  of  statute.] 
Section  1.  All  property  within  the  jurisdiction  of  the  commonwealth,  corporeal 
or  incorporeal,  and  any  interest  therein,  belonging  to  inhabitants  of  the  common- 
wealth, and  all  real  estate  within  the  commonwealth  or  any  interest  therein  and 
all  stock  in  any  national  bank  situated  in  this  commonwealth  or  in  any  corporation 
organized  under  the  laws  of  this  commonwealth  belonging  to  persons  who  are  not 
inhabitants  of  the  commonwealth,  which  shall  pass  by  will,  or  by  laws  regulating 
intestate  succession,  or  by  deed,  grant  or  gift,  except  in  cases  of  a  bona  fide 
purchase  for  full  consideration  in  money  or  money's  worth,  made  in  contemplation 
of  the  death  of  the  grantor  or  donor  or  made  or  intended  to  take  effect  in 
possession  or  enjoyment  after  his  death,  and  any  beneficial  interest  therein  which 
shall  arise  or  accrue  by  survivorship  in  any  form  of  joint  ownership  in  which 
the  decedent  joint  owner  contributed  during  his  life  any  part  of  the  property 
held  in  such  joint  ownership  or  of  the  purchase  price  thereof,  to  any  person, 
absolutely  or  in  trust,  except  to  or  for  the  use  of  charitable,  educational  or 
religious  societies  or  institutions,  the  property  of  which  is  by  the  laws  of  the 
commonwealth  exempt  from  taxation,  or  for  or  upon  trust  for  any  charitable 
purposes  to  be  carried  out  within  the  commonwealth,  or  to  or  for  the  use  of  the 
commonwealth  or  any  town  therein  for  public  purposes,  shall  be  subject  to  a 
tax  at  the  percentage  rates  fixed  by  the  following  table: 
[See  Table  No.  1.]  As  amended  by  ch.  403,  L.  1922. 

Powers  of  appointment: 

Chapter  527,  L.  1909,  provides: 

§  8.  Whenever  any  person  shall  exercise  a  power  of  appointment  derived  from 
any  disposition  of  property  made  prior  to  September  first,  nineteen  hundred  and 
seven,  such  appointment  when  made  shall  be  deemed  to  be  a  disposition  of  prop- 
erty by  the  person  exercising  such  power,  taxable  under  the  provisions  of  chapter 
five  hundred  and  sixty-three  of  the  acts  of  the  year  nineteen  hundred  and  seven, 


MASSACHUSETTS  943 

and  of  all  acts  in  amendment  thereof  and  in  addition  thereto,  in  the  same  manner 
as  though  the  property  to  which  such  appointment  relates  belonged  absolutely  to 
the  donee  of  such  power,  and  had  been  bequeathed  or  devised  by  the  donee  by 
will;  and  whenever  any  person  possessing  such  a  power  of  appointment  so  derived 
shall  omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole 
or  in  part,  a  disposition  of  property  taxable  under  the  provisions  of  chapter  five 
hundred  and  sixty-three  of  the  acts  of  the  year  nineteen  hundred  and  seven  and 
all  acts  in  amendment  thereof  and  in  addition  thereto  shall  be  deemed  to  take 
place  to  the  extent  of  such  omission  or  failure  .in  the  same  manner  as  though  the 
persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoyment 
of  the  property  to  which  such  power  related  and  succeeded  thereto  by  a  will  of 
the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time 
of  such  omission  or  failure. 

§  2,  chap.  490,  L.  1919,  applies  to  nonresidents  and  is  repealed. 

§  3.  (As  amended  L.  1912,  chap.  678.)  Property  of  a  resident  of  the  common- 
wealth which  is  not  therein  at  the  time  of  his  death  shall  not  be  taxable  under 
the  provisions  of  this  part  if  legally  subject  in  another  state  or  country  to  a  tax 
of  like  character  and  amount  to  that  hereby  imposed,  and  if  such  tax  be  actually 
paid  or  guaranteed  or  secured  in  accordance  with  law  in  such  other  state  or 
country;  if  legally  subject  in  another  state  or  country  to  a  tax  of  like  character 
but  of  less  amount  than  that  hereby  imposed  and  such  tax  be  actually  paid  or 
guaranteed  or  secured  as  aforesaid,  such  property  shall  be  taxable  under  this 
part  to  the  extent  of  the  difference  between  the  tax  thus  actually  paid,  guaranteed 
or  secured,  and  the  amount  for  which  such  property  would  otherwise  be  liable 
hereunder. 

§  4.  (As  amended  L.  1915,  chap.  152.)  Except  as  hereinafter  provided,  taxes 
imposed  by  the  provisions  of  this  act  shall  be  payable  to  the  treasurer  and  receiver 
general  by  the  executors,  administrators  or  trustees  at  the  expiration  of  one  year 
after  the  date  of  giving  bond  by  the  executors,  administrators  or  trustees  first 
appointed.  If  the  probate  court,  acting  under  the  provisions  of  section  thirteen 
of  chapter  one  hundred  and  forty-one  of  the  Revised  Laws,  has  ordered  the 
executor  or  administrator  to  retain  funds  to  satisfy  a  claim  of  a  creditor,  the 
payment  of  the  tax  may  be  suspended  by  the  court  to  await  the  disposition  of 
such  claim.  In  all  cases  where  there  shall  be  a  grant,  devise,  descent,  or  bequest 
to  take  effect  in  possession  or  come  into  actual  enjoyment  after  the  expiration 
of  one  or  more  life  estates  or  a  term  of  years,  the  taxes  thereon  shall  be  payable 
by  the  executors,  administrators  or  trustees  in  office  when  such  right  of  possession 
accrues,  or,  if  there  is  no  such  executor,  administrator  or  trustee,  by  the  person 
or  persons  so  entitled  thereto,  at  the  expiration  of  one  year  after  the  date  when 
the  right  of  possession  accrues  to  the  person  or  persons  so  entitled.  If  the  taxes 
are  not  paid  when  due,  interest  shall  be  charged  and  collected  from  the  time  the 
same  became  payable.  Property  of  which  a  decedent  dies  seized  or  possessed, 
subject  to  taxes  as  aforesaid,  in  whatever  form  of  investment  it  may  happen  to 
be,  and  all  property  acquired  in  substitution  therefor,  shall  be  charged  with  a 
lien  for  all  taxes  and  interest  thereon  which  are  or  may  become  due  on  such  prop- 
erty; but  said  lien  shall  not  affect  any  personal  property  after  the  same  has  been 
sold  or  disposed  of  for  value  by  the  executors,  administrators  or  trustees.  The 
lien  charged  by  this  act  upon  any  real  estate  or  separate  parcel  thereof  may  be 
discharged  by  the  payment  of  all  taxes  due  and  to  become  due  upon  said  real 
estate  or  separate  parcel,  or  by  an  order  or  decree  of  the  probate  court  discharg- 
ing said  lien  and  securing  the  payment  to  the  commonwealth  of  the  tax  due  or  to 
become  due  by  bond  or  deposit  as  hereinafter  provided,  or  by  transferring  such 
lien  to  other  real  estate  owned  by  the  owner  or  owners  of  said  real  estate  or 
separate  parcel  thereof. 

§  5.  In  every  case  where  there  shall  be  a  bequest  or  grant  of  personal  estate 
made  or  intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the 
grantor,  to  take  effect  in  possession  or  come  into  actual  enjoyment  after  the 
expiration  of  one  or  more  life  estates,  or  a  term  of  years,  whether  conditioned 
upon  the  happening  of  a  contingency  or  dependent  upon  the  exercise  of  a  dis- 
cretion, or  subject  to  a  power  of  appointment  or  otherwise,  the  executor  or 
administrator  or  grantee  may  deposit  with  the  treasurer  and  receiver  general  a 
sum  of  money  sufficient  in  the  opinion  of  the  tax  commissioner  to  pay  all  taxes 
which  may  become  due  upon  such  bequest  or  grant,  and  the  person  or  persons 
having  the  right  to  the  use  or  income  of  such  personal  estate  shall  be  entitled  to 


944  THE  STATE  STATUTES 

receive  from  the  commonwealth  interest  at  the  rate  of  2y2%  per  annum  upon 
such  deposit,  and  when  said  tax  shall  become  due  the  treasurer  and  receiver 
general  shall  repay  to  the  persons  entitled  thereto  the  difference  between  the  tax 
certified  and  the  amount  deposited ;  or  any  executor,  administrator,  trustee  or 
grantee,  or  any  person  interested  in  such  bequest  or  grant  may  give  bond  to  a 
judge  of  the  probate  court  having  jurisdiction  of  the  estate  of  the  decedent,  in 
such  amount  and  with  such  sureties  as  said  court  may  approve,  with  the  condition 
that  the  obligor  shall  notify  the  tax  commissioner  when  said  tax  becomes  due 
and  shall  then  pay  the  same  to  the  treasurer  and  receiver  general. 

§  6.  Except  as  hereinafter  provided,  said  tax  shall  be  assessed  upon  the  actual 
value  of  the  property  at  the  time  of  the  death  of  the  decedent.  In  every  case 
where  there  shall  be  a  devise,  descent,  bequest  or  grant  to  take  effect  in  posses- 
sion or  enjoyment  after  the  expiration  of  one  or  more  life  estates  or  a  term  of 
years,  the  tax  shall  be  assessed  on  the  actual  value  of  the  property  or  the  interest 
of  the  beneficiary  therein  at  the  time  when  he  becomes  entitled  to  the  same  in 
possession  or  enjoyment.  The  value  of  an  annuity  or  a  life  interest  in  any  such 
property,  or  any  interest  therein  less  than  an  absolute  interest,  shall  be  determined 
by  the  "American  Experience  Tables"  at  4%  compound  interest. 

§  7.  Provides  for  the  immediate  payment  of  future  tax  claims  by  beneficiary 
at  his  election.  Where  they  are  uncertain  the  Tax  Commissioner  may  compromise 
with  the  consent  of  the  Attorney-General. 

§  8.  Makes  bequest  to  executors  in  lieu  of  commissions  taxable  in  excess  or 
reasonable  compensation. 

§  9.  Requires  the  executor  or  administrator  to  deduct  the  tax,  collect  it  from 
the  legatee  or  from  the  heir  where  it  is  a  charge  on  real  estate. 

|  10.  Where  the  legacy  is  charged  on  real  estate  the  heir  is  required  to  deduct 
the  tax  before  paying  the  legacy  and  the  tax  is  made  a  lien  on  the  real  estate. 

§  11.  Where  the  will  provides  for  payment  of  tax  on  legacy  from  another 
fund  no  tax  imposed  on  money  so  provided. 

§  12.  Executors  or  administrators  may  be  authorized  to  sell  real  estate  to  pay 
the  tax  in  the  same  way  as  in  case  of  debts. 

§  13.  Eequires  the  executor  or  administrator  to  file  a  verified  inventory  and 
appraisal  with  the  probate  court  by  the  Tax  Commissioner  within  three  months 
of  appointment  under  penalty  of  $1,000  fine. 

§  14.  Requires  the  register  of  probate  to  furnish  the  Tax  Commissioner  with 
copies  of  the  inventory,  will  and  all  other  papers. 

§§15  and  16  repealed  by  chap.  678,  L.  1912. 

§  17.  Requires  notice  of  any  petition  to  be  served  on  the  Tax  Commission. 

§  18.  Provides  refund  of  taxes  erroneously  paid. 

§  19.  The  value  of  the  property  upon  which  the  tax  is  computed  shall  be 
determined  by  the  Tax  Commissioner  and  notified  by  him  to  the  person  or  persons 
by  whom  the  tax  is  payable,  and  such  determination  shall  be  final  unless  the  value 
so  determined  shall  be  reduced  by  proceedings  as  herein  provided.  At  any  time 
within  three  months  after  such  determination  the  probate  court  shall,  upon  the 
application  of  any  party  interested  in  the  succession,  or  of  the  executor,  admin- 
istrator or  trustee,  appoint  one  disinterested  appraiser  or  three  disinterested 
appraisers,  who,  first  being  sworn,  shall  appraise  such  property  at  its  actual 
market  value,  as  of  the  day  of  the  death  of  the  decedent  and  shall  make  return 
thereof  to  said  court.  Such  return,  when  accepted  by  said  court,  shall  be  final; 
provided,  that  any  party  aggrieved  by  such  appraisal  shall  have  an  appeal  upon 
matters  of  law.  One  half  of  the  fees  of  said  appraisers,  as  determined  by  the 
judge  of  said  court,  shall  be  paid  by  the  Treasurer  and  Receiver  General,  and 
one  half  of  said  fees  shall  be  paid  by  the  other  party  or  parties  to  said  proceeding. 

§  20.  The  Tax  Commissioner  shall  determine  the  amount  of  tax  due  and  pay- 
able upon  any  estate  or  upon  any  part  thereof,  and  shall  certify  the  amount  so 
due  and  payable  to  the  Treasurer  and  Receiver  General  and  to  the  person  or 
persons  by  whom  the  tax  is  payable;  but  in  the  determination  of  the  amount  of 
any  tax  said  Tax  Commissioner  shall  not  be  required  to  consider  any  payments 
on  account  of  debts  or  expenses  of  administration  which  have  not  been  allowed  by 
the  probate  court  having  jurisdiction  of  said  estate.  Payment  of  the  amount  so 
certified  shall  be  a  discharge  of  the  tax.  An  executor,  administrator,  trustee  or 
grantee  who  is  aggrieved  by  any  determination  of  the  Tax  Commissioner  may, 
within  one  year  after  the  payment  of  any  tax  to  the  Treasurer  and  Receiver 
General,  apply  by  a  petition  in  equity  to  the  probate  court  having  jurisdiction  of 
the  estate  of  the  decedent  for  the  abatement  of  said  tax  or  any  part  thereof, 


MASSACHUSETTS  945 

and  if  the  court  adjudges  that  said  tax  or  any  part  thereof  was  wrongly  exacted 
it  shall  order  an  abatement  of  such  portion  of  said  tax  as  was  assessed  without 
authority  of  law.  Upon  a  final  decision  ordering  an  abatement  of  any  portion 
of  said  tax,  the  Treasurer  and  Receiver  General  shall  pay  the  amount  adjudged 
to  have  been  illegally  exacted,  with  interest,  without  any  further  act  or  resolve 
making  appropriation  therefor. 

§  21.  Provides  that  the  probate  court  having  jurisdiction  of  the  estate  shall 
hear  and  determine  all  questions  arising  under  the  transfer  tax  statute  with  the 
usual  rights  of  appeal. 

§  22.  Gives  the  Tax  Commissioner  the  right  to  move  for  administration  if  no 
probate  proceedings  are  commenced  within  four  months  after  death. 

§  23.  Requires  executor  or  administrator  to  show  that  tax  has  been  paid  or 
adjusted  before  final  accounting  allowed. 

§  24.  Provides  for  the  collection  of  unpaid  taxes  by  the  Treasurer  and  Receiver 
General. 

§  25.  Provides  that  the  law  applies  only  to  subsequent  transfers. 

§  26.  Concerns  the  construction  of  repealing  acts. 

§  27.  Is  a  saving  clause  as  to  other  legislation. 

ACT  OF  1916. 

GENERAL  ACTS  OF  1916,  CHAPTER  268. 

An  Act  relative  to  the  Taxation  of  Legacies  and  Successions. 
Be  it  enacted,  etc.,  as  follows: 

Section  1.  Section  one  of  chapter  five  hundred  and  sixty-three  of  the  acts  of 
the  year  nineteen  hundred  and  seven,  as  amended  by  chapter  two  hundred  and 
sixty-eight  of  the  acts  of  the  year  nineteen  hundred  and  nine,  codified  as  section 
one  of  Part  IV  of  chapter  four  hundred  and  ninety  of  the  acts  of  the  year 
nineteen  hundred  and  nine,  and  further  amended  by  section  one  of  chapter  five 
hundred  and  twenty-seven  of  the  acts  of  the  year  nineteen  hundred  and  nine,  and 
by  chapter  six  hundred  and  seventy-eight  of  the  acts  of  the  year  nineteen  hundred 
and  twelve,  and  by  chapter  four  hundred  and  ninety-eight  of  the  acts  of  the  year 
nineteen  hundred  and  thirteen,  is  hereby  further  amended  by  striking  out  the  said 
section  and  inserting  in  place  thereof  the  following:  Section  1.  All  property 
within  the  jurisdiction  of  the  commonwealth,  corporeal  or  incorporeal,  and  any 
interest  therein,  belonging  to  inhabitants  of  the  commonwealth,  and  all  real  estate 
within  the  commonwealth,  or  any  interest  therein,  belonging  to  persons  who  are 
not  inhabitants  of  the  commonwealth,  which  shall  pass  by  will,  or  by  the  laws 
regulating  intestate  succession,  or  by  deed,  grant  or  gift,  except  in  cases  of  a 
bona  fide  purchase  for  full  consideration  in  money  or  money's  worth,  made  or 
intended  to  take  effect  in  possession  or  enjoyment  after  the  death  of  the  grantor 
or  donor,  and  any  beneficial  interest  therein  which  shall  arise  or  accrue  by  sur- 
vivorship in  any  form  of  joint  ownership  in  which  the  decedent  joint  owner  con- 
tributed during  his  life  any  part  of  the  property  held  in  such  joint  ownership 
or  of  the  purchase  price  thereof,  to  any  person,  absolutely  or  in  trust,  except  to 
or  for  the  use  of  charitable,  educational  or  religious  societies  or  institutions,  the 
property  of  which  is  by  the  laws  of  this  commonwealth  exempt  from  taxation  or 
for  or  upon  trust  for  any  charitable  purposes,  to  be  carried  out  within  this  com- 
monwealth, or  to  or  for  the  use  of  the  commonwealth  or  any  city  or  town  within 
this  commonwealth  for  public  purposes,  shall  be  subject  to  a  tax  as  follows: — 

Class  A.  In  case  such  property  or  interest  therein  shall  so  pass  or  any  beneficial 
interest  therein  shall  so  accrue  to  or  for  the  benefit  of  a  husband,  wife,  parent, 
child,  grandchild,  adopted  child  or  adoptive  parent  of  the  deceased,  the  tax  shall 
be  at  the  following  rates: — 

On  its  value  not  exceeding  twenty-five  thousand  dollars,  at  !%> 

On  the  excess  of  its  value  over  twenty-five  thousand  dollars,  and  not  exceeding 
fifty  thousand  dollars,  at  2%  ; 

On  the  excess  of  its  value  over  fifty  thousand  dollars,  and  not  exceeding  two 
hundred  and  fifty  thousand  dollars,  at  4% ; 

On  the  excess  of  its  value  over  two  hundred  and  fifty  thousand  dollars,  and  not 
exceeding  one  million  dollars,  at  5%;  and 

On  the  excess  of  its  value  over  one  million  dollars,  at  6%. 

60 


946  THE  STATE  STATUTES 

Class  B.  In  case  such  property  or  interest  therein  shall  so  pass  or  any  beneficial 
interest  therein  shall  so  accrue  to  or  for  the  benefit  of  a  lineal  ancestor  or  descend- 
ant other  than  those  included  in  Class  A,  a  wife  or  widow  of  a  son,  the  husband 
of  a  daughter,  or  a  lineal  descendant  of  an  adopted  child,  or  a  lineal  ancestor  of 
an  adoptive  parent  of  the  deceased,  the  tax  shall  be  at  the  following  rates: — 

On  its  value  not  exceeding  ten  thousand  dollars,  at  1%; 

On  the  excess  of  its  value  over  ten  thousand  dollars,  and  not  exceeding  twenty- 
five  thousand  dollars,  at  2%  • 

On  the  excess  of  its  value  over  twenty-five  thousand  dollars,  and  not  exceeding 
fifty  thousand  dollars,  at  4% ; 

On  the  excess  of  its  value  over  fifty  thousand  dollars,  and  not  exceeding  two 
hundred  and  fifty  thousand  dollars,  at  5% ; 

On  the  excess  of  its  value  over  two  hundred  and  fifty  thousand  dollars,  and  not 
exceeding  one  million  dollars,  at  6%;  and 

On  the  excess  of  its  value  over  one  million  dollars,  at  7%. 

Class  C.  In  case  such  property  or  interest  therein  shall  so  pass  or  any  beneficial 
interest  therein  shall  so  accrue  to  or  for  the  benefit  of  a  brother,  sister,  step- 
child, step-parent,  half  brother,  half  sister,  nephew  or  niece  of  the  deceased,  the 
tax  shall  be  at  the  following  rates: — 

On  its  value  not  exceeding  ten  thousand  dollars,  at  3% ; 

On  the  excess  of  its  value  over  ten  thousand  dollars,  and  not  exceeding  twenty- 
five  thousand  dollars,  at  5% ; 

On  the  excess  of  its  value  over  twenty-five  thousand  dollars,  and  not  exceeding 
fifty  thousand  dollars,  at  7% ; 

On  the  excess  of  its  value  over  fifty  thousand  dollars,  and  not  exceeding  two 
hundred  and  fifty  thousand  dollars,  at  8%; 

On  the  excess  of  its  value  over  two  hundred  and  fifty  thousand  dollars,  and 
not  exceeding  one  million  dollars,  at  9% ;  and 

On  the  excess  of  its  value  over  one  million  dollars,  at  10%. 

Class  D.  In  case  such  property  or  interest  therein  shall  so  pass  or  any  beneficial 
interest  therein  shall  so  accrue  to  or  for  the  benefit  of  any  person  not  included 
in  any  of  the  foregoing  classes,  the  tax  shall  be  at  the  following  rates: — 

On  its  value  not  exceeding  ten  thousand  dollars,  at  5% ; 

On  the  excess  of  its  value  over  ten  thousand  dollars,  and  not  exceeding  twenty- 
five  thousand  dollars,  at  6% ; 

On  the  excess  of  its  value  over  twenty-five  thousand  dollars,  and  not  exceeding 
fifty  thousand  dollars,  at  7% ; 

On  the  excess  of  its  value  over  fifty  thousand  dollars,  and  not  exceeding  two 
hundred  and  fifty  thousand  dollars,  at  8%; 

On  the  excess  of  ila  value  over  two  hundred  and  fifty  thousand  dollars,  and 
not  exceeding  one  million  dollars,  at  9% ;  and 

On  the  excess  of  its  value  over  one  million  dollars,  at  10%. 

Administrators,  executors  and  trustees,  grantees  or  donees  under  conveyances 
or  gifts  made  during  the  life  of  the  grantor  or  donor,  and  persons  to  whom 
beneficial  interests  shall  accrue  by  survivorship,  shall  be  liable  for  such  taxes, 
with  interest,  until  the  same  have  been  paid ;  but  no  property  or  interest  therein, 
which  shall  pass  or  accrue  to  or  for  the  use  of  a  husband,  wife,  father,  mother, 
child,  adopted  child  or  adoptive  parent  of  the  deceased,  unless  its  value  exceeds 
ten  thousand  dollars,  and  no  other  property  or  interest  therein,  unless  its  value 
exceeds  one  thousand  dollars,  shall  be  subject  to  the  tax  imposed  by  this  act, 
and  no  tax  shall  be  exacted  upon  property  or  interests  so  passing  or  accruing 
which  shall  reduce  the  value  of  such  property  or  interest  below  the  amount  of 
the  above  exemptions.  All  taxes  under  this  act  shall  be  paid  out  of  and  charge- 
able to  capital  and  not  income,  unless  otherwise  provided  in  a  will  or  codicil,  or 
deed  or  other  instrument  creating  the  grant  or  gift,  but  nothing  herein  contained 
shall  affect  any  right  of  the  commonwealth  to  collect  such  tax  or  lien  therefor. 

§  2.  Section  four  of  chapter  five  hundred  and  sixty-three  of  the  acts  of  the 
year  nineteen  hundred  and  seven,  codified  as  section  four  of  Part  IV  of  chapter 
four  hundred  and  ninety  of  the  acts  of  the  year  nineteen  hundred  and  nine,  as 
amended  by  section  two  of  chapter  five  hundred  and  twenty-seven  of  the  acts  of 
the  year  nineteen  hundred  and  nine,  and  by  section  one  of  chapter  one  hundred 
and  fifty-two  of  the  General  Acts  of  the  year  nineteen  hundred  and  fifteen,  is 
hereby  further  amended  by  striking  out  the  said  section  and  inserting  in  place 
thereof  the  following: — Section  4.  Except  as  hereinafter  provided,  taxes  imposed 


MASSACHUSETTS  947 

by  the  provisions  of  this  act  upon  property  or  interests  therein,  passing  by  will 
or  by  the  laws  regulating  intestate  succession,  shall  be  payable  to  the  Treasurer 
and  Receiver  General  by  the  executors,  administrators  or  trustees  at  the  expiration 
of  one  year  after  the  date  of  the  giving  of  bond  by  the  executors,  administrators 
or  trustees  first  appointed. 

If  the  probate  court,  acting  under  the  provisions  of  section  thirteen  of  chapter 
one  hundred  and  forty-one  of  the  Revised  Laws,  has  ordered  the  executor  or 
administrator  to  retain  funds  to  satisfy  a  claim  of  a  creditor,  the  payment  of 
the  tax  may  be  suspended  by  the  court  to  await  the  disposition  of  such  claim. 

Except  as  hereinafter  provided,  taxes  imposed  by  the  provisions  of  this  act 
upon  property  or  interests  therein,  passing  by  deed,  grant  or  gift  to  take  effect 
in  possession  or  enjoyment  after  the  death  of  the  grantor  or  donor,  or  upon  bene- 
ficial interests  arising  or  accruing  by  survivorship  in  any  form  of  joint  owner- 
ship shall  be  payable  by  the  grantee,  donee  or  survivor  at  the  expiration  of  one 
year  after  the  date  when  his  right  of  possession  or  enjoyment  accrues.  In  all 
cases  where  there  shall  be  a  grant,  gift,  devise,  descent,  or  bequest  to  take  effect 
in  possession  or  come  into  actual  enjoyment  after  the  expiration  of  one  or  more 
life  estates  or  a  term  of  years,  the  taxes  thereon  shall  be  payable  by  the  executors, 
administrators  or  trustees  in  office  when  such  right  of  possession  accrues,  or,  if 
there  is  no  such  executor,  administrator  or  trustee,  by  the  person  or  persons  so 
entitled  thereto,  at  the  expiration  of  one  year  after  the  date  when  the  right  of 
possession  accrues  to  the  person  or  persons  so  entitled.  If  the  taxes  are  not  paid 
when  due,  interest  shall  be  charged  and  collected  from  the  time  the  same  became 
payable.  Property  of  which  a  decedent  dies  seized  or  possessed,  subject  to  taxes 
as  aforesaid,  in  whatever  form  of  investment  it  may  happen  to  be,  and  all  prop- 
erty acquired  in  substitution  therefor,  shall  be  charged  with  a  lien  for  all  taxes 
and  interest  thereon  which  are  or  may  become  due  .on  such  property;  but  said 
lien  shall  not  affect  any  personal  property  after  the  same  has  been  sold  or  dis- 
posed of  for  value  by  the  executors,  administrators  or  trustees.  The  lien  charged 
by  this  act  upon  any  real  estate  or  separate  parcel  thereof  may  be  discharged 
by  the  payment  of  all  taxes  due  and  to  become  due  upon  said  real  estate  or 
separate  parcel,  or  by  an  order  or  decree  of  the  probate  court  discharging  said 
lien  and  securing  the  payment  to  the  commonwealth  of  the  tax  due  or  to  become 
due  by  bond  or  deposit  as  hereinafter  provided,  or  by  transferring  such  lien  to 
other  real  estate  owned  by  the  owner  or  owners  of  said  real  estate  or  separate 
parcel  thereof. 

§  3.  So  much  of  section  three  of  chapter  five  hundred  and  sixty-three  of  the 
acts  of  the  year  nineteen  hundred  and  seven,  codified  as  section  three  of  Part  IV 
of  chapter  four  hundred  and  ninety  of  the  acts  of  the  year  nineteen  hundred  and 
nine,  and  amended  by  chapter  five  hundred  and  two  of  the  acts  of  the  year  nine- 
teen hundred  and  eleven,  as  was  not  repealed  by  section  two  of  chapter  six 
hundred  and  seventy-eight  of  the  acts  of  the  year  nineteen  hundred  and  twelve, 
is  hereby  repealed. 

§  4.  This  act  shall  take  effect  upon  its  passage,  but  it  shall  apply  only  to 
property  or  interests  therein  passing  or  accruing  upon  the  death  of  persons  who 
die  subsequently  to  the  passage  hereof.  Property  or  interests  therein  passing 
or  accruing  upon  the  death  of  persons  dying  prior  to  the  passage  hereof  shall 
remain  subject  to  the  laws  then  in  force.  (Approved  May  26,  1916.) 

1918  AMENDMENTS. 
GENERAL  ACTS  OF  1918,  CHAPTER  14. 
An  Act  to  provide  a  discount  on  advance  payments  of  inheritance  taxes. 

Be  it  enacted,  etc.,  as  follows: 

Section  1.  Section  four  of  chapter  five  hundred  and  sixty-three  of  the  acts  of 
nineteen  hundred  and  seven,  codified  as  section  four  of  Part  IV  of  chapter  four 
hundred  and  ninety  of  the  acts  of  nineteen  hundred  and  nine,  as  amended  by 
section  two  of  chapter  five  hundred  and  twenty-seven  of  the  acts  of  nineteen 
hundred  and  nine,  by  section  one  of  chapter  one  hundred  and  fifty-two  of  the 
General  Acts  of  nineteen  hundred  and  fifteen,  and  by  section  two  of  chapter  two 
hundred  and  sixty-eight  of  the  General  Acts  of  nineteen  hundred  and  sixteen,  is 
hereby  further  amended  by  adding  at  the  end  thereof  the  following  new  para- 


948  THE  STATE  STATUTES 

graph: — If  a  tax  imposed  by  the  provisions  of  this  act  is  paid  prior  to  the  date 
upon  which  it  is  due,  it  shall  be  discounted  at  the  rate  of  4%  a  year. 

§  2.  This  act  shall  take  effect  upon  its  passage.  (Approved  February  14, 
1918.) 

GENERAL  ACTS  OF  1918,  CHAPTER  191. 

An  Act  to  provide  for  an  additional  legacy  and  succession  tax. 
Be  it  enacted,  etc.,  as  follows: 

Section  1.  All  property  subject  to  a  legacy  and  succession  tax  under  the  pro- 
visions of  section  one  of  chapter  five  hundred  and  sixty-three  of  the  acts  of 
nineteen  hundred  and  seven,  codified  as  section  one  of  Part  IV  of  chapter  four 
hundred  and  ninety  of  the  acts  of  nineteen  hundred  and  nine,  as  amende'd  by 
section  one  of  chapter  two  hundred  and  sixty-eight  of  the  General  Acts  of  nine- 
teen hundred  and  sixteen,  and  of  any  further  amendments  thereof  or  additions 
thereto,  shall  be  subject  to  an  additional  tax  of  twenty- five  per  cent  of  all  taxes 
imposed  thereon  by  said  acts.  All  provisions  of  law  relative  to  the  determination, 
certification,  payment,  collection  and  abatement  of  such  legacy  and  succession 
taxes  shall  apply  to  the  additional  tax  imposed  by  this  act. 

§  2.  This  act  shall  take  effect  upon  its  passage,  but  it  shall  apply  only  to 
property  or  interests  therein  passing  or  accruing  upon  the  death  of  persona  who 
die  subsequent  to  the  passage  hereof  and  within  one  year  thereafter.  (Approved 
May  2,  1918.) 

1920  AMENDMENTS. 

CHAPTER  548. 

An  Act  relative  to  the  taxation  of  legacies  and  successions. 
Be  it  enacted,  etc.,  as  follows: 

Section  1.  Section  one  of  chapter  five  hundred  and  sixty-three  of  the  acts  of 
nineteen  hundred  and  seven,  as  amended  by  chapter  two  hundred  and  sixty-eight 
of  the  acts  of  nineteen  hundred  and  nine,  codified  as  section  one  of  Part  IV  of 
chapter  four  hundred  and  ninety  of  the  acts  of  nineteen  hundred  and  nine,  and 
further  amended  by  section  one  of  chapter  five  hundred  and  twenty-seven  of  the 
acts  of  nineteen  hundred  and  nine,  by  chapter  six  hundred  and  seventy-eight  of 
the  acts  of  nineteen  hundred  and  twelve,  by  chapter  four  hundred  and  ninety- 
eight  of  the  acts  of  nineteen  hundred  and  thirteen,  by  section  one  of  chapter  two 
hundred  and  sixty-eight  of  the  General  Acts  of  nineteen  hundred  and  sixteen 
and  by  section  one  of  chapter  three  hundred  and  ninety-six  of  the  acts  of  nineteen 
hundred  and  twenty,  and  as  affected  by  chapter  four  hundred  and  ninety-eight 
of  the  acts  of  nineteen  hundred  and  thirteen,  is  hereby  further  amended  by 
striking  out  the  first  paragraph  and  substituting  the  following, — so  as  to  read 
as  follows: — Section  1.  All  property  within  the  jurisdiction  of  the  commonwealth, 
corporeal  or  incorporeal,  and  any  interest  therein,  whether  belonging  to  inhab- 
itants of  the  commonwealth  or  not,  which  shall  pass  by  will,  or  by  the  laws 
regulating  intestate  succession,  or  by  deed,  grant  or  gift,  except  in  cases  of  a 
bona  fide  purchase  for  full  consideration  in  money  or  money's  worth,  made  in 
contemplation  of  the  death  of  the  grantor  or  donor,  or  made  or  intended  to  take 
effect  in  possession  or  enjoyment  after  the  death  of  the  grantor  or  donor,  and 
any  beneficial  interest  therein  which  shall  arise  or  accrue  by  survivorship  in  any 
form  of  joint  ownership  in  which  the  decedent  joint  owner  contributed  during 
his  life  any  part  of  the  property  held  in  such  joint  ownership  or  of  the  purchase 
price  thereof,  to  any  person,  absolutely  or  in  trust,  except  to  or  for  the  use  of 
charitable,  educational  or  religious  societies  or  institutions,  the  property  of  which 
is  by  the  laws  of  this  commonwealth  exempt  from  taxation,  or  for  or  upon 
trust  for  any  charitable  purposes  to  be  carried  out  within  this  commonwealth, 
or  to  or  for  the  use  of  the  commonwealth  or  any  city  or  town  within  the 
commonwealth  for  public  purposes,  shall  be  subject  to  a  tax  as  follows: — 

See  table  of  rates,  p.  939. 

§  2.  Any  deed,  grant  or  gift  completed  inter  vivos,  except  in  cases  of  bona  fide 
purchase  for  full  consideration  in  money  or  money's  worth,  made  not  more  than 
six  months  prior  to  the  death  of  the  grantor  or  donor,  shall,  prima  facie,  be 
deemed  to  have  been  made  in  contemplation  of  the  death  of  the  grantor  or  donor. 
Notwithstanding  any  provision  of  section  one  of  this  act,  no  tax  shall  be  payable 


MASSACHUSETTS  949 

thereunder  on  account  of  any  deed,  grant  or  gift  in  contemplation  of  death  made 
more  than  two  years  prior  to  the  death  of  the  grantor  or  donor.  The  taxes 
imposed  by  the  provisions  of  this  act  upon  property  or  interests  therein  passing 
by  deed,  grant  or  gift  made  in  contemplation  of  death  shall  be  payable  by  the 
grantee  or  donee  at  the  expiration  of  one  year  after  the  death  of  the  grantor  or 
donor,  but  real  estate  so  passing  shall  not  be  subject  to  a  lien  for  such  tax. 

§  3.  Property  of  a  non-resident  decedent  which  is  within  the  jurisdiction  of 
the  commonwealth  at  the  time  of  his  death,  if  subject  to  a  tax  of  like  character 
with  that  imposed  by  this  act  by  the  law  of  the  state  or  country  of  his  residence, 
shall  be  subject  only  to  such  part  of  the  tax  hereby  imposed  as  may  be  in  excess 
of  the  tax  imposed  by  the  laws  of  such  other  state  or  country:  provided,  that  a 
like  exemption  is  made  by  the  laws  of  such  other  state  or  country  in  favor  of 
estates  of  residents  of  this  commonwealth,  but  no  such  exemption  shall  be  allowed 
until  the  tax  provided  for  by  the  law  of  such  other  state  or  country  shall  be 
actually  paid,  guaranteed,  or  secured  in  accordance  with  law. 

§  4.  If  a  foreign  executor,  administrator  or  trustee  assigns  or  transfers  any 
stock  in  any  national  bank  situated  in  this  commonwealth,  or  in  any  corporation 
organized  under  the  laws  of  this  commonwealth,  owned  by  a  deceased  non-resident 
at  the  date  of  his  death  and  liable  to  a  tax  under  the  provisions  of  this  act,  the 
tax  shall  be  paid  to  the  treasurer  and  receiver-general  at  the  time  of  such  assign- 
ment or  transfer;  and  if  it  is  not  paid  when  due,  such  executor,  administrator  or 
trustee  shall  be  personally  liable  therefor  until  it  is  paid.  A  bank  situated  in  this 
commonwealth  or  a  corporation  organized  under  the  laws  of  this  commonwealth 
which  shall  record  a  transfer  of  any  share  of  its  stock  made  by  a  foreign  executor, 
administrator  or  trustee,  or  issue  a  new  certificate  for  a  share  of  its  stock  at  the 
instance  of  a  foreign  executor,  administrator  or  trustee,  before  all  taxes  imposed 
thereon  by  the  provisions  of  this  act  have  been  paid,  shall  be  liable  for  such  tax 
in  an  action  of  contract  brought  by  the  treasurer  and  receiver-general. 

§  5.  Securities  or  assets  belonging  to  the  estate  of  a  deceased  non-resident  shall 
not  be  delivered  or  transferred  to  a  foreign  executor,  administrator  or  legal  repre- 
sentative of  such  decedent,  unless  such  executor,  administrator  or  legal  repre- 
sentative has  been  licensed  to  receive  the  said  securities  or  assets  under  the  pro- 
visions of  section  three  of  chapter  one  hundred  and  forty-eight  of  the  Revised 
Laws.  License  to  receive,  sell,  transfer  or  convey  securities  or  assets  under  the 
provisions  of  said  section  three  shall  not  be  granted  unless  it  appears  to  the  judge 
of  the  probate  court  that  all  taxes  imposed  by  the  provisions  of  this  act  have 
been  paid  or  secured  according  to  law.  Any  person  or  corporation  that  delivers 
or  transfers  any  securities  or  assets  belonging  to  the  estate  of  a  non-resident 
decedent  before  all  taxes  imposed  thereon  by  the  provisions  of  this  act  have  been 
so  paid  or  secured,  shall  be  liable  for  such  tax  in  an  action  of  contract  brought 
by  the  treasurer  and  receiver-general.  The  notice  required  by  said  section  three 
to  be  given  to  the  treasurer  and  receiver-general  shall  be  given  to  the  commis- 
sioner of  corporations  and  taxation  in  regard  to  all  property  subject  to  the 
provisions  of  this  act,  instead  of  to  the  treasurer  and  receiver-general. 

§  6.  This  act  shall  apply  only  to  estates  of  persons  dying  on  or  after  the  date 
of  its  passage.  (Approved  May  4,  1920.) 

1922  AMENDMENTS. 

CHAPTER  300,  1922. 

Chapter  sixty-five  of  the  General  Laws  is  hereby  amended  by  striking  out  sec- 
tion fifteen  and  inserting  in  place  thereof  the  following: — Section  15.  In  case  of 
a  devise,  bequest  or  grant  of  real  or  personal  property  made  or  intended  to  take 
effect  in  possession  or  enjoyment  after  the  death  of  the  grantor,  to  take  effect 
in  possession  or  come  into  actual  enjoyment  after  the  expiration  of  one  or  more 
life  estates  or  a  term  of  years,  whether  conditioned  upon  the  happening  of  a 
contingency,  dependent  upon  the  exercise  of  a  discretion,  subject  to  a  power  of 
appointment,  or  otherwise,  the  taxes  upon  which  have  not  yet  become  due,  the 
executor,  administrator,  trustee  or  grantee  may  (a)  deposit  with  the  state  treas- 
urer bonds  or  other  negotiable  obligations  of  the  commonwealth  or  of  the  United 
States  of  America  of  such  aggregate  face  amount  as  the  commissioner  may  from 
time  to  time  deem  necessary  to  adequately  secure  payment  of  such  taxes,  or  (b) 
deposit  with  the  state  treasurer  a  sum  of  money  sufficient  in  the  opinion  of  the 
commissioner  to  pay  all  taxes  which  may  become  due  upon  such  devise,  bequest 


950  THE  STATE  STATUTES 

or  grant,  or  (c)  any  executor,  administrator,  trustee  or  grantee,  or  any  person 
interested  in  such  devise,  bequest  or  grant  may  give  a  bond  to  a  judge  of  the 
probate  court  having  jurisdiction  of  the  estate  of  the  decedent,  in  such  amount 
and  with  such  sureties  as  said  court  may  approve,  conditioned  that  the  obligor 
shall  notify  the  commissioner  when  said  taxes  shall  become  due  and  shall  then 
pay  the  same  to  the  commonwealth.  In  case  of  a  deposit  of  money  hereunder,  the 
state  treasurer  shall  pay  to  such  executor,  administrator,  trustee  or  grantee  having 
the  right  to  the  use  or  income  of  such  real  or  personal  property,  interest  at  the 
rate  of  two  and  one-half  per  cent  per  annum  upon  such  deposit,  and,  when  said 
taxes  shall  become  due,  shall  repay  to  the  persons  entitled  thereto  the  difference 
between  such  part  of  the  tax  certified  as  remains  unpaid  and  the  amount  deposited. 
In  case  of  a  deposit  of  bonds  or  other  negotiable  obligations  with  the  state  treas- 
urer hereunder,  he  shall  pay  to  such  executor,  administrator,  trustee  or  grantee 
as  aforesaid  or  persons  entitled  thereto  the  interest  accruing  thereon  and,  if  such 
taxes  shall  be  paid  in  full  when  due,  shall  return  such  bonds  or  obligations  to  the 
persons  entitled  thereto ;  but  if  such  taxes  shall  not  be  paid  when  due,  the  state 
treasurer  may  sell  all  or  any  part  of  such  bonds  or  obligations  to  satisfy  such 
taxes  and  shall  return  to  the  persons  entitled  thereto  all  the  proceeds  of  such 
sale,  and  all  such  bonds  or  obligations,  remaining  in  his  hands  after  satisfying 
such  taxes.  (Approved  April  15,  1922.) 

CHAPTER  403,  L.  1922. 

Section  2.  Section  four  of  said  chapter  sixty-five  is  hereby  amended  by  striking 
out,  in  the  first  and  second  lines,  the  words  ' '  passing  under  section  one  from  any 
person  not  an  inhabitant  of  the  commonwealth",  and  inserting  in  place  thereof 
the  words: — of  any  person  not  an  inhabitant  of  the  commonwealth  taxable  under 
section  one, — so  as  to  read  as  follows: — Section  4.  When  the  personal  estate  of 
any  person  not  an  inhabitant  of  the  commonwealth  taxable  under  section  one 
consists  in  whole  or  in  part  of  shares  in  any  railroad  or  street  railway  company 
or  telegraph  or  telephone  company  incorporated  under  the  laws  of  this  common- 
wealth and  also  of  some  other  state  or  country,  so  much  only  of  each  share  as  is 
proportional  to  the  part  of  such  company's  line  lying  within  this  commonwealth 
shall  be  considered  as  property  of  such  person  within  the  jurisdiction  of  the 
commonwealth  for  the  purposes  of  this  chapter. 

Additional  Tax  Extended. 

The  additional  tax  of  25%  imposed  by  chapter  191,  L.  1918,  was  extended  by 
Acts  of  1919,  chapter  342,  section  4,  and  Acts  of  1920,  chapter  441,  so  that  it  ran 
continuously  from  May  3,  1918,  to  December  1,  1920,  inclusive. 

Prior  Statutes:  L.  1891,  ch.  425;  L.  1892,  ch.  379;  L.  1893,  ch.  432;  L.  1895, 
ch.  307;  L.  1895,  ch.  430;  L.  1896,  ch.  108;  L.  1900,  ch.  371;  L.  1901,  ch.  277; 
L.  1901,  ch.  297;  L.  1902,  ch.  473;  L.  1903,  ch.  248;  L.  1903,  ch.  251;  L.  1903, 
ch.  276 ;  L.  1904,  ch.  421 ;  L.  1905,  ch.  367 ;  L.  1905,  ch.  470 ;  L.  1906,  ch.  436 ; 
L.  1907,  ch.  452;  L.  1907,  ch.  563;  L.  1908,  pg.  840;  L.  1908,  ch.  268;  L.  1908, 
ch.  624;  L.  1909,  ch.  266;  L.  1909,  ch.  268. 


MASSACHUSETTS  951 

MASSACHUSETTS  FORMS. 

NONRESIDENT  EXECUTOR'S  AFFIDAVIT. 

This  affidavit  should  be  mailed  to  Hon.  William  D.  T.  Trefry,  Tax  Commis- 
sioner, Boom  235,  State  House,  Boston,  when  completed. 

(NONRESIDENT  DECEDENT.) 


RE  ESTATE  OF 


Late  of   

Date  of  Death 191 

Date  of  Executor's  Bond 191 

NOTE.  —  If  no  bond  is  required,  give  date  of 
appointment.  If  ancillary  administrator  is 
appointed  in  Mass,  give  date  of  Mass.  bond. 

Attorney 

Address  of  Attorney 


Affidavit 

of 
Executor 

or 
Administrator. 


State  of   

County  of S< 

191.... 

(1)  I,    ,   on  oath   depose   and  aay  that  my  post-office 

address  is  street,  City  or  Town  of   , 

the  Execut 

State  of ;  that  I  am         duly-appointed 

a  Administrat 

of  the    eslat'e  of  '  late  of   '  in  th° 

County  of   ,  and  State  of   ,  who 

died  on  the    day  of    ,   191 ;    that   the   date  of  my 

,       ,  ,   Administrat is   ,  191 ;   and  that 

'n  Execut (See  note  in  brackets  above.) 

the  said  bond  is  now  in  full  force: 

(2)  That  the  total  value  of  all  real  estate  situated  in  Massachusetts,  of  which 
said  decedent  died  seized  or  possessed,  over  which  he  had  a  power  of  appoint- 
ment, or  which  prior  to  h         death  he  had  transferred  by  deed,  grant  or  gift 
(except  bona  fide  sales  for  full  consideration  in  money  or  money's  worth)  made 
or  intended  to  take  effect  in  possession  or  enjoyment  after  death,  at  its  actual 

value  on  the  date  of  h       death  was  REAL  ESTATE,       $ 

an  itemized  statement  of  which  is  hereto  annexed,  made  a  part  hereof,  and  marked 
"Schedule  A." 

(3)  That  the  total  value  of  all  interests  in  Massachusetts  real  estate  other 
than  that  listed  in  Schedule  "A,"  including  mortgages  on  real  estate  in  Massa- 
chusetts and  shares  or  other  certificates  of  interest  in  real  estate  trusts  owning 
real   estate   in   Massachusetts,   owned   by  said  decedent,   over   which     he  had   a 
power   of   appointment,   or  which     he  had   transferred   by   deed,   grant   or   gift 
(except  bona  fide  sales  for  full  consideration  in  money  or  money's  worth)  made 
or  intended  to  take  effect  in  possession  or  enjoyment  after  death,  at  its  actual 
value  on  the  date  of  h       death  was 

OTHER  INTERESTS  IN  REAL  ESTATE,     $ 

an  itemized   statement   of  which   is  hereto    annexed,   made   a  part   hereof,   and 
marked  "Schedule  B." 

IF  THE  DECEDENT  OWNED  NO  REAL  ESTATE,  MORTGAGES  NOR 
OTHER  INTERESTS  IN  REAL  ESTATE  WITHIN  MASSACHUSETTS, 
HAD  NO  POWER  OF  APPOINTMENT  OVER  ANY  SUCH  PROPERTY, 
AND  HAD  TRANSFERRED  NO  SUCH  PROPERTY  BY  DEED,  GRANT 
OR  GIFT  AS  ABOVE  STATED,  NO  FURTHER  INFORMATION  IS 
NECESSARY. 

(4)  That  hereto  annexed  and  made  a  part  hereof  is  a  true  copy  of  the  will  and 
codicils  of  the  deceased  as  allowed  by  the  probate  court  of  the  State  of  domicile. 

(5)  That  hereto  annexed,   marked   "Schedule  C, "   is   a   true   list   of  all   the 


952 


THE  STATE  STATUTES 


legatees  and  devisees  or  heirs  at  law  and  next  of  kin  who  take  any  share  of  the 
estate,  with  their  legal  relationships  to  the  decedent  and  the  dates  of  birth  of 
any  who  take  life  interests  or  who  are  remaindermen. 

(6)  That  hereto  annexed,  marked  "Schedule  D,"  is  a  true  statement  of  the 
total  value  of  all  real  estate  and  of  all  personal  estate  both  within  and  without 
Massachusetts. 

(7)  That  hereto  annexed,  marked  "Schedule  E,"  is  a  true  itemized  statement 
of  the  debts  and  expenses  of  administration  in  Massachusetts,  and  a  true  statement 
of  the  total  amount  of  all  other  debts  and  expenses  of  administration. 

The    information    here    requested    is    unnecessary    where    the    decedent    left    NO 
PROPERTY  in  Massachusetts. 

SCHEDULE  "  A. " 

Itemized  List  of  All  Real  Estate  in  Massachusetts. 
Description  and  Location.  Value. 

SCHEDULE  "B." 
Itemized  List  of  Mortgages  or  Other  Interests  in  Eeal  Estate  in  Massachusetts. 

SCHEDULE  "C." 

List  of  Legatees  and  Devisees  or  Heirs  at  Law  Who  Take  any  Share  of  the  Estate 
Name.  Residence.  Relationship.       Date  of  Birth.         Share. 

SCHEDULE  "D." 
Total  value  of  all  real  estate,  both  within  and  without  Massachusetts 

TOTAL  REAL  ESTATE    . . , 

Total  value  of  all  personal  estate  within  Massachusetts 

(Including  all  personal  property  physically  located  within  the 
State,  and  shares  of  stock  in  Mass.  Corporations  wherever 
located.) 
Total  value  of  all  other  personal  estate  wherever  situated 

TOTAL  PERSONAL  ESTATE    .  .  . 

(1)  Total  amount  of  all  debts  and  expenses  outside  Massachusetts  $. 

(2)  Total  amount  of  all  debts  and  expenses  within  Massachusetts 

(itemized  below)    

Items  of  (2)  Items  of  (2)  Cont'd 

Signature 

State  of Administrat Execut 

ss 191 

Then  personally  appeared  the  above-named   

to  me  personally  known,  and  made  oath  that  the  foregoing  statements  by  h 
subscribed  are  full,  true  and  correct. 

Justice  of  the  Peace  or  Notary  Public. 

The  officer  before  whom  the  affiant  is  sworn  is  requested  to  see  that  every  item 

is  marked. 


MASSACHUSETTS  953 

OFFER  OF  SETTLEMENT. 
Under  Provisions  of  Section  7,  Chapter  490, 
Acts  of  the  Year  1909  as  Amended  by  Sec- 
tion 4,  Chapter  527,  Acts  of  the  Year  1909. 

Section  7.  Any  person  or  persons  entitled  to  a  future  interest  or  to  future 
interests  in  any  property  may  pay  the  tax  on  account  of  the  same  at  any  time 
before  such  tax  would  be  due  in  accordance  with  the  provisions  hereinbefore 
contained,  and  in  such  cases  the  tax  shall  be  assessed  upon  the  actual  value  of 
the  interest  at  the  time  of  the  payment  of  the  tax,  and  such  value  shall  be 
determined  by  the  tax  commissioner  as  hereinafter  provided.  In  every  case  in 
which  it  is  impossible  to  compute  the  present  value  of  any  interest  the  tax  com- 
missioner may,  with  the  approval  of  the  attorney-general,  effect  such  settlement 
of  the  tax  as  he  shall  deem  to  be  for  the  best  interests  of  the  commonwealth,  and 
payment  of  the  sum  so  agreed  upon  shall  be  a  full  satisfaction  of  such  tax. 

191 

•Hon.  WILLIAM  D.  T.  TREFRY, 
Tax  Commissioner, 

State  House,  Boston. 

Sir: — In  the  matter  of  the  estate  of 

late  of the  undersigned  being  all  the  parties  in 

interest    hereby    offer    to    The    Commonwealth    of    Massachusetts    the    sum    of 

$ to  be  paid  on  or  before 191 ....  in  settlement 

of  all  legacy  and  succession  taxes  due  or  to  become  due  upon  the  interests  in 

the  property  scheduled  in  the  inventory  of  the  estate  filed 

191 . . . . ,  passing  under  the clause  ....  of  the  will  of  the  deceased  to 


Deeming  it  to  be  for  the  best  interest 
of  the  Commonwealth,  the  above 
offer  is  accepted. 


Tax  Commissioner. 
Approved, 

A  ttorney-  G  eneral. 


Request  for  Assessment  of  Tax  on  Future  Interests. 
Under  Provisions  of  Section   7,  Chapter  490, 
Acts  of  the  Year  1909  as  Amended  by  Sec- 
tion 4,  Chapter  527,  Acts  of  the  Year  1909. 

Section  7.  Any  person  or  persons  entitled  to  a  future  interest  or  to  future 
interests  in  any  property  may  pay  the  tax  on  account  of  the  same  at  any  time 
before  such  tax  would  be  due  in  accordance  with  the  provisions  hereinbefore 
contained,  and  in  sueh  cases  the  tax  shall  be  assessed  upon  the  actual  value  of 
the  interest  at  the  time  of  the  payment  of  the  tax,  and  such  value  shall  be 
determined  by  the  tax  commissioner  as  hereinafter  provided.  In  every  case  in 
which  it  is  impossible  to  compute  the  present  value  of  any  interest  the  tax  com- 
missioner may,  with  the  approval  of  the  attorney-general,  effect  such  settlement, 
of  the  tax  as  he  shall  deem  to  be  for  the  best  interests  of  the  commonwealth,  and 
payment  of  the  sum  so  agreed  upon  shall  be  a  full  satisfaction  of  such  tax. 

191 

Hon.  WILLIAM  D.  T.  TREFRY, 
Tax  Commissioner, 

State  House,  Boston. 

Sir : — In  the  matter  of  the  estate  of  

late  of the  undersigned  being  entitled  to  a 


954  THE  STATE  STATUTES 

future  interest,  or  to  future  interests,  respectfully  request  that  the  tax  be 
computed  upon  such  interest  or  interests  on  the  present  worth  of  the  same: 
payment  to  be  made  on  or  before  19 


NOTE:  If  this  request  is  signed  by  executors  or  attorneys  as  representing  the 
persons  entitled  to  future  interests,  the  authority  for  such  representation  must 
be  alleged. 

Inventory. 

Filed  with  the  Tax  Commissioner  in  Accordance  with  the  Provisions  of  Chap.  490, 
Part  IV,  Acts  of  1909,  as  Amended  by  Sect.  5,  Chap.  527, 

Acts  of  1909. 

I,  ,  P.  O.  Address   

Execut Will 

duly  appointed  of  the  of 

Administrat Estate 

late  of do  hereby  depose  and  say  that  the  within 

is  a  full  and  complete  inventory  of  all  the  property  of  the  said  decedent   of 
every  kind  and  description  which  has  come  to  my  possession  or  knowledge  as 

Execut 

such  and  that  the  values  given  are  the  actual  market  values 

Administrat , 

on  the  day  of  death  of  said  decedent,  to  wit :    

Amount  of  Personal  Estate  as  per  Schedule $ 

Amount  of  Real  Estate  as  per  Schedule $ 


Total $ 

Signed 

Execut Administrat 

Date  of  bond : 

191 

S3. 

Then  personally  appeared  the  above-named 

to  me  personally  known,  and  made  oath  that  the  within  schedules  constitute  a 
full  and  complete  inventory  of  all  the  estate  of  the  said  decedent  which  has 
come  to possession  or  knowledge. 


Justice  of  the  Peace. 

Schedule  of  Personal  Estate,  wherever  situated,  in  Detail. 

Dollars.        Cts. 


THE  COMMONWEALTH  OF  MASSACHUSETTS 
DEPARTMENT  OF  TAX  COMMISSIONER 

State  House,  Boston. 

Compliance  with  the  following  suggestions  in  compiling  inventories  will  facilitate 
the  computation  of  the  Legacy  Tax.  All  valuations  to  be  made  as  of  the  date 
of  death. 

PERSONAL   PROPERTY. 

In  listing  the  property  appraised,  describe  accurately  and  concisely  each  item 
as  follows: — 


MASSACHUSETTS  955 

BONDS — Show  quantity  and  denomination,  exact  title  of  corporation,  state  or 
country  of  incorporation,  place  of  business,  interest  rate  and  maturity  date. 
Indicate  whether  registered  or  coupon,  and  give  such  other  information  as 
will  enable  the  particular  class  or  issue  to  be  identified. 

Example. 
10— $1,000  Am.  Tel.   &  Tel.   Co.,   N.   Y.,  Conv.   gold  4%    Coupon,   1936   opt. 

1914  M.  &  S.  at  81=8100.    Bonds  are  to  be  appraised  at  market  value  with 

interest  to  the  day  of  death.     All  uncollected  or  overdue  coupons  on  such 

bonds  should  be  included  and  listed  separately. 
STOCKS— State  the  number  of  shares,  whether  common  or  preferred,  exact  title 

of  corporation,  state  or  country  of  incorporation,  place  of  business  and  the 

par  value  of  the  shares. 
NOTES — Indicate  amount  due  on  principal  and  show  interest  rate  and  the  date 

to  which  interest  had  been  paid  at  the  time  of  the  decedent's  death. 
BANK  DEPOSITS — Appraise  to  include  all  interest  and  dividends  to  the  credit  of 

the  account  at  the  date  of  death,  and  indicate  by  a  note  that  this  has  been 

done. 
When   an  interest   in   property  other   than   an    entire   interest   is   inventoried, 

indicate  the  fractional  part. 

REAL  ESTATE. 

Show  the  location  of  each  parcel  by  city  or  town  and  give  the  area.  Indicate 
the  street  and  number  if  any.  State  character  of  land  if  unimproved  and  character 
of  buildings  if  any. 

In  the  case  of  real  estate  subject  to  mortgage,  show  the  total  value  of  each 
parcel,  and  the  amount  of  mortgage  indebtedness  applicable  to  each  parcel, 
carrying  out  the  equity  only  in  the  valuation  column. 

In  the  case  of  mortgage  indebtedness  applicable  to  undivided  interests  in 
realty,  indicate  plainly  that  the  mortgage  shown  is  applicable  to  the  fractional 
interest  or  to  the  entire  parcel. 

If  the  decedent  owned  an  undivided  interest  in  realty,  such  interest  only  should 
be  appraised,  but  the  decedent's  fractional  interest  in  each  parcel  must  be  indi- 
cated. The  total  value  of  the  property  and  the  names  of  the  co-tenants  should 
also  appear. 

WILLIAM  D.  T.  TREFRY, 

Tax  Commissioner. 

Schedule  of  Real  Estate  in  Detail  situated  within  the  Commonwealth. 

Dollars.        Cts. 


NOTE. — In  the  absence  of  this  waiver,  three  months  from  date  of  determination 
of  value  must  elapse  before  the  tax  is  computed. 

WAIVER  OF  APPEAL  FROM  VALUATION,  AND  WAIVER  OF  CLAIM  FOR  DEDUCTIONS  OF 
FOREIGN  LEGACY  TAXES. 

Estate  of   

Late  of  .• . . 

191 

Hon.  WILLIAM  D.  T.  TREFRY, 
Tax  Commissioner, 

State  House,  Boston. 
DEAR  SIR: — 

Being  duly  authorized  so  to  do,  the  undersigned  hereby  accepts  the  Tax  Com- 
missioner's valuation  of  the  property  in  the  above-named  estate,  and  waives  all 
rights  of  appeal  thereon  in  behalf  of  the  said  estate;  and  waives  all  rights  to 
deductions  on  account  of  foreign  legacy  taxes,  the  evidence  of  the  assessment  and 
payment  of  which  is  not  presented  herewith. 


Execut Administrat . 


956 


THE  STATE  STATUTES 


NOTICE. 

This  affidavit,  together  with  all  other  information  necessary  to  the  computation 
of  the  tax,  should  be  filed  in  the  office  of  the  Tax  Commissioner  at  least  Three 
Weeks  before  the  tax  becomes  due. 

The  inheritance  tax  becomes  due  at  the  expiration  of  one  year  from  the  date 
of  giving  bond  by  the  original  executor  or  administrator  (or  two  years  thereafter, 
if  the  death  occurred  prior  to  April  8,  1915)  and  draws  interest  from  such  due 
date  at  the  rate  of  6%  per  annum. 

The  tax  upon  Future  Interests  becomes  due  One  Tear  from  the  date  the  gift 
vests  in  possession  or  enjoyment.  Such  tax  may  be  paid  upon  the  present  worth 
of  the  future  interest  at  any  time  upon  request  by  the  person  entitled  thereto- 
A  form  for  such  request  will  be  furnished. 

The  Tax  Commissioner  has  no  authority  to  abate  interest. 

Resident  Decedent. 
Affidavit    of   Debts,    Expenses,    Etc. 

Estate  of    

Late  of  

Date  of  Death . .  Probate  Docket  No 


INSTRUCTIONS. 

Head  Carefully. 

In  General:  No  debt  or  expense  of  any  kind  should  be  included  in  this  affidavit 
unless  the  same  is  a  proper  charge  against  PRINCIPAL  of  the  estate.  Fees  based 
on  income  are  not  allowable  for  the  purpose  of  the  computation  of  the  tax. 

Mortgage  Notes  secured  by  real  estate  of  the  decedent  should  not  be  included  as 
debts  if  the  equity  only  of  such  real  estate  has  been  valued  for  taxation.  If  a 
mortgage  note  is  included  in  this  affidavit,  state  by  what  property  of  the 
deceased  it  was  secured. 

Local  Taxes  and  assessments  should  not  be  included  as  debts  or  expenses  of 
administration  unless  the  same  were  assessed  as  of  April  first  prior  to  the  death 
of  the  decedent.  When  taxes  or  water  rates  are  included,  give  the  year  for 
which  they  were  assessed. 

Foreign  Legacy  Taxes.  If  the  decedent  died  prior  to  May  26,  1916,  the  original 
documents  showing  the  details  of  the  assessment  of  the  foreign  tax,  together 
with  the  receipt  for  its  payment,  should  be  enclosed  for  the  inspection  of  the 
Tax  Commissioner.  These  papers  will  be  returned  after  examination.  If  the 
death  occurred  on  or  subsequent  to  May  26,  1916,  foreign  legacy  taxes  may  be 
included  in  this  affidavit  as  expenses  of  administration  provided  the  will  directs 
the  payment  of  all  legacy  and  succession  taxes  from  the  residue  of  the  estate, 
but  not  otherwise. 

Every  question  should  be  fully  and  carefully  answered,  and  it  is  the  duty  of  the 
affiant  to  fully  inform  himself  concerning  all  matters  covered  by  this  form. 

1.    I  DEBTS    AND    EXPENSES. 

We  (Address)    

Administrat. . . .  estate 

duly  appointed  Execut of  the  will 

of  late  of  

deceased,  hereby  depose  and  say  that  the  following  is  a  true  list  of  the  debts, 
funeral  expenses  and  expenses  of  administration  paid,  or  to  be  paid,  from  the 
assets  of  the  estate  of  said  decedent. 


Item. 


Dollars      Cents 


(a)  Debts  actually  contracted  by  the  decedent 

(b)  Funeral  expenses 

(c)  Expenses  of  administration  itemised 

Total.. 

MASSACHUSETTS 


957 


ADDITIONAL  PROPERTY. 

2.  The  following  property,  other  than  interest  accruing  after  the  death,  has 
come  to  my  knowledge  or  possession  since  the  inventory  of  this  estate  was  filed, 
to  wit: — (If  there  is  none  please  write  "nothing"  at  the  right.) 


Total. 

3.  Does  the  inventory  of  the  property  of  the  estate,  together  with  the  above 
additions,  constitute  a  full  and  complete  list  of  all  the  property  in  which  the  said 
decedent  had  any  interest  whether  within  or  without  the  Commonwealth,  which 
has  come  to  the  knowledge  or  possession  of  the  Executors  or  Administrators  t 

DEED,   GRANT   OR   GIFT. 

4.  Did  the  said  decedent  make  any  deed,  grant  or  gift  intended  to  take  effect 
in  possession  or  enjoyment  after  h....    death  except   bona  fide  sales   for   full 
consideration  in  money  or  money's  worth? 

(This  question  embraces  death-bed  gifts,  trust-deeds,  etc.) 

JOINT  OWNERSHIP. 

5.  Did  the  decedent  at  the  time  of  his  death  own  jointly  with  any  other  person 
or  persons  who  had  rights  by  survivorship  therein  any  stocks,  bonds,  bank  accounts, 
real  estate  or  any  other  property? 

If  so,  did  the  decedent  contribute  to   such  joint  ownership   any  part  of  the 

property  so  held  or  of  the  purchase  price  thereof? 

(State  details.) 

POWER  OF  APPOINTMENT. 

6.  Did  the  said  decedent  have  a  power  of  appointment  over  any  property  not 

included  in  the  inventory  of  this  estate?   

(Whether  or  not  such  power  was  exercised  is  not  material,   and  copy   of   the 

instrument  creating  the  power  and  an  inventory  of  the  property 
should  be  furnished. 

MARKED  ENVELOPES,  ETC. 

7.  Did  the  decedent  leave  any  property  within  or  without  the  Commonwealth, 
marked  with  the  name  of  any  person  to  whom  the  same  had  not  been  actually 
delivered  prior  to  death?  

(If  so,  furnish  full  details.) 

LEGATEES  AND  DISTRIBUTEES. 

Please  Follow  Instructions  Carefully, 

In  case  of  persons  taking  by  representation,  group  together  all  who  take  through 

a  common  ancestor,  giving  date  of  death  and  relationship 

of  such  ancestor. 

8.  I  further  depose  and  say  that  the  following  is  a  true  list  of  all  the  persons 
or  corporations  named  in  the  will  or  who  are  entitled  to  any  share  of  the  estate, 
their  residences  and  legal  relationships  to  the  deceased,  and  the  date  of  birth  of 
such  as  take  life  interests  or  are  remaindermen  after  Iffe  estates  or  terms  of 
years: — 

Name. 

(Show  relationships  *Whether 

of  legatees  by  di-  Legal  Living 

vision  into  family  Residence  Relationship  to        Date  of  at  Death 

groups)  the  Decedent  Birth  of  Decedent 


958  THE  STATE  STATUTES 

*  If  "no,"  state  whether  such  beneficiary  left  issue  who  will  take  by  right 
of  representation  under  the  statute,  giving  names,  etc.,  of  such  issue,  if  any. 
If  since  deceased  give  date  of  birth. 


Signatures 

!••••• 

Executors  or  Administrators. 

The  officer  before  whom  the  affiant  is  sworn  is  requested  to   see  that  every 
question  is  answered. 

ss 19 

Then  personally  appeared  the  above-named  

and  made  oath  that  the  above  statements  by subscribed  are  true. 

Before  me, 


Justice  of  the  Peace  or  Notary  Public. 
My  commission  will  expire 


No 

DETERMINATION  OF  TAX  COMMISSIONER. 

THE  COMMONWEALTH  OF  MASSACHUSETTS. 

OFFICE  OF  THE  TAX  COMMISSIONER 

State  House,  Boom  235. 

Boston, 191, 

Estate  of 

Late  of  

To.. 


In  accordance  with  the  provisions  of  section  19  of  Part  IV  of  chapter  490  of 
the  Acts  of  the  year  1909,  I  determine  the  value  of  the  property  of  said  decedent 
within  the  jurisdiction  of  the  Commonwealth  of  Massachusetts,  disclosed  by 
information  on  file,  to  be  as  below  stated.  Upon  this  valuation,  after  deductions 
for  debts,  funeral  expenses,  expenses  of  administration  and  exempted  legacies 
or  shares,  the  evidence  of  which  has  been  seasonably  submitted,  the  tax,  if  any, 
will  be  computed. 

Personal  Estate,  as  per  within  schedule $ 

Keal  Estate,  as  per  within  schedule 


Too;  Commissioner. 

Schedule  of  Real  Estate  in  Detail. 

Dollars.        Cts. 


MICHIGAN 


959 


MICHIGAN. 

Taxes  all  property  of  nonresidents  within  the  State,  including  stock  in  domestic 
corporations. 

TABLE  OF  RATES  PRIOR  TO  1919. 


CLASS  OB  RELATIONSHIP 

Exemption 

Rate  of  tax 

Grandparents,  parents,  husband,  wife,  child,  brother,  sister, 
wife  or  widow  or  son,  husband  of  daughter,  adopted  or  mutu- 
ally acknowledged  child,  lineal  descendants. 

Wife, 

$5,000; 
others, 
$2,000 

If  property  exceeds 
exemption  1%  on 
all  personal  prop- 
erty. 

$100 

real  estate. 

TABLE  OF  RATES  AND  EXEMPTIONS  UNDER  AMENDMENTS  OF  1919. 


$50,000 

In  ex- 

Class 

or  Relationship 

Up  to 

to 

cess  of 

Exemption 

$50,000 

$500,000 

$500,000 

Grandparents,  parents,  husband,  wife,  child,  brother, 

Wife,  no  tax, 

1% 

2% 

4% 

Bister,  wife  or  widow  or  son,  husband  of  daugh- 

unless proper- 

ter,   adopted    or 

mutually    acknowledged    child, 

ty  exceeds  $5,- 

lineal  descendants 

000,    then   no 

exemption. 

Others,  no  tax, 

1% 

2% 

4% 

unless  proper- 

ty exceeds  $2,- 

000,    then    no 

exemption. 

Non-resident  aliens 
in  this  country. 

and  corporation  not   chartered 

None 

25% 

25% 

25% 

All  others  

None 

5% 

10% 

20% 

THE    STATUTE. 

ACT  188  OF  THE  PUBLIC  ACTS  OF  1899,  AS  AMENDED  BY  ACT  195  OF 
THE  PUBLIC  ACTS  OF  1903,  ACTS  155  AND  328  OF  THE  PUBLIC  ACTS 
OF  1907,  ACT  44  OF  THE  PUBLIC  ACTS  OF  1909,  ACTS  73  AND  265  OF 
THE  PUBLIC  ACTS  OF  1911,  ACTS  17  AND  30  OF  THE  PUBLIC  ACTS 
OF  1913,  ACTS  195  AND  198  OF  THE  PUBLIC  ACTS  OF  1915,  ACT  336 
OF  THE  PUBLIC  ACTS  OF  1917,  AND  ACTS  92  AND  98,  1919. 

Section  1.  After  the  passage  of  this  act  a  tax  shall  be  and  is  hereby  imposed 
upon  the  transfer  of  any  property,  real  or  personal,  of  the  value  of  one  hundred 
dollars  or  over,  or  of  any  interest  therein  or  income  therefrom,  in  trust  or  other- 
wise, to  persons  or  corporations  not  exempt  by  law  from  taxation  on  real  or 
personal  property,  in  the  following  cases : 

First,  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  State  from 
any  person  dying  seized  or  possessed  of  the  property  while  a  resident  of  this 
State ; 

Second,  When  the  transfer  is  by  will  or  intestate  law  of  property  within  the 
State,  and  the  decedent  was  a  nonresident  of  the  State  at  the  time  of  his  death; 

Third,  When  the  transfer  is  of  property  made  by  a  resident  or  by  nonresident, 
when  such  nonresident's  property  is  within  this  State,  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor 
or  intended  to  take  effect,  in  possession  or  enjoyment  at  or  after  such  death. 
Such  tax  shall  also  be  imposed  when  any  such  person  or  corporation  becomes 
beneficially  entitled  in  possession  or  expectancy  to  any  property  or  the  income 
thereof  by  any  such  transfer,  whether  made  before  or  after  the  passage  of  this 
act; 


960  THE  STATE  STATUTES 

Fourth,  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though  the  property 
to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power 
and  had  been  bequeathed  or  devised  by  such  donee  by  will;  and  whenever  any 
person  or  corporation  possessing  such  a  power  of  appointment  so  derived  shall 
omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or 
in  part,  a  transfer  taxable  under  the  provisions  of  this  act  shall  be  deemed  to 
take  place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner  as  though 
the  persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoy- 
ment of  the  property  to  which  such  power  related  had  succeeded  thereto  by  a  will 
of  the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time 
of  such  omission  or  failure. 

§  2.  When  the  property  or  any  beneficial  interest  therein  so  passed  or  trans- 
ferred exceeds  the  exemption  hereinafter  specified  and  shall  not  exceed  in  value 
fifty  thousand  dollars,  the  tax  hereby  imposed  shall  be: 

First,  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  grandfather,  grandmother,  father,  mother,  husband,  wife, 
child,  brother,  sister,  wife  or  widow  of  the  son,  or  the  husband  of  the  daughter, 
or  to  or  for  the  use  of  any  child  or  children  adopted  as  such  in  conformity  with 
the  laws  of  this  State  or  any  other  state  or  country,  of  the  decedent  grantor, 
donor. or  vendor,  or  for  the  use  of  any  persons  to  whom  such  decedent  grantor, 
donor  or  vendor  stood  in  the  mutually  acknowledged  relation  of  a  parent:  Pro- 
vided, however,  That  such  relationship  began  at  or  before  the  child's  seventeenth 
birthday  and  continued  until  the  death  of  such  decedent  grantor,  donor,  vendor, 
or  to  or  for  the  use  of  any  lineal  descendant  of  such  decedent  grantor,  donor  or 
vendor,  such  transfer  of  property  shall  not  be  taxable  under  this  act,  unless  it  is 
personal  property  of  the  clear  market  value  of  two  thousand  dollars  or  over,  and 
when  the  transfer  is  to  a  wife  such  transfer  of  property  shall  not  be  taxable 
unless  it  is  personal  property  of  the  clear  market  value  of  five  thousand  dollars 
or  over,  in  which  case  the  entire  transfer  shall  be  taxed  under  this  act  at  the  rate 
of  1%  of  the  clear  market  value  thereof.  The  exemptions  of  sections  one  and 
two  of  this  act  shall  apply  and  be  granted  to  each  beneficiary's  interest  therein, 
and  not  to  the  entire  estate  of  a  decedent.  No  deductions  or  exemptions  from 
such  tax  shall  be  made  for  any  allowance  granted  by  the  order  of  any  court  for 
the  maintenance  and  support  of  the  widow  or  family  of  a  decedent  pending  the 
administration  of  the  estate,  when  there  is  income  from  such  estate  accruing 
after  death,  which  is  available  to  pay  such  allowance,  or  for  a  longer  period  than 
one  year,  or  for  a  greater  amount  than  is  actually  used  and  expended  for  the 
maintenance  and  support  of  such  widow  or  family  for  one  year: 

Second,  Except  as  hereinafter  provided,  in  all  other  cases  the  tax  shall  be  at 
the  rate  of  5%  upon  the  clear  market  value  of  the  property  transferred; 

Third,  Upon  the  transfer  of  property  in  any  manner  hereinbefore  described, 
to  or  for  the  use  of  collateral  relations  or  strangers  in  blood  who  are  aliens  not 
residing  in  the  United  States,  or  to  or  for  the  use  of  any  corporation  which  is 
not  chartered  by  the  authority  of  the  government  of  the  United  States  or  of  any 
state,  a  tax  of  25%  shall  be  levied  and  collected; 

Fourth,  The  foregoing  rates  are  for  convenience  termed  the  primary  rates. 
When  the  market  value  of  such  property  or  interest  exceeds  fifty  thousand  dollars 
the  rate  of  tax  upon  such  excess  shall  be  as  follows: 

Subdivision  (a)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  five 
hundred  thousand  dollars,  two  times  the  primary  rate; 

Subdivision  (b)  Upon  all  in  excess  of  five  hundred  thousand,  three  times  the 
primary  rate. 

Fifth,  The  provisions  of  subdivisions  (a)  and  (b)  of  paragraph  four  of  this 
section,  shall  not  apply  to  the  rate  as  fixed  by  paragraph  three  of  this  section. 

(As  amended  by  chap.  98,  L.  1919.) 

§  3.  Makes  the  tax  a  lien  on  the  property  transferred  and  the  transferee  as 
well  as  the  executor  or  administrator  personally  liable  until  paid.  Provides  for 
receipts  which  must  be  produced  to  entitle  the  executor  or  administrator  to  a 
discharge.  Taxes  accrue  at  death  except  in  the  case  of  remainders  dependent 
upon  some  uncertain  future  event  or  contingency  in  which  case  they  are  due  when 
the  beneficiary  comes  into  actual  possession. 


MICHIGAN  961 

§  4.  Allows  a  discount  of  5%  if  the  tax  is  paid  within  twelve  months.  If  not 
paid  within  eighteen  months  interest  from  date  of  death  at  8%  is  charged.  In 
case  of  unavoidable  delay  interest  at  6%  from  and  after  eighteen  months  is 
charged. 

§  5.  Requires  the  executor  or  administrator  to  deduct  the  tax  from  a  money 
legacy,  to  collect  it  from  the  beneficiaries  in  case  of  property  to  whom  it  may  not 
be  delivered  until  the  tax  is  paid.  If  legacy  is  made  a  charge  on  real  property 
the  heir  or  devisee  must  deduct  the  tax  before  paying  the  legacy. 

§  6.  Makes  provision  for  proportionate  fund  if  debts  are  proved  after 
distribution. 

§  7.  Provides  that  remaindermen  may  elect  not  to  pay  the  tax  until  they  get 
the  property  by  filing  a  bond  in  three  times  the  amount  of  the  tax  and  an  inventory 
of  the  property  within  one  year  of  death  and  renewing  bond  every  five  years. 

§  8.  Taxes  bequests  to  executors  in  lieu  of  the  tax  in  excess  of  reasonable  value 
of  services. 

§  9.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  convey  any 
stock  or  obligation  in  this  State  standing  in  the  name  of  a  decedent  or  in  trust 
for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  treasurer  of 
the  proper  county  on  the  transfer  thereof.  No  safe  deposit  company,  trust  com- 
pany, corporation,  bank  or  other  institution,  person  or  persons  having  in  posses- 
sion or  under  control  securities,  deposits  or  other  assets  of  a  decedent,  including 
the  shares  of  the  capital  stock  of,  or  other  interests  in  the  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution  making  the  delivery  or 
transfer  herein  provided,  shall  deliver  or  transfer  the  same  to  the  executors, 
administrators  or  legal  representatives  of  said  decedent,  or  upon  their  order  or 
request,  unless  notice  of  the  time  and  place  of  such  intended  delivery  or  transfer 
be  served  upon  the  county  treasurer  at  least  five  days  prior  to  said  delivery  or 
transfer;  nor  shall  any  such  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution,  person  or  persons  deliver  or  transfer  any  securities, 
deposits  or  other  assets  of  the  estate  of  a  nonresident  decedent  including  the 
shares  of  the  capital  stock  of,  or  other  interests  in  the  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution  making  the  delivery  or 
transfer,  without  retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax 
and  penalty  which  may  thereafter  be  assessed  on  account  of  the  delivery  or 
transfer  of  such  securities,  deposits  or  other  assets,  including  the  shares  of  the 
capital  stock  or  other  interests  in  the  safe  deposit  company,  trust  company,  cor- 
poration, bank  or  other  institution  making  the  delivery  or  transfer  under  the 
provisions  of  this  article,  unless  the  proper  county  treasurer  consents  thereto  in 
writing.  And  it  shall  be  lawful  for  the  said  county  treasurer  and  it  shall  be  his 
duty  to  examine  said  securities,  deposits  or  assets  at  the  time  of  such  delivery  or 
transfer.  Failure  to  serve  such  notice  and  to  allow  such  examination,  and  to 
retain  a  sufficient  portion  or  amount  to  pay  such  tax  and  penalty  as  herein  pro- 
vided, shall  render  said  safe  deposit  company,  trust  company,  corporation,  bank  or 
other  institution,  person  or  persons  liable  to  the  payment  of  the  amount  of  the 
tax  and  interest  and  penalty  due  or  thereafter  to  become  due  upon  said  securities, 
deposits  or  other  assets,  including  shares  of  the  capital  stock  of,  or  other  interests 
in  the  safe  deposit  company,  trust  company,  corporation,  bank  or  other  institution 
making  the  delivery  or  transfer;  and  the  payments  as  herein  provided  shall  be 
enforced  in  an  action  of  assumpsit  to  be  instituted  and  maintained  by  the  Attor- 
ney General  or  other  person  or  officer  duly  authorized  by  him,  and  any  judgment 
rendered  in  such  action  shall  carry  costs  to  be  taxed  as  in  other  cases.  *  *  * 

§  10.  Gives  jurisdiction  to  the  probate  court  administering  the  estate  in  transfer 
tax  matters. 

§  11.  Provides  for  the  appointment  of  appraisers  and  for  the  computation  of 
life  estates  and  remainders  by  the  Commissioner  of  Insurance  on  mortality  tables 
at  the  5%  rate. 

§§  12  and  13.  Provide  for  hearings  before  the  appraiser  on  due  notice,  his 
report,  appeal  and  rehearing  before  the  probate  judge  closely  following  the 
New  York  practice. 

§  14.  Provides  for  proceedings  to  collect  delinquent  taxes. 

§§  15,  16  and  17.  Provides  for  the  furnishing  of  duplicate  receipts,  fees  of  the 
county  treasurer  and  the  keeping  of  records  in  the  probate  court. 

61 


962  THE  STATE  STATUTES 

§§  18  to  20.  Provide  for  details  as  to  records,  reports  and  the  disposition  of 
taxes  collected. 

§  21.  (As  amended  by  St.  1907,  Chap.  328.)  The  words  "estate"  and  "prop- 
erty" as  used  in  this  act  shall  be  taken  to  mean  .the  property  or  interest  therein 
of  the  testator,  intestate,  grantor,  bargainer  or  vendor,  passing  or  transferred 
to  those  not  herein  specifically  exempted  from  the  provisions  of  this  act,  and 
not  as  the  property  or  interest  therein  passing  or  transferred  to  the  individual 
legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees  or  vendees,  and  shall 
include  all  property  or  interest  therein  whether  situated  within  or  without  this 
State  and  including  all  property  represented  or  evidenced  by  note,  certificate, 
stock,  land  contract,  mortgage  or  other  kind  or  character  of  evidence  thereof,  and 
regardless  of  whether  any  such  evidence  of  property  is  owned,  kept  or  possessed 
within  or  without  this  State.  The  word  "transfer"  as  used  in  this  act  shall  be 
taken  to  include  the  passing  of  property  or  any  interest  therein  in  possession  or 
enjoyment,  present  or  future,  by  inheritance,  descent,  devise,  bequest,  grant,  deed, 
bargain,  sale  or  gift  in  the  manner  herein  prescribed.  The  words  "county 
treasurer,"  "prosecuting  attorney,"  as  used  in  this  act  shall  be  taken  to  mean 
the  county  treasurer  or  prosecuting  attorney  of  the  county  having  jurisdiction  in 
section  10  of  this  act. 


MINNESOTA 


963 


MINNESOTA. 

Taxes   all   property  of  nonresidents  within   the   State  including   transfers   of 
stock  in  domestic  corporations. 

TABLE  OF  RATES  ANE»  EXEMPTIONS. 

Explanatory:  Chapter  410,  G.  L.  1919,  amende  sec.  2272,  6.  S.  1913,  fixing  the  rate  of  taxa- 
tion of  inheritances,  devises,  bequests,  legacies,  and  gifts.  The  following  table  gives  rates  and 
exemptions.  Figures  opposite  letter  "  a  "  are  rates  and  exemptions  in  force  July  1,  1911,  to 
April  23,  1919.  Figures  opposite  letter  "  b  "  are  rates  and  exemptions  in  force  on  and  after 
April  24,  1919. 


Rate  on 

excess 

over  ex- 

emption 

Rate 

Rate 

Rate 

Person,    association,    or   corporation 

Exemp- 

where 

on  ex- 

on ex- 

on ex- 

to whom  tansfer  is*  made. 

tion 

total 

cess  of 

cess  of 

cess  of 

amount 

$15,000 

$30,000 

$50,000 

Rate 

d  oes  not 

and 

and 

and 

on  ex- 

exceed 

up  to 

up  to 

up  to 

cess  of 

$15,000 

$30,000 

$50,000 

$100,000 

$100,OW 

Wife  or  lineal  issue  of  decedent. 

a.   $10,000 

1% 

1%% 

2% 

2%% 

3% 

b.     10,000 

1% 

2% 

2%% 

3% 

4%   . 

Husband,  adopted  child  or  lineal  is- 

a.    10,000 

1%% 

2%% 

3% 

3%% 

4?&% 

sue  of  adopted  child  of  decedent. 

b.     10,000 

iy2% 

3% 

394% 

4%% 

6% 

Lineal  ancestor  of  decedent. 

a.       3,000 

iy2% 

2%% 

3% 

3%% 

4%% 

b.       3,000 

i%% 

3% 

3%% 

4%% 

6% 

Brother,       sister,       descendant      of 

a.       1,000 

3% 

4%% 

6% 

7%% 

9% 

brother  or  sister;   wife  or  widow 

b.       1,000 

3% 

6% 

7%% 

9% 

12% 

of  a  son,  or  husband  of  a  daughter 

of  decedent. 

Brother  or  sister  of  father  or  mother, 

a.          250 

4% 

6% 

8% 

10% 

12% 

or  descendant  of  a  brother  or  sister 

b.          250 

4% 

8% 

10% 

12% 

16% 

of  father  or  mother  of  decedent. 

Any  other  degree  of  collateral  con- 

a.        100 

6% 

7%% 

10% 

12%% 

15% 

sanguinity,    or  stranger    in   blood 

b.          100 

5% 

10% 

12%% 

15% 

20% 

to  decedent;  or  a  body  politic  or 

corporate,  except  aa  below. 

Public    hospital,    academy,    college, 

a.       2,500 

{Before 

Apr.  23, 

1919 

university,    seminary    of    learning, 
church  or  institution  of  purely  pub- 

5% 
After 

7%% 
Apr.  23, 

10% 
1919 

12%% 

15% 

lic  charity  within  Minnesota. 

2% 

3% 

4% 

5% 

6% 

Municipal  corporation  in   Minnesota 

a.          All 

for  strictly  county,  town  or  mu- 

nicipal  purposes. 

State  of  Minnesota,  or  any  political 

b.          All 

division    for    public    purposes    ex- 

clusively, or  association  or  corpora- 

tion for  religious,   charitable,  sci- 

entific, literary  or  educational  pur- 

- 

poses  exclusively,  including  encour- 

agement of  art,  and  prevention  of 

cruelty  to  children  and  animals,  or 

to  a  trustee  or  trustees  exclusively 

for  such  purposes. 

LAWS  OF  1911,  CHAPTER  209.  AS  AMENDED  BY  LAWS  1913,  CHAPTERS 

455,  574  AND  565. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  of  prop- 
erty, real,  personal  or  mixed,  or  any  interest  therein,  or  income  therefrom  in 
trust  or  otherwise,  to  any  person,  association  or  corporation,  except  county, 
town  or  municipal  corporation  within  the  State,  for  strictly  county,  town  or 
municipal  purposes,  in  the  following  cases: 


THE  STATE  STATUTES 

( 1 )  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  State  from 
any  person  dving  possessed  of  the  property  while  a  resident  of  the  State. 

(2)  When  "a   transfer    is   by   will   or    intestate    law,    of    property   within   the 
State  or  within  its  jurisdiction  and  the  decedent  was  nonresident  of  the  State 
at  the  time  of  his  death. 

(3)  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  nonresident 
when  such  nonresident's  property  is  within  this  State,  or  within  its  jurisdiction, 
by  deed,  grant,  bargain,  sale  or  gift,  made  in  contemplation  of  the  death  of  the 
grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession  or  enjoyment 
at  or  after  such  death. 

(4)  Such  tax  shall  be  imposed  when  any  such  person  or  corporation  become 
beneficially  entitled,  in  possession  or  expectancy  to  any  property  or  the  income 
thereof,  by  any  such  transfer  whether  made  before  or  after  the  passage  of  this 
act. 

(5)  Whenever  any  person  or  corporation   shall   exercise  a   power   of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  act,   such  appointment  when  made   shall  be   deemed   a   transfer 
taxable  under  the  provisions  of  this  act  in  the   same   manner  as  though  the 
property  to  which   such   appointment   relates   belonged   absolutely   to   the   donee 
of  such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will;   and 
whenever   any   person  or   corporation   possessing   such   a    power   of   appointment 
so   derived  shall   omit   or  fail  to   exercise   the   same  within   the   time   provided 
therefor,  in  whole  or  in  part  a  transfer  taxable  under  the  provisions  of  this  act 
shall  be  deemed  to  take  place  to  the  extent  of  such  omission  or  failure,  in  the 
same  manner  as  though  the   persons  or  corporations   thereby  becoming   entitled 
to  the  possession  or  enjoyment  of  the  property  to  which  such  power  related  had 
succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such 
power,  taking  effect  at  the  time  of  such  omission  or  failure. 

§  2.  The  tax  so  imposed  shall  be  computed  upon  the  true  and  full  value  in 
money  of  such  property  at  the  rates  hereinafter  prescribed  and  only  upon  the 
excess  of  the  exemptions  hereinafter  granted. 

§§  2a,  b.  Prescribes  the  rates  and  exemptions  of  the  foregoing  table. 

§  3.  Provides  that  the  tax  accrues  at  death,  is  payable  within  one  year,  and 
for  the  valuation  of  life  estates  and  remainders  by  the  Commissioner  of  Insur- 
ance on  mortality  tables  reckoned  on  the  5%  basis. 

Where  property  is  devised  in  court  it  shall  be  valued  as  if  received  by  the 
beneficiaries  directly. 

The  section  further  provides: 

Where  an  estate  for  life  or  for  years  can  be  divested  by  the  act  or  omission 
of  the  legatee  or  devisee,  it  shall  be  taxed  as  if  there  were  no  possibility  of 
such  divesting. 

When  property  is  transferred  in  trust  or  otherwise,  and  the  rights,  interest 
or  estates  of  the  transferee  are  dependent  upon  contingencies  or  conditions 
whereby  they  may  be  wholly  or  in  part  created,  defeated,  extended  or  abridged, 
a  tax  shall  be  imposed  upon  said  transfer  at  the  highest  rate  which,  on  the 
happening  of  any  of  said  contingencies  or  conditions,  would  be  possible  under 
the  provisions  of  this  act,  and  such  tax  so  imposed  shall  be  due  and  payable 
forthwith  by  the  executors  or  trustees  out  of  the  property  transferred;  pro- 
vided, hoAvever,  that  on  the  happening  of  any  contingency  whereby  the  said 
property,  or  any  part  thereof,  is  transferred  to  a  person  or  corporation,  exempt 
from  taxation  under  the  provisions  of  this  act,  or  to  any  person  taxable  at  a 
rate  less  than  the  rate  imposed  and  paid,  such  person  or  corporation  shall  be 
entitled  to  a  return  of  so  much  of  the  tax  imposed  and  paid  as  is  the  difference 
between  the  amount  paid  and  the  amount  which  said  person  or  corporation 
should  pay  under  the  provisions  of  this  article,  which  interest  thereon  at  the 
rate  of  3%  per  annum  from  the  time  of  payment.  Such  return  of  overpayment 
shall  be  made  in  the  manner  provided  by  §  21-c  (§  9  of  this  act). 

In  estimating  the  value  of  any  estate  or  interest  in  property,  to  the  beneficial 
enjoyment  or  possession  whereof  there  are  persons  or  corporations  presently 
entitled  thereto,  no  allowance  shall  be  made  on  account  of  any  contingent 
incumbrance  thereon,  nor  on  account  of  any  contingency  upon  the  happening 
of  which  the  estate  or  property,  or  some  part  thereof  or  interest  therein  might 
be  abridged,  defeated  or  diminished;'  provided,  however,  that  in  the  event  of 
such  incumbrance  taking  effect  as  an  actual  burden  upon  the  interest  of  the 


MINNESOTA  965 

beneficiary  or  in  the  event  of  the  abridgment,  defeat  or  diminution  of  said  estate 
or  property,  or  interest  therein,  as  aforesaid,  a  return  shall  be  made  to  the  per- 
son properly  entitled  thereto  of  a  proportionate  amount  of  such  tax  on  account 
of  the  incumbrance  when  taking  effect,  or  so  much  as  will  reduce  the  same  to 
the  amount  which  would  have  been  assessed  on  account  of  the  actual  duration 
or  extent  of  the  estate  or  interest  enjoyed.  Such  return  of  tax  shall  be  made 
in  the  manner  provided  by  section  21-c  (section  9  of  this  act). 

Where  any  property  shall,  after  the  passage  of  this  act,  be  transferred  sub- 
ject to  any  charge,  estate  or  interest,  determinable  by  the  death  of  any  person, 
or  at  any  period  ascertainable  only  by  reference  to  death,  the  increase  accruing 
to  any  person  or  corporation  upon  the  extinction  or  determination  of  such 
charge,  estate  or  interest,  shall  be  deemed  a  transfer  of  property  taxable  under 
the  provisions  of  this  act  in  the  same  manner  as  tnough  the  person  or  corpora- 
tion beneficially  entitled  thereto  had  then  acquired  such  increase  from  the 
person  from  whom  the  title  to  their  respective  estates  or  interests  is  derived. 

The  tax  on  any  devise,  bequest,  legacy,  gift  or  transfer  limited,  conditioned, 
dependent  or  determinable  upon  the  happening  of  any  contingency  or  future 
event,  by  reason  of  which  the  full  and  true  value  thereof  cannot  be  ascertained 
as  provided  for  by  the  provisions  of  this  act  at  or  before  the  time  when  the 
taxes  become  due  and  payable  as  hereinbefore  provided,  shall  accrue  and  become 
due  and  payable  when  the  person  or  corporation  beneficially  entitled  thereto 
shall  come  into  actual  possession  or  enjoyment  thereof. 

Estates  in  expectancy  which  are  contingent  or  defeasible  and  in  which  pro- 
ceedings for  the  determination  of  the  tax  have  not  been  taken  or  where  the 
taxation  thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their  full, 
undiminished  value  when  the  persons  entitled  thereto  shall  come  into  the  bene- 
ficial enjoyment  or  possession  thereof,  without  diminution  for  or  on  account  of 
any  valuation  theretofore  made  of  the  particular  estates  for  purposes  of  taxa- 
tion, upon  which  said  estates  in  expectancy  may  have  been  limited. 

§  4.  Eequires  executors  or  administrators  to  deduct  the  tax  or  collect  it 
from  beneficiaries  to  whom  he  may  deliver  property  unless  the  tax  is  paid. 

§  5.  Provides  for  payment  to  county  treasurer  who  gives  a  receipt  which 
must  be  produced  to  entitle  executor  or  administrator  to  final  accounting. 

§  6.  Makes  the  tax  a  lien  and  executors,  administrators,  trustees  and  bene- 
ficiaries personally  liable. 

§  7.  If  tax  is  not  paid  with  one  year  7%  interest  charged  from  date  of  death, 
which  may  be  reduced  to  6%  in  case  of  unavoidable  delay. 

§  8.  Gives  power  of  sale  to  pay  tax. 

§  9.  Where  legacy  charged  on  real  estate  heir  must  deduct  tax. 

§  10.  Provides  for  refund  of  taxes  erroneously  paid  if  application  made  within 
three  years. 

§  11.  Provides  that  no  transfer  of  stock  or  obligation  within  State  by  foreign 
executor  or  administrator  shall  be  valid  unless  tax  is  paid.  Such  property  can 
only  be  transferred  on  consent  of  Attorney-General,  who  gives  it  only  when  tax 
has  been  paid  or  no  tax  is  due.  Such  application  must  be  made  on  affidavits 
giving  copy  of  will  and  full  information  as  to  nature  and  value  of  the  property, 
and  on  this  information  he  may  determine  the  amount  of  the  tax  or  that  none 
is  due.  If  any  corporation  within  the  State  makes  transfer  on  its  books  of  stock 
owned  by  a  nonresident  decedent  without  the  consent  of  the  Attorney-General 
it  is  liable  for  the  tax  plus  10%  to  be  recovered  in  a  civil  action.  Any  person 
aggrieved  by  the  finding  of  the  Attorney-General  may  appeal  to  the  district 
court  of  Hennepin  or  Ramsey  county  from  the  order  of  which  an  appeal  lies 
by  either  party  to  the  supreme  court. 

§  12.  Forbids  bond  and  safe  deposit  companies  holding  securities  of  decedent 
to  deliver  same  without  notice  to  county  treasurer,  who  may  examine  them 
and  require  that  delivery  be  deferred  ten  days.  Failure  to  notify  treasurer 
makes  the  institution  liable  for  the  tax. 

§  13.  Provides  for  notice  to  county  treasurer  of  all  probate  proceedings. 

§§  13  to  19.  Provide  for  the  appointment  'of  appraiser's  valuation  report  and 
rehearing  by  the  probate  court  closely  following  the  New  York  practice. 

§  20.  Provides  for  the  collection  of  delinquent  taxes  by  the  county  attorney. 

§  21.  Provides  for  the  keeping  of  transfer  tax  records  by  the  probate  court. 

§  21  (a).  Provides  for  compromise  of  uncertain  or  contingent  tax  claims  by 
the  Attorney-General  on  consent  of  the  State  Auditor. 


966  THE  STATE  STATUTES 

§  21  (b).  Authorizes  the  Attorney-General  to  cite  any  person  believed  to 
have  information  concerning  taxable  decedent's  estate  to  appear  before  him 
and  examine  such  person  on  oath. 

§  21    (c).  Provides  for  proceedings  to  secure  refund  of  taxes  erroneously  paid. 

§  21  (d).  Provides  for  the  payment  of  taxes  collected  by  county  treasurer  to 
the  State  Treasurer. 

§  21  (e  and  f).  Provide  a  seal  for  the  Attorney-General  and  authorize  him 
to  employ  a  transfer  tax  assistant. 

AMENDMENT  OF  1919. 

(CHAPTER  410,  H.  F.  824.) 

An  Act  to   amend   Section  2272,  General   Statutes  of    1913,   fixing  the  rate   of 

taxation  of  inheritances,  devises,  bequests,  legacies  and  gifts. 
Be  it  enacted  by  the  Legislature  of  the  State  of  Minnesota: 

Section  1.  Section  2272,  General  Statutes,  1913,  is  hereby  amended  to  read 
as  follows : 

The  tax  so  imposed  shall  be  computed  upon  the  true  and  full  value  in  money 
of  such  property  at  the  rates  hereinafter  prescribed  and  only  upon  the  excess 
of  the  exemptions  hereinafter  granted. 

§  2a.  When  the  property  or  any  beneficial  interest  therein  passes  by  any  such 
transfer  where  the  amount  of  the  property  shall  exceed  in  value  the  exemption 
hereinafter  specified  and  shall  not  exceed  in  value  fifteen  thousand  dollars  the 
tax  hereby  imposed  shall  be: 

( 1 )  Where  the   person   entitled   to   any   beneficial   interest   in    such    property 
shall  be  the  wife,  or  lineal  issue,  at  the  rate  of  1%  of  the  clear  value  of  such 
interest  in  such  property. 

(2)  Where  the  person  or  persons  entitled  to   any  beneficial   interest   in   such 
property   shall   be  the    husband,    lineal    ancestor   of   the   decedent  or   any   child 
adopted   as   such   in   conformity   with   the   laws   of   this   State,   or   any   child   to 
whom  decedent  for  not  less  than  ten  years  prior  to  such  transfer  stood  in  the 
mutually   acknowledged   relation  of  a   parent,   provided,   however,   such   relation- 
ship began  at  or  before  the  child's  fifteenth  birthday,   and  was  continuous   for 
said   ten    years   thereafter,   or   any    lineal    issue    of    such    adopted    or    mutually 
acknowledged  child,  at  the  rate  of  !%%>  of  the  clear  value  of  such  interest  in 
such  property. 

(3)  Where  the  person  or  persons  entitled  to   any  beneficial  interest   in   such 
property  shall  be  the  brother  or  sister  or  a  descendant  of  a  brother  or  sister  of 
the  decedent,  a  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter  of  the 
decedent,  at  the  rate  of  3%  of  the  clear  value  of  such  interest  in  such  property. 

(4)  Where  the   person  or  persons  entitled  to  any  beneficial   interest   in   such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother  or  a  descendant 
of  a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the   rate   of 
4%  of  the  clear  value  of  such  interest  in  such  property. 

(5)  Where  the  person  or  persons  entitled  to  any  beneficial   interest   in   such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than   is  here- 
inbefore stated,  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a 
body   politic  or   corporate,   except   as   hereinafter   provided,   at  the   rate  of   5% 
of  the  clear  value  of  such  interest  in  such  property. 

Section  2b.  The  foregoing  rates  in  section  2a  are  for  convenience  termed 
the  primary  rates. 

When  the  amount  of  the  clear  value  of  such  property  or  interest  exceeds 
fifteen  thousand  dollars,  the  rates  of  tax  upon  such  excess  shall  be  as  follows: 

(1)  Upon  all  in  excess  of  fifteen  thousand  dollars  and  up  to  thirty  thousand 
dollars,  two  times  the  primary  rates. 

(2)  Upon  all  in  excess  of  thirty  thousand  dollars  and  up  to  fifty  thousand 
dollars,  two  and  one-half  times  the  primary  rates. 

(3)  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred  thousand 
dollars,  three  times  the  primary  rates. 

(4)  Upon    all    in    excess    of    one    hundred    thousand    dollars,    four    times    the 
primary  rates. 

§  2c.  The  following  exemptions  from  the  tax  are  hereby  allowed:  "Any 
devise,  bequest,  gift,  or  transfer  to  or  for  the  use  of  the  State  of  Minnesota 
or  for  any  political  division  thereof  for  public  purposes  exclusively,  and  any 


MINNESOTA  967 

devise,  bequest,  gift,  or  transfer  to  or  for  the  use  of  any  corporation  or  associa- 
tion organized  and  operated  for  religious,  charitable,  scientific,  literary  or  edu- 
cational purposes  exclusively,  including  the  encouragement  of  art  and  the 
prevention  of  cruelty  to  children  or  animals,  no  part  of  which  devise,  bequest, 
gift  or  transfer,  inures  to  the  profit  of  any  private  stockholder  or  individual, 
and  any  bequest  or  transfer  to  a  trustee  or  trustees  exclusively  for  such  purposes 
shall  be  exempt." 

(2)  Property  of  the  clear  value  of  ten  thousand  dollars  transferred  to   the 
widow  of  the  decedent    (or  husband  of   the  decedent,   each  of  the  lineal  issue 
of  the  decedent,  or  any  child  adopted  as  such  in  conformity  with  the  laws  of 
this   State,    or   any   child   to   whom   the    decedent   for   not   less   than   ten    (10) 
years  prior   to   such  transfer   stood   in   the   mutually   acknowledged   relation   of 
a  parent;   provided,  however,  such  relationship  began  at  or  before  the  child's 
fifteenth  birthday,  and  was  continuous  for  said  ten  years  thereafter,  or  any  lineal 
issue  of  such  adopted  or  mutually  acknowledged  child),  shall  be  exempt. 

(3)  Property   of    the   clear   value    of    three    thousand    dollars    transferred    to 
each  of  the  lineal  ancestors  of  the  decedent  shall  be  exempt. 

(4)  Property  of  the  clear  value  of  one  thousand  dollars  transferred  to  each 
of  the  persons  described  in  the  third  subdivision  of  section  two-a  (2a)   shall  be 
exempt. 

(5)  Property  of  the  clear  value  of  two  hundred  and  fifty  dollars  transferred 
to  each  of  the  persons  described  in  the  fourth  subdivision  of  section  two-a  (2a) 
shall  be  exempt. 

(6)  Property  of  the  clear  value  of  one  hundred  dollars  transferred  to  each  of 
the  persons  and  corporations  described  in  the  fifth  subdivision  of  section  two-a 
(2a)   shall  be  exempt. 

§  2.  This  act  shall  take  effect  and  be  in  force  from  and  after  its  passage. 

[Approved  April  23,  1919.] 

Eecent  Minnesota  Cases:  State  v.  Chadwick  et  al.,  157  N.  W.  1077;  State  v. 
Probate  Court  of  St.  Louis  County  (Cutler),  162  N.  W.  459;  State  v.  Probate 
Court  of  Hennepin  County  (Pettit),  163  N.  W.  285;  State  v.  Probate  Court  of  St. 
Louis  County  (Bailey),  164  N.  W.  365;  State  v.  Probate  Court  of  Hennepin 
County  (Linton),  166  N.  W.  125;  State  v.  Probate  Court  of  Lyon  County 
(Williams),  168  N.  W.  14;  State  v.  Probate  Court  of  St.  Louis  County  (Bodman), 
172  N.  W.  318;  State  v.  Probate  Court  of  Kandiyohi  County  (Mclntyre),  will  be 
found  in  Northwestern  Reporter  for  July,  1919;  State  of  Iowa  v.  Slimer  et  al., 
and  State  of  Minnesota,  248  U.  S.  115. 

Prior  Statutes:  L.  1905,  ch.  288;  L.  1909,  Revised  Statutes,  sec.  1038.  Other 
prior  statutes  were  held  unconstitutional. 

SEPTEMBER,  1919,  AMENDMENT. 

Exemption   to   Charitable   and   Religious   Corporations   Applies    Only   to   Those 
Organized  Within  the  State. 

APPLICATION  OP  RATES. 

The  Minnesota  Supreme  Court  has  decided  the  application  of  the  rates  of  tax 
under  the  Statute  in  Boutin's  Estate,  182  N.  W.  990.  The  opinion  is  in  full  as 
follows : 

Certiorari  to  review  the  action  of  the  probate  court  fixing  the  transfer  tax  to 
be  paid  by  a  widow  who  under  her  husband's  will  took  his  entire  estate  amounting 
to  $20,566.88  after  deducting  all  claims,  allowances  and  expenses  of  adminis- 
tration. The  court  determined  that  since  the  clear  value  of  the  widow's  interest, 
after  deducting  her  exemption  of  $10,000,  did  not  exceed  $15,000,  no  other  rate 
than  the  primary  rate  of  one  per  cent  was  payable  upon  any  part  of  her  dis- 
tributive share.  The  state  contends  that  for  the  purpose  of  fixing  the  rate  the 
exemption  is  not  to  be  considered.  Hence  when  the  clear  value  of  the  estate  to 
be  distributed  to  the  widow  is  $15,000,  or  more,  no  other  sum  than  $5,000  may 
take  the  primary  rate,  and  upon  whatever  amount  in  excess  of  $15,000  the  widow 
receives  the  secondary,  or  two  per  cent  rate  must  be  paid.  In  this  case  it  would 
be  one  per  cent  on  $5,000,  and  two  per  cent  on  $5,566.88. 

State  ex  rel  Holdridge  v.  Probate  Court,  111  Minn.  297  is  said  to  sustain  the 
court  below.  But  significant  changes  in  the  law  went  into  effect  after  that 
decision  was  rendered.  Then  ch.  288,  L.  1905  was  in  force  and  it  clearly  indicated 


968  THE  STATE  STATUTES 

that  only  that  part  of  an  inheritance  or  legacy  which  was  in  excess  of  $10,000 
could  be  considered  in  computing  the  tax  or  fixing  the  rate.  In  the  subsequent 
enactment,  ch.  372,  L.  1911  (§  2272  G.  S.  1913),  the  whole  inheritance  or  legacy 
is  subject  to  a  transfer  tax,  but  a  certain  amount  thereof  is  exempt  to  the  heir 
or  legatee  according  to  the  relationship  he  or  she  sustained  to  the  decedent. 
Sec.  2  provides:  "The  tax  so  imposed  shall  be  computed  upon  the  true  and  full 
value  in  money  of  such  property  at  the  rates  hereinafter  prescribed  and  only 
upon  the  excess  of  the  exemptions  hereinafter  granted.  .  .  .  Sec.  2a.  When 
the  property  or  any  beneficial  interest  therein  passes  by  any  suc.i  transfer  where 
the  amount  of  the  property  shall  exceed  in  value  the  exemption  hereinafter 
specified  and  shall  not  exceed  in  value  fifteen  thousand  dollars  the  tax  hereby 
imposed  shall  be:  (1)  Where  the  person  entitled  to  any  beneficial  interest  shall 
be  the  wife  or  lineal  issue,  at  the  rate  of  one  per  centum  of  the  clear  value  of 
such  interest  in  such  property.  .  .  .  Sec.  2b.  The  foregoing  rates  in  section 
2a  are  for  convenience  termed  the  primary  rates.  When  the  amount  of  the  clear 
value  of  such  property  or  interest  exceed  fifteen  thousand  dollars,  the  rates  of 
tax  upon  such  excess  shall  be  as  follows : 

(1)  Upon  all  in  excess  of  fifteen  thousand  and  up  to  thirty  thousand  dollars 
one  and  one-half  times  the  primary  rates  .  .  .  Section  2c.  The  following 
exemption  from  the  tax  are  hereby  allowed:  (2)  Property  of  the  clear  value  of 
ten  thousand  dollars  transferred  to  the  widow  of  the  decedent  .  .  .  "  The 
court  below  found:  "  That  at  all  times  since  April  20,  1911,  the  judges  of  the 
Minnesota  Probate  Courts  and  the  Assistant  Attorneys  General  in  charge  of 
inheritance  tax  matters  in  Minnesota  have  by  a  well  established  practice  uni- 
versally and  in  more  than  ten  thousand  cases  construed  chapter  372,  Laws  1911, 
in  the  manner  contended  for  by  the  petitioner  (the  State)  herein. 

This  practical  construction,  adopted  by  the  officers  whose  duty  it  is  to  ad- 
minister the  law  for  such  a  long  period,  moves  the  members  of  the  court,  who 
would  otherwise  be  inclined  to  follow  the  decisions  of  Illinois  and  New  York 
(In  re  Ullman  Est.,  263  111.  528;  Matter  of  Schwartz  Est.,  156  App.  Div.  931, 
affirming  upon  dissenting  opinion  of  Jenks,  P.  J.,  in  Matter  of  Jowdan,  151 
App.  Div.,  sustained  in  209  N.  Y.  531),  to  apply  the  interpretation  given  very 
similar  statutes  in  Estate  of  Timken,  158  Cal.  51 ;  Torrance  v.  Edwards,  89  N.  J.  L. 
507;  and  In  re  Hones'  Estate,  50  Utah  92.  According  to  the  last  mentioned  cases 
only  the  unexempt  part  of  the  first  fifteen  thousand  dollars  worth  of  clear 
property  which  passes  to  the  heir  or  legatee  from  the  decedent  takes  the  primary 
rate,  and  all  the  property  in  excess  of  fifteen  thousand  dollars  in  value,  without 
regard  to  any  exemption  whatever,  must  pay  the  secondary  rate.  The  words 
' '  clear  property ' '  plainly  cannot  refer  to  the  property  left  after  the  exemption 
is  deducted,  for  in  designating  the  exemption  itself  the  same  words  are  used.  The 
meaning  sought  to  be  conveyed  by  the  words  referred  to  undoubtedly  is  that, 
in  determining  the  rate  as  well  as  the  exemption,  all  debts  and  expenses  payable 
in  the  course  of  administration  and  all  existing  liens,  such  as  mortgages  and 
federal  taxes,  against  the  property  must  be  deducted.  In  reaching  this  con- 
clusion we  are  not  unmindful  of  the  rule  that  ambiguities  in  an  act  of  special 
taxation  are  to  be  construed  in  favor  of  the  taxpayer.  But  in  view  of  the  fact 
that  radical  changes  were  made  in  the  law  as  soon  as  the  legislature  met  after 
the  Holdrige  decision  was  rendered,  and  the  practical  construction  given  the 
law  since  amended,  by  the  attorney  general's  office  and  the  different  probate 
courts  for  such  a  long  period,  we  think,  the  interpretation  now  contended  for  by 
the  state  should  be  adopted. 

The  order  of  the  probate  court  is  reversed  and  the  matter  remanded  with 
direction  to  compute  the  tax  in  harmony  herewith.  No  statutory  cost  is  allowed. 


MISSISSIPPI 


969 


MISSISSIPPI. 

Taxes  tangible  property  of  nonresidents  within  the  State,  but  not  stock  in 
domestic  corporations. 

TABLE  OF  RATES  AND  EXEMPTIONS. 


Above 

exemp- 

$25,000 

$50,000 

$75,000 

$100,003 

In  excess 

Ex- 

tion to 

to 

to 

to 

to 

of 

Class  or  Relationship 

emption 

$25,000 

$50,000 

$75,000 

$100,000 

$500,000 

$500,000 

Grandparent,  parent,  hus- 
band,      wife,       child, 

Widow, 
$7,500 

%% 

1% 

1%% 

2% 

2%% 

3% 

brother,  sister,  nephew, 

Child 

niece,       son-in-law, 

und'r  18 

daughter-in-law,  adopt- 

$7,500 

ed    or     mutually     ac- 

Others 

knowledged  child,  lin- 

$4,500 

eal  descendant. 

Above 

exemp- 

$25,000 

$60,000 

$150,000 

$260,000 

In  excess 

Ex- 

tion to 

to 

to 

to 

to 

of 

emption 

$25,000 

$50,000 

$150,000 

$260,000 

$1,000,000 

$1,000,000 

All  others,  except  insti- 

$600 

5% 

6%% 

6% 

6%% 

7% 

8% 

tions   exempt    by    law 

from  taxation,  or  chari- 

table, religious  or  edu- 

cational or  public  pur- 

poses which  are  wholly 

exempt. 

In  addition.  — 


on  entire  estate  above  $5,000. 


CHAPTER  109,  LAWS  1918. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  net  estate  of  every 
resident  decedent  and  upon  the  net  estate  of  every  nonresident  decedent,  con- 
sisting of  real  estate  and  such  corporeal,  tangible  personal  property  capable  of 
having  a  situs  of  itself  located  within  the  State,  or  any  interest  therein,  as  a 
tax  upon  the  right  to  transfer ;  provided,  however,  as  to  the  nonresident  this  shall 
not  include  such  intangible  property  as  money  on  hand  or  deposit,  shares  of 
stock,  bonds,  notes,  credits  and  evidences  of  debt.  Such  tax  shall  be  imposed  at 
the  rate  of  one-half  of  1%  upon  the  excess  value  of  cash  said  estate  over  five 
thousand  dollars,  provided,  that  in  case  the  estate  of  a  nonresident  decedent  only 
said  proportion  of  said  exemption  of  five  thousand  dollars  shall  be  allowed  as  the 
value  of  real  estate  and  tangible  personal  property  located  in  Mississippi,  or  any 
interest  therein,  bears  to  the  value  of  the  entire  estate  wherever  located,  and, 
provided  further,  that  the  executor,  administrator  or  trustees  of  such  nonresident 
decedent's  estate  shall  file  with  the  board  of  tax  commissioners  a  sworn  state- 
ment showing  the  full  and  fair  cash  value  of  the  entire  estate.  If  said  statement 
is  not  filed  as  herein  provided  no  exemption  shall  be  allowed. 

§  2.  Provides  for  the  ascertainment  of  the  net  value  of  the  estate  of  a 
resident.  As  to  a  nonresident  the  section  then  provides  as  follows : 

The  value  of  the  net  estate  of  a  nonresident  decedent  for  the  assessment 
of  the  tax  imposed  by  section  1  of  this  act  shall  be  ascertained  by  taking  the 
full  and  fair  cash  value  of  the  real  estate  and  such  corporeal  tangible  personal 
property  of  the  decedent  at  the  time  of  his  decease,  capable  of  having  a  situs 
of  its  own  located  within  the  State  or  any  interest  therein,  including  property 
described  in  paragraphs  2,  3  and  4  of  section  5  of  this  act  and  deducting 
therefrom  such  proportion  of  the  indebtedness  of  the  entire  estate  of  such 
nonresident  decedent  as  the  value  of  said  property  and  interest  therein  of 
such  decedent  located  within  this  State  bears  to  the  value  of  the  entire  estate; 
provided,  that  only  the  excess  of  such  proportion  of  indebtedness  over  the 


970  THE  STATE  STATUTES 

value  of  said  tangible  personal  property  shall  be  deducted  from  the  appraised 
value  of  said  real  property,  and,  provided  further,  that  the  executor,  adminis- 
trator or  trustee  of  such  nonresident  decedent's  estate  shall  file  with  the  State 
Tax  Commission  a  sworn  statement  showing  the  full  and  fair  cash  value  of  the 
entire  estate  and  the  indebtedness  of  the  said  estate.  If  such  statement  is  not 
filed,  as  herein  provided,  only  such  debts  and  expenses  as  are  chargeable  to 
said  property  under  the  laws  of  this  State  shall  be  deducted.  The  full  and  fair 
cash  value  of  the  estate  of  a  decedent  shall  be  determined  by  the  State  Tax 
Commission  as  aforesaid  in  accordance  with  the  provisions  of  sections  22,  23, 
24  and  31  of  this  act. 

§  3.  Makes  tax  payable  within  thirty  days  after  notice  of  amount  thereof. 
After  that  interest  at  8%,  amount  to  cover  the  tax,  may  be  deposited  with 
State  Treasurer  before  the  tax  is  fixed  and  any  excess  thereafter  refunded. 

§  4.  Provides  for  proportionate  refund  in  case  claims  are  proved  against 
an  estate  after  the  tax  has  been  paid. 

§  5.  Imposes  taxes  on  the  right  to  receive  by  will,  intestate  law,  gifts  to  take 
effect  after  death  and  in  contemplation  of  death,  exercise  of  powers  of  appoint- 
ment and  testamentary  trusts. 

§  6.  Makes  the  tax  a  lien  and  the  beneficiaries  personally  liable. 

§§  7,  8  and  9  fix  the  rates  and  exemptions  shown  in  the  foregoing  tables. 

The  rest  of  the  act  concerns  minor  details  and  procedure  and  closely  follows 
the  Rhode  Island  statute.  The  tax  is  collected  by  the  State  Tax  Commission. 

The  1922  session  of  the  Legislature  made  only  one  amendment  to  the  In- 
heritance Tax  Law  of  this  State.  This  amendment  was  to  Section  25  of  the  law, 
and  gives  the  Attorney-General  or  "  other  proper  officers "  the  right  to  bring 
suit  for  the  collection  of  taxes,  and  to  compel  the  proper  return  of  the  property. 
The  amendment  also  makes  the  inheritance  taxes  a  debt,  recoverable  by  suit, 
thus  giving  the  State  a  further  remedy  in  enforcing  the  collection  of  the  tax. 


MISSOURI 


971 


MISSOURI. 

Taxes    all    property    of    nonresidents    within    the    State,    including    stock    in 
domestic  corporations. 

TABLE  OF  RATES  AND  EXEMPTIONS  UNDER  ACT  OF  1917,  IN  EFFECT  JUNE  33 


CLASS  OB  RELATIONSHIP 

Amount 
of 
exemp- 
tion 

Above 
exemp- 
tion 
to 
$20,000 

$20,000 
to 
$40,000 

$40,000 
to 
$80,000 

$80,000 
to 
$200,000 

$200,000 
to 
$400,000 

In 

excess 
of 
$400,000 

Husband  or  wife  

$15,000 

Lineal  ancestor,  lineal  de- 
scendant, adopted  child  or 
its  descendant  illegitimate 
child. 

$5,000 

1% 

2% 

3% 

4% 

5% 

6% 

Brother,  sister  or  their  de- 
scendants, son-in-law, 
daughter-in-law. 

$500 

3% 

6% 

9% 

12% 

15% 

18% 

Aunt,  uncle  or  their  descend- 
ants. 

$250 

3-/0 

6% 

9% 

12% 

15% 

18% 

Brother  or  sister  of  grand- 
parents or  their  descend- 
ants. 

$100 

4% 

8% 

12% 

16% 

20% 

24% 

All  others  except  exempt 
charities,  etc. 

If  less  than 
$100  not 
taxed. 

5% 

10% 

15% 

20% 

25% 

30% 

Municipal,  charitable,  educa- 
tional or  religious  purposes 
within  the  State. 

All  exempt. 

As  to  estates  of  decedents  dying  prior  to  June  18,  1917,  the  statute  in  force 
(Revised  Statutes  1909)  taxed  transfers  to  collaterals  and  strangers  only,  and 
the  table  of  rates  and  exemptions  under  that  act  follows: 


Parents,  husband,  wife,  adopted  child,  and  direct  lineal 
descendants  

Exempt  altogether. 

Bequests  for  religious,  charitable  or  religious  purposes 
exclusively  

Exempt  altogether. 

All  others   I  5%  on  all. 


ACT  OF  1917,  IN  EFFECT  JUNE  18,  1917. 

NOTE. — Unimportant  amendments  as  to  procedure  were  made  by  the  Legis- 
lature of  1921. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any 
property,  real,  personal  or  mixed  or  any  interest  therein  or  income  therefrom,  in 
trust  or  otherwise,  to  persons,  institutions,  associations,  or  corporations,  not 
hereinafter  exempted,  in  the  following  cases:  When  the  transfer  is  by  will  or 
by  the  intestate  laws  of  this  State  from  any  person  dying  possessed  of  the 
property  while  a  resident  of  the  State  not  hereinafter  exempted,  in  the  following 
cases:  When  the  transfer  is  by  will  or  intestate  law  of  property  within  the 
State  or  within  the  jurisdiction  of  the  State  and  decedent  was  a  nonresident  of 
the  State  at  the  time  of  his  death.  When  the  transfer  is  made  by  a  resident 
or  by  a  nonresident  when  such  nonresident's  property  is  within  this  State,  or 
within  its  jurisdiction,  by  deed,  grant,  bargain,  sale  or  gift,  made  in  contempla- 
tion of  the  death  of  grantor,  vendor  or  donor,  or  intending  to  take  effect  in 


972  THE  STATE  STATUTES , 

possession  or  enjoyment  at  or  after  such  death.  Every  transfer  by  deed,  grant, 
bargain,  sale  or  gift  made  within  two  years  prior  to  the  death  of  grantor,  vendor,  or 
donor,  of  a  material  part  of  his  estate  or  in  the  nature  of  a  final  disposition  or 
distribution  thereof  without  an  adequate  valuable  consideration  shall  be  con- 
strued to  have  been  made  in  contemplation  of  death  within  the  meaning  of  this 
section.  Such  tax  shall  be  imposed  when  any  person,  association,  institution  or 
corporation  actually  comes  into  the  possession  and  enjoyment  of  the  property, 
interest  therein,  or  income  therefrom,  whether  the  transfer  thereof  is  made  before 
or  after  the  passage  of  this  act ;  provided,  that  property  which  is  actually  vested 
in  such  persons  or  corporations  before  this  act  takes  effect  shall  not  be  subject 
to  the  tax. 

§  2.  Whenever  any  person  or  corporation  shall  exercise  the  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though  the  property 
to  which  said  appointment  relates  belonged  absolutely  to  the  donee  of  such  power 
and  had  been  bequeathed  or  devised  by  the  donor  by  will;  and  whenever  any 
person  or  corporation  possessing  such  power  of  appointment  so  derived  shall 
omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or  in 
part,  a  transfer  taxable  under  the  provisions  of  this  act  shall  be  deemed  to  take 
place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner  as  though 
the  persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoy- 
ment of  the  property  to  which  such  power  relates  had  succeeded  thereto  by  a  will 
of  the  donee  of  the  power  failing  to  exercise  such  power  taking  effect  at  the  time 
of  such  omission  or  failure.  The  tax  so  imposed  shall  be  determined  by  the  clear 
market  value  of  such  property  at  the  rate  hereinafter  prescribed  and  only  upon 
the  excess  over  the  exemptions  hereinafter  made. 

§§3  and  4.  Prescribe  the  rates  and  exemptions  of  the  foregoing  table. 

§  5.  Provides  for  the  valuation  of  life  estates  and  remainders  and  the  imme- 
diate taxation  of  the  latter  unless  the  remainderman  elects  to  file  a  bond  in  three 
times  the  amount  of  the  tax  with  an  inventory  of  the  property  and  shall  renew 
the  same  every  five  years. 

§  6.  Makes  tax  due  at  death,  no  interest  for  six  months,  after  that  6%  from 
date  of  death.  If  not  paid  in  one  year  executor  or  administrator  must  file  a  bond. 
Requires  the  executor  to  deduct  the  tax  from  a  money  legacy  or  if  in  property  to 
collect  it  from  the  beneficiary,  and  forbids  delivery  without  payment  of  the  tax. 

It  imposes  the  same  duty  on  the  heir  when  a  legacy  is  charged  on  the  real 
estate,  makes  it  a  lien,  and  provides  for  its  enforcement  in  the  same  manner  as 
the  legacy. 

§  7.  Makes  executors  and  administrators  personally  liable  and  gives  them 
power  of  sale  in  the  same  manner  as  to  pay  debts. 

§  8.  Provides  for  receipts  which  must  be  produced  to  entitle  the  executor  or 
administrator  to  final  accounting. 

§  9.  Taxes  bequests  to  executors  in  lieu  of  commissions  when  in  excess  of 
reasonable  compensation. 

§  10.  Provides  for  a  proportionate  refund  when  debts  have  been  proved  against 
the  estate  after  distribution. 

§  11.  If  a  foreign  executor,  administrator,  or  trustee  shall  assign  or  transfer 
any  stock  or  obligation  in  this  State  standing  in  the  name  of  the  decedent  or  in 
trust  for  a  decedent  liable  for  any  such  tax,  the  tax  shall  be  paid  to  the  State 
Treasurer  on  the  transfer  thereof.  No  safe  deposit  company,  trust  company,  cor- 
poration, bank  or  other  institution,  person  or  persons  having  in  possession  or 
under  control  securities,  deposits,  or  other  assets  belonging  to  or  standing  in 
the  name  of  a  decedent  who  is  a  resident  or  nonresident,  or  belonging  to  or  stand- 
ing in  the  joint  names  of  such  a  decedent  and  one  or  more  persons,  including  the 
shares  of  capital  stock  or  other  interest  in  a  safe  deposit  company,  trust  com- 
pany, corporation,  bank  or  other  institution  making  a  delivery  or  transfer  herein 
provided,  shall  deliver  or  transfer  the  same  to  the  executor,  administrator,  or 
legal  representatives  of  said  decedent  or  the  survivor  or  survivors  when  in  the 
joint  name  of  a  decedent  and  one  or  more  persons  or  upon  their  order  or  request 
unless  notice  of  the  time  and  place  of  such  intended  delivery  or  transfer  be  served 
upon  the  State  Treasurer  and  Attorney-General  at  least  ten  days  prior  to  said 
delivery  or  transfer;  nor  shall  any  safe  deposit  company,  trust  company,  cor- 
poration, bank  or  other  institution,  person  or  persons,  deliver  or  transfer  any 


MISSOURI  973 

securities,  deposits,  or  other  assets  belonging  to  or  standing  in  the  name  of 
decedent  or  belonging  to  or  standing  in  the  joint  names  of  a  decedent  and  one  or 
more  persons,  including  the  shares  of  capital  stock  of  or  any  other  interest  in  the 
same  deposit  company,  trust  company,  corporation,  bank  or  other  institution 
making  the  delivery  or  transfer  without  retaining  a  sufficient  portion  or  amount 
thereof  to  pay  any  tax  or  interest  which  may  thereafter  be  assessed  on  account 
of  the  delivery  or  transfer  of  such  securities,  deposits,  or  other  assets,  including 
the  shares  of  capital  stock  or  other  interest  in  the  safe  deposit  company,  trust 
company,  corporation,  bank  or  other  institution  making  the  delivery  or  transfer 
under  the  provisions  of  this  article  unless  the  State  Treasurer  and  the  Attorney- 
General  consent  thereto  in  writing.  And  it  shall  be  lawful  for  the  State  Treasurer, 
together  with  the  Attorney-General,  personally  or  by  representative  to  examine 
said  securities,  deposits  or  assets  at  the  time  of  such  delivery  or  transfer.  Failure 
to  serve  such  notice  or  failure  to  allow  such  examination  or  failure  to  retain  a 
sufficient  portion  or  amount  to  pay  such  tax  or  interest  as  herein  provided  shall 
render  said  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution,  person  or  persons  liable  to  the  payment  of  the  amount  of  the  tax  and 
interest  due  or  thereafter  to  become  due  upon  said  securities,  deposits,  or  other 
assets,  including  the  charges  of  capital  stock  of,  or  other  interest  in  the  safe 
deposit  company,  trust  company,  corporation,  bank  or  other  institution  making  the 
delivery  or  transfer,  and  in  addition  thereto  a  penalty  of  one  thousand  dollars; 
and  the  payment  of  such  tax  and  interest  thereon  or  the  penalty  above  prescribed 
or  both  may  be  enforced  in  an  action  brought  by  the  State  Treasurer  in  any  court 
of  competent  jurisdiction. 

§  12.  Provides  for  refunds  of  taxes  erroneously  paid  when  the  application  is 
made  within  two  years  of  such  payment. 

§  13.  Gives  the  probate  court  granting  letters  of  jurisdiction  of  the  tax  pro- 
ceedings and  for  the  appointment  of  an  appraiser  by  the  judge  on  his  own  motion 
or  on  the  application  of  the  estate  or  State  officers. 

§§  14  to  23.  Provide  for  proceedings  before  appraisers,  appeals  and  proceed- 
ings to  fix  the  tax  where  no  administration  proceedings  are  pending,  and  for  the 
valuation  of  life  estates  and  remainders  by  the  Superintendent  of  Insurance  on 
the  5%  basis,  using  actuaries'  combined  experience  tables  of  mortality. 

§  24.  In  determining  the  value  of  any  estate,  property,  interest  therein  or  income 
therefrom  to  the  beneficial  enjoyment  or  possession  whereof  there  are  persons  or 
corporations  presently  entitled,  no  allowance  shall  be  made  on  account  of  any 
contingent  encumbrance  thereon,  nor  on  account  of  any  contingency  upon  the 
happening  of  which  the  estate,  property,  interest  or  income  or  some  part  thereof 
or  interest  therein  might  be  abridged,  defeated  or  diminished ;  provided,  however, 
that  in  the  event  of  such  encumbrance  taking  effect  as  an  actual  burden  upon  the 
interest  of  the  beneficiary,  or  in  the  event  of  the  abridgement,  defeat  or  diminu- 
tion of  said  estate  or  property  or  interest  therein  as  aforesaid,  a  return  shall  be 
made  to  the  persons  properly  entitled  thereto  of  a  proportionate  part  of  such 
tax  on  account  of  the  encumbrance  when  taking  effect,  or  so  much  as  will  reduce 
the  same  to  the  amount  which  would  have  been  assessed  on  account  of  the  actual 
duration  or  extent  of  the  estate  or  interest  enjoyed.  Such  return  of  tax  shall  be 
made  in  the  manner  provided  by  section  12  thereof  upon  order  of  the  court 
having  jurisdiction. 

§  25.  Where  any  property  shall  after  the  passage  of  this  act,  be  transferred 
subject  to  any  charge,  estate  or  interest,  determinable  by  the  death  of  any  person, 
or  at  any  period  ascertainable  only  by  reference  to  death,  the  increase  accruing 
to  any  person  or  corporation  upon  the  extinction  or  determination  of  such  charge, 
estate  or  interest,  shall  be  deemed  a  transfer  of  property  taxable  under  the  pro- 
visions of  this  act  in  the  same  manner  as  though  the  person  or  corporation  bene- 
ficially entitled  thereto  had  then,  acquired  such  increase  from  the  person  from 
whom  the  title  to  their  respective  estate  or  interests  is  derived.  When  the 
property  is  transferred  in  trust  or  otherwise,  and  the  rights,  interests  or  estates 
of  the  transferees  are  wholly  dependable  upon  contingencies  or  conditions  whereby 
they  may  be  wholly  or  in  part  created,  defeated,  extended  or  abridged,  a  tax  shall 
be  imposed  upon  said  transfer  at  the  highest  rate  which,  on  the  happening  of  any 
of  the  said  contingencies  or  conditions,  would  be  possible  under  the  provisions  of 
this  act,  and  such  tax  so  imposed  shall  be  due  and  payable  forthwith  by  the 
executor,  administrator,  or  trustee  out  of  the  property  transferred;  provided, 
however,  that  on  the  happening  of  any  contingency  whereby  the  said  property,  or 


974  THE  STATE  STATUTES 

any  part  thereof,  is  transferred  to  a  person  or  corporation  exempt  from  taxation 
under  the  provisions  of  this  act,  or  to  any  person  taxable  at  a  rate  less  than  the 
rate  imposed  and  paid,  such  person  or  corporation  shall  be  entitled  to  a  return 
of  so  much  of  the  tax  imposed  and  paid  as  is  the  difference  between  the  amount 
paid  and  the  amount  which  said  person  or  corporation  should  pay  under  the 
provisions  of  this  act.  Such  return  of  overpayment  shall  be  made  in  the  manner 
provided  by  section  12  of  this  act,  upon  the  order  of  the  court  having  jurisdiction. 
Estates  in  expectancy  which  are  contingent  or  defeasible  and  in  which  proceed- 
ings for  the  determination  of  the  tax  have  not  been  taken  or  where  the  taxation 
thereof  has  been  held  in  abeyance,  shall  be  appraised  at  their  full,  undiminished 
value  when  the  persons  entitled  thereto  shall  come  into  the  beneficial  enjoyment 
or  possession  thereof,  without  diminution  for  or  on  account  of  any  valuation 
theretofore  made  of  the  particular  estate  for  purposes  of  taxation,  upon  which 
said  estates  in  expectancy  may  have  been  limited.  Where  an  estate  for  life  or 
for  years  can  be  divested  by  the  act  or  omission  of  the  legatee  or  devisee  it  shall 
be  taxed  as  if  there  were  no  possibility  of  such  divesting. 

§  26.  Actions  may  be  brought  against  the  State  for  the  purpose  of  quieting 
the  title  to  any  property,  against  the  lien  or  claim  of  lien  of  any  tax  or  taxes 
under  this  act,  or  for  the  purpose  of  having  it  determined  that  any  property  is 
not  subject  to  any  lien  for  taxes  under  this  act.  In  any  such  action,  the  plaintiffs 
may  be  any  administrator,  or  executor  of  the  estate  or  will  of  any  decedent 
whether  the  said  estate  shall  have  been  fully  administered  and  the  estate  settled 
and  closed  or  not,  and  any  heir,  legatee,  devisee  of  any  such  decedent,  or  trustee 
of  the  estate  or  of  any  part  of  the  estate  of  such  decedent,  or  distributee  of  the 
estate  or  of  any  part  of  the  estate  of  any  such  decedent,  and  any  assignee, 
grantee  or  successor  in  interest  of  any  such  persons,  and  all  or  any  other  persona 
who  might  be  made  parties  defendant  in  any  action  brought  by  the  State  under 
the  provisions  of  this  section,  and  notwithstanding  that  all  or  any  of  the  persons 
enumerated  in  this  section  shall  or  may  have  assigned,  granted,  conveyed  or  other- 
wise parted  with  all  or  any  interest  in  or  title  to  the  property,  or  any  part  thereof, 
involved  in  any  such  claim  or  lien  before  the  commencement  of  such  act.  All  or 
any  of  the  persons  in  this  action  enumerated  may  be  joined  or  united  as  parties 
plaintiff.  The  enumeration  in  this  section  of  the  parties  who  may  be  made  parties 
shall  not  be  deemed  to  be  exclusive,  but  the  joinder  or  non- joinder  of  parties 
except  when  otherwise  herein  provided,  shall  be  governed  by  the  rules  in  equity 
in  similar  cases.  In  all  eases  any  person  who  might  properly  be  a  party  plaintiff 
in  any  such  action  who  refuses  to  join  as  plaintiff  may  be  made  a  defendant.  All 
actions  under  this  section  shall  be  commenced  in  the  Circuit  Court  of  any  county 
in  which  is  situated  any  part  of  any  real  property  against  which  any  lien  is 
sought  to  be  enforced,  or  to  which  title  is  sought  to  be  quieted  against  any  lien, 
or  claim  of  lien;  but  if  in  said  action  no  lien  against  real  property  is  sought 
to  be  enforced,  the  action  shall  be  brought  in  the  Circuit  Court  of  the  county 
which  has  or  which  had  jurisdiction  of  the  administration  of  the  estate  of  the 
decedent  mentioned  herein.  Service  of  summons  in  the  actions  brought  against 
the  State  shall  be  made  on  the  State  Treasurer  and  the  prosecuting  attorney  of 
the  county,  and  it  shall  be  the  duty  of  said  prosecuting  attorney  to  defend  for 
the  State.  The  procedure  and  practice  in  all  actions  brought  under  this  section, 
except  as  otherwise  provided  in  this  act,  shall  be  governed  by  the  provisions  of 
the  Code  of  Civil  Procedure  in  relation  to  civil  actions,  so  far  as  the  same  shall 
or  may  be  applicable,  including  all  provisions  relating  to  motions  for  new  trials 
and  appeals.  The  remedies  provided  in  this  section  shall  be  in  addition  to  and 
not  exclusive  of  any  remedies  provided  in  the  sections  preceding  this  section. 

§§  27,  28  and  29.  Provide  for  reports  by  State  officers  and  impose  a  penalty 
for  neglect  of  duty  in  failing  to  enforce  the  statute. 

§  30.  When  any  property,  benefit  or  income  shall  pass  to  or  for  the  use  of  any 
hospital,  religious,  educational,  Bible,  missionary,  scientific,  benevolent  or  char- 
itable purpose  in  this  State,  or  to  any  trustee,  association  or  corporation,  bishop, 
minister  of  any  church,  or  religious  denomination  in  this  State,  to  be  held  and 
used  and  actually  held  and  used  exclusively  for  religious,  educational  or  charitable 
uses  and  purposes,  the  same  shall  not  be  subject  to  any  tax,  but  this  provision 
shall  not  apply  to  any  corporation  which  has  a  right  to  make  dividends  or  dis- 
tribute profits  or  assets  among  its  members,  except  when  the  property  is  trans- 
ferred to  any  of  the  above  named  parties  in  the  first  instance;  the  intent  being 
to  exclude  and  exempt  from  the  tax  herein  provided  for,  all  property  held  by  any 


MISSOURI  975 

person  or  persons  as  the  trustee  or  other  legal  representative  of  any  religious, 
charitable,  scientific,  or  educational  institutions,  society  or  corporation,  when  by 
death  the  title  to  property  passes  by  the  right  of  succession  to  other  persons  as 
trustee  or  legal  representatives  of  such  institutions,  societies  or  corporations. 

§  31.  When  property  or  any  interest  therein  or  income  therefrom  shall  pass 
to  or  for  the  use  of  any  person,  institution,  association  or  corporation  by  the  death 
of  another  by  deed,  instrument  or  memoranda  or  by  any  transfer  or  passage 
whatsoever  and  such  transfer  shall  be  deemed  a  transfer  within  the  meaning  of 
this  act  and  taxable  at  the  same  rates  and  be  appraised  in  the  same  manner  and 
subjected  to  the  same  duties  and  liabilities  as  any  other  form  of  transfer  provided 
in  this  act. 

§  32.  Makes  the  usual  definitions  as  to  estate  and  property. 

§  33.  Repeals  the  former  statutes  with  the  usual  saving  clause  as  to  the  rights 
of  the  State  to  taxes  already  accrued. 

AMENDMENT  OF  1919,  IN  EFFECT  NOV.  1,  1919,  AS  TO  EXEMPTIONS. 

The  Legislature  of  1919  amended  sections  4  and  30  of  the  1917  act  to  read  as 
follows : 

§  4.  The  following  shall  be  exempt  from  taxes  provided  for  in  this  act: — All 
transfers  of  property  or  any  beneficial  interest  therein  to  be  used,  and  actually 
used  solely  for  county,  city,  town  or  municipal  purposes,  or  for  religious,  char- 
itable, or  educational  purposes  in  this  State  whether  such  transfer  be  made 
directly  or  indirectly  and  said  property  shall  be  exempt  from  the  tax  where  the 
same  descends  from  a  trustee  or  trustees  to  other  trustee  or  trustees  who  hold 
property  for  the  uses  of  the  above  named  institutions.  All  transfers  of  property 
or  any  beneficial  interest  therein  of  the  clear  market  value  of  fifteen  thousand 
dollars  to  the  surviving  husband  or  wife,  and  five  thousand  dollars  to  each  of  the 
other  persons  described  in  the  first  subdivision,  section  3,  of  this  act.  All 
transfers  of  property  or  any  beneficial  interest  therein  of  the  clear  market  value 
of  five  hundred  dollars  to  each  of  the  persons  described  in  the  second  subdivision 
of  section  3  of  this  act.  All  transfers  of  property  or  any  beneficial  interest  therein 
of  the  clear  market  value  of  two  hundred  and  fifty  dollars  to  each  of  the  persons 
described  in  the  third  subdivision  of  section  3  of  this  act.  All  transfers  of 
property  or  any  beneficial  interest  therein  of  the  clear  market  value  of  one 
hundred  dollars  to  each  of  the  persons  described  in  the  fourth  subdivision  of 
section  3  of  this  act.  All  transfers  of  property  or  any  beneficial  interest  therein 
of  which  the  clear  market  value  shall  be  less  than  one  hundred  dollars  shall  not 
be  subject  to  any  tax. 

§  30.  When  any  property,  benefit  or  income  shall  pass  to  or  for  the  use  of  any 
hospital,  religious,  educational,  Bible,  missionary,  scientific,  benevolent  or  char- 
itable purpose  in  this  State,  or  to  any  trustee,  association  or  corporation,  bishop, 
minister  of  any  church,  or  religious  denomination  in  this  State,  to  be  held  and 
used  and  actually  held  and  used  exclusively  for  religious,  educational,  or  char- 
itable uses  and  purposes,  whether  such  transfer  be  made  directly  or  indirectly, 
the  same  shall  not  be  subject  to  any  tax,  but  this  provision  shall  not  apply  to  any 
corporation  which  has  a  right  to  make  dividends  or  distribute  profits  or  assets 
among  its  members. 

FORMS  FOR  WAIVER  AND  CONSENT  TO  TRANSFER  NONRESIDENT 

ASSETS. 

TRANSFER  LAW. 
Laws  of  Missouri,  1917,  Page  114. 

NOTICE  OF  INTENTION   TO   DELIVER  OR  TRANSFER   SECURITIES   OR   OTHER   ASSETS. 

HON.  GEORGE  H.  MIDDLEKAMP, 
Treasurer  of  Missouri, 

and 
HON.  FRANK  W.  MCALLISTER, 

Attorney-General  of  Missouri, 
Jefferson  City,  Missouri. 

Pursuant  to  Section  11  of  an  Act  Providing  for  a  Tax  on  the  transfer  of 
Property  by  Gift,  Inheritance,  etc.,  Approved  April  12,  1917,  Laws  of  Missouri, 
1917,  Page  114,  you  and  each  of  you  are  hereby  notified  that  the  undersigned 


976  THE  STATE  STATUTES 

will  on  the  day  of   , 

19 ,  at , , 

(Place  of  Business)  (Street  or  Building  Number) 

,  all  securities,  deposits,  assets,  and  other 

evidences  of  property  in possession  or  under control, 

including  the  contents  of  Safe  Deposit  Box  No ,  belonging  to  or  standing 

in  the  name  of ,  deceased   (and  ) , 

a resident  of   County,  State  of   , 

•who  is  said  to  have  died  at  ,  , 

on  or  about  the  day  of  ,  19 . . . ,  at  which 

said  time  and  place  of  delivery  you  and  each  of  you  or  your  respective  repre- 
sentatives may  attend,  if  you  so  desire. 

Dated  this day  of ,  19. . . 


STATE  OF  MISSOURI. 
TRANSFER  AND  INHERITANCE  TAX. 

NONRESIDENT  DECEDENT. 
IN  THE  MATTER  OP  THE  ESTATE  OF 


Deceased. 
Late  of ,  State  of 


CONSENT  TO  TRANSFER  OR  DELIVER  ASSETS. 
To    . 


We,  the  undersigned,  George  H.  Middlekamp,  Treasurer  of  the  State  of  Mis- 
souri, and  Frank  W.  McAllister,  Attorney-General  of  the  State  of  Missouri, 
hereby  consent  to  the  transfer,  payment  or  delivery  to  the  duly  appointed  and 

acting  administrat or  execut of  the  Estate  of  , 

Deceased,  who  died  on  the day  of   •. ,  19 . . . ,  a 

resident  of  the  State  of  ,  or  to  the  order  of  such  admin- 
istrat     or  execut of  the  following  described  personal  property, 

which  said  property  appears  to  be  in  possession,  under  control,  or  on  the  books 

of  said in  the  name  of  said  , 

Deceased: 

No.  of  Shares 

or  Description. 

Items. 


"We  hereby  release  said  from  any  and  all 

liability  to  the  State  of  Missouri  for  the  tax  and  penalties  imposed  by  the 
Transfer  and  Inheritance  Tax  Laws  thereof  by  reason  of  said  transfer,  payment 
or  delivery. 

Dated  this  day  of  ,  19. . 


Treasurer  State  of  Missouri. 
By 

Attorney-General  State  of  Missuori. 
By 


MONTANA 


977 


MONTANA. 

Taxes  all  property  of  nonresidents  within  the  State. 

TABLE  OF  RATES  AND  EXEMPTIONS  — 1917 


CLASS  OB  RELATIONSHIP 

Exemption 

Rate  of  tax 

Father,  mother,  husband,  wife,  lawful  issue,  sister, 
brother,  son-in-law,  daughter-in-law,  adopted  or 
mutually  acknowledged  child,  lineal  descendants, 
born  in  wedlock. 

Estate  valued  at 
less  than  $7,- 
500,  no  tax. 

1%  on  entire  value  of 
personal  property, 
if  over  $7,500  in 
value. 

less  than  $500, 
not  taxed. 

over  $500. 

TABLE  OF  RATES  AND  EXEMPTIONS  UNDER  ACT  OF  1921. 


PARTIES 

Exemp- 
tions 

Above 
exemp- 
tion   to 
$25,030 

$25,000 
to 
$50,000 

$50.000 
to 
$100,000 

$100,000 
to 
$500,000 

Above 
$500,000 

Widow. 

$10,000 

1% 

1% 

1% 

1% 

1% 

Husband,  lineal  issue,  lineal 
ancestor,  adopted  or  mu- 
tually acknowledged  child 
or  its  issue. 

2,000 

1% 

1% 

1% 

1% 

1% 

Brother  and  sister  and  their 
descendants,    son-in-law, 
daugh  ter-in-law. 

500 

2% 

4% 

6% 

8% 

10% 

Aunt  and  uncle  and  their 
descendants. 

250 

3% 

6% 

9% 

12% 

15% 

Great  aunt,  great  uncle  and 
descendants. 

150 

4% 

8% 

12% 

15% 

15% 

All  others  except  public,  edu- 
tional,  charitable,  religious 
and  educational  corpora- 
tions within  the  state  which 
are  wholly  exempt. 

100 

5% 

10% 

15% 

15% 

15% 

LAWS  1921,  CHAPTER  14. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  of  property, 
real,  personal  or  mixed,  or  any  interest  therein,  or  income  therefrom  in  trust  or 
otherwise,  to  any  person,  association  or  corporation,  except  the  state  or  any  of 
its  institutions,  county,  town  and  municipal  corporations  within  the  state,  for 
strictly  county,  town  or  municipal  purposes,  and  corporations  of  this  state  organ- 
ized under  its  laws,  or  voluntary  associations,  organized  solely  for  religisu, 
charitable  or  educational  purposes,  which  use  the  property  so  transferred  ex- 
clusively for  the  purposes  of  their  organization,  within  the  state  in  the  following 
cases,  except  as  hereinafter  provided: 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  state  from 
any  person  dying  possessed  of  the  property  while  a  resident  of  the  state. 

(2)  When  a  transfer  is  by  will  or  intestate  law,  of  property  within  the  state 
or  within  its  jurisdiction  and  the  decedenf  was  a  non-resident  of  the  state  at  the 
time  of  his  death. 

(3)  When  the  transfer  is  of  property  within  this  state  and  such  transfer  is 
made  by  a  resident  or  by  a  non-resident  when  such  non-resident's  property  is 
within  this  state,  or  within  its  jurisdiction,  by  deed,   grant,   bargain,   or   gift 
made  in  contemplation  of  the  death  of  the  grantor,  vendor,  or  donor,  or  intended 

62 


978  THE  STATE  STATUTES 

to  take  effect  in  possession  or  enjoyment  at  or  after  such  death.  Every  transfer 
by  deed,  grant,  bargain,  or  gift,  made  within  two  (2)  years  prior  to  the  death 
of  the  grantor,  vendor  or  donor,  of  a  material  part  of  his  estate,  or  in  the  nature 
of  a  final  disposition  or  distribution  thereof,  and  is  without  other  valuable  con- 
sideration, shall  be  prima  facie  presumed  to  have  been  made  in  contemplation  of 
death  within  the  meaning  of  this  section. 

(4)  Such  tax  shall  be  imposed  when  any  such  person  or  corporation  becomes 
beneficially  entitled,  in  possession  or  expectancy  to  any  property  or  the  income 
thereof,  by  any  such  transfer  whether  made  before  or  after  the  passage  of  this 
Act;   provided,  that  property  or  estates  which  have  vested  in  such  persons  or 
corporations  before  this  Act  shall  take  effect,  shall  not  be  subject  to  a  tax  under 
the  provisions  of  this  Act,  but  shall  be  subject  to  a  tax  under  the  provisions  of 
the  inheritance  tax  laws  in  force  at  the  date  the  property  or  estates  vested  in 
such  persons   or   corporations;    and   provided,   further,   that    contingent   interests 
created  by  the  will  or  conveyance  of  any  person  who  died  prior  to  the  passage 
of  this  Act  shall  not  be  taxed  hereunder,  but  shall  be  taxed  under  such  prior 
inheritance  tax  laws. 

(5)  Whenever  any  person   or   corporation   shall  exercise   a  power   of   appoint- 
ment derived  from  any  disposition  of  property,  made  either  before  or  after  the 
passage  of  this  Act,  such  appointment  when  made,  shall  be  deemed  a  transfer 
taxable  under   the   provisions   of   this  Act,  in   the   same   manner   as   though   the 
property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of 
such  power,  and  had  been  bequeathed  or  devised  by  such  donee  by  will;   and 
whenever  any  person  or  corporation  possessing  such  a  power  of  appointment  so 
derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor, 
in  whole  or  in  part,  a  transfer  taxable  under  the  provisions  of  this  Act,  shall 
be  deemed  to  take  place  to  the  extent  of  such  omission  or  failure,  in  the  same 
manner  as  though  the  persons  or  corporations  thereby  becoming  entitled  to  the 
possessing  or  enjoyment  of  the  property  to  which  such  power  related  had  suc- 
ceeded thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  power, 
taking  effect  at  the  time  of  such  omission  or  failure. 

(6)  Whenever  any  property,  real  or  personal,  is  held  in  the  joint  names  of 
two  or  more  persons,  or  as  tenants  by  the  entirety,  or  is  deposited  in  banks  or 
other  institutions  or  depositaries  in  the  joint  names  of  two  or  more  persons  and 
payable  to  either  or  the  survivor,  upon  the  death  of  one  of  such  persons,  the 
right  of  the  surviving  tenant  by  the  entirety,  joint  tenant  or  joint  tenants,  person 
or   persons,   to   the   immediate   ownership   or   possession   and   enjoyment    of   such 
property  shall  be  deemed  a  transfer  of  one-half  or  other  proper  fraction  thereof 
taxable  under  the  provisions  of  this  Act  in  the  same  manner  as  though  the  prop- 
erty to  which  such  transfer  relates  belonged  to  the  tenants  by  the  entirety,  joint 
tenants  or  joint  depositors  as  tenants  in  common,  and  had  been  bequeathed  or 
devised  to  the  surviving  tenant  by  the  entirety,  joint  tenant  or  joint  tenants, 
person  or  persons,  by  such  deceased  tenant  by  the  entirety,  joint  tenant  or  joint 
depositor,  by  will,  except  such  part  thereof  as  may  be  shown  to  have  originally 
belonged  to  the  survivor  and  never  to  have  belonged  to  the  decedent. 

(7)  The  tax  so  imposed  shall  be  upon  the  clear  market  value  of  such  property 
at  the  rates  hereinafter  prescribed  and  only  apon  the  excess  of  the  exemptions 
hereinafter  granted. 

§  2.  When  the  property  or  any  beneficial  interest  therein  passes  by  any  such 
transfer  where  the  amount  of  the  property  shall  exceed  in  value  the  exemption 
hereinafter  specified,  and  shall  not  exceed  in  value  twenty-five  thousand  dollars 
($25,000.00)  the  tax  hereby  imposed  shall  be: 

(1)  Where  the  person  or  persons   entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  husband,  wife,  lineal  issue,  lineal  ancestor  of  the  decedent, 
or  any  child  adopted  as  such  in  conformity  with  the  law,  or  any  child  to  whom 
such  decedent  for  not  less  than  ten  (10)  years  prior  to  such  transfer  stood  in  the 
mutual    acknowledged    relation    of    a    parent;    provided,    however,    such    relation 
began  at  or  before  the  child's  fifteenth  birthday,  and  was  continued  for  said 
ten    (10)    years  thereafter,   or   any   lineal   issue    of    such   adopted    or    mutually 
acknowledged  child,  at  the  rate  of  one  per  cent  (1%)  of  the  clear  value  of  such 
interest  in  such  property. 

(2)  Where  the   person   or  persons   entitled  to   any   beneficial   interest   in   such 
property  shall  be  the  brother  or  sister  or  a  descendant  of  a  brother  or  sister  of 
the  decedent,  a  wife  or  widow  of  a  son  or  the  husband  of  a  daughter  of  the 


MONTANA  979 

decedent,  at  the  rate  of  two  per  cent  (2%)   of  the  clear  value  of  such  interest 
in  such  property. 

(3)  Where  the  person  or  persons  entitled  to   any  beneficial  interest   in  such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother,  or  a  descendant 
of  a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the  rate  of  three 
per  cent  (3%)  of  the  clear  value  of  such  interest  in  such  property. 

(4)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  grandfather  or  grandmother  or  a 
descendant  of  the  brother  or  sister  of  the  grandfather  or  grandmother  of  the 
decedent,  at  the  rate  of  four  per  cent  (4%)  of  the  clear  value  of  such  interest 
in  such  property. 

(5)  Where  the  person  or  persons  entitled  to   any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a  body 
corporate  or  body  politic  outside  this  state,  at  the  rate  of  five  per  cent  (5%)  of 
the  clear  value  of  such  interest  in  such  property. 

§  3.  The  foregoing  rates  in  section  2  are  for  convenience  termed  the  primary 
rates. 

When  the  amount  of  the  clear  value  of  such  property  or  interest  exceeds 
twenty-five  thousand  dollars  ($25,000.00),  and  the  beneficiary  entitled  thereto 
shall  belong  to  any  of  the  classes  mentioned  in  subdivisions  2,  3,  4  and  5  of 
section  2  of  this  Act,  the  rates  of  tax  upon  such  excess  shall  be  as  follows : 

(1)  Upon  all  in  excess  of  twenty- five  thousand  dollars  ($25,000.00),  and  up  to 
fifty  thousand  dollars   ($50,000.00),  two   (2)   times  the  primary  rates. 

(2)  Upon  all  in  excess  of  fifty  thousand  dollars   ($50,000.00),  and  up  to  one 
hundred  thousand  dollars  ($100,000.00),  three  (3)   times  the  primary  rates.- 

(3)  Upon  all  in  excess  of  one  hundred  thousand  dollars  ($100,000.00),  and  up 
to  five  hundred  thousand  dollars  ($500,000.00),  four  (4)  times  the  primary  rates. 

(4)  Upon  all  in  excess  of  five  hundred  thousand  dollars  ($500,000.00),  five  (5) 
times  the  primary  rate. 

(5)  No  such  tax,  however,  shall  exceed  fifteen  per  cent  (15%)  of  the  property 
transferred  to  any  beneficiary. 

§  4.  The  following  exemptions  from  the  tax  to  be  taken  out  of  the  first  twenty- 
five  thousand  dollars  ($25,000.00),  are  hereby  allowed: 

(1)  All  property  transferred  to  the  state  or  any  of  its  institutions  or  municipal 
corporations  within  this  state  for  strictly  county,   city,  town  or  municipal  pur- 
poses, or  to  corporation  or  voluntary  associations  of  this  state  organized  under 
its  laws  solely  for  religious,  charitable  or  educational  purposes,  which  shall  use 
the  property  so  transferred  exclusively  for  the  purposes  of  their  organizations 
within  the  state  is  excepted  from  the  operation  of  this  Act. 

(2)  Property  of  the  clear  value  of  ten  thousand  dollars    ($10,000.00),  trans- 
ferred to   the   widow   of   the   decedent,   and   two    thousand    dollars    ($2,000.00), 
transferred  to  each  of  the  other  persons  described  in  the  first  subdivision  of  sec- 
tion 2,  shall  be  exempt.     Exemption  to  the  widow  shall  include  her  dower  and 
homestead  rights. 

(3)  Property  of  the  clear  value  of  five  hundred  dollars  ($500.00),  transferred 
to  each  of  the  persons  described  in  the  second  subdivision  of  section  2  shall  be 
exempt. 

(4)  Property  of  the  clear  value  of  two  hundred  and  fifty  dollars   ($250.00), 
transferred  to  each  of  the  persons  described  in  the  third  subdivision  of  section  2, 
shall  be  exempt. 

(5)  Property  of  the  clear  value  of  one  hundred  and  fifty  dollars    ($150.00), 
transferred  to  each  of  the  persons  described  in  the  fourth  subdivision  of  section  2, 
shall  be  exempt. 

(6)  Property  of  the  clear  value  of  one  hundred  dollars  ($100.00),  transferred 
to  each  of  the  persons  and  corporations  described  in  the  fifth  subdivision   of 
section  2,  shall  be  exempt. 

(7)  No  tax  shall  be  imposed  upon  any  tangible  personal  property  of  a  resident 
decedent  when  such  property  is  located  without  the  state,  and  when  the  transfer 
of  such  property  is  subject  to  an  inheritance  or  transfer  tax  in  the  state  where 
located,  and  which  tax  has  actually  been  paid;   provided  such  property  is  not 
without  this  state  temporarily  nor  for  the  sole  purpose  of  deposit  or  safekeeping; 
and  provided  the  laws  of  the  state  where  such  property  is  located  allow  a  like 


980  THE  STATE  STATUTES 

exemption  in  relation  to  such  property  left  by  a  resident  of  that  state  and  located 
in  this  state. 

§  5.  (1)  All  taxes  imposed  by  this  Act  shall  be  due  and  payable  at  the  time  of 
the  transfer,  except  as  hereinafter  provided;  and  every  tax  shall  be  and  remain 
a  lien  upon  the  property  transferred  until  paid,  and  the  person  to  whom  the 
property  is  transferred,  and  the  administrators,  executors  and  trustees  of  every 
estate  so  transferred  shall  be  personally  liable  for  such  tax  until  its  payment. 

(2)  The  tax  shall  be  paid  to  the  State  Treasurer  or  to  the  treasurer  of  the 
county  in  which  the  district  court  is  situated  having  jurisdiction  as  herein  pro- 
vided; and  if  paid  to  the  county  treasurer,  such  county  treasurer  shall  make  a 
triplicate  receipt  of  such  payment,  one  of  which  he  shall  keep  on  file  in  his  office, 
one  of  which  he  shall  immediately  send  to  the  State  Treasurer,  whose  duty  it 
shall  be  to  charge  the  county  treasurer  so  receiving  the  tax,  with  the  portion  due 
the  state  thereof;  and  one  receipt  shall  be  delivered  to  the  excutor,  administrator 
or  trustee,  whereupon  it   shall   be   a   proper  voucher   in   the   settlement   of   his 
accounts. 

(3)  But  no  executor,  administrator  or  trustee  shall  be  entitled  to  have  approved 
any  final  account  of  any  estate,  in  settlement  of  which  a  tax  is  due  under  the 
provisions  of  this  Act,  unless  he  shall  produce  such  receipts  or  a  certified  copy 
thereof,  or  unless  a  bond  shall  have  been  filed  as  prescribed  by  section  9. 

§  6.  If  such  tax  is  paid  within  one  (1)  year  from  the  accruing  thereof,  a 
discount  of  five  per  cent  (5%)  shall  be  allowed  and  deducted  from  said  tax,  but 
if  not  so  paid,  interest  at  the  rate  of  ten  per  cent  (10%)  per  annum  shall  be 
charged  and  collected  from  the  time  such  tax  accrued;  unless  by  reason  of  claims 
made  upon  the  estate,  necessary  litigation  or  other  unavoidable  cause  of  delay, 
such  tax  shall  not  be  determined  and  paid  as  herein  provided,  in  which  case 
interest  at  the  rate  of  six  per  cent  (6%)  per  annum  shall  be  charged  upon  such 
tax  from  the  accrual  thereof  until  the  cause  of  such  delay  is  removed,  after 
which  ten  per  cent  (10%)  shall  be  charged;  provided,  however,  that  litigation 
to  defeat  the  payment  of  the  tax  shall  not  be  considered  as  necessary  litigation. 
And  in  all  cases  where  a  bond  shall  be  given,  under  the  provisions  of  section  9 
of  this  Act,  interest  shall  be  charged  at  the  rate  of  six  per  cent  (6%)  per  annum 
from  the  accrual  of  the  tax  until  the  date  of  payment  thereof. 

§  7.  Every  executor,  administrator  or  trustee  shall  have  full  power  to  sell  so 
much  of  the  property  of  the  decedent  as  will  enable  him  to  pay  such  tax  in  the 
same  manner  as  he  might  be  entitled  by  law  to  do  for  the  payment  of  the  debts 
of  the  testator  or  intestate.  Any  such  administrator,  executor  or  trustee,  having 
in  charge  or  in  trust  any  legacy  or  property  for  distribution,  subject  to  such 
tax,  shall  deduct  the  tax  therefrom;  and  within  thirty  (30)  days  therefrom  shall 
pay  over  the  same  to  the  county  treasurer  as  herein  provided.  If  such  legacy 
or  property  be  not  in  money,  he  shall  collect  the  tax  thereon  upon  the  appraised 
value  thereof  from  the  person  entitled  thereto.  He  shall  not  deliver  or  be  com- 
pelled to  deliver  any  specific  legacy  or  property,  subject  to  tax  under  this  law,  to 
any  person  until  he  shall  have  collected  the  tax  thereon.  If  any  such  legacy  shall 
be  charged  upon  or  payable  out  of  real  property,  the  heir  or  devisee  shall  deduct 
such  tax  therefrom  and  pay  it  to  the  administrator,  executor,  or  trustee,  and  the 
tax  shall  remain  a  lien  or  charge  on  such  real  property  until  paid,  and  the  pay- 
ment thereof  shall  be  enforced  by  the  executor,  administrator,  or  trustee  in  the 
same  manner  that  payment  of  the  legacy  might  be  enforced  by  the  Attorney 
General  under  section  16.  If  any  such  legacy  shall  be  given  in  money  to  any 
such  person  for  a  limited  period,  the  administrator,  executor,  or  trustee,  shall 
retain  the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money,  he  shall  make 
application  to  the  court  having  jurisdiction  of  an  accounting  by  him  to  make  an 
apportionment  if  the  case  require  it,  of  the  sum  to  be  paid  into  the  hands  of  such 
legatees,  and  for  further  order,  relative  thereto  as  the  case  may  require. 

§  8.  (1)  If  any  debt  shall  be  proved  against  the  estate  of  a  decedent,  after 
the  payment  of  any  legacy  or  distributive  share  thereof,  from  which  any  such 
tax  has  been  deducted,  or  upon  which  it  has  been  paid  by  the  person  entitled  to 
such  legacy  or  distributive  share  and  such  person  is  required  by  the  order  of  the 
district  court  having  jurisdiction  of  the  tax  so  deducted  or  paid,  to  refund  the 
amount  of  such  debts  or  any  part  thereof,  an  equitable  proportion  thereof  shall 
be  repaid  to  such  person  by  the  executor,  administrator  or  trustee,  if  the  said 
tax  has  not  been  paid  to  the  county  treasurer  or  State  Treasurer  or  by  them,, 
in  the  proper  proportionate  shares,  if  it  has  been  so  paid. 


MONTANA  981 

(2)  When  any  amount  of  said  tax  shall  have  been  paid  erroneously  to  the 
county  and  State  Treasurer,  or  to  either  of  them,  it  shall  be  lawful  for  them,  on 
satisfactory  proof  to  the  State  Board  of  Equalization  of  such  erroneous  pay- 
ment, to  refund  to  the  executor,  administrator,  person  or  persons  who  shall  have 
paid  any  such  tax  in  error  the  county's  and  state's  proportionate  amount  of  such 
tax  so  paid;  provided  that  all  such  applications  for  refund  shall  be  made  within 
two  (2)  years  from  the  date  of  such  payment. 

§  9.  Any  beneficiary  of  any  property  chargeable  with  a  tax  under  this  Act, 
and  any  executors,  administrators  and  trustees  thereof  may  elect  within  one  (1) 
year  from  the  date  of  the  transfer  thereof  as  herein  provided,  not  to  pay  such 
tax  until  the  person  or  persons  beneficially  interested  therein  shall  come  into  the 
actual  possession  or  enjoyment  thereof.  The  person  or  persons  so  electing  shall 
give  a  bond  to  the  state  in  a  penalty  of  twice  the  amount  of  any  such  tax,  with 
.such  sureties  as  the  district  court  of  the  proper  county,  or  the  State  Board  of 
Equalization  as  the  case  may  be,  may  approve,  conditioned  for  the  payment  of 
such  tax  and  interest  thereon,  at  such  time  or  period  as  the  person  or  persons 
beneficially  interested  therein  may  come  into  the  actual  possession  or  enjoyment 
of  such  property,  which  bond  shall  be  filed  in  the  district  court  or  in  the  office 
-of  the  State  Treasurer,  as  the  case  may  be,  and  such  bond  must  be  renewed  every 
five  (5)  years. 

§  10.  If  a  testator  bequeaths  property  to  one  or  more  executors  or  trustees  in 
lieu  of  their  commissions  or  allowances,  or  makes  them  his  legatees  in  an  amount 
exceeding  the  commissions  or  allowances  prescribed  by  law  for  the  executor  or 
trustee,  the  excess  in  value  of  the  property  so  bequeathed,  above  the  amount  of 
commissions  or  allowances  prescribed  by  law  in  similar  cases,  shall  be  taxable 
by  this  Act. 

$  11.  (1)  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  trans- 
fer any  stock  or  obligation  in  this  state,  or  within  the  jurisdiction  of  this  state 
standing  in  the  name  of  a  decedent,  or  in  trust  for  a  decedent,  liable  to  such  tax, 
the  tax  shall  be  paid  to  the  treasurer  of  the  proper  county  or  the  State  Treasurer 
on  the  transfer  thereof,  otherwise  the  corporation  permitting  such  transfer  shall 
become  liable  to  pay  such  tax. 

(2)  Where  stocks,  bonds,  mortgages  or  other  securities  or  corporations  organ- 
ized under  the  laws  of  this  state  or  of  foreign  corporations  owning  property  or 
doing  business  in  this  state  shall  have  been  transferred  by  a  non-resident  decedent, 
the  tax  shall  be  upon  such  proportion  of  the  value  thereof  as  the  property  of  such 
corporation  in  this  state  bears  to  the  total  property  of  the  corporation  issuing 
such  stock,  bonds,  mortgages  or  other  securities. 

(3)  If  any  stocks,  bonds,  mortgages  or  other  securities  of  a  holding  company 
-or  other  corporation  are  based  upon  or  represent  in  whole  or  in  part  the  value  of 
any  stocks,  bonds,  mortgages  or  other  securities  of  a  Montana  corporation  or  a 
corporation    owning    property    in    this    state,    either    directly    or    indirectly,    the 
transfer  of  the  stocks,  bonds,  mortgages  or  other  securities  of  such  holding  com- 
pany or  other  corporation  shall  be  subject  to  the  inheritance  tax  in  proportion 
which  the  Montana  property  bears  to  the  total  property  represented  by  or  subject 
to   the   total   stocks,   bonds,   mortgages,    or    other   securities   of   which   those    so 
transferred  are  a  part. 

(4)  Whenever  a  tax  may  be  due  from  the  estate,  or  the  beneficiaries  therein 
•of  any  resident  or  non-resident   decedent   upon   the  transfer   of   any  property, 
when  the  property  or  estate  left  by  such  decedent  is  partly  within  and  partly 
without  this  state,  or  upon  any  stocks,  bonds,  mortgages  or  other  securities  repre- 
resenting  property  or  estate  partly  within  and  partly  without  this   state,   any 
beneficiary  of  such  estate  shall  be  entitled  to  deduct  only  a  proportion  of  his 
share  of  the  debts,  expenses  of  administration  and  of  his  Montana  exemption 
equal  to  the  proportion  which  his  interest  in  the  property  within  this  state,  or 
within  its  jurisdiction,  bears  to  his  entire  interest  in  such  estate. 

(5)  The  State  Board  of  Equalization  shall  require  such  reports  and  informa- 
tion and  shall  make  such  orders,  rules  and  regulations  as  it  may  deem  necessary 
to  enable  the  State  Board  of  Equalization  to  secure  the  necessary  information 
from  corporations,  domestic  and  foreign  and  to  ascertain  the  amount  of  and 
collect  such  tax;   and  no  holding  company  or  other  corporation,  subject  to  the 
provisions  of  this  section  shall  deliver  or  transfer  any  such  stocks,  bonds,  mort- 
gages or  other  securities  of  a  non-resident  decedent  based  upon  or  representing  in 
-whole  or  in  part,  directly  or  indirectly,  the  value  of  Montana  property,  or  stocks, 


982  THE  STATE  STATUTES 

bonds,  mortgages  or  other  securities  of  a  Montana  corporation  or  a  corporation 
owning  property  in  this  state,  without  retaining  a  sufficient  portion  or  amount 
thereof  to  pay  any  tax  which  may  thereafter  be  assessed  on  account  of  such 
transfer,  except  upon  order  of  the  proper  court  or  a  certificate  of  consent  to 
transfer  from  the  State  Board  of  Equalization. 

(6)  Any  corporation  or  holding  company  violating  the  provisions  of  this  sec- 
tion shall  be  liable  to  the  state  for  the  amount  of  the  tax,  together  with  a  penalty 
of  ten  per  cent  (10%)  thereof;  and  for  wilful  violation  of  its  provisions  shall 
forfeit  its  charter  or  its  license  to  do  business  within  this  state  upon  complaints 
of  the  State  Board  of  Equalization  and  conviction  thereunder. 

§  12.  The  district  court  of  every  county  of  the  state  having  jurisdiction  to 
grant  letters  testamentary  or  of  administration  upon  the  estate  of  a  decedent 
whose  property  is  chargeable  with  any  tax  under  the  inheritance  tax  laws,  or  to 
appoint  a  trustee  of  such  an  estate  or  any  part  thereof,  or  to  give  ancillary  let- 
ters thereon,  shall  have  jurisdiction  to  hear  and  determine  all  questions  arising 
under  the  provisions  of  the  inheritance  tax  laws,  and  to  do  any  act  in  relation 
thereto  authorized  by  law  to  be  done  by  a  district  court  in  other  matters  or  pro- 
ceedings coming  within  jurisdiction;  and  if  two  or  more  district  courts  shall  be 
entitled  to  exercise  such  jurisdiction,  the  district  court  first  acquiring  jurisdiction 
hereunder,  shall  retain  the  same  to  the  exclusion  of  every  other  district  court. 

(2)  Every   petition   for    ancillary   letters    testamentary    or    of    administration 
shall  include  the  State  Board  of  Equalization  as  a  person  to  be  notified,  and  a 
true  and  correct  statement  of  all  of  the  decedent's  property  in  this  state  with  the 
value  thereof;  upon  presentation  thereof,  the  district  court  shall  cause  the  order 
for  hearing  to  be  served  upon  the  said  Board,  and  upon  the  hearing  the  district 
court  shall  determine  the  amount  of  inheritance  tax  which  may  be  or  become  due, 
and  the  order  awarding  the  letters  may  contain  provisions  for  the  payment  of 
such  tax  or  the  giving  of  security  therefor. 

(3)  Any  personal  representative,  trustee,  heir,   devisee  or  legatee   of  a  non- 
resident decedent  leaving  no  estate  requiring  administration  in  this  state,  desiring 
to  transfer  any  stocks,  bonds,  mortgages  or  other  securities,  or  other  personal  prop- 
erty in  this  state  or  within  the  jurisdiction  of  this  state,  may  make  application  to 
the  State  Board  of  Equalization  for  the  determination  of  whether  there  is  any 
tax  due  upon  account  of  the  transfer  thereof,  and  the  amount  of  any  such  tax, 
and  such  applicant  shall  furnish  to  the  State  Board  of  Equalization  therewith, 
an  affidavit  setting  forth  a  description  and  statement  of  the  property  owned  by 
the  decedent  situated  within  this  state,  or  within  its  jurisdiction  at  the  time  of 
his  death,  the  true  value  of  said  property  at  the  time  of  decedent's  death;   a 
description  and  statement  of  the  true  value  of  all  property  owned  by  the  decedent 
at  the  time  of  his  death  situated  outside  of  this  state  and  without  its  jurisdiction ; 
and  containing  a  schedule  or  statement  of  all  valid  claims  against  the  estate  of 
the  decedent,   including  the  expenses   of   his  last  illness,   funeral   expenses  and 
expenses  of  administering  his  estate.     Such  applicant  shall  also,  at  the  same  time, 
furnish  the  State  Board  of  Equalization  with  a  certified  copy  of  the  last  will  of 
the  decedent,  in  case  he  died  testate,  or  an  affidavit  setting  forth  the  names,  ages, 
and  residences  of  the  heirs  at  law  of  decedent  in  case  he  died  intestate,  and  the 
proportion  of  the  entire  estate  of  said  decedent  inherited  by  each  of  aaid  persons, 
and  the  relation,  if  any,  which  each  legatee,  devisee,  heir  or  transferee  sustained 
to  the  decedent,   or  person  from  whom  the  transfer  was   made.     Such   affidavit 
shall  be  subscribed  and  sworn  to  by  the  personal  representative  Of  the  decedent,  or 
some  other  person  having  knowledge  of  the  facts  therein  set  forth. 

The  statements  contained  in  any  affidavits,  statements  or  schedules  as  to  values, 
or  otherwise,  shall  not  be  binding  upon  the  State  Board  of  Equalization  in  case 
they  believe  the  same  to  be  erroneous  or  untrue.  From  the  information  so 
furnished  them  and  such  other  information  as  they  may  be  able  to  obtain  with 
reference  thereto,  the  State  Board  of  Equalization  shall,  with  reasonable  dili- 
gence, proceed  to  ascertain  and  determine  the  amount  of  tax,  if  any,  due  under 
the  provisions  of  this  Act,  and  notify  the  person  making  the  application  of  the 
amount  of  the  tax  so  ascertained  and  determined  to  be  due;  or  in  case  there  is 
no  tax  to  be  paid,  the  State  Board  of  Equalization  shall  issue  a  consent  to  the 
transfer  of  the  property  so  owned  by  the  decedent. 

Any  person  aggrieved  by  the  determination  of  the  State  Board  of  Equalization 
in  any  matter  herein  provided  for  in  this  subdivision,  may,  within  thirty  (30) 
days  thereafter  appeal  to  the  District  Court  of  Lewis  and  Clark  county,  or  the 


MONTANA  983 

district  court  of  the  county  of  his  residence,  if  he  be  a  resident  of  this  state,  by 
serving  on  the  State  Board  of  Equalization  a  notice  in  writing  setting  forth  his 
objections  to  such  determination,  and  by  filing  such  notice,  after  so  serving 
the  same,  in  the  office  of  the  clerk  of  such  court,  and  thereupon,  and  within  ten 
days  (10)  after  the  service  of  such  notice  on  them  the  State  Board  of  Equaliza- 
tion shall  transmit  full  and  complete  copies  of  all  original  papers  and  records 
which  have  been  filed  with  them  in  relation  to  such  application,  to  the  clerk  of 
said  District  Court,  and  thereupon  the  said  District  Court  shall  have  jurisdiction 
of  such  application  and  proceeding.  Upon  ten  days'  (10)  notice  given  by  either 
the  applicant  or  the  State  Board  of  Equalization,  the  matter  may  be  brought  on 
for  hearing  and  determination  by  said  court,  either  in  term  time  or  in  vacation, 
at  a  general  or  special  term  of  court,  or  at  chambers,  as  may  be  directed  by  the 
order  of  the  court. 

The  court  may  determine  any  and  all  questions  of  law  and  fact  necessary  to 
the  enforcement  of  the  provisions  of  this  Act,  according  to  its  intent  and  purpose, 
and  may,  by  order,  direct  the  correction,  amendment  or  modification  of  any 
determination  made  by  the  State  Board  of  Equalization.  On  such  hearing,  either 
party  may  introduce  the  testimony  of  witnesses  and  other  evidence  in  the  same 
manner  and  subject  to  the  same  rules  which  govern  in  the  trial  of  civil  actions. 
When  necessary,  the  court  may  adjourn  or  continue  its  hearings  from  time  to  time 
to  enable  the  parties  to  secure  the  attendance  of  witnesses,  or  the  taking  of 
depositions.  Depositions  may  be  taken  and  used  in  such  proceedings,  in  the  same 
manner  as  is  now  provided  by  law  for  the  taking  and  using  of  depositions  in 
civil  actions. 

The  State  Board  of  Equalization  or  any  person  aggrieved,  by  an  order  of  the 
District  Court,  may  appeal  to  the  Supreme  Court  from  such  order  made  by  such 
District  Court  within  the  time  and  in  the  manner  provided  by  law  for  the  taking 
of  appeals  from  orders  in  civil  actions. 

(4)  Whenever  any  non-resident  decedent,  leaving  no  estate  requiring  adminis- 
tration in  this  state,  shall  leave  any  stocks,  bonds,  mortgages  or  other  securities, 
or  other  personal  property  within  this  state  or  within  the  jurisdiction  thereof, 
and  no   personal  representative,  trustee,  heir,   devisee   or   legatee   of   such  non- 
resident decedent  has  made  application  to  the  State  Board  of  Equalization  for  the 
determination  of  whether  there  is  any  tax  due  for  the  transfer  thereof  and  the 
amount  of  such  tax,  if  any,  the  State  Board  of  Equalization,  upon  such  matter 
being  called  to  its  attention,  shall  make  an  order,  and  cause  a  copy  thereof  to  be 
served  upon  the  personal  representative,   trustee,  heirs,  devisees  or  legatees   of 
such  non-resident  decedent,  ordering  and  directing  that  a  statement  and  return, 
under  oath,  containing  the  statements  and  information  prescribed  in  subdivision  3 
of  this  section,  be  filed  with  such  board  within  thirty  days  (30)  from  the  date  of 
such  order,  or  within  such  further  time  as  the  State  Board  of  Equalization  may 
grant  therefor;  and  if  such  statement  is  not  filed  with  the  State  Board  of  Equali- 
zation within  such  time  the  State  Board  of  Equalization  may  then  procure  such 
information  in  any  manner  it  may  deem   advisable.     Upon  the   filing   of   such 
statement,  or  the  procuring  of  such  information  by  the  State  Board  of  Equali- 
zation in  the  event  of  a  failure  to  file  the  same  in  compliance  with  such  order, 
the  State  Board  of  Equalization  shall  proceed  in  the  same  manner  as  prescribed 
by  subdivision  3   of  this  section,  and  all  provisions  thereof  with   reference   to 
hearings  and  appeals  shall  be  applicable  thereto. 

(5)  All  taxes  levied  and  collected  and  paid  to  the  State  Treasurer  under  the 
provisions  of  subdivisions  3  and  4  of  this  section  shall  be  by  such  State  Treasurer 
deposited  in  the  State  Treasury  to  the  credit  of  the  general  fund  of  the  state. 

§  13.  The  District  Court,  upon  the  application  of  any  interested  party,  includ- 
ing the  State  Board  of  Equalization,  or  upon  its  own  motion,  shall,  as  often  as 
and  whenever  occasion  may  require,  appoint  a  competent  person  as  a  special 
appraiser  to  fix  the  clear  market  value  at  the  time  of  the  death  of  the  decedent 
or  transfer  thereof  of  any  property  of  a  decedent  whose  estate  shall  be  subject 
to  the  payment  of  any  tax  imposed  by  this  Act. 

§  14.  Every  such  appraiser  shall  forthwith  give  notice  by  mail  to  all  persons 
known  to  have  a  claim  or  interest  in  the  property  to  be  appraised,  including  the 
State  Board  of  Equalization,  and  to  such  persons  as  the  District  Court  may  by 
order  direct,  of  the  time  and  place  when  he  will  appraise  such  property.  He  shall 
at  such  time  and  place  appraise  the  same  at  its  clear  market  value  as  herein 
prescribed,  and  for  that  purpose  the  appraiser  is  authorized  to  issue  subpoenas 


984  THE  STATE  STATUTES 

and  to  compel  the  attendance  of  witnesses  and  on  order  of  such  District  Court 
the  production  of  documents,  books,  and  records  pertinent  to  such  appraisal 
before  him,  and  to  take  the  evidence  of  such  witnesses,  under  oath,  concerning 
such  property  and  the  value  thereof,  and  he  shall  make  report  thereof  in  writing 
to  the  said  District  Court,  together  with  the  depositions  of  the  witnesses  exam- 
ined, and  such  other  facts  in  relation  thereto  and  to  the  said  matter  as  the  said 
district  court  may  order  or  require. 

Every  appraiser  shall  be  allowed  compensation  at  the  rate  of  five  dollars 
($5-00)  per  day  for  every  day  actually  and  necessarily  employed  in  such  appraisal 
and  his  actual  and  necessary  traveling  expenses,  and  witnesses  shall  be  allowed 
the  same  fees  as  are  allowed  witnesses  in  civil  action  in  courts  of  record,  and  the 
same  shall  be  paid  by  the  county  treasurer,  on  the  certificates  of  the  district 
judge,  out  of  any  of  the  state's  inheritance  tax  funds  he  may  have  in  his 
possession. 

[NOTE:  The  rest  of  the  Act  relates  to  procedure  and  is  substantially  copied 
from  the  Wisconsin  statute  of  1919  to  which  reference  is  hereby  made.] 


NEBRASKA 


985 


NEBRASKA. 

Taxes  property  of  nonresidents  within  the  State.     But  this  is  construed  not  to 
include  transfers  of  stock  in  domestic  corporations. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OK  RELATIONSHIP 

Amount 
exempt 

Rates 

Father,  mother,  husband,  wife, 
child,  brother,  sister,  daughter- 
in-law,  son-in-law,  adopted  or 
mutually  acknowledged  child, 
lineal  descendant. 

$10,000 

1%  on  all  above  exemption. 

Auntf<  uncle,  niece,  nephew,  or 
their  lineal  descendants. 

$2,000 

2%  on  all  in  excess  of  exemption. 

All  others  

Less 
than  $500, 
no  tax 

On  all 
up  to 
$5,000 

$5,000 
to 

$10,000 

$10,000     $20 
to              t 
$20,000     $50 

In 

000      excess 
o              of 
000     $50,000 

2% 

3% 

4% 

5%              6% 

REVISED   STATUTES   OF   1913,   AS   AMENDED   BY   CHAPTER    113,   LAWS 

OF  1915. 

§  6622.  All  property,  real,  personal  and  mixed  which  shall  pass  by  will  or  by 
the  intestate  laws  of  this  State  from  any  person  who  may  die  seized  or  possessed 
of  the  same  while  a  resident  of  this  State,  or,  if  decedent  was  not  a  resident  of 
this  State  at  the  time  of  his  death,  which  property  or  any  part  thereof  shall  be 
within  this  State,  or  any  interest  therein  or  income  therefrom,  which  shall  be 
transferred  by  deed,  grant,  sale  or  gift  made  in  contemplation  of  the  death  of  the 
grantor,  or  bargainer,  or  intended  to  take  effect,  in  possession  or  enjoyment 
after  such  death,  to  any  person  or  persons  or  to  any  body  politic  or  corporate 
in  trust  or  otherwise,  or  by  reason  thereof  any  person  or  body  corporate  shall 
become  beneficially  entitled  in  possession  or  expectation  to  any  property  or 
income  thereof,  shall  be  and  is  subject  to  a  tax,  at  the  rate  hereinafter  specified 
to  be  paid  to  the  treasurer  of  the  proper  county  for  the  use  of  the  State  and  all 
heirs,  legatees  and  devisees,  administrators,  executors  and  trustees  shall  be  liable 
for  any  and  all  such  taxes  until  the  same  shall  have  been  paid  as  hereinafter 
directed. 

The  rest  of  the  section  prescribes  the  rates  and  exemptions  as  shown  in  the 
foregoing  table. 

§  6624.  All  taxes  imposed  by  this  act,  unless  otherwise  herein  provided  for, 
shall  be  due  and  payable  at  the  death  of  the  decedent,  and  interest  at  the  rate  of 
7%  per  annum  shall  be  charged  and  collected  therefrom  for  such  time  as  such 
taxes  are  not  paid;  provided,  that  if  said  tax  is  paid  within  one  year  from  the 
accruing  thereof,  interest  shall  not  be  charged  or  collected  thereon,  and  in  all 
cases  where  the  executors  and  administrators  or  trustees  do  not  pay  such  tax 
within  one  year  from  the  death  of  the  decedent  they  shall  be  required  to  give  a 
bond  in  the  form  and  to  the  effect  prescribed  in  section  2  of  this  act,  for  the 
payment  of  said  tax  together  with  interest. 

§  6625.  Requires  the  executor  or  administrator  to  deduct  the  tax  from  money 
or  collect  it  from  beneficiary  in  case  of  property,  which  must  not  be  delivered 
unless  the  tax  is  paid.  Requires  the  heir  to  deduct  the  tax  before  paying  a  legacy 
charged  on  real  estate.  When  property  is  given  for  a  limited  period  the  court 
apportions  the  tax. 

§  6626.  Gives  power  of  sale  for  payment  of  tax  in  the  same  way  as  in  case  of 
debts. 

§  6627.  Provides  for  receipts  which  must  be  produced  on  final  accounting. 

§  6628.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  corporate  or  to  any  person  or  persons  or  in  trust  for  them 


986  THE  STATE  STATUTES 

or  some  of  them,  it  shall  be  the  duty  of  the  executor,  administrator  or  trustee  of 
such  decedent  to  give  information  thereof,  in  writing,  to  the  treasurer  of  the 
county  where  said  real  estate  is  situated,  within  six  months  after  they  undertake 
the  execution  of  their  expected  duties,  or  if  the  facts  be  not  known  within  that 
period,  then  within  one  month  after  the  same  shall  have  come  to  their  knowledge. 

§  6629.  Whenever  debts  shall  be  proved  against  the  estate  of  the  deceased 
after  distribution  of  legacies  from  which  the  inheritance  tax  had  been  deducted 
in  compliance  with  this  act,  and  the  legatee  is  required  to  refund  any  portion 
of  the  legacy,  a  proportion  of  the  said  tax  shall  be  paid  to  him  by  the  executor 
or  administrator;  if  the  said  tax  has  not  been  paid  into  the  county  treasury  or 
by  the  county  treasurer  if  it  has  been  so  paid. 

§  6630.  Whenever  any  foreign  executors  or  administrators  shall  assign  or 
transfer  any  stocks  or  loans  in  this  State  standing  in  the  name  of  the  decedent,  or 
in  trust  for  a  decedent  which  shall  be  liable  to  the  said  tax,  such  tax  shall  be  paid 
to  the  treasury  or  treasurer  of  the  proper  county  on  the  transfer  thereof ;  other- 
wise the  corporation  making  such  transfer  shall  become  liable  to  pay  such  taxes, 
provided  that  such  corporation  has  knowledge  before  such  transfer  that  said 
stocks  or  loans  are  liable  for  such  taxes. 

§  6631.  When  any  amount  of  the  said  tax  shall  have  been  paid  erroneously  to 
the  county  treasurer  it  shall  be  lawful  for  him,  on  satisfactory  proof  rendered  to 
him  of  said  erroneous  payment,  to  refund  and  pay  to  the  executor,  administrator 
or  trustee,  person  or  persons  who  have  paid  any  such  tax  in  error,  the  amount  of 
such  tax  so  paid  provided  that  all  applications  for  the  repayment  of  the  said  tax 
shall  be  made  within  two  years  of  the  date  of  said  payment. 

The  rest  of  the  statute,  sections  6632  to  6641,  makes  the  usual  provisions  for 
appointment  of  appraisers,  valuation,  appeal  and  reports  of  State  officers. 

Under  the  1915  amendment  to  section  6632  the  county  court  is  empowered  to 
make  an  order  on  proper  proof  that  the  estate  is  not  subject  to  any  tax,  thus 
avoiding  unnecessary  appraisal  of  small  estates,  following  the  New  York  practice. 

AMENDMENT  OF  1921. 

6641.  §  353.  Inheritance  tax  a  lien. — The  lien  of  the  inheritance  tax  shall 
continue  until  such  tax  is  settled  and  satisfied.  Such  lien  shall  be  limited  to  the 
property  subjected  to  such  inheritance  tax.  All  inheritance  taxes  shall  be  sued 
for  within  five  years  after  the  amount  thereof  shall  be  finally  ascertained  and 
assessed  by  the  court  having  jurisdiction  thereof,  otherwise  they  shall  be  pre- 
sumed to  be  paid  and  cease  to  be  a  lien  and  no  action  shall  be  maintained 
thereafter  for  the  enforcement  of  said  tax. 

Prior  Statutes:  L.  1901,  ch.  54;  L.  1905,  ch.  117;  L.  1907,  chs.  103  and  104; 
L.  1911,  ch.  107. 


NEVADA 


987 


NEVADA. 

Taxes  all  property  of  nonresidents  within  the  State. 

TABLE  OF   GRADED  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount 
of 
exemption 

Graded  rates 

Above 
exemp- 
tion 
up  to 
$25,000 

$25,000 
to 
$50,000 

$50.000 
to 
$100,000 

$100,000 
$500°000 

In 

excess 
of 
$500,000 

Husband,  wife,  lineal  issue,  lineal 
ancestor,  adopted  or  mutually 
acknowledged  child  or  its 
lineal  issue. 

$20,000          to 
widow        or 
minor  child; 
others,  $10,- 
000. 

1% 

2% 

3% 

4% 

5% 

Brother  or  sister  of  decedent  and 
their  descendants,  son-in-law, 
daughter-in-law. 

$10,000 

2% 

4% 

6% 

8% 

10% 

Aunt  or  uncle  of  their  descend- 
ants. 

$5,000 

3% 

6% 

9% 

12% 

15% 

Brother  or  sister  of  grandparents 
and  their  descendants. 

None 

4% 

8% 

12% 

16% 

20% 

All  others  

None 

5% 

10% 

15% 

20% 

25% 

LAWS  OF  1913,  CHAPTER  266,  BECAME  A  LAW  MARCH  26,  1913. 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  and 
all  property  within  the  jurisdiction  of  this  State,  and  any  interest  therein  or 
income  therefrom,  whether  belonging  to  the  inhabitants  of  this  State  or  not,  and 
whether  tangible  or  intangible,  not  hereinafter  exempted,  which  shall  pass  in  trust 
or  otherwise  by  will  or  by  the  statutes  of  inheritance  of  this  or  any  other  State 
or  by  deed,  grant,  sale  or  gift  made  without  valuable  and  adequate  consideration 
in  contemplation  of  the  death  of  the  grantor,  vendor,  assignor  or  donor  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  such  death,  as  specified  in 
this  act.  For  the  purposes  of  this  act,  the  ownership  of  shares  of  stock  in  a  cor- 
poration owning  property  in  this  State  shall  be  considered  as  the  ownership  of 
such  interest  in  the  property  so  owned  by  such  corporation,  as  the  number  of 
shares  so  owned  shall  bear  to  the  entire  issued  and  outstanding  capital  stock  of 
such  corporation;  and  notes  and  other  evidences  of  indebtedness  secured  by 
mortgage  on  real  estate  situated  in  this  State  are  and  shall  be,  upon  the  owner's 
death,  subject  to  the  inheritance  tax  hereinafter  provided. 

§§  2,  3  and  4.  Impose  the  rates  and  exemptions  shown  in  the  foregoing  table. 

§  5.  Provides  that  remaindermen  may  elect  not  to  pay  the  tax  until  they  get 
the  property  by  filing  an  inventory  and  bond  within  one  year  in  twice  the  amount 
of  the  tax  and  renewing  the  bond  every  five  years. 

§  6.  Taxes  bequests  to  executors  in  lieu  of  commissions  when  in  excess  of 
reasonable  compensation. 

§  7.  Makes  all  taxes  due  at  death.  If  paid  within  six  months  allows  discount 
of  5%.  No  interest  until  after  eighteen  months,  then- 10%  from  date  of  death, 
and  executor  or  administrator  must  file  a  bond. 

§  8.  In  case  of  unavoidable  delay  interest  after  eighteen  months  reduced  to  7%. 

§  9.  Requires  the  executor  or  administrator  to  collect  the  tax  from  beneficiary 
or  deduct  it  from  money  legacy  or  share. 

§  10.  Gives  power  of  sale  to  pay  the  tax  and  no  final  accounting  allowed  unless 
tax  receipt  is  produced. 

§  11.  Requires  the  executor  or  administrator  to  pay  the  tax,  provides  for 
receipts  and  duplicate  copies  thereof. 


988  THE  STATE  STATUTES 

§  12.  Provides  for  proportionate  refund  of  tax  if  debts  are  proved  against 
estate  after  distribution. 

§  13.  Gives  jurisdiction  of  the  tax  proceedings  to  the  district  court  in  which 
the  probate  is  pending. 

§§14  to  23.  Provide  for  the  appointment  of  appraisers  and  the  usual  proceed- 
ings for  the  valuation  of  the  estate  and  collection  of  the  tax  closely  following  the 
Xew  York  practice. 

§  24.  Whenever  any  property  belonging  to  a  foreign  estate  which  estate,  in 
whole  or  in  part,  is  liable  to  pay  an  inheritance  tax  in  this  State,  the  said  tax 
shall  be  assessed  upon  the  market  value  of  said  property  remaining  after  the 
payment  of  such  debts  and  expenses  as  are  chargeable  to  the  property  under  the 
laws  of  this  State;  in  the  event  that  the  executor,  administrator  or  trustee  of 
such  foreign  estate,  files  with  the  clerk  of  the  court  having  ancillary  jurisdiction, 
and  with  the  State  Treasurer,  duly  certified  statements  exhibiting  the  true  market 
value  of  the  entire  estate  of  the  decedent  owner,  and  the  indebtedness  for  which 
the  said  estate  has  been  adjudged  liable,  which  statements  shall  be  duly  attested 
by  the  judge  of  the  court  having  original  jurisdiction,  the  beneficiaries  of  said 
estate  shall  then  be  entitled  to  have  deducted  such  proportion  of  the  said 
indebtedness  of  the  decedent  from  the  value  of  the  property  as  the  value  of  the 
property  within  this  State  bears  to  the  value  of  the  entire  estate. 

§.  25.  If  a  foreign  administrator,  executor  or  trustee  shall  assign  or  transfer 
any  corporate  stock  or  obligations  in  this  State  standing  in  the  name  of  the 
decedent,  or  in  trust  for  a  decedent  and  liable  to  the  tax  herein  provided,  the  tax 
must  be  paid  to  the  county  treasurer  of  the  county  in  which  such  transfer  is 
made  before  the  transfer  thereof ;  otherwise  the  corporation  permitting  its  stock 
to  be  so  transferred  shall  be  liable  to  pay  such  tax,  and  it  is  the  duty  of  the 
State  Controller  and  the  district  attorney  of  the  proper  county  to  enforce  the 
payment  thereof. 

§§  26-29.  Provide  for  the  collection  of  delinquent  taxes. 

§  30.  The  words  "estate"  and  "property"  as  used  in  this  act  shall  be  taken 
to  mean  the  real  and  personal  property  or  interest  therein  of  the  testator,  intestate, 
grantor,  bargainer,  vendor,  or  donor  passing  or  transferred  to  individual  legatees,, 
devisees,  heirs,  next  of  kin,  grantees,  donees,  vendees,  or  successors,  and  shall 
include  all  personal  property  within  or  without  the  State.  The  word  "transfer" 
as  used  in  this  act  shall  be  taken  to  include  the  passing  of  property  or  any  interest 
therein,  in  possession  or  enjoyment,  present  or  future,  by  inheritance,  descent, 
devise,  succession,  bequest,  grant,  deed,  bargain,  sale,  gift,  or  appointment  in  the 
manner  herein  described.  The  word  "decedent"  as  used  in  this  act  shall  include 
the  testator,  intestate,  grantor,  bargainor,  vendor,  or  donor. 

The  words  "contemplation  of  death"  as  used  in  this  act  shall  be  taken  to 
include  that  expectancy  of  death  which  actuates  the  mind  of  a  person  on  the 
execution  of  his  will,  and  in  nowise  shall  said  words  be  limited  and  restricted  to 
that  expectancy  of  death  which  actuates  the  mind  of  a  person  in  making  a  gift 
oamsa  mortis,  and  it  is  hereby  declared  to  be  the  intent  and  purpose  of  this  act 
to  tax  any  and  all  transfers  by  testate  or  intestate  laws. 

§  31.  This  act  shall  take  effect  thirty  days  from  and  after  the  date  of  its 
approval. 

Prior  Statutes:     None  prior  to  above  act. 


NEW  HAMPSHIRE 


989 


NEW  HAMPSHIRE. 

Taxes  property  of  nonresidents  within  the  State. 

TABLE  OF  RATES  AND  EXEMPTIONS  PRIOR  TO  MARCH  12,  1919. 


CLASS  oa  RELATIONSHIP 

Amount  exempt 

Rates 

Father,  mother,  husband,  wife,  brother,  sister, 

Wholly  exempt  

lineal  descendant,  adopted  child,  the  lineal 
descendant  of  any  adopted  child,  the  wife  or 
widow  of  a  son,  or  the  husband  of  a  daugh- 
ter, of  a  decedent,  or  to  or  for  the  use  of 
educational,    religious,   cemetery,   or  other 
institution,  societies,  or  associations  of  pub- 
lic charity  in  this  state,  or  for  or  upon  trust 
for  any  charitable  purpose  in  the  state,  or 
for  the  care  of  cemetery  lots,  or  to  a  city  or 
town  in  this  state  for  public  purposes. 

5% 

All  others  when  residents  

5%  on  all. 

RATE    OF    SUCCESSION   TAX    UNDER   CHAPTER   37,    LAWS   OF    1919.      IN   EFFECT    UPON 
THE   ESTATES   OF   PERSONS    DYING   ON    OR    AFTER    MARCH    12,    1919 


Value  of  Share 

Beneflciary 

In  ex- 

In ex- 

In ex- 

In ex- 

cess of 

cess  of 

cess  of 

cess  of 

$10,000 

$10,000 

$25,000 

$50,000 

$100,000 

In  ex- 

or 

to 

to 

to 

to 

cess  of 

under 

$25,000 

$50,000 

$100,000 

$250,000 

$250,000 

Class  A.  Educational,  religious,  ceme- 

No tax 

No  tax 

No  tax 

No  tax 

No  tax 

No  tax 

tery,    or    other    institutions,    socie- 

ties or  associations  of  public  charity 

in  N.  H.,  or  for  or  upon  trust  for 

any    charitable    purpose    in    N.    H., 

or  for  the  care  of  cemetery  lots,  or 

to  a  city  or  town  in  N.  H.  for  pub- 

lic purposes. 

Olass  B      Husband     wife  

No  tax 

1% 

2% 

zy2% 

3% 

6% 

Class   C.     Father,    mother,    lineal    de- 

w /V 

scendant,    adopted   child,    lineal   de- 

scendant  of   adopted   child,    wifs   or 

widow     of    a    son,     husband    of     a 

daughter. 

(1)  If  under  21  

No  tax 

1% 

2% 

2%% 

3% 

6% 

(2)  21  or  over  

1% 

lf/o 

2% 

z%% 

3% 

5<?5> 

Class   D.     All   others  

5% 

K% 

5% 

5% 

5% 

**  /o 

5% 

[NOTE:     These  rates  apply  to  residents, 
flat  tax  of  2%  on  nonresident  transfers.] 


The  amendment  of  1921  imposes  a 


LAWS  OF  1905,  CHAPTER  40,  AS  AMENDED  BY  LAWS  OF  1907,  CHAPTER 
68;  LAWS  OF  1911,  CHAPTER  42;  LAWS  OF  1913.  CHAPTER  202; 
LAWS  OF  1915,  CHAPTER  106  AND  CHAPTER  116,  AND  CHAPTER  37, 
LAWS  OF  1919. 

Section  1.  All  property  within  the  jurisdiction  of  the  State,  real  or  personal, 
and  any  interest  therein,  belonging  to  inhabitants  of  the  State,  and  all  real  estate 
within  the  State,  or  any  interest  therein,  belonging  to  persons  who  are  not  inhab- 
itants of  the  State,  which  shall  pass  by  will,  or  by  the  laws  regulating  intestate 


990  THE  STATE  STATUTES 

succession,  or  by  deed,  grant,  bargain,  sale,  or  gift,  made  in  contemplation  of 
death,  or  made  or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after 
the  death  of  the  grantor  or  donor,  absolutely  or  in  trust,  to  or  for  the  use  of  the 
father,  mother,  husband,  wife,  lineal  descendant,  adopted  child,  the  lineal 
descendant  of  any  adopted  child,  the  wife  or  widow  of  a  son,  or  the  husband  of  a 
daughter,  of  a  decedent,  shall  be  subject  to  a  tax,  for  the  use  of  the  State,  of  1% 
of  its  value  up  to  $25,000;  of  2%  of  its  value  in  excess  of  $25,000  up  to  $50,000; 
of  2%%  of  its  value  in  excess  of  $50,000  up  to  $100,000;  of  3%  of  its  value  in 
excess  of  $100,000  up  to  $250,000;  and  of  5%  of  its  value  in  excess  of  $250,000; 
but  no  bequest,  devise  or  distributive  share  of  any  estate  which  shall  so  pass  to 
or  for  the  use  of  a  husband,  wife  or  of  any  such  person  who  is  under  21  years  of 
age  at  the  time  of  the  decedent's  death  shall  be  subject  to  such  tax,  except  upon 
its  value  in  excess  of  $10,000 ;  and  all  such  property  which  shall  so  pass  to  or  for 
the  use  of  any  other  person,  except  educational,  religious,  cemetery,  or  other 
institutions,  societies  or  associations  of  public  charity  in  this  State,  or  for  or 
upon  trust  for  any  charitable  purpose  in  the  State,  or  for  the  care  of  cemetery 
lots  or  to  a  city  or  town  in  this  State  for  public  purposes,  shall  be  subject  to  a 
tax  of  5%  of  its  value,  for  the  use  of  the  State;  and  administrators,  executors, 
trustees  and  any  such  grantees  under  a  conveyance  made  during  the  grantor's 
life,  shall  be  liable  for  such  taxes,  with  interest,  until  the  same  have  been  paid. 
An  institution  or  society  shall  be  deemed  to  be  in  this  State,  within  the  meaning 
of  this  act,  when  its  sole  object  and  purpose  is  to  carry  on  charitable,  religious, 
or  educational  work  within  the  State,  but  not  otherwise.  [As  amended  by  chap.  37, 
L.  1919.] 

§  2.  When  any  interest  in  property  less  than  an  estate  in  fee  shall  pass  by 
will,  or  otherwise,  as  set  forth  in  section  1,  to  one  or  more  beneficiaries,  with 
remainder  to  others,  the  several  interests  of  such  beneficiaries,  except  as  they 
may  be  entitled  to  exemption  under  the  provisions  of  section  1,  shall  be  subject 
to  said  tax.  The  value  of  an  annuity  or  life  estate  shall  be  determined  by  the 
actuaries'  combined  experience  tables  at  4%  compound  interest,  and  the  value 
of  any  intermediate  estate  less  than  a  fee  shall  be  so  determined  whenever 
possible.  The  value  of  a  remainder  after  such  estate  shall  be  determined  by 
subtracting  the  value  of  the  intermediate  estate  from  the  total  value  of  the 
bequest  or  devise.  Whenever  such  intermediate  estate  or  remainder  is  conditioned 
upon  the  happening  of  a  contingency,  or  dependent  upon  the  exercise  of  a  dis- 
cretion, so  that  the  value  of  either  cannot  be  determined  by  the  tables  as  herein- 
before provided,  the  value  of  the  property  which  is  the  subject  of  the  bequest 
shall  be  determined  as  provided  in  section  13  and  such  value  having  thus  been 
ascertained  the  State  Treasurer  shall,  upon  such  evidence  as  may  be  furnished  by 
the  will  and  the  executor's  statement  or  by  the  beneficiaries  or  otherwise,  deter- 
mine the  value  of  the  interests  of  the  several  beneficiaries,  and  the  values  thus 
determined  shall  be  deemed  to  be  the  values  of  such  several  interests  for  the 
purpose  of  the  assessment  of  the  tax  except  in  so  far  as  they  shall  be  changed  by 
the  court  upon  appeal.  The  executor  or  any  beneficiary  aggrieved  by  such 
determination  of  the  value  of  any  such  interest  by  the  State  Treasurer  may  at 
any  time  within  three  months  after  notice  thereof  appeal  therefrom  to  the  probate 
court  having  jurisdiction  of  the  estate  of  the  decedent,  which  court  shall  deter- 
mine such  value  subject  to  appeal  as  in  other  cases.  Whenever  the  identity  of 
the  beneficiary  who  is  to  take  such  a  remainder  is  conditioned  upon  the  happening 
of  a  contingency,  or  dependent  upon  the  exercise  of  a  discretion  the  State 
Treasurer  shall  assess  and  collect  the  tax  upon  such  remainder  at  the  highest 
rate  and  amount,  which,  on  the  happening  of  any  of  the  said  contingencies  or 
conditions,  or  by  the  exercise  of  such  discretion,  would  be  possible  under  the  pro- 
visions of  section  1,  and  the  executor  shall  be  liable  for  such  tax  as  in  other 
cases.  Provided,  however,  that  if  at  the  termination  of  the  intermediate  estate 
such  remainder  or  any  portion  thereof  shall  pass  to  a  person  or  corporation  which 
at  the  time  of  the  death  of  the  decedent  was  exempt  from  such  tax,  such  person 
or  corporation  may  at  any  time  within  one  year  after  the  termination  of  the 
intermediate  estate,  but  not  afterwards,  apply  to  the  probate  court  for  an  abate- 
ment of  the  tax  on  such  remainder  as  provided  in  section  12,  and  the  State 
Treasurer  shall  repay  the  amount  adjudged  to  have  been  illegally  exacted  as 
provided  in  said  section  12  with  interest  thereon  at  3%  per  annum  from  the  date 
of  the  payment  of  the  tax.  Provided,  however,  that  the  power  of  the  State 
Treasurer,  with  the  approval  of  the  Attorney-General,  to  adjust  the  tax  by  com- 


NEW  HAMPSHIRE  991 

promise  in  certain  cases,  as  set  forth  in  chapter  69  of  the  Laws  of  1907,  shall 
remain  in  force.  [As  amended  by  chap.  37,  L.  1919.] 

§  3.  Taxes  bequests  to  executors  in  lieu  of  commissions  in  excess  of  reasonable 
compensation. 

§  4.  Makes  taxes  due  two  years  from  giving  bonds  by  executors  or  adminis- 
trators, after  that  10%,  and  tax  is  made  a  lien  on  the  property  until  paid. 

§  5.  Requires  executors  or  administrators  to  deduct  the  tax  or  collect  it  from 
beneficiaries  and  gives  them  power  of  sale. 

The  section  provides  further: 

When  a  conveyance  made  by  a  decedent  in  his  lifetime  is  subject  to  said  tax, 
and  the  property  thus  conveyed,  being  personal  property  is  without  the  State,  or  is 
removed  from  the  State  before  the  tax  is  paid,  such  tax  shall  become  a  lien  upon 
all  the  property  of  the  decedent  and  shall  be  chargeable  as  an  expense  of  admin- 
istration ;  and  the  executor  or  administrator  shall  collect  taxes  due  on  account  of 
such  conveyance  and  may  be  authorized  to  sell  any  property  subject  to  the  lien 
of  such  tax,  for  the  payment  thereof,  as  in  other  cases. 

§  6.  Requires  the  heir  to  deduct  the  tax  before  paying  legacy  charged  on  real 
estate,  makes  the  tax  a  lien  until  paid  and  payment  may  be  enforced  in  the  same 
way  as  payment  of  the  legacy. 

§§  7,  8.  Give  power  of  sale  of  property  and  real  estate  to  pay  the  tax  if  not 
paid  by  beneficiaries  when  due. 

§  9.  Every  administrator  shall  prepare  a  statement  in  duplicate,  showing  as  far 
as  can  be  ascertained  the  names  of  all  the  heirs-at-law,  and  every  executor  shall 
prepare  a  life  statement  showing  the  names  of  all  legatees  named  in  the  will  or 
entitled  to  take  thereunder  and  stating  whether  or  not  the  same  were  living  at 
the  time  of  the  decedent's  death,  which  said  statements  shall  also  show  the 
relationship  to  the  decedent  of  all  heirs-at-law  or  legatees,  and  the  age  at  the  time 
of  the  death  of  the  decedent,  of  all  legatees  to  whom  property  is  bequeathed  or 
devised  for  life  or  for  a  term  of  years  or  subject  to  a  contingency  or  the  exercise 
of  a  discretion  and  of  all  other  heirs  or  legatees  except  collateral  relatives  and 
persons  not  related  to  the  decedent,  and  shall  file  the  same  with  the  register  of 
probate  at  the  time  of  his  appointment.  Letters  of  administration  shall  not  be 
issued  by  the  probate  court  to  any  executor  or  administrator  until  he  has  filed 
such  statement  in  duplicate  and  has  given  bond  to  the  judge  of  probate  with 
sufficient  sureties  containing,  in  addition  to  the  other  conditions  required  by  law, 
a  condition  in  terms  as  follows,  viz.,  that  he  shall  "pay  all  taxes  for  which  he 
may  be  or  become  liable  under  the  provisions  of  chapter  40  of  the  Laws  of  1905 
of  the  State  of  New  Hampshire  relating  to  a  tax  on  legacies  and  successions  and 
all  amendments  thereto,  and  comply  with  all  the  provisions  of  said  laws."  An 
inventory  and  appraisal  under  oath  of  every  estate,  in  the  form  prescribed  by 
the  statute,  shall  be  filed  in  probate  court  by  the  executor,  administrator  or  trustee 
within  three  months  after  his  appointment.  If  he  neglects  or  refuses  to  comply 
with  any  of  the  requirements  of  this  section  he  shall  be  liable  to  a  penalty 
of  not  more  than  one  thousand  dollars,  which  shall  be  recovered  by  the  State 
Treasury  for  the  use  of  the  State,  and  after  hearing  and  such  notice  as  the  court 
of  probate  may  require,  the  said  court  of  probate  may  remove  said  executor  or 
administrator,  as  the  case  may  be;  and  the  register  of  probate  shall  notify  the 
State  Treasurer  within  thirty  days  after  the  expiration  of  said  three  months  of 
the  failure  by  any  executor,  administrator  or  trustee  to  file  such  inventory  and 
appraisal  in  his  office.  [As  amended  by  chap.  37,  L.  1919.] 

§  10.  The  register  of  probate  shall,  within  thirty  days  after  it  is  filed,  send 
to  the  State  Treasurer  by  mail,  one  copy  of  every  statement  filed  with  him  by 
executors  and  administrators  as  provided  in  section  9,  a  copy  of  every  will 
admitted  to  probate,  and  a  copy  of  the  inventory  and  appraisal  of  every  estate, 
and  he  shall  in  like  manner  send  to  the  State  Treasurer  a  copy  of  every  account 
of  an  executor  or  administrator  within  seven  days  after  it  is  filed,  unless  notified 
by  the  State  Treasurer  that  such  copies  will  not  be  required.  The  fees  for  such 
copies  shall  be  paid  by  the  State  Treasurer.  The  register  of  probate  shall  also 
furnish  such  copies  of  papers  and  such  information  as  to  the  records  and  files 
in  his  office,  in  such  form,  as  the  State  Treasurer  may  require.  A  refusal  or 
neglect  by  the  register  so  to  send  such  copies  or  to  furnish  such  information  shall 
be  a  breach  of  his  official  bond.  The  fees  of  registers  of  probate  for  copies 
furnished  under  the  provisions  of  this  section  shall  be  one  dollar  for  each  will, 
inventory  or  account  not  exceeding  four  full  typewritten  pages,  eight  by  ten  and 


992  THE  STATE  STATUTES 

one-half  inches,  and  twenty-five  cents  for  each  page  in  excess  of  four.  [As 
amended  by  chap.  37,  L.  1919.] 

§  11.  Requires  the  executor  or  administrator  to  notify  the  State  Treasurer  of 
any  real  estate  passing  so  as  to  be  liable  to  the  tax. 

§  12.  Requires  the  State  Treasurer  to  determine  the  amount  of  the  tax  and 
provides  further:  The  amount  due  upon  the  claim  of  any  creditor  against  the 
estate  of  a  deceased  person  arising  under  a  contract  made  after  the  passage  of 
this  act,  if  payable  by  the  terms  of  such  contract  at  or  after  the  death  of  the 
deceased  shall  be  subject  to  the  same  tax  imposed  by  this  chapter  upon  a  legacy 
of  like  amount.  The  value  of  legacies  or  distributive  shares  in  the  estates  of 
deceased  persons  for  the  purpose  of  the  legacy  or  succession  tax  shall  not  be 
diminished  by  reason  of  any  claim  against  the  estate  based  upon  such  a  contract 
in  favor  of  the  persons  entitled  to  such  legacies  or  distributive  shares,  except  in 
so  far  as  it  may  be  shown  affirmatively  by  competent  evidence  that  such  claim 
was  legally  due  and  payable  in  the  lifetime  of  the  decedent.  Payment  of  the 
amount  so  certified  shall  be  a  discharge  of  the  tax.  An  executor,  administrator, 
trustee  or  grantee,  who  is  aggrieved  by  any  such  determination  of  the  State 
Treasurer  and  who  pays  the  tax  assessed  without  appeal,  may  within  one  year 
after  the  payment  of  such  tax  to  the  Treasurer,  but  not  afterwards,  apply  to  the 
probate  court  having  jurisdiction  of  the  estate  of  the  decedent  for  the  abatement 
of  said  tax  or  any  part  thereof,  and  if  the  court  adjudges  that  said  tax  or  any 
part  thereof  was  wrongfully  exacted  it  shall  order  an  abatement  of  such  portion 
of  said  tax  as  was  assessed  without  authority  of  law,  which  said  order  or  decree 
shall  be  subject  to  appeal  as  in  other  cases.  Upon  a  final  decision  ordering  an 
abatement  of  any  portion  of  said  tax,  the  State  Treasurer  shall  repay  the  amount 
adjudged  to  have  been  illegally  exacted  without  any  further  act  or  resolve  making 
appropriation  therefor.  Whenever  a  specific  bequest  of  household  furniture, 
wearing  apparel,  personal  ornaments,  or  similar  articles  of  small  value  is  subject 
to  a  tax  under  the  provisions  of  this  act,  the  State  Treasurer  in  his  discretion 
may  abate  such  tax  if  in  his  opinion  the  tax  is  not  of  sufficient  amount  to  justify 
the  labor  and  expense  of  its  collection. 

§  13.  Provides  for  the  appointment  of  appraisers  by  State  Treasurer  if  the 
estate  fails  to  make  one  or  he  is  dissatisfied  with  that  made,  for  reappraisal  on 
application  to  the  probate  court  and  for  appeal. 

§  14.  Gives  right  of  appeal  to  the  probate  court  to  the  executor  or  admin- 
istrator if  dissatisfied  with  finding  of  the  State  Treasurer. 

§  15.  The  State  Treasurer  may  apply  for  administration  of  an  estate  liable 
to  tax  if  no  proceedings  for  probate  or  administration  are  begun  within  four 
months  of  death. 

§  16.  Executor  or  administrator  must  show  that  the  tax  has  been  paid  or 
that  none  is  due  before  being  entitled  to  final  accounting. 

§  17.  Authorizes  the  State  Treasurer  to  require  the  production  of  books  and 
papers. 

§  18.  When  real  estate  within  the  State,  or  any  interest  therein,  belonging  to  a 
person  who  is  not  an  inhabitant  of  the  State,  shall  pass  by  will  or  otherwise 
so  that  it  may  be  subject  to  tax  under  the  provisions  of  section  1,  and  an 
executor  or  administrator  of  the  estate  of  said  decedent  is  appointed  by  a 
probate  court  of  this  State  upon  ancillary  proceedings,  or  otherwise,  such  executor 
or  administrator  shall,  for  the  purpose  of  this  act,  have  the  same  powers  and 
be  subject  to  the  same  duties  and  liabilities  with  reference  to  such  real  estate  as 
though  the  decedent  had  been  a  resident  of  this  State;  but  the  provisions  of 
this  act,  in  so  far  as  they  refer  to  personal  property,  shall  not  apply  to  such 
executor  or  administrator. 

§  19.  In  the  absence  of  administration  in  this  State  upon  the  estate  of  a 
nonresident,  the  State  Treasurer  may,  at  the  request  of  an  executor  or  admin- 
istrator duly  appointed  and  qualified  in  the  State  of  the  decedent's  domicile, 
or  of  a  grantee  under  a  conveyance  made  during  the  grantor's  lifetime,  and 
upon  satisfactory  evidence  furnished  him  by  such  executor,  administrator,  or 
grantee,  or  otherwise,  determine  whether  or  not  any  real  estate  of  said  decedent 
within  this  State  is  subject  to  tax  under  the  provisions  of  this  act,  and  if  so, 
may  determine  the  amount  of  such  tax  and  adjust  the  same  with  such  executor, 
administrator,  or  grantee,  and  for  that  purpose  may  appoint  an  appraiser  to 
appraise  said  property  as  provided  in  section  13,  and  the  expense  of  such  ap- 
praisal shall  be  a  charge  upon  said  real  estate  in  addition  to  the  tax.  The 


NEW  HAMPSHIRE  993 

Treasurer's  certificate  as  to  the  amount  of  such  tax  and  his  receipt  for  the 
amount  therein  certified  may  be  filed  in  the  probate  office  in  the  county  where  the 
real  estate  is  located,  and  when  so  filed  shall  be  conclusive  evidence  of  the  payment 
of  the  tax,  to  the  extent  of  such  certification,  as  provided  in  section  16.  Whenever 
in  such  a  case  the  tax  is  not  adjusted  within  four  months  after  the  death  of  the 
decedent,  the  proper  probate  court,  upon  application  of  the  State  Treasurer, 
shall  appoint  an  administrator  in  this  State  as  provided  in  section  15. 

§  20.  The  State  Treasurer  shall  be  entitled  to  appear  in  any  preceding  in  any 
court  in  which  the  decree  may  in  any  way  affect  the  tax;  and  no  decree  in  any 
such  proceeding,  or  upon  appeal  therefrom,  shall  be  binding  upon  the  State 
unless  personal  notice  of  such  proceeding  shall  have  been  given  to  the  State 
Treasurer. 

§  21.  Requires  books  and  blanks  to  be  furnished  by  the  State  Treasurer. 

AMENDMENTS  OF  1921. 
Chapter  70. 

AN  ACT  imposing  a  tax  upon  the  transfer  at  death  of  the  personal  property  of 
nonresidents. 

Section  1.  All  personal  property  within  the  jurisdiction  of  the  state  and  any  in- 
terest therein,  belonging  to  person  whose  domicile  is  without  the  state  shall,  upon 
the  death  of  the  owner,  be  subject  to  a  tax  of  two  per  cent  of  its  value  for  the  use 
of  the  state,  upon  its  transfer,  payment  or  delivery  to  the  executor,  adminis- 
trator or  trustee  of  the  state  of  said  deceased. 

§  2.  No  stock  or  obligation  of  any  national  bank  located  in  this  state  or  of  any 
corporation  organized  under  the  laws  of  this  state,  deposit  in  any  bank,  trust 
company,  or  other  similar  institution  located  in  this  state  or  organized  under  its 
laws,  obligations  of  any  citizen  of  this  state,  or  securities  or  personal  property 
of  any  description  within  the  jurisdiction  of  the  state,  or  any  interest  therein, 
belonging  to  the  estate  of  a  nonresident  shall  be  transferred,  paid  or  delivered 
to  any  person  except  an  executor,  administrator  or  trustee,  of  the  estate  of  said 
deceased  duly  appointed  either  in  this  state  or  in  the  state  of  the  decedent's 
domicile  by  a  court  having  jurisdiction  for  that  purpose. 

§  3.  Such  property  shall  not  be  transferred,  paid  or  delivered  to  a  foreign 
executor,  administrator  or  trustee  until  the  tax  has  been  paid.  Any  person  or 
corporation  which  shall  transfer,  pay,  or  deliver  or  having  control  thereof  shall 
permit  the  transfer,  payment,  or  delivery  of  any  such  property  to  any  person 
other  than  a  resident  executor,  administrator,  or  trustee  before  such  tax  has  been 
paid  shall  be  liable  for  the  tax  and  to  an  additional  penalty  of  not  more  than 
one  thousand  dollars  in  an  action  brought  by  the  state  treasurer.  Any  such 
bank  or  corporation  which  shall  record  such  a  transfer  of  any  share  of  its  stock 
or  of  its  obligations  or  issue  a  new  certificate  of  stock  or  other  instrument  to 
evidence  such  a  transfer  before  all  taxes  imposed  upon  the  transfer  by  this  act 
have  been  paid  shall  be  subject  to  the  same  liability  and  penalty. 

§  4.  Executors,  administrators,  and  trustees  shall  be  liable  for  such  transfer 
tax  upon  all  such  property  which  shall  come  to  their  hands,  with  interest  as 
hereinafter  provided. 

§  5.  Every  person  having  in  his  possession  or  control  any  personal  property 
belonging  to  a  nonresident,  shall,  unless  the  property  is  delivered  to  a  resident 
administrator,  within  thirty  (30)  days  after  the  death  of  the  owner,  notify  the 
state  treasurer  and  prepare  and  transmit  to  him  an  itemized  schedule  of  the 
property.  If  the  tax  is  not  paid  or  a  resident  administrator  appointed  within 
four  months  after  the  owner's  death  the  probate  court  shall,  upon  petition  of 
the  state  treasurer,  appoint  a  resident  administrator  or  a  special  administrator 
as  the  circumstances  of  the  case  may  require  to  whom  the  property  shall  be 
transferred,  whose  duty  it  shall  be  to  collect  and  pay  the  tax  and  to  account 
for  the  balance  of  the  property  according  to  law  under  order  of  the  court. 

§  6.  All  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the  time  of  the 
transfer  of  the  property,  and  if  not  then  paid  interest  at  the  rate  of  ten  per  cent 
per  annum  shall  be  charged  and  collected  from  the  time  of  the  transfer  and 
said  taxes  and  interest  shall  be  and  remain  a  lien  on  the  property  transferred 
until  the  same  are  paid.  Provided,  however,  that  if  the  transfer  is  not  made 
within  four  months  after  the  owner's  death  interest  as  aforesaid  shall  be  charged 
and  collected  after  the  expiration  of  said  four  months. 

63 


994  THE  STATE  STATUTES 

§  7.  Personal  property  within  the  jurisdiction  of  this  State  belonging  to 
nonresidents  which  shall  pass  by  deed,  bargain,  sale,  or  gift,  made  in  contempla- 
tion of  death,  or  made  or  intended  to  take  effect  in  possession  or  enjoyment  at 
or  after  the  death  of  the  grantor  or  donor  shall  be  subject  to  the  same  tax  im- 
posed upon  the  transfers  hereinbefore  described  in  this  act.  The  taxes  upon 
such  transfers  shall  become  due  at  once  upon  the  death  of  the  grantor  or  donor, 
and  if  not  paid  within  four  months  shall  be  subject  to  interest  as  aforesaid  after 
the  expiration  of  said  period,  until  paid.  Said  taxes  and  interest  shall  be  a 
charge  against  the  persons  receiving  such  transfer,  and  the  property  transferred 
and  any  other  property  of  the  grantor  or  donor  within  the  jurisdiction  of  the 
State  shall  be  subject  to  a  lien  to  secure  its  payment.  All  persons  or  corpora- 
tions within  the  jurisdiction  of  the  State  in  whose  possession  or  control  any 
such  property  so  transferred  or  to  be  transferred  remains  at  the  time  of  the 
death  of  the  grantor  or  donor  shall  be  subject  to  all  the  duties,  liabilities,  and 
penalties  imposed  by  the  act  upon  persons  having  the  possession  or  control  of 
personal  estate  of  such  a  decedent. 

8.  A  resident  executor,  administrator,  or  trustee  holding  personal  property 
of  a  deceased  nonresident  subject  to  said  tax  shall  deduct  the  tax  therefrom  or 
collect  it  from  the  executor,  administrator,  or  trustee  in  the  State  of  the 
decedent's  domicile,  and  shall  not  deliver  such  property  to  him  or  any  other 
person  until  he  has  collected  the  tax.  When  the  transfer  of  such  personal  prop- 
erty, other  than  money,  is  subject  to  a  tax  under  the  provisions  of  this  act  and 
the  executor,  administrator,  or  trustee  in  the  State  of  domicile  neglects  or 
refuses  to  pay  the  tax  upon  demand,  or  if  for  any  reason  the  tax  is  not  paid 
within  four  months  after  the  decedent's  death,  the  resident  administrator, 
executor,  or  trustee  may,  upon  such  notice  as  the  probate  court  may  direct,  be 
authorized  to  sell  such  property,  or  if  the  same  can  be  divided  such  portion 
thereof  as  may  be  necessary,  and  shall  deduct  the  tax  from  the  proceeds  of  such 
sale  and  shall  account  for  the  balance,  if  any,  in  lieu  of  the  property.  When 
a  conveyance  made  by  a  nonresident  decedent  in  his  lifetime  is  subject  to  said 
tax,  the  resident  executor  or  administrator  shall  collect  the  taxes  due  on  account 
of  such  conveyance  and  may  be  authorized  to  sell  any  property  subject  to  the 
lien  of  such  tax,  as  in  other  cases. 

§  9.  The  State  Treasurer  shall  determine  the  amount  of  all  taxes  due  and 
payable  under  the  provisions  of  this  act  and  shall  certify  the  amount  due  and 
payable  to  the  resident  executor,  administrator  or  trustee,  if  any,  otherwise  to 
the  person  or  persons  by  whom  the  tax  is  payable.  Said  tax  shall  be  assessed 
upon  the  actual  market  value  of  the  property  transferred  at  the  time  of  the 
decedent's  death.  Such  tax  shall  be  determined  by  the  state  treasurer  who  shall 
certify  the  same  to  the  person  or  persons  by  whom  the  tax  is  payable  and  such 
determination  shall  be  final  unless  the  tax  shall  be  reduced  upon  appeal  or 
petition  for  abatement,  in  proceedings  commenced  by  a  resident  executor, 
administrator  or  trustee,  in  the  form  and  within  the  time  prescribed  in  cases 
arising  under  chapter  40  of  the  Laws  of  1905,  as  set  forth  in  sections  12  and  14 
of  said  act  and  amendments  thereto. 

§  10.  The  state  treasurer,  whenever  he  has  knowledge  or  reason  to  believe  that 
any  person  or  corporation  has  in  his  possession  or  control  any  personal  property 
belonging  to  the  estate  of  a  deceased  nonresident  upon  which  the  tax  has  not 
been  paid  and  a  schedule  of  which  has  not  been  furnished  him,  as  herein  pro- 
vided, or  that  any  such  person  or  corporation  has  received  a  transfer  of  such 
property  or  made  such  a  transfer  (except  to  a  resident  executor,  administrator, 
or  trustee)  upon  which  the  tax  has  not  been  paid,  as  herein  provided,  or  that 
such  person  or  corporation  has  knowledge  of  a  transfer  of  any  such  personal 
property  of  such  nonresident  decedent  in  his  life  time  by  deed,  grant,  bargain, 
sale,  or  gift,  made  in  contemplation  of  death,  or  made  or  intended  to  take  effect 
in  possession  or  enjoyment  at  or  after  the  death  of  the  grantor  or  donor,  or  has 
possession  or  control  of  property  so  transferred,  may  require  such  person  or 
any  officer  of  such  corporation  to  appear  at  the  state  treasury,  at  such  time  as 
the  treasurer  may  designate  and  then  and  there  to  produce  for  the  use  of  the 
treasurer  all  books,  papers  or  securities  which  may  be  in  the  possession  or  con- 
trol of  such  person  or  corporation  relating  to  such  property  or  transfer  and 
to  furnish  such  other  information  relating  to  the  same  as  he  may  be  able  and 
the  treasurer  may  require.  Whenever  the  treasurer  shall  require  the  attendance 
of  any  person,  as  herein  provided,  he  shall  issue  a  notice  stating  the  time  when 


NEW  HAMPSHIRE  995 

such  attendance  is  required,  and  shall  transmit  the  same  by  registered  mail, 
or  cause  a  copy  of  the  same  to  be  given  in  hand,  to  such  person  fourteen  (14) 
days  at  least  before  the  date  when  such  person  is  required  to  appear.  If  any 
person  receiving  such  notice  shall  neglect  to  attend  or  to  give  attendance  so 
long  as  may  be  necessary,  for  the  purpose  for  which  the  notice  was  issued,  or 
refuses  to  furnish  such  books  or  papers  or  give  such  information,  or  if  a  cor- 
poration whose  officer  is  thus  summoned  refuses  to  permit  him  to  produce  such 
books,  papers  or  securities  as  are  called  for  and  are  within  the  control  of  the 
corporation  such  person  or  corporation  shall  be  liable  to  a  penalty  of  twenty-five 
(25)  dollars  for  each  offense,  which  may  be  recovered  by  the  state  treasurer  for 
the  use  of  the  state.  Any  person  attending  in  response  to  summons  as  herein 
provided,  shall  thereafter  be  entitled  to  the  same  travel  and  witness  fees  as  are 
allowed  to  witnesses  summoned  to  testify  in  actions  pending  in  the  superior 
court.  The  state  treasurer  may  commence  an  action  for  the  recovery  of  any 
taxes  at  any  time  after  the  same  may  become  payable. 

§  11.  The  provisions  of  chapter  40  of  the  Laws  of  1905,  and  amendments 
thereto,  relative  to  the  powers,  privileges,  duties,  obligations  and  penalties 
granted  to  and  imposed  upon  the  state  treasurer,  the  judges  and  registers  of 
probate,  executors,  administrators,  trustees  and  others  with  regard  to  the  taxt > 
imposed  by  said  act  and  amendments,  and  all  provisions  therein  contained  rela- 
tive to  the  administration  of  said  law,  shall  apply  to  the  taxes  imposed  by 
this  act  in  so  far  as  the  same  are  applicable,  and  not  in  conflict  with  the  pro- 
visions of  this  act.  Provided,  however,  that  upon  satisfactory  evidence  that  the 
estate  of  a  deceased  nonresident  within  the  jurisdiction  of  the  state  is  limited 
to  personal  property  the  state  treasurer,  may,  in  his  discretion,  waive  those 
provisions  of  section  9  of  said  chapter  40  and  amendments,  which  require  that 
the  statement,  to  be  filed  by  an  administrator  before  his  appointment,  shall  in- 
clude the  names,  ages,  relationships,  etc.,  of  heirs  or  legatees.  In  the  absence 
of  administration  in  this  state,  upon  the  estate  of  a  nonresident,  the  state 
treasurer  may,  at  the  request  of  any  person  who  is  liable  or  may  become  liable 
under  the  provisions  of  this  act  to  a  tax  upon  the  transfer  of  such  personal  prop- 
erty, appoint  an  appraiser  to  appraise  said  property,  and  the  expense  of  such 
appraisal  shall  be  a  charge  upon  said  property  in  addition  to  the  tax. 

§  12.  The  state  treasurer  shall  provide  such  books  and  blanks  as  are  requisite 
for  the  execution  of  this  act. 

§  13.  The  assistant  attorney-general  shall  conduct  all  litigation  and  shall 
advice  the  state  treasurer  upon  all  questions  of  law  arising  in  the  administration 
of  this  act  and  have  general  oversight  of  such  administration,  including  the 
computation  and  collection  of  the  tax,  and  may  employ  such  clerical  assistance 
as  may  be  necessary  and  the  governor  and  council  may  approve. 

§  14.  The  expenses  of  the  execution  of  this  act  shall  be  paid  by  the  state 
treasurer  and  charged  to  the  appropriation  for  the  department  of  the  attorney- 
general,  and  the  bills  thereafter  shall  be  submitted  to  the  governor  and  council 
for  their  approval. 

§  15.  The  provisions  of  this  act  shall  not  apply  to  the  stock  or  obligations 
of  a  corporation  organized  under  New  Hampshire  laws,  and  owned  by  a  non- 
resident, if,  at  the  time  of  the  death  of  the  owner  all  the  business  conducted  by 
the  corporation  under  the  authority  of  its  charter  (except  stockholders'  or 
directors'  meetings  and  the  duties  performed  by  the  clerk  with  reference  thereto) 
is  actually  carried  on  outside  of  the  state. 

§  16.  This  act  shall  take  effect  upon  its  passage. 

Approved  April  6,  1921. 

Chapter  72. 

AN  ACT  m  amendment  of  chapter  40,  Laws  of  1905,  as  amended  by  68  and 
138,  Laws  of  1907,  chapter  104,  Laws  of  1909,  chapter  42,  Laws  of  1911,  chapters 
106,  and  116,  Laics  of  1915,  and  chapter  37,  Laws  of  1919,  relating  to  the  taxa- 
tion of  legacies  and  successions,  and  in  amendment  of  chapter  116,  Laws  of 
1915,  relating  to  the  duties  of  the  assistant  attorney-general. 

Section  1.  Amend  section  4  of  chapter  40  of  the  Laws  of  1905,  as  amended  by 
section  1,  chapter  42,  Laws  of  1911,  by  striking  out  the  entire  section  and  inserting 
in  place  thereof  the  following:  Sec.  4.  All  taxes  imposed  by  the  provisions  of 
this  chapter,  including  taxes  on  intermediate  estates  and  remainders  as  set  forth 
in  section  2,  shall  be  due  and  payable  to  the  state  treasurer  at  the  expiration  of 


996  THE  STATE  STATUTES 

fifteen  months  after  date  of  the  decedent's  death.  If  the  probate  court  has 
ordered  the  executor  or  administrator  to  retain  funds  to  satisfy  a  claim  of  a 
creditor,  the  payment  of  the  tax  may  be  suspended  by  the  court  to  await  the 
disposition  of  such  claim.  If  the  taxes  are  not  paid  when  due.  interest  at  the 
rate  of  ten  per  cent,  per  annum  shall  be  charged  and  collected  from  the  time  the 
same  became  payable;  and  said  taxes  and  interest  shall  be  and  remain  a  lien  on 
the  property  subject  to  the  taxes  until  the  same  are  paid.  A  discount  of  three 
per  cent,  shall  be  allowed  on  all  taxes  paid  in  full  within  six  months  after  date  of 
the  decedent's  death. 

§  2.  Amend  section  12  of  chapter  40  of  the  Laws  of  1905,  as  amended  by 
section  5,  chapter  68,  Laws  of  1907,  and  section  1,  chapter  42,  Laws  of  1911,  by 
striking  out  the  whole  section  and  inserting  in  place  thereof  the  following: 
Sec.  12.  The  state  treasurer  shall  determine  the  amount  of  all  taxes  due  and 
payable  under  the  provisions  of  this  act,  and  shall  certify  the  amount  so  due  and 
payable  to  the  executor  or  administrator,  if  any,  otherwise  to  the  person  or 
persons  by  whom  the  tax  is  payable;  but  in  the  determination  of  the  amount  of 
any  tax  said  state  treasurer  shall  not  be  required  to  consider  any  payments  on 
account  of  debts  or  expenses  of  administration  which  have  not  been  allowed  by  the 
probate  court  having  jurisdiction  of  said  estate.  The  amount  due  upon  the 
claim  of  any  legatee  named  in  the  will,  or  of  any  person  who  is  or  in  the  absence 
of  a  will  would  be  an  heir-at-law  of  a  deceased  person,  arising  under  a  contract 
made  after  the  passage  of  this  act  for  board,  lodging,  support,  maintenance,  or 
personal  care  and  attention,  covering  a  period  of  more  than  six  months,  shall  be 
subject  to  the  same  tax  imposed  by  this  chapter  upon  a  legacy  or  succession  of 
like  amount,  except  to  the  extent  that  such  claim  is  evidenced  by  a  writing  signed 
by  the  decedent  containing  an  agreement  for  payment  at  some  specified  time  or 
times  within  the  decedent's  lifetime.  Payment  of  the  amount  so  certified  shall  be 
a  discharge  of  the  tax.  An  executor,  administrator,  trustee  or  grantee  who  is 
aggrieved  by  any  such  determination  of  the  state  treasurer  and  who  pays  the 
tax  assessed  or  demanded,  without  appeal  may,  within  one  year  after  the  payment 
of  such  tax  to  the  treasurer,  but  not  afterwards,  apply  to  the  probate  court 
having  jurisdiction  of  the  estate  of  the  decedent  for  the  abatement  or  repayment 
of  said  tax  or  any  part  thereof,  and  if  the  court  adjudges  that  said  tax  or  any 
part  thereof  was  wrongfully  exacted  it  shall  order  the  repayment  of  such  portion 
of  said  tax  as  was  assessed  or  demanded  without  authority  of  law  which  said 
order  or  decree  shall  be  subject  to  appeal  as  in  other  cases.  Upon  a  final  de- 
cision ordering  the  repayment  of  any  portion  of  said  tax,  the  state  treasurer 
shall  repay  the  amount  adjudged  to  have  been  illegally  exacted  without  any 
further  act  or  resolve  making  appropriation  therefor.  The  state  treasurer,  in 
his  discretion,  may  abate  the  tax  in  any  case  if  in  his  opinion  the  tax  is  not  of 
sufficient  amount  to  justify  the  labor  and  expense  of  its  collection,  and  may  do 
so  without  requiring  executors  and  administrators  to  furnish  evidence  of  disburse- 
ments in  all  cases  where  the  total  estate  is  shown  by  the  inventory  to  be  less 
than  two  hundred  dollars  in  value. 

§  3.  Amend  section  16  of  chapter  40  of  the  Laws  of  1905,  as  amended  by  sec- 
tion 1,  chapter  42,  Laws  of  1911,  and  section  1,  chapter  106,  Laws  of  1915,  by 
adding  at  the  end  of  said  section  the  words,  whenever  an  account  is  otherwise  in 
order  for  allowance  by  the  court  but  the  treasurer's  certificate,  as  above  provided, 
is  not  produced  or  on  file  in  the  probate  court  the  account  shall  be  continued  by 
the  judge  of  probate  until  such  tax  has  been  paid  and  the  certificate  of  the 
treasurer  duly  filed,  so  that  said  section  shall  read  as  follows:  §  16.  No  account 
of  an  executor,  administrator,  or  trustee  shall  be  allowed  by  the  probate  court 
until  the  certificate  of  the  state  treasurer  has  been  filed  in  said  court,  that  all 
taxes  imposed  by  the  provisions  of  this  act  upon  any  property  or  interest  therein 
belonging  to  the  estate  to  be  included  in  said  account  have  been  paid,  or  settled 
as  hereinbefore  provided,  or  that  the  payment  thereof  to  the  state  is  secured  by 
deposit,  or  by  lien  on  real  estate.  The  certificate  of  the  state  treasurer  as  to  the 
amount  of  the  tax  and  his  receipt  for  the  amount  therein  certified  shall  be  con- 
clusive as  to  the  payment  of  the  tax  to  the  extent  of  such  certification.  When- 
ever an  account  is  otherwise  in  order  for  allowance  by  the  court  but  the  treas- 
urer's certificate,  as  above  provided,  is  not  produced  or  on  file  in  the  probate 
court  the  account  shall  be  continued  by  the  judge  of  probate  until  such  tax  has 
been  paid  and  the  certificate  of  the  treasurer  duly  filed. 

§  4.  Amend  section  18  of  chapter  40  of  the  Laws  of  1905,  as  amended  by  sec- 


NEW  HAMPSHIRE  997 

tion  1,  chapter  42,  Laws  of  1911,  and  section  1,  chapter  106,  Laws  of  1915,  by 
striking  out  at  the  end  of  said  section  the  words,  "but  the  provisions  of  this 
act,  in  so  far  as  they  refer  to  personal  property,  shall  not  apply  to  such  executor 
or  administrator,"  so  that  said  section  shall  read  as  follows:  §  18.  When  real 
estate  within  the  state,  or  any  interest  therein,  belonging  to  a  person  who  is  not 
an  inhabitant  of  the  state,  shall  pass  by  will  or  otherwise  so  that  it  may  be  subject 
to  tax  under  the  provisions  of  section  1,  and  an  executor  or  administrator  of  the 
estate  of  said  decedent  is  appointed  by  a  probate  court  of  this  state  upon  ancil- 
lary proceedings,  or  otherwise,  such  executor  or  administrator  shall,  for  the 
purposes  of  this  act,  have  the  same  powers  and  be  subject  to  the  same  duties 
and  liabilities  with  reference  to  such  real  estate  as  though  the  decedent  had  been 
a  resident  of  this  state. 

§  5.  Amend  section  22  of  chapter  40  of  the  Laws  of  1905,  as  amended  by 
section  1,  chapter  138,  Laws  of  1907,  section  1,  chapter  104,  Laws  of  1909,  and 
section  5,  chapter  116,  Laws  of  1915,  by  striking  out  the  entire  section  and  insert- 
ing in  place  thereof  the  following:  §  22.  The  expenses  of  the  execution  of  this 
act  shall  be  paid  by  the  state  treasurer  and  charged  to  the  appropriations  for  the 
department  of  the  attorney-general,  and  the  bills  therefor  shall  be  submitted  to 
the  governor  and  council  for  their  approval. 

§  6.  Amend  chapter  40  of  the  Laws  of  1905,  as  amended  by  chapters  68  and 
138,  Laws  of  1907,  chapter  104,  Laws  of  1909,  chapter  42,  Laws  of  1911,  chap- 
ters 106  and  116,  Laws  of  1915,  and  chapter  37,  Laws  of  1919,  by  adding  after 
section  22  the  following  new  sections:  §  23.  Whenever  property,  real  or  personal, 
is  held  in  the  joint  names  of  two  or  more  persons,  or  is  deposited  in  banks  or 
other  institutions  or  depositories  in  the  joint  names  of  two  or  more  persons  and 
payable  to  either  or  the  survivor,  upon  the  death  of  one  of  such  persons  the  right 
of  the  surviving  joint  tenant  or  joint  tenants,  person  or  persons,  to  the  imme- 
diate ownership  or  possession  and  enjoyment  of  such  property  shall  be  deemed  a 
transfer  taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though 
the  whole  property  to  which  such  transfer  relates  was  owned  by  said  parties  as 
tenants  in  common  and  had  been  bequeathed  to  the  surviving  joint  tenant  or  joint 
tenants,  person  or  persons,  by  such  deceased  joint  tenant  or  joint  depositor  by 
will.  To  the  extent  that  such  joint  account  or  property  is  acquired  by  the  use 
of  the  funds  of  the  persons  to  whom  it  is  payable  or  by  whom  it  is  held,  the  value 
of  the  separate  interest  of  each  for  the  purposes  of  this  act  shall  be  measured 
by  his  proportionate  contribution  to  the  fund  or  to  the  purchase  price  of  the 
property.  §  24.  No  person  or  corporation  engaged  in  the  business  of  renting  or 
furnishing  safety  deposit  boxes  to  its  customers  or  others,  for  the  safe  keeping 
of  securities  or  other  papers,  shall  without  the  consent  in  writing  of  the  state 
treasurer  permit  any  person,  except  an  executor  or  administrator  duly  appointed 
and  qualified  in  this  state  to  remove  any  of  the  contents  of  any  such  safety 
deposit  box  after  knowledge  of  the  decease  of  any  person  having  the  right  to  use 
the  same,  whether  such  deceased  person  was  a  resident  of  this  state  or  not,  except 
the  will,  if  any,  of  the  deceased  which  may  be  delivered  to  the  executor  named 
therein.  No  corporation  organized  and  existing  under  the  laws  of  this  state  shall 
transfer  on  its  books  or  issue  a  new  certificate  for  any  share  or  shares  of  its 
capital  stock  standing  in  the  name  of  a  decedent,  or  in  trust  for  a  decedent  or 
belonging  to  or  standing  in  the  joint  names  of  a  decedent  and  one  or  more 
persons,  and  no  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution,  person  or  persons  having  in  possession  or  under  control  or  custody 
or  partial  control  or  partial  custody,  securities,  deposits,  assets  or  property 
belonging  to,  or  standing  in  the  name  of  a  decedent  who  was  a  resident  or  non- 
resident, or  belonging  to,  or  standing  in  the  joint  names  of  such  a  decedent  and 
one  or  more  persons,  or  which  was  received  from  the  decedent  for  delivery  to 
any  other  person,  or  is  marked  or  designated  for  such  delivery,  including  the 
shares  of  capital  stock  of  or  other  interest  in,  said  safe  deposit  company,  trust 
company,  corporation,  bank,  or  other  institution,  shall,  except  as  hereinafter  pro- 
vided, deliver  or  transfer  the  same  to  any  person  except  a  resident  executor  or 
administrator  of  the  estate  of  the  decedent  without  the  written  consent  of  the 
state  treasurer  or  the  assistant  attorney-general.  Every  person  or  corporation 
having  the  custody  or  control  of  such  property  shall,  within  10  days  after  receiv- 
ing knowledge  of  the  death  of  the  decedent,  notify  the  state  treasurer,  and  when- 
ever possible  prepare  and  transmit  to  him  an  itemized  schedule  of  the  property. 
Upon  receipt  of  such  notice  the  state  treasurer  in  person  or  by  the  assistant 


998  THE  STATE  STATUTES 

attorney-general  or  other  representative,  may  examine  such  securities,  deposits, 
assets,  or  the  records  of  such  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution,  or  person  relative  thereto  and  shall  as  soon  as  possible 
notify  the  holder  of  the  property  whether  or  not  a  tax  will  be  claimed  upon  its 
transfer,  and  may  by  an  instrument  in  writing  consent  to  the  immediate  transfer 
of  such  property  if,  in  his  judgment,  the  transfer  is  not  subject  to  tax.  If  a  tax 
is  claimed  by  the  state  treasurer  under  the  provisions  of  this  act  the  property 
shall  be  delivered  to  the  resident  executor  or  administrator  of  the  deceased  or 
held  until  the  tax  has  been  assessed  and  paid  as  the  circumstances  of  the  case 
may  require,  unless  the  treasurer's  claim  is  overruled  by  the  court  in  appropriate 
proceedings.  Savings  banks,  trust  companies,  and  all  other  similar  institutions 
shall  when  receiving  deposits  in  more  than  one  name  ascertain  and  record  the  place 
of  residence  of  the  parties,  and  shall  upon  request  of  the  state  treasurer  furnish 
him  with  a  list  of  all  such  deposits,  together  with  the  names  and  addresses  of 
the  depositors,  and  such  other  information  as  he  may  require  and  the  institution 
is  able  to  furnish.  Failure  to  comply  with  the  provisions  of  this  section  shall 
render  such  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution,  person  or  persons  liable  to  a  penalty  of  not  more  than  one  thousand 
dollars,  and  in  addition  thereto  for  the  amount  of  the  taxes,  interest  and  penalties 
due  under  this  act  upon  the  passing  or  transfer  of  said  securities,  deposits,  or 
other  property,  and  said  penalties  and  liabilities  may  be  enforced  in  an  action 
brought  by  the  state  treasurer.  The  provisions  of  this  section  shall  not  apply  to 
the  transfer  or  registration  of  a  transfer  by  a  corporation,  not  organized  under 
the  laws  of  this  state,  of  its  own  stock  or  other  registered  securities,  belonging 
to  the  estate  of  a  non-resident,  or  to  or  upon  the  order  or  assignment  of  a  duly 
appointed  executor  or  administrator. 

§  7.  Amend  section  2  of  chapter  116,  Laws  of  1915,  by  striking  out  the  entire 
section  and  inserting  in  place  thereof  the  following:  §  2.  The  assistant  attorney- 
general  shall  conduct  all  litigation  and  shall  advise  the  state  treasurer  upon  all 
questions  of  law  arising  in  the  administration  of  this  act  and  have  general  over- 
sight of  such  administration,  including  the  computation  and  collection  of  the  tax, 
and  may  employ  such  clerical  assistance  as  may  be  necessary  and  the  governor 
and  council  may  approve. 

§  8.  Amend  section  20  of  chapter  40  of  the  Laws  of  1905,  as  amended  by 
section  9,  chapter  68,  Laws  of  1907,  section  1,  chapter  1,  chapter  42,  Laws  of 
1911,  and  section  1,  chapter  106,  Laws  of  1915,  by  striking  out  the  entire  section 
and  inserting  in  place  thereof  the  following:  §  20.  The  state  treasurer  shall  be 
entitled  to  appear  in  any  proceeding  in  any  court  in  which  the  decree  may  in 
any  way  affect  the  tax.  No  decree  in  any  such  proceeding,  or  upon  appeal  there- 
from, shall  be  binding  upon  the  state,  and  no  decree  shall  be  entered  upon  a 
petition  for  leave  to  file  an  authenticated  copy  of  a  foreign  will  and  the  probate 
thereof  or  upon  a  probate  appeal,  unless  notice  of  such  proceeding  shall  have 
been  given  to  the  state  treasurer. 

§  9.  This  act  shall  not  apply  to  the  estates  of  persons  deceased  prior  to  the 
date  when  it  takes  effect,  nor  to  property  of  such  decedents  passing  by  deed, 
grant,  bargain,  sale  or  gift,  as  set  forth  in  section  1  of  chapter  40,  laws  of  1905, 
and  amendments  thereto,  nor  to  the  powers,  duties,  liabilities  or  obligations  of 
the  state  treasurer,  the  judges  and  registers  of  probate,  administrators,  executors, 
trustees,  heirs,  legatees,  grantees,  or  other  persons  with  reference  to  the  same; 
but  such  estates,  persons  and  property  shall  remain  subject  to  the  provisions  of 
the  laws  in  force  prior  to  the  passage  of  this  act. 

§  10.  This  act  shall  take  effect  upon  its  passage. 

[Approved  April  8,  1921.] 

DIGEST  OF  NEW  HAMPSHIRE  AUTHORITIES. 

Holds  the  collateral  inheritance  tax  of  1905  constitutional.  Thompson  v. 
Kidder,  74  N.  H.  89. 

Where  a  statute  is  copied  construction  by  courts  of  State  originally  passing 
the  act  applicable.  Mann  v.  Carter,  74  N.  H.  345. 

Statute  in  force  at  date  of  death  controls  tax,  amendments  not  retroactive. 
Carter  V.  Whitcomb,  74  N.  H.  482. 

Shares  of  stock  in  domestic  corporations  held  by  nonresident  decedents  taxable 
under  act  of  1905.  Gardner  v.  Carter,  74  N.  H.  507. 


NEW  HAMPSHIRE  999 

Taxes  paid  in  another  State  a  deduction  as  an  expense  of  administration. 
Kingsbury  v.  Baseley,  75  N.  H.  13. 

Religious  corporations  exempt.  Carter  v.  Eaton,  75  N.  H.  560 ;  Carter  v.  Story, 
76  N.  H.  34. 

Conveyances  intended  to  take  effect  at  death  taxable.  Carter  v.  Craig,  77 
N.  H.  200. 

Intangible  assets  have  the  situs  of  the  owner's  domicile  notwithstanding 
physical  presence  within  the  State.  Crosby  v.  Charlestown,  78  N.  H.  39. 

Facts  and  law  considered  as  to  change  of  domicile.  Kerby  v.  Charlestown,  78 
N.  H.  301. 

Federal  tax  charged  pro  rata  to  each  beneficiary  in  the  absence  of  testamentary 
provision  to  the  contrary.  Fuller  v.  Gale,  78  N.  H.  544. 

Note. — For  other  New  Hampshire  cases  see  Table  of  Cases. 


1000 


THE  STATE  STATUTES 


NEW  JERSEY. 


RATES     AND 


EXEMPTIONS     PREVAILING     DURING     PERIOD 
APRIL   9,   1914,   AND   ENDING   MARCH   10,   1922. 


COMMENCING 


BEN'EFICIARY 

Exemption 

Rate 

Over 
amount    of 
exemption 
to   $50,000 

$50,000 
to 
$150,000 

$150,000 
to 
$250,000 

Over 
8250,000 

CLASS  A. 
Husband,  wife,  child,  lineal  descendant, 
adopted    child    and    issue     thereof, 
mutually  acknowledged  child. 

$5,000 

1% 

m% 

2% 

3% 

CLASS  B. 
Father,   mother,   brother,   sister,   wife 
or  widow  of  son,  husband  of  daughter 

$5,000 

2% 

2*A% 

3% 

4% 

CLASS  C. 
All  others  except  Class  D. 

Less  than 
$500; 
if     in     excess 
thereof,  no 
exemption. 

5% 

5% 

5% 

5% 

CLASS  D. 
Gifts    to     church,     hospital,     orphan 
asylum,  public  library,  Bible,  tract, 
religious,    benevolent    or    charitable 
societies   incorporated    or   operating 
in  State. 

Entirely 

exempt 

RATES  AND  EXEMPTIONS  PREVAILING  UNDER  THE  AMENDMENT  OF  1922  WHICH 
BECAME  EFFECTIVE  MARCH  11TH,  1922. 


Rate 

BENEFICIARY 

Exemption 

Over 
amount    of 

$50,000 
to 

$150,000 
to 

Over 

exemption 

$150,000 

$250,000 

$250,000 

to   $50,000 

CLASS  A. 

Husband,  wife,  child,  lineal  descendant, 

adopted  child  and  issue  thereof. 

$5,000 

1% 

1J<% 

2% 

3% 

CLASS  B. 

Father,   mother,   brother,  sister,   wife 

or     widow     of     son,     husband     of 

daughter,    churches,    hospitals    and 

Less  than 

orphan     asylums,     public    libraries, 
Bible  and  tract  societies,  religious, 

$500; 
if    in     excess 

benevolent    and    charitable   institu- 

thereof no 

tions  and  organizations. 

exemption 

5% 

5% 

5% 

5% 

CLASS  C. 

AD  others  except  Class  D. 

Less  than 

$500; 

if    in    excess 

thereof  no 

exemption 

8% 

8% 

8% 

8% 

CLASS  D. 

State  of  New  Jersey,  municipal  cor- 

poration within  the  State  of   New 

Jersey  or  other  political  subdivision 

Entirely 

thereof. 

exempt 

NEW  JERSEY  1001 

CHAPTER  228,  LAWS  OF  1909,  AS  AMENDED  BY  CHAPTER  226,  LAWS  OF 
1912;  CHAPTER  57,  LAWS  OF  1914;  CHAPTER  151,  LAWS  OF  1914; 
CHAPTER  213,  LAWS  OF  1916;  CHAPTER  283,  LAWS  OF  1918; 
CHAPTER  174,  LAWS  OF  1922,  EFFECTIVE  MARCH  11,  1922. 

An  Act  to  tax  the  transfer  of  property,  of  resident  and  nonresident  decedents, 

by  devise,  bequest,  descent,  distribution  by  statute,  gift,  deed,  grant,  bargain 

and   sale,   in   certain   cases,    approved    April   twentieth,    one    thousand   nine 

hundred  and  nine. 

Be  it  enacted  by  the  Senate  and  General  Assembly  of  the  State  of  New  Jersey: 

I.  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  property, 
real  or  person,  of  the  value  of  five  hundred  dollars  or  over,  or  of  any  interest 
therein  or  income  therefrom,  in  trust  or  otherwise,  to  persons  or  corporations, 
except  as  hereinafter  provided,  in  the  following  cases: 

First.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  State  from 
any  person  dying  seized  or  possessed  of  the  property  while  a  resident  of  the 
State. 

Second.  When  the  transfer  is  by  will  or  intestate  law  of  real  property  within 
this  State,  or  of  goods,  wares  and  merchandise  within  this  State,  or  of  shares 
of  stock  of  corporations  of  this  State  or  of  national  banking  associations  located 
in  this  State,  and  the  decedent  was  a  nonresident  of  the  State  at  the  time  of 
his  death. 

Third.  When  the  transfer  is  of  property  made  by  a  resident,  or  is  of  real 
property  within  this  State,  or  of  goods,  wares  and  merchandise  within  this  State, 
or  of  shares  of  stock  of  corporations  of  this  State  or  of  national  banking  asso- 
ciations located  in  this  State,  made  by  a  nonresident,  by  deed,  grant,  bargain, 
sale  or  gift  made  in  contemplation  of  the  death  of  the  grantor,  vendor  or  donor, 
or  intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 
Every  transfer  by  deed,  grant,  bargain,  sale  or  gift,  made  within  two  years  prior 
to  the  death  of  the  grantor,  vendor  or  donor,  of  a  material  part  of  his  estate,  or 
in  the  nature  of  a  final  disposition  or  distribution  thereof,  and  without  an 
adequate  valuable  consideration,  shall,  in  the  absence  of  proof  to  the  contrary, 
be  deemed  to  have  been  made  in  contemplation  of  death  within  the  meaning  of 
this  section. 

Fourth.  When  any  person  or  corporation  comes  into  the  possession  or  enjoy- 
ment, by  a  transfer  from  a  resident  or  from  a  nonresident  decedent,  when  such 
nonresident  decedent's  property  consists  of  real  property  within  this  State  or 
of  shares  of  stock  of  corporations  of  this  State  or  of  national  banking  associ- 
ations located  in  this  State,  of  an  estate  in  expectancy  of  any  kind  or  character 
which  is  contingent  or  defeasible,  transferred  by  an  instrument  taking  effect 
after  the  passage  of  this  act,  or  of  any  property  transferred  pursuant  to  a  power 
of  appointment  contained  in  any  instrument  taking  effect  after  the  passage  of 
this  act. 

Fifth.  Whenever  property,  real  or  personal,  is  held  in  the  joint  names  of  two 
or  more  persons,  or  is  deposited  in  banks  or  other  institutions  or  depositaries  in 
the  joint  names  of  two  or  more  persons  and  payable  to  either  or  the  survivor, 
upon  the  death  of  one  of  such  persons,  the  right  of  the  surviving  joint  tenant  or 
joint  tenants,  person  or  persons,  to  the  immediate  ownership  or  possession  and 
enjoyment  of  such  property  shall  be  deemed  a  transfer  taxable  under  the  pro- 
visions of  this  act  in  the  same  manner  as  though  the  whole  property  to  which 
such  transfer  relates  belonged  absolutely  to  the  deceased  joint  tenant  or  joint 
depositor  and  had  been  devised  or  bequeathed  to  the  surviving  joint  tenant  or 
joint  tenants,  person  or  persons,  by  such  deceased  joint  tenant  or  joint  depositor 
by  will,  excepting  therefrom  such  part  thereof  as  may  be  proved  to  the  satisfac- 
tion of  the  Comptroller  of  the  Treasury  by  the  surviving  joint  tenant  or  joint 
tenants,  person  or  persons,  to  have  originally  belonged  to  him  or  them  and  never 
to  have  belonged  to  the  decedent ;  provided,  however,  that  in  case  of  a  nonresident 
decedent  this  paragraph  shall  apply  only  to  real  property  within  this  State, 
shares  of  stock  of  corporations  of  this  State  or  shares  of  stock  of  national 
banking  associations  located  in  this  State. 

All  taxes  imposed  by  this  act  shall  be  at  the  rate  of  eight  per  centum  upon 
the  clear  market  value  of  such  property,  except  as  hereinafter  provided,  to  be 
paid  to  the  Treasurer  of  the  State  of  New  Jersey,  for  the  use  of  said  State,  and 
all  administrators,  executors,  trustees,  grantees,  donees  or  vendees,  shall  be  per- 
sonally liable  for  any  and  all  such  taxes  until  the  same  shall  have  been  paid  as 


1002  THE  STATE  STATUTES 

hereinafter  directed,  for  which  an  action  of  debt  shall  lie  in  the  name  of  the 
State  of  New  Jersey.  In  determining  the  clear  market  value  of  such  property 
the  following  deductions  and  no  others  shall  be  allowed:  Debts  of  the  decedent 
owing  at  the  date  of  death;  providing,  however,  that  in  the  case  of  a  resident 
decedent  there  shall  not  be  allowed  a  debt  of  said  resident  decedent  owing  for 
or  secured  by  property  outside  of  this  State  except  when  the  property  for  which 
the  debt  is  owing  or  for  which  it  is  secured  is  subject  to  the  tax  imposed  by  this 
act,  or  except  when  the  foreign  debt  exceeds  the  value  of  the  property  securing 
it  or  for  which  it  was  contracted,  when  the  excess  may  be  deducted,  a  reasonable 
sum  for  funeral  expenses  and  last  illness,  such  proportion  of  the  State,  county 
and  municipal  taxes  for  the  current  fiscal  year  upon  the  property  as  the  elapsed 
portion  of  the  said  year  bears  to  a  full  calendar  year,  the  ordinary  expenses  of 
administration,  including  the  ordinary  fees  allowed  executors  and  administrators 
and  the  ordinary  fees  of  their  attorneys,  the  amount  due  or  paid  the  government 
of  the  United  States  as  a  Federal  estate  tax;  provided,  that  the  amount  of  such 
Federal  estate  tax  allowable  herein  as  a  deduction  shall  be  limited  to  a  compu- 
tation thereof,  commencing  at  the  primary  rates,  made  by  the  Comptroller  of  the 
Treasury  of  this  State  upon  his  own  valuations  of  that  portion  of  such  property 
only,  the  transfer  of  which  is  taxable  under  the  provisions  of  this  act,  by  apply- 
ing to  such  valuations  the  exemptions  and  rates  of  the  Federal  estate  tax  in  force 
at  the  date  of  death;  provided  further,  however,  that  where  the  Federal  estate 
tax  so  computed  shall  exceed  the  amount  of  the  tax  actually  levied  by  the  Federal 
government,  the  amount  so  computed  shall  be  disregarded  and  the  amount  so 
levied  by  the  Federal  government  shall  be  allowed. 

Property  passing  to  or  for  the  use  of  the  State  of  New  Jersey,  or  to  or  for  the 
use  of  a  municipal  corporation  within  the  State  of  New  Jersey,  or  other  political 
subdivision  thereof,  for  exclusively  public  purposes  shall  be  exempt  from  taxation 
under  this  act.  Property  passing  to  churches,  hospitals  and  orphan  asylums, 
public  libraries,  Bible  and  tract  societies,  religious,  benevolent  and  charitable 
institutions  and  organizations,  a  father,  mother,  brother  or  sister  of  a  decedent, 
wife  or  widow  of  a  son  of  a  decedent,  or  the  husband  of  a  daughter  of  a  decedent, 
shall  be  taxed  at  the  rate  of  five  per  centum.  Property  passing  to  a  husband, 
wife,  child  or  children  or  to  the  issue  of  any  child  or  children  of  a  decedent, 
shall  be  taxed  at  the  rate  of  one  per  centum  on  any  amount  in  excess  of  five 
thousand  dollars,  up  to  fifty  thousand  dollars;  one  and  one-half  per  centum  on 
any  amount  in  excess  of  fifty  thousand  dollars,  up  to  one  hundred  and  fifty 
thousand  dollars;  two  per  centum  on  any  amount  in  excess  of  one  hundred  and 
fifty  thousand  dollars,  up  to  two  hundred  and  fifty  thousand  dollars ;  and  three 
per  centum  on  any  amount  in  excess  of  two  hundred  and  fifty  thousand  dollars. 
Property  passing  to  a  child  or  children  of  any  decedent,  adopted  in  conformity 
with  the  laws  of  this  State,  or  of  any  of  the  United  States,  or  of  any  foreign 
kingdom  or  nation,  or  to  the  issue  of  any  such  child  or  children,  shall  be  taxed 
at  the  same  rate  and  with  the  same  exemption  up  to  five  thousand  dollars  allowed 
to  a  child  or  children  born  in  lawful  wedlock,  or  to  the  issue  of  any  such  child 
or  children;  provided,  however,  that  nothing  in  this  act  contained  shall  be  con- 
strued to  repeal  or  in  anywise  impair  the  provisions  of  an  act  entitled  "An  act 
to  provide  for  the  payment  to  counties  of  five  per  centum  of  transfer  taxes 
collected,"  approved  April  twenty- first,  one  thousand  nine  hundred  and  nine,  but 
the  said  act  shall  remain  in  full  force  and  effect  as  though  this  act  had  not  been 
passed. 

2.  When  any  person  shall  bequeath  or  devise,  convey,  grant,  sell,  or  give  any 
property  or  interest  therein,  or  income  therefrom,  to  any  person  or  corporation 
for  life  or  for  a  term  of  years,  and  a  vested  interest  in  the  remainder  or  corpus 
of  said  property  to  any  person,  or  to  any  body  politic  or  corporation,  the  whole 
of  said  property  so  transferred  as  aforesaid,  shall  be  appraised  immediately  at 
its  clear  market  value;  and  the  value  of  said  life  estate  or  estate  for  a  term 
of  years  shall  be  fixed  in  the  manner  hereinafter  provided  by  section  fourteen 
of  this  act;  and  the  value  of  the  remainder  in  said  property  so  limited  shall  be 
ascertained  by  deducting  the  value  of  said  life  estate  or  estate  for  a  term  of 
years  from  the  appraised  market  value  of  the  property  so  limited;  and  the  tax 
on  the  said  estate  or  estates,  remainder  or  remainders,  interest  or  interests,  shall 
be  immediately  due  and  payable  and  remain  a  lien  upon  the  entire  property  so 
limited  until  paid. 

3.  Where  an  instrument  creates  an  executory  devise,  or  an  estate  in  expectancy 


NEW  JERSEY  1Q03 

of  any  kind  or  character  which  is  contingent  or  defeasible,  the  property  trans- 
ferred in  accordance  with  such  executory  devise,  or  the  property  in  which  such 
contingent  or  defeasible  interest  is  created  by  any  such  instrument,  shall  be 
appraised  immediately  at  its  clear  market  value,  and  after  deducting  from  such 
appraisement  the  value  of  the  life  estate,  or  estate  for  a  term  of  years,  created 
by  such  instrument,  the  tax  on  such  life  estate,  or  estate  for  a  term  of  years, 
if  taxable  under  this  act,  shall  be  immediately  levied  and  assessed,  but  the  tax 
on  the  balance  of  said  appraised  value  of  such  estate  shall  not  be  levied  or 
assessed  until  the  person  or  corporation  entitled  to  said  property  comes  into  the 
beneficial  enjoyment,  seizin  or  possession  thereof,  and  if  taxable  shall  then  be 
taxed.  Where  an  instrument  creates  a  power  of  appointment,  the  life  estate,  or 
estate  for  a  term  of  years,  created  and  transferred  by  such  instrument,  if  tax- 
able, shall  be  immediately  appraised  and  taxed  at  its  clear  market  value,  but 
the  appraisal  and  taxation  of  the  interest  or  interests  in  remainder  to  be  disposed 
of  by  the  donee  of  power  shall  be  suspended  until  the  exercise  of  the  power  of 
appointment,  and  shall  then  be  taxed,  if  taxable,  at  the  clear  market  value  of  such 
property,  which  value  of  such  property  shall  be  determined  as  of  the  date  of  the 
death  of  the  creator  of  the  power. 

A  tax  on  an  estate  for  life,  or  on  an  estate  for  a  term  of  years,  levied  and 
assessed  as  directed  in  this  section,  shall  be  due  and  payable  as  provided  in 
section  five  of  this  act.  All  other  taxes  levied  and  assessed  as  directed  in  this 
section  and  all  taxes  on  any  property  which  may  be  transferred  to  the  residuary 
legatees,  heir  or  next  of  kin  of  any  decedent,  or  which  may  revert  to  the  heir  of 
any  decedent  by  reason  of  the  failure  of  any  contingency  upon  which  any 
remainder  may  be  limited,  shall  be  due  and  payable  within  two  months  after  the 
person  entitled  to  the  property  shall  come  into  the  enjoyment,  seizin  or  possession 
thereof,  and  if  not  paid  shall  thenceforth  bear  interest  at  the  rate  of  ten  per 
centum  per  annum  until  paid.  No  executor  or  trustee  shall  turn  over  any  prop- 
erty of  an  estate  mentioned  in  this  section  until  the  tax  due  thereon,  and  interest, 
if  any,  shall  have  been  paid  to  the  Treasurer  of  this  State,  and  any  executor  or 
trustee  who  shall  turn  over  any  property  prior  to  the  payment  of  the  tax  due 
thereon,  together  with  interest,  shall  be  personally  liable  for  such  tax  and  interest, 
which  said  liability  may  be  enforced  by  an  action  of  debt  in  the  name  of  the 
State  of  New  Jersey. 

The  Comptroller  of  the  Treasury  of  this  State  is  hereby  empowered  and  author- 
ized to  enter  into  an  agreement  with  the  executors  or  trustees  of  any  estate  in 
which  remainders  or  expectant  estates  have  been  of  such  a  nature,  or  so  disposed 
and  circumstanced  that  the  taxes  therein  were  held  not  presently  payable,  or 
where  the  interest  of  the  legatees  or  devisees  were  not  ascertainable  at  the  death 
of  the  testator,  grantor,  donor  or  vendor,  and  to  compound  such  taxes  upon  such 
terms  as  may  be  deemed  equitable  and  expedient;  and  to  grant  discharge  to  said 
executors  and  trustees  upon  the  payment  of  the  taxes  provided  for  in  such  com- 
position ;  provided,  however,  that  no  such  composition  shall  be  conclusive  in  favor 
of  said  executors  or  trustees  as  against  the  interest  of  such  cestuis  que  trust  as 
may  possess  either  present  rights  of  enjoyment  or  fixed,  absolute  or  indefeasible 
rights  of  future  enjoyment,  or  of  such  as  would  possess  such  rights  in  the  event 
of  the  immediate  termination  of  particular  estates,  unless  they  consent  thereto, 
either  personally,  when  competent,  or  by  guardian  or  committee. 

Provided  further,  however,  that  if  the  executor,  trustee  or  the  person  or  per- 
sons, or  the  body  politic  or  corporate,  beneficially  interested  in  the  property 
chargeable  with  the  tax  shall  elect  to  defer  the  adjustment  of  the  taxes  until  the 
said  person  or  persons,  or  body  politic  or  corporate,  shall  come  into  actual  pos- 
session or  enjoyment  of  the  said  property,  such  person  or  persons,  or  body  politic 
or  corporate,  or  the  executor  or  trustee,  shall  execute  a  bond  to  the  State  of  New 
Jersey,  in  a  penalty  of  twice  the  amount  of  the  tax  imposed  at  the  highest  pos- 
sible rate,  with  such  surety  or  sureties  as  the  Comptroller  of  the  Treasury  shall 
approve,  conditioned  for  the  payment  of  the  said  tax  and  interest  thereon  at  such 
time  or  period  as  hereinabove  provided,  which  bond  shall  be  filed  in  the  office  of 
the  Comptroller  of  the  Treasury.  Upon  the  filing  and  approval  of  said  bond,  the 
Comptroller  of  the  Treasury  shall  be  authorized  to  issue  consents  permitting  the 
transfer  of  any  and  all  property  disclosed  in  the  proceeding. 

4.  Whenever  a  decedent  appoints  or  names  one  or  more  executors  or  trustees, 
and  makes  a  bequest  or  devise  of  property  to  them  in  lieu  of  their  commissions 
or  allowances,  which  otherwise  would  be  liable  to  said  tax,  or  appoints  them  his 


1004  THE  STATE  STATUTES 

residuary  legatees,  and  said  bequest,  devise  or  residuary  legacy  exceeds  what 
would  be  a  reasonable  compensation  for  their  services,  such  excess  shall  be  liable 
to  said  tax,  and  the  Ordinary,  or  Orphans'  Court,  having  jurisdiction  in  the  case, 
shall  fix  such  compensation. 

5.  All  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the  death  of  the 
testator,  intestate,  grantor,  donor  or  vendor,  unless  in  this  act  otherwise  pro- 
vided, and  if  not  paid  within  one  year  from  the  date  of  the  death  of  the  testator, 
intestate,  grantor,  donor  or  vendor,  such  tax  shall  bear  interest  at  the  rate  of  ten 
per  centum  per  annum,  to  be  computed  from  the  expiration  of  one  year  from  the 
date  of  the  death  of  such  testator,  intestate,  grantor,  donor  or  vendor,  or  until 
the  same  is  paid,  and  in  all  cases  where  the  executors,  administrators,  grantees, 
donees,  vendees  or  trustees  do  not  pay  such  tax  within  one  year  from  the  death 
of  the  decedent,  they  shall  be  required  to   give  a  bond  to   the   State  of  New 
Jersey  in  double  the  amount  of  the  tax,  conditioned  to  pay  said  tax,  and  any 
interest  which  may  fall  due  thereon,  said  bond  to  be  approved  as  to  form  and 
sufficiency  thereof  by  the  Comptroller  of  the  Treasury  of  this  State. 

All  taxes  levied  and  assessed  under  this  act  shall  be  and  remain  a  lien  on  all 
property  owned  by  the  decedent  as  of  the  date  of  death  until  paid  or  secured  by 
bond,  as  provided  for  in  the  several  provisions  of  this  act. 

6.  The  penalty  of  ten  per  centum  per  annum  imposed  .by  section  five  hereof  for 
the  non-payment  of  said  tax  shall  not  be  charged  where  in  cases  by  reason  of 
claims  made  upon  the  estate  necessary  litigation  or  other  unavoidable  cause  of 
delay  the  estate  of  any  decedent,  or  a  part  thereof,  cannot  be  settled  at  the  end 
of  a  year  from  the  death  of  the  decedent,  and  in  such  cases  only  six  per  centum 
per  annum  shall  be  charged  upon  the  said  tax  from  the  expiration  of  such  year 
until  the  cause  of  such  delay  is  removed. 

7.  Any  administrator,  executor  or  trustee  having  in  charge  or  trust  any  legacy 
or  property  for  distribution,  subject  to  said  tax,  shall  deduct  the  tax  therefrom, 
or  if  the  legacy  or  property  be  not  money  he  shall  collect  the  tax  thereon  upon 
the  appraised  value  thereof  from  the  legatee  or  persons  entitled  to  such  property, 
and  he  shall  not  deliver  or  be  compelled  to  deliver  any  specific  legacy  or  property 
subject  to  tax  to  any  person  until  he  shall  have  collected  the  tax  thereon,  and 
whenever  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real  estate,  the 
heir  or  devisee,  before  paying  the  same,  shall  deduct  said  tax  therefrom  and  pay 
the  same  to  the  executor,  administrator  or  trustee,  and  the  payment  thereof  shall 
be  enforced  by  the  executor,  administrator  or  trustee  in  the  same  manner  that 
the  payment  of  such  legacy  might  be  enforced;  if,  however,  such  legacy  be  given 
in  money  to  any  person  for  a  limited  period  he  shall  retain  the  tax  upon  the  whole 
amount,  but  if  it  be  not  in  money  he  shall  make  application  to  the  court  having 
jurisdiction  of  his  accounts  to  make  an  apportionment,  if  the  case  require  it,  of 
the  sum  to  be  paid  into  his  hands  by  such  legatees,  and  for  such  further  order 
relative  thereto  as  the  case  may  require. 

8.  All  executors,  administrators  and  trustees  shall  have  full  power  to  sell  so 
much  of  the  property  of  the  decedent  as  will  enable  them  to  pay  said  tax  in  the 
same  manner  as  they  may  be  enabled  by  law  to  do  for  the  payment  of  debts  of 
their   testators   and   intestates,   and  the   amount   of  said   tax   shall   be   paid   as 
hereinafter  directed. 

9.  Any  sum  of  money  retained  by  any  executor,  administrator  or  trustee,  or 
paid  into  his  hands  for  any  tax  due  under  this  act,  shall  be  paid  by  him,  within 
thirty  days  thereafter,  to  the  Treasurer  of  this  State,  and  the  person  so  paying 
shall  be  entitled  to  receive  a  receipt  signed  by  the  Treasurer  of  this  State  and 
countersigned  by  the  Comptroller  thereof,  for  such  payment,  which  receipt  shall 
be  a  proper  voucher  in  the   settlement  of   the   account   of   any  such  executor, 
administrator  or  trustee. 

Whenever  the  tax  and  interest  chargeable  has  been  paid  in  full  or  secured  by 
bond,  as  is  provided  for  in  the  several  provisions  of  this  act,  or  whenever  any 
estate  is  determined  by  the  Comptroller  of  the  Treasury  to  be  exempt  from  the 
payment  of  any  inheritance  tax  to  the  State  of  New  Jersey,  there  shall  be  issued 
to  the  executor,  administrator  or  other  proper  representative  of  the  estate,  a 
statement  of  the  fact  in  such  form  as  may  be  adopted  by  the  Comptroller  of  the 
Treasury,  which  statement  shall  include  a  concise  but  definite  description  of  the 
real  property  disclosed  in  the  proceeding  and  shall  be  signed  by  the  Comptroller. 
Such  statement  may  also  be  recorded  in  the  clerk's  office  of  th'e  county  in  which 
said  real  property  is  situated,  in  the  book  which  shall  be  kept  by  said  clerk  for 


NEW  JERSEY  1005 

such  purpose,  labeled  ''Inheritance  Tax,"  for  which  recording  and  indexing  the 
said  clerk  shall  receive  a  fee  at  the  same  rates  as  those  charged  for  recording 
deeds,  mortgages,  bills  of  sale,  chattel  mortgages  and  all  other  documents. 

10.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  politic  or  corporate,  or  to  any  devisee  or  beneficiary  other 
than  the  corporations,  institutions  and  organizations  specifically  exempted  under 
the  provisions  of  this  act  from  the  tax  imposed  hereby,  it  shall  be  the  duty  of  the 
heirs,  devisees,   executors,   administrators   or  trustees   of   such   decedent   to   give 
information  thereof  in  writing  to  the  Comptroller  of  the  Treasury  of  this  State 
within  six  months  after  they  obtain  title  thereto  or  undertake  the  execution  of 
their  respective  duties,  or,  if  the  fact  be  not  known  to  them  within  that  period, 
then  within  one  month  after  the  same  shall  have  come  to  their  knowledge. 

11.  Whenever  any  debts  shall  be  proven  against  the  estate  of  the  decedent, 
after  the  payment  of  the  legacies  or  distribution  of  property  from  which  the  said 
tax  has  been  deducted,  or  upon  which  it  has  been  paid,  and  a  refund  is  made  by 
the  legatee,  devisee,  heir,  or  next  of  kin,  a  proportion  of  the  tax  so  paid  shall  be 
repaid  to  the  State  Treasurer,  or  by  the  State  Treasurer,  if  the  same  has  been 
paid  into  the  State  Treasury. 

12.  If   a  foreign  executor,   administrator  or  trustee   shall   assign  or  transfer 
any  stock  or  obligations  in  this  State  standing  in  the  name  of  a  decedent,  or 
standing  in  the  joint  names  of  such  a  decedent  and  one  or  more  persons,  or  in 
trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  Treasurer 
of  this  State  on  the  transfer  thereof.     No  safe  deposit  company,  trust  company, 
corporation,  bank  or  other  institution,  person  or  persons  having  in  possession  or 
under  control,  securities,  deposits  or  other  assets  belonging  to  or  standing  in  the 
name  of  a  decedent  who  was  a  resident,  or  belonging  to  or  standing  in  the  joint 
name  of  such  a  resident  decedent  and  one  or  more  persons,  including  the  shares 
of  the  capital  stock  of,  or  other  interests  in,  safe  deposit  company,  trust  com- 
pany, corporation,  bank  or  other  innstitution  making  the  delivery  or  transfer  herein 
provided,  shall  deliver  or  transfer  the  same  to  the  executors,  administrators  or 
legal  representatives  of  said  decedent,  or  to  the  survivor  or  survivors  when  held 
in  the  joint  names  of  a  decedent  and  one  or  more  persons,  or  upon  their  order  or 
request,  unless  notice  of  the  time  and  place  of  such  intended  delivery  or  transfer 
be  served  upon  the  Comptroller  of  the  Treasury  of  this  State  at  least  ten  days 
prior  to   said   delivery  or  transfer ;   nor   shall   any  such   deposit   company,   trust 
company,   corporation,   bank   or   other   institution,   person   or   persons   deliver    or 
transfer  any  securities,  deposits  or  other  assets  belonging  to  or  standing  in  the 
name  of  a  resident  decedent,  or  belonging  to  or  standing  in  the  joint  names  of  a 
resident  decedent  and  one  or  more  persons,  including  the  shares  of  the  capital 
stock  of,  or  other  interests  in,  the  safe  deposit  company,  trust  company,  cor- 
poration,  bank   or   other   institution    making   the    delivery    or    transfer,    without 
retaining  a  sufficient  portion  or  amount  thereof  to  pay  any  tax  and  interest  which 
may  thereafter  be  assessed  on  account  of  the  delivery  or  transfer  of  such  securi- 
ties, deposits,  shares  of  stock,  or  other  assets,  including  the  shares  of  capital 
stock  of,  or  other  interests  in,  the  safe  depoit  company,  trust  company,  corpora- 
tion, bank  or  other  institution,  making  the  delivery  or  transfer,  under  the  pro- 
visions of  this  act,  unless  the  Comptroller  of  the  Treasury  consents  thereto  in 
writing.     And  it  shall  be  lawful  for  the  said  Comptroller  of  the  Treasury,  either 
personally  or  by  representative,  to  examine  said  securities,  deposits  or  assets  of  a 
resident  decedent,  at  the  time  of  such  delivery  or  transfer.     Failure  to  serve 
such  notice  or  failure  to  allow  such  examination,  or  failure  to  retain  a  sufficient 
portion  or  amount  to  pay  such  tax  and  interest  as  herein  provided  shall  render 
said  safe  deposit  company,  trust  company,  corporation,  bank  or  other  institution, 
person  or  persons  liable  to  the  payment  of  the  amount  of  the  tax  and  interest 
due  or  thereafter  to  become  due  upon  said  securities,  deposits,  shares  of  stock, 
or  other  assets,  including  the  shares  of  capital  stock  of,  or  other  interests  in,  the 
safe    deposit    company,    trust   company,    corporation,    bank    or    other   institution 
making  the  delivery  or  transfer,  and  in  addition  thereto  a  penalty  of  one  thousand 
dollars;  which  liability  for  such  tax  and  interest,  or  the  penalty  above  described, 
or  both,  shall  be  enforced  in  an  action  of  debt  in  the  name  of  the  State  of  New 
Jersey,  and  the  same,  when  recovered,  shall  be  paid  inio  the  treasury  of  the  State 
of  New  Jersey  for  the  use  of  the  State;  provided,  there  shall  be  no  liability  for 
the  payment  of  such  tax  and  interest,  or  for  such  penalty  of  one  thousand  dollars 
in  any  case  where  such  safe  deposit  company,  trust  company,  corporation,  bank 


1006  THE  STATE  STATUTES 

or  other  institution,  person  or  persons  shall  make  delivery  of  securities,  deposits, 
shares  of  stock  or  other  assets,  including  the  shares  of  capital  stock  of,  or  other 
interest  in,  the  safe  deposit  company,  trust  company,  corporation,  bank  or  other 
institution  making  the  delivery  or  transfer,  belonging  to  or  standing  in  the  names 
of  two  or  more  persons,  without  knowledge  or  reasonable  ground  to  believe,  that 
one  of  the  persons  to  whom  such  securities,  deposits  or  other  assets  belong  or  in 
whose  name  they  stand  is  dead. 

No  corporation  of  this  State  shall  transfer  any  stock  of  said  corporation  stand- 
ing in  the  name  of  or  belonging  to  a  decedent,  resident  or  nonresident,  or  in  the 
joint  names  of  a  decedent  and  one  or  more  persons,  or  in  trust  for  a  decedent, 
unless  notice  of  the  time  of  such  intended  transfer  be  served  upon  the  Comp- 
troller of  the  Treasury  of  this  State  at  least  ten  days  prior  to  such  transfer,  nor 
until  said  Comptroller  shall  consent  thereto  in  writing.  Any  corporation  making 
such  a  transfer  without  first  obtaining  the  consent  of  the  Comptroller  of  the 
Treasury  as  aforesaid  shall  be  liable  for  the  amount  of  any  tax  which  may  there- 
after be  assessed  on  account  of  the  transfer  of  such  stock,  together  with  the 
interest  thereon,  and  in  addition  thereto  a  penalty  of  one  thousand  dollars,  which 
liability  for  such  tax  and  interest  and  the  said  penalty  prescribed  may  be  enforced 
in  an  action  of  debt  in  the  name  of  the  State  of  New  Jersey,  said  penalty,  when 
recovered,  to  be  paid  into  the  treasury  of  the  State  of  New  Jersey. 

A  tax  shall  be  assessed  on  the  transfer  of  property  made  subject  to  tax  as 
aforesaid  in  this  State  of  a  nonresident  decedent  if  all  or  any  part  of  the  estate 
of  such  decedent,  wherever  situated,  shall  pass  to  persons  or  corporations  taxable 
under  this  act,  which  tax  shall  bear  the  same  ratio  to  the  entire  tax  which  the 
said  estate  would  have  been  subject  to  under  this  act  if  such  nonresident  decedent 
had  been  a  resident  of  this  State,  and  all  his  property,  real  and  personal,  had 
been  located  within  this  State,  as  such  taxable  property  within  this  State  bears 
to  the  entire  estate,  wherever  situated;  provided,  that  nothing  in  this  clause 
contained  shall  apply  to  any  specific  bequest  or  devise  of  any  property  in  this 
State. 

13.  The  Comptroller  of  the  Treasury  of  this  State,  either  personally  or  by  any 
of  his  employees,  may  investigate  the  question  of  the  liability  of  any  property 
to  any  tax  due  prior  to  the  passage  of  this  act,  and  if  said  Comptroller  is  satisfied 
that  any  taxes  are  due  this  State,  he  shall  report  such  fact  to  the  register  of  the 
Prerogative  Court,  or  surrogate  of  the  proper  county,  whereupon  said  register  or 
surrogate  shall  cause  said  property  to  be  taxed. 

14.  In  determining  the  value  of  a  life  estate,  annuity,  or  estate  for  a  term  of 
years,  the  American  Experience  Table  of  Mortality,  with  interest  at  the  rate  of 
five  per  centum  per  annum  shall  be  used. 

15.  When  any  amount  of  said  tax  shall  have  been  paid  erroneously  to  the  State 
Treasurer,  it  shall  be  lawful  for  the  Comptroller  of  the  Treasury  on  satisfactory 
proof  rendered  to  him  of  such  erroneous  payments,  to  draw  his  warrant  on  the 
State  Treasurer,  in  favor  of  the  executor,  administrator,  person  or  persons  who 
have  paid  any  such  tax  in  error,  or  who  may  be  lawfully  entitled  to  receive  the 
same,  for  the  amount  of  such  tax  so  paid  in  error;  provided,  that  all  such  appli- 
cations for  the  repayment  of  such  tax  shall  be  made  within  two  years  from  the 
date  of  such  payment. 

16.  The  register  of  the  Prerogative  Court  and  every  surrogate  of  any  county 
in  this  State  shall,  within  ten  days  after  the  probate  of  any  will,  either  foreign 
or  domestic,  or  the  filing  of  a  copy  of  any  foreign  will,  or  the  taking  out  of 
letters  of  administration,  notify,  in  writing,  the  Comptroller  of  the  Treasury  of 
this  State  of  such  probate  or  administration;  and  any  surrogate  or  the  register  of 
the  Prerogative  Court  failing  to  notify  said  Comptroller  in  writing  of  the  probate 
of  any  will,  or  the  filing  of  a  copy  of  any  foreign  will,  or  the  taking  out  of  any 
letters  of  administration,  shall  be  liable  to  a  penalty  of  two  hundred  dollars,  to 
be  recovered  in  an  action  of  debt  in  the  name  of  the  State  of  New  Jersey. 

17.  The  Comptroller  of  the  Treasury  of  this  State,  either  personally  or  by  his 
assistant  or  other  employee,  is  hereby  empowered  to  examine  any  and  all  papers, 
documents  and  files  which  now  are  or  hereafter  may  be  filed  or  lodged  with  the 
register  of  the  Prerogative  Court,  or  with  the  surrogate  of  any  county  or  with 
any  other  official  of  this  State  or  of  any  municipality  thereof,  or  with  any  person 
or  corporation,  for  the  purpose  of  ascertaining  what,  if  any,  property  is,  or  shall 
be,  liable  to  the  payment  of  the  tax  provided  for  by  this  act.     The  sum  of  ten 


NEW  JERSEY  1007 

thousand  dollars  is  hereby  appropriated  to  the  Comptroller  of  the  Treasury  of  this 
State  for  the  purpose  of  enabling  said  Comptroller  to  carry  out  the  provisions 
of  this  act. 

18.  In  order  to  fix  the  value  of  property  of  persons  whose  estates  shall  be  liable 
to  the  payment  of  a  tax  under  this  act,  whether  the  same  be  in  the  ownership  of 
a  resident  or  nonresident  decedent,  the  Comptroller  of  the  Treasury  of  this  State 
on  the  application  of  any  interested  party,  or  upon  his  own  motion,  shall  appoint 
gome  competent  person   as  appraiser   as   often   as   and   whenever   occasion  may 
require.    Every  such  appraiser  shall  forthwith  give  notice,  by  mail,  to  such  person 
as  the  Comptroller  of  the  Treasury  of  this  State  shall  direct,  of  the  time  and  place 
when  and  where  he  will  appraise  such  property.     He  shall  at  such  time  and  place 
appraise  the  same  at  its  fair  market  value,  and  for  that  purpose  the  said  appraiser 
is  authorized  to  issue  subpoenas  and  to  compel  the  attendance  of  witnesses,  and 
to  take  the  evidence  of  such  witnesses  under  oath  concerning  such  property  and 
the  value  thereof,  and  he  shall  make  report  thereof,  and  of  such  value,  in  writing 
to  said  Comptroller  of  the  Treasury,  together  with  such  other  facts  in  relation 
thereto  as  the  said  Comptroller  of  the  Treasury  may,  by  order,  require,  which 
report  and  other  data  required  by  said  Comptroller  shall  be  filed  in  the  office  of 
such  Comptroller,  and  from  said  report  the  said  Comptroller  of  the   Treasury 
shall  forthwith  assess  and  fix  the  cash  value  of  such  estate  and  levy  the  tax  to 
which  the  same  is  liable,  and  shall  immediately  give  notice  thereof,  by  mail  to 
all  parties  known  by  said  Comptroller  of  the  Treasury  to  be  interested  therein. 
Any  person  or  corporation  dissatisfied  with  said  appraisement  or  assessment  may 
appeal  therefrom  to  the  Ordinary  of  this  State  within  sixty  days  after  the  making 
and  filing  of  such  assessment,  on  giving  a  bond,  approved  by  the  Ordinary  of 
this  State,  conditioned  to  pay  said  tax  so  as  aforesaid  levied  by  the  said  Comp- 
troller of  the   Treasury,  together  with  interests  and  costs,  if   the  said  tax  be 
affirmed  by  the  Ordinary.    Any  person  failing  to  attend  before  an  appraiser  after 
service  of  a  subpoena,  or  refusing  to  give  evidence  concerning  any  estate,  shall 
be  liable  to  a  penalty  of  two  hundred  dollars,  to  be  recovered  in  an  action  of 
debt  by  the  Comptroller  of  the  Treasury. 

19.  Any  appraiser  appointed  pursuant  to  the  provisions  of  this  act  who  shall 
take  any  fee  or  reward,  either  directly  or  indirectly,  from  any  executor  or  admin- 
istrator, or  any  other  person  liable  to  pay  any  tax  or  any  portion  thereof,  under 
the  provisions  of  this  act,  shall  be  guilty  of  a  misdemeanor,  and,  on  conviction, 
shall  be  punished  by  a  fine  not  exceeding  one  thousand  dollars,  or  by  imprison- 
ment not  exceeding  one  year,  or  both,  at  the  discretion  of  the  court,  and,  in 
addition  thereto,  the  Comptroller  of  the  Treasury  of  this  State  shall  immediately 
dismiss  such  appraiser  from  his  employment.    The  compensation  of  said  appraisers 
shall  be  a  sum  not  exceeding  five  dollars  per  day,  to  be  fixed  and  determined  upon 
by  the  said  Comptroller  of  the  Treasury,  and  to  be  paid  out  of  the  treasury  of 
this   State.     Such   appraisers  shall  also  be   reimbursed  for   all   actual   expenses 
incurred  in  the  discharge  of  their  duties. 

20.  The  Ordinary  of  this  State  shall  have  jurisdiction  to  hear  and  determine  all 
questions  in  relation  to  any  tax  levied  under  the  provisions  of  this  act. 

21.  If  it  shall  appear  to  the  Comptroller  of  the  Treasury  of  this  State  that 
any  tax  which  has  accrued  under  this  act  has  not  been  paid  according  to  law 
said  Comptroller  shall  report  such  fact,  in  writing,  to  the  register  of  the  Pre- 
rogative Court,  and  said  register  shall  issue  a  citation  citing  the  persons  or  cor- 
porations interested   in   the   property  liable   to   said   tax  to   appear   before   the 
Ordinary  on  a  certain  day,  not  more  than  three  months  from  the  date  of  such 
citation,  and  show  cause  why  such  tax  should  not  be  paid;  the  service  of  such 
citation  and  the  subsequent  proceedings  had  thereon  shall  conform  to  the  practice 
prevailing  in  the  Prerogative  Court.     Upon  the  making  of  any  decree  the  register 
of  the  Prerogative  Court  shall,  upon  the  request  of  the  Comptroller  of  the  Treasury 
of  this  State  furnish  one  or  more  copies  of  said  decree,  and  the  same  shall  be 
docketed  and  filed  by  the  clerk  of  the  Supreme  Court,  or  by  the  county  clerk  of 
any  county  in  this  State,  upon  the  request  of  the  Comptroller  of  the  Treasury 
of  this  State,  and  the  same  shall  have  the  same  effect  as  a  lien  by  judgment,  and 
execution  shall  issue  thereon  according  to  the  rule  and  practice  appertaining  to 
other  judgments  docketed  and  filed  with  said  respective  clerks. 

22.  Whenever  the  Comptroller  of  the  Treasury  of  this  State  shall  have  reason 
to  believe  that  any  tax  is  due  and  unpaid  under  this  act,  after  the  neglect  and 


1008  THE  STATE  STATUTES 

refusal  of  the  persons  or  corporations  interested  in  the  property  and  liable  to 
said  tax  to  pay  the  same,  he  shall  notify  the  Attorney-General  of  this  State,  in 
writing,  of  such  failure  to  pay  such  tax,  and  the  said  Attorney-General,  when 
so  notified,  if  he  have  probable  cause  to  believe  that  a  tax  is  due  and  unpaid, 
shall  prosecute  the  proceeding  before  the  Ordinary  of  this  State,  as  provided  for 
in  section  twenty-one  of  this  act,  and  the  State  Treasurer  shall,  on  the  warrant 
of  the  Comptroller,  pay  all  the  expenses  of  said  proceeding. 

23.  The  Comptroller  of  the  Treasury  of  this  State  shall  keep  a  record  in  his 
department  of  all  returns  made  by  appraisers,  the  cash  value  of  annuities,  life 
estates  and  term  of  years,   and  the  amount  of   all  taxes  assessed  by  him;   in 
addition  to  the  foregoing  the  said  Comptroller  may  enter  in  said  books  all  other 
information  and  data  which  he  may  deem  desirable  or  proper.     All  returns  made 
by  appraisers  and  all  data  otherwise  gathered  by  the  Comptroller  of  the  Treasury, 
shall   be   considered   as   privileged   communications    and   the    same   shall   not   be 
exhibited  for  inspection  to  any  person  or  persons  other  than  the  executor  or  the 
administrator   or  a   beneficiary  entitled  under   the   terms   of   the   last  will   and 
testament  or  the  intestate  laws  to  share  in  the  estate,  or  the   duly  authorized 
attorney  of  said  executor,  administrator  or  beneficiary.     Nothing  in  this  section 
shall  be  construed  as  prohibiting  the  use  of  such  returns  made  by  appraisers 
and  all  data  otherwise  gathered  by  the  Comptroller  in  legal  proceedings  involving 
the  assessment,   collection   or  abatement  of   taxes  provided  for  by  the  various 
inheritance  tax  statutes  prevailing  in  this  State. 

24.  Whenever  a  resident  of  this  State  has  died,  or  shall  hereafter  die,  testate 
or  intestate,  seized  or  possessed  of  any  property  liable  to  the  payment  of  a  tax 
under  the  provisions  of  this  act,  and  no  letters  testamentary  or  of  administration 
have  or  shall  have  been  taken  out  on  such  estate  within  one  year  from  the  date  of 
the  death  of  such  person,  or  whenever  there  is  property,  real  or  personal,  within 
this  State  owned  by  a  nonresident  decedent  which  is  liable  to  the  payment  of  a 
tax  under  this  act,  and  such  nonresident  decedent  has  been  deceased  for  a  period 
of  three  months  without  the  tax  due  this  State  having  been  paid,  it  shall  be 
lawful  for  the  Comptroller  of  the  Treasury  of  this  State  to  enter  into  an  agree- 
ment, in  writing,  with  any  person  giving  him  information  of   the   existence  of 
property  so  liable  to  a  tax,  to  pay  to  such  person  or  persons  out  of  any  sum 
which  may  be  collected  from  any  such  estate  an  amount  not  exceeding  ten  per 
centum  thereof. 

25.  Every  executor,  administrator,  trustee,  grantee,  donee  or  vendee  who  wil- 
fully and  knowingly  subscribes  or  makes  any  false  statement  of  facts,  or  know- 
ingly subscribes  or  exhibits  any  false  paper  or  false  report  with  intent  to  deceive 
any  appraiser  appointed  pursuant  to  the  provisions  of  this  act,  shall  be  guilty 
of  a  misdemeanor  and  punished  accordingly. 

26.  The  words  "estate"  and  "property,"  wherever  used  in  this  act,  except 
where  the  subject  or  context  is  repugnant  to  such  construction,  shall  be  construed 
to  mean  the   interest   of   the   testator,   intestate,   grantor,  bargainer   or   vendor, 
passing  or  transferred  to  the  individual  or  specific  legatee,  devisee,  heir,  next  of 
kin,  grantee,  donee  or  vendee,  not  exempt  under  the  provisions  of  this  act,  whether 
such  property  be  situated  within  or  without  this  State.     The  word  "transfer," 
as  used  in  this  act,  shall  be  taken  to  include  the  passing  of  property,   or  any 
interest  therein,  in  possession  or  enjoyment,  present  or  future,  by  distribution  by 
statute,  descent,  devise,  bequest,  grant,  deed,  bargain,  sale  or  gift. 

2'7.  In  case  for  any  reason  any  section  or  any  provision  of  this  act  shall  be 
questioned  in  any  court,  and  shall  be  held  to  be  unconstitutional  or  invalid,  the 
same  shall  not  be  held  to  affect  any  other  section  or  provision  of  this  act. 

28.  All  acts  and  parts  of  acts  inconsistent  with  the  provisions  of  this  act  are 
hereby  repealed,  but  nothing  in  this  repealer  shall  affect  or  impair  the  lien  of 
any  taxes  heretofore  assessed,  or  any  tax  due  and  payable,  or  any  remedies  for  the 
collection  of  the  same,  or  to  surrender  any  remedies,  powers,  rights  or  privileges 
acquired  by  the  State  under  any  act  heretofore  passed,  or  to  relieve  any  person 
or  corporation  from  any  penalty  imposed  by  said  acts. 


NEW  JERSEY  1Q09 

Chapter  58,  P.  L.  1914. 

A  Supplement  to  an  act  entitled  "An  act  to  tax  the  transfer  of  property,  of 
resident  and  nonresident  decedents,  by  devise,  bequests,  descent,  distribution 
by  statute,  gift,  deed,  grant,  bargain,  and  sale,  in  certain  cases,"  approved 
April  twentieth,  one  thousand  nine  hundred  and  nine. 

BE  IT  ENACTED  by  the  Senate  and  General  Assembly  of  the  State  of  New  Jersey: 

1.  Whenever  a  foreign  executor,  administrator  or  trustee  shall  desire  to  transfer 
stock  in  a  New  Jersey  corporation,  owned  by  a  nonresident  decedent,  it  shall  and 
may  be  lawful  for  the  Comptroller  of  the  Treasury  of  this  State  to  issue  a  waiver 
for  the  transfer  of  said  stock  upon  such  foreign  executor,  administrator  or  trustee 
paying  to  the  Comptroller  of  the  Treasury  a  five  per  centum  tax,  based  upon  the 
full  value  of  the  said  shares  of  stock  or  property.    If  after  said  transfer  it  shall 
be  ascertained  by  the  Comptroller  of  the  Treasury  that  the  said  stock  or  property 
was  not  liable  to  said  full  five  per  centum  tax,  said  Comptroller  of  the  Treasury 
shall  by  his  check  pay  to  said  executor,  administrator  or   trustee   the  amount 
overpaid  to  the  State  Comptroller.     For  the  purpose  of  carrying  into  effect  the 
provisions    of   this   act,   the  Comptroller    of   the    Treasury    is    hereby   expressly 
authorized  to  maintain  a  separate  fund  into  which  shall  be  paid  the  amount  of 
taxes  as  aforesaid,  and  when  the  exact  or  precise  tax  which  the  stock  or  property 
in  New  Jersey  is  liable  for  shall  have  been  ascertained,  the  Comptroller  of  the 
Treasury  shall  pay  to  the  Treasurer  of  the  State  of  New  Jersey,  the  amount  of 
said  tax  so  ascertained  to  be  due. 

2.  This  act  shall  take  effect  immediately. 
Approved,  March  26th,  1914. 


NEW  JERSEY  FORMS. 

TRANSFER  INHERITANCE  TAX,  NONRESIDENT  DECEDENT. 

STATE  OF  NEW  JERSEY. 
OFFICE  OF  THE  COMPTROLLER  OF  THE  TREASURY. 

Trenton ,  19 . 

N  BE 

ESTATE  OF 


LATE  OF  

In  Reply  to  Letter  of ,  191. .. 

Dear  Sir: 

Herewith  enclosed  find  a  form  of  affidavit  indicating  the  requirements  of  this 
Department  with  reference  to  the  estate  of  a  nonresident  decedent.  This  affidavit 
should  be  completed  in  detail  and  returned  to  this  Department. 

The  proceeding  will  receive  no  attention  whatsoever  unless  there  is  a  strict 
compliance  with  all  the  requirements  indicated  in  said  affidavit. 

As  the  Department  indices  are  kept  by  estates,  all  communications  should 
indicate  plainly  the  estate  by  name.  Certificates  of  shares  of  stock  are  neither 
desired,  required  nor  necessary  and  must  not  be  forwarded  to  this  Department. 
READ  CAREFULLY  THE  INSTRUCTIONS  PRINTED  IN  THE  AFFIDAVIT.  THEY  ARE  VERY 
IMPORTANT. 

Very  respectfully, 

NEWTON  A.  K.  BUGBEE, 

Comptroller. 

64 


1010 


THE  STATE  STATUTES 


STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  NONRESIDENT  DECEDENT. 


IN  THE  MATTER  OF  THE  ESTATE  OF 


1 


[Administrator 
Executor 
Affidavit  of 
Late  of  J 

State  of   ) 

County  of j  8S': 

,  Executor        Administrator        of  the  estate 

of  the  above-named  decedent,  being  duly  sworn,  depose         and  say       : 

Decedent  died  {  |SS£te  }      ,1»,» 

Address  of  deponent  or  deponents  is 

Attorney  of  Estate  is 

Address  of  Attorney  is 

Total  amount  of  real  estate,  less  mortgages,  Schedule  A $ 

Total  amount  of  personal  estate,  Schedule  B $ 

Total  amount  of  estate  wherever  situate $ 

Total  amount  of  debts  (exclusive  of  mortgages  on  real  estate), 
including  funeral,  administration  and  other  expenses,  de- 
tailed in  Schedule  C $ 

Net  estate $ 

Property  owned  by  decedent  at  date  of  death  and  subject  to 
the  jurisdiction  of  State  of  New  Jersey: 

Real  estate,  less  mortgages $ 

Personal    estate    $ 

Total    amount    of    real    and    personal    estate    subject    to 

jurisdiction  of  the  State  of  New  Jersey,  Schedule  D . .     $ 

Deponent    further    says    that    the   decedent    was   not    possessed    of    any    other 
property  subject  to  the  jurisdiction  of  the  State  of  New  Jersey. 

The  names  of  beneficiaries  and  relationship  of  each  to  decedent,  etc.,  are  as 
follows : 

Age  of  Life 

Survived          Tenants  or 
Decedent       Annuitants  at        Interest  of 
State  Yes          Death  of  Beneficiary 

Names  Relationship  or  No  Decedent  in  Estate 


Deponent  further  says  that  all  of  the  above-named  beneficiaries  survived  the 
decedent  and  are  still  living  with  the  exception  of 

Names  Date  of  Death  Residence 


Sworn   and   subscribed   before   me   this 
day  of ,  A.  D.  19. . . 


Executor 
Administrator 


NEW  JERSEY  1011 

IMPORTANT — KEAD   FOLLOWING   INSTRUCTIONS. 

If  decedent  died  TESTATE  attach  Certified  copy  of  Will  and  Certificate  of  Quali- 
fication of  Executors. 

If  decedent  died  INTESTATE  attach  Certificate  of  Appointment  of  Administrator. 

If  this  affidavit  is  made  by  an  administrator  strike  out  the  word  "Executor" 
wherever  found  herein,  and  if  by  an  executor  strike  out  the  word  "Adminis- 
trator" wherever  found. 

Administrators  with  will  annexed  will  use  the  letters  "C.  T.  A."  and  forward 
certified  copy  of  will. 

All  papers  must  be  certified  by  the  public  official  under  whose  jurisdiction  the 
estate  is,  whether  it  be  surrogate,  probate  judge  or  by  whatever  title  such 
official  may  be  designated. 

ALL   DOCUMENTS  REMAIN   ON   FILE  IN   DEPARTMENT   OF   THE   STATE   COMPTROLLER  as 

his  authority  and  voucher  for  action  taken. 
Unauthenticated  statements  are  not  acceptable.     Answer  each  question  in  detail. 

Make  each  schedule  in  full  detail. 

Relationship  of  Beneficiaries  to  decedent,  whether  or  not  such  beneficiaries  sur- 
vived decedent  and  the  interest  of  the  beneficiary  in  the  estate,  are  the 
important  factors  respecting  Transfer  Inheritance  Tax.  The  age  at  time 
of  death  of  decedent,  of  Beneficiaries  who  are  life-tenants  or  annuitants,  is 
information  absolutely  necessary. 
Notaries  public  must  affix  seal  or  Certificate  of  Appointment  to  Affidavit. 

When  decedent  died  prior  to  April  20,  1909.     In  lieu  of  above  form. 
Establish  this  fact  by  certificate  of  public  official  authorized  by  law  to 

so  certify. 

Supply  certificate  of  appointment  of  executor  or  administrator. 
Supply   affidavit   of   executor   or   administrator   setting   forth  in   detail 


Note 


the  following  data:      Description   of   any  and   all  property,   real   or 


personal,  subject  to  the  jurisdiction  of  the  State  of  New  Jersey  and 
owned  by  the  decedent  at  date  of  birth;  a  recital  stating  whether 
or  not  the  beneficiaries  are  still  living;  if  any  have  died,  give  names, 
dates  of  death,  and  places  of  residence  at  date  of  death.  Attach 
certified  copy  of  will,  if  decedent  died  testate. 
If  a  tax  is  due,  consent  permitting  the  transfer  of  shares  of  stock  of  New  Jersey 
corporation  will  not  be  granted  unless  and  until  said  tax  is  paid.  Security 
is  not  acceptable  in  lieu  thereof.  However,  consent  to  transfer  will  be 
granted  upon  payment  of  5%  of  the  full  market  value  of  the  stock  or  prop- 
erty. If,  after  said  transfer,  it  shall  be  ascertained  by  the  Comptroller  of 
the  Treasury  that  said  stock  or  property  was  not  liable  to  said  full  5%  tax, 
the  Comptroller  of  the  Treasury  will  return  to  the  executor,  administrator, 
trustee  or  other  representative  the  amount  overpaid. 


STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  NONRESIDENT  DECEDENTS. 
Attached  to  and  part  of  affidavit. 

SCHEDULE  A. 

Real  Property  WHEREVER  SITUATE,  with  statement  of   liens   and   encumbrances 
upon  each  parcel  at  death  of  decedent. 


Assessed  Value 
for  Year  of 
Decedent  's  Death 

Estimated 
Market  Value 

Value  of 
Equity 

. 

IMPORTANT. 


The  proceeding  will  receive  no  attention  whatsoever  unless  this  schedule  is 
complete  in  every  detail. 


1012  THE  STATE  STATUTES 

STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  NONRESIDENT  DECEDENTS, 
Attached  to  and  part  of  affidavit. 

SCHEDULE  B 

PERSONAL    PROPERTY    WHEREVER    SITUATE. 

(Corporate  Stocks. — State  the  correct  corporate  title,  the  number  and  kind  of 

shares,  the  par  and  market  values. 
(Corporate    Bonds. — State    correct    corporate    title,    nature    of    bond,    year    due, 

and  rate   of  interest.     State  the   amount   of   accrued  interest   computed  to 

the  date  of  death  of  decedent. 
(Bonds    and    Mortgages,    Notes,    Etc. — Short    description    of    each.      State    the 

amount  of  accrued  interest  computed  to  the  date  of  death  of  decedent.) 
Cash  in  hand  and  on  deposit,  bonds  and  mortgages,  promissory  notes,  claims, 

insurance,    corporate    bonds    and    stocks    and    all    other    personal    property 

wherever  situate. 

Estimated 
Market  Value 


IMPORTANT. 

The   proceeding    will    receive   no    attention    whatsoever    unless    this    schedule    is 

complete  in  every  detail. 


STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  NONRESIDENT  DECEDENTS. 
Attached  to  and  part  of  affidavit. 

SCHEDULE  C 

DETAILS   OF  DEBTS,   OTHER   THAN    MORTGAGES    ON    REAL    ESTATE. 

(If  any  claims  are  securad  by  collateral,  state  what  property  has  been  pledged.) 
Debt  or  Claim  of  Nature  of   Same  Amount 

Funeral  expenses 

Administration  expenses  (estimated)    

Counsel  Fees  

Executor's  or  Administrator's  Commissions. 


(Detail  other  Debts) 

IMPORTANT 

The    proceeding    will    receive    no    attention    whatsoever    unless    this    schedule    is 
complete  in  every  detail. 


STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  NONRESIDENT  DECEDENTS, 
Attached  to  and  part  of  affidavit. 

SCHEDULE  D 

Details  of  Real  and  Personal  Property  subject  to  the  jurisdiction  of  the  State 
of  New  Jersey.  CONSENTS  TO  TRANSFER  WILL  BE  GRANTED  ONLY  ON  PROP- 
ERTY INCLUDED  IN  THIS  SCHEDULE. 


Estimated 
Market  Value 



IMPORTANT. 

The   proceeding   will    receive   no    attention    whatsoever    unless    this    schedule    is. 
complete  in   every   detail. 


NEW  JERSEY  1013 

STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX. 

IN  THE  MATTER  OF  THE  APPRAISEMENT  OF  1 
THE  ESTATE  OF 

I.    Affidavit 


Deceased. 


STATE  OF  NEW  JERSEY, 
COUNTY  OF   . 


>  ss. 


,  being  duly  sworn  according  to  law  on 

oath  says  that  he  resides  at   ,  County  of   , 

New  Jersey ;  that ,  who  resided  at  the  time 

of  death  at   ,  County  of    ,  New  Jersey, 

departed  this  life  on  the  day  of   ,  19. . . ; 

that  this  deponent  is  a of  said  decedent. 

(Relationship.) 

That  said  decedent  died  intestate  and  that  no  application  for  letters  of  ad- 
ministration has  been,  or  will  be,  made. 

That  the  following  are  the  names  and  addresses  of  the  heirs-at-law  and  next 
•of  kin  of  said  decedent. 

Names  and  Addresses.  Relationship. 


That  said  decedent  was  not  possessed  of  any  real  property. 

That  decedent  was  possessed  of  the  following  personal  property: 

Deposit  with  standing  to  the 

(Name  of  Bank) 

credit  of amounting  to  $ 

Deposit    with    standing   to    the 

(Name  of  Bank) 
credit  of  amounting  to  $ 

DETAIL  OTHER  PERSONAL  PROPERTY. 


Deponent  further  says  that  the  said  decedent  was  not  possessed  of  any  other 
property,  real  or  personal,  except  as  hereinabove  recited;  that  the  facts  herein 
contained  are  true;  that  this  affidavit  is  made  for  the  purpose  of  inducing 
the  Comptroller  of  the  Treasury  of  the  State  of  New  Jersey  to  grant  consents 
to  the  transfer  of  the  assets  of  said  decedent. 


Sworn  to  and  subscribed  before  me  this 
day  of 19... 


STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  RESIDENT  DECEDENT. 


Affidavit  of  Executor 
Administrator. 


Deceased. 


STATE  OF  NEW  JERSEY, 
COUNTY  OF   . 


I  ss. 


: .    Administrator 

Executor  of  the  estate  of  the  above-named  decedent  being  duly  sworn  in  this 
proceeding  for  the  determination  of  the  tax,  if  any,  to  be  paid  upon  the  assets 


1014  THE  STATE  STATUTES 

of  the  said  estate  under  the  Act  in  Relation  to  Taxable  Transfers  of  property, 
deposes  and  says: 

FIRST  :  That  the  said  decedent  died  a  resident  of  , 

County  of  ,  State  of  New  Jersey,  on  the  

day  of ,  192. . .,  Intestate,  leaving  a  Last  Will  and  Testament, 

a  true  copy  of  which  is  hereto  attached  and  made  part  thereof,  which  was  duly 

admitted  to  probate  by  the  Surrogate  of  the  County  of  

on  the day  of  ,  192 . . . ,  and  that  Letters  of  Admin- 
istration Testamentary  were  duly  issued  by  the  said  Surrogate  of  the  County 

of on  the  day  of  ,  192...,  to 

this  deponent,  wsoe  post-office  address  is  , 

,  whose  post-office  address  is  

and  ,  whose  post-office  address  is  

SECOND:  That  as  such  administrator  executor  deponent  is  personally  familiar 
with  the  affairs  of  said  estate,  the  property  constituting  the  assets  thereof  and 
their  fair  market  value,  and  with  the  debts,  expenses  and  charges  properly  and 
legally  allowable  as  deductions  therefrom.  That  the  decedent  at  the  time  of 
h . .  death  had  no  safe  deposit  box  except  

THIRD:  That  Schedule  A  attached  hereto  and  made  part  hereof  sets  forth 
fully  and  in  detail  all  the  property  in  the  State  of  New  Jersey  of  which 
decedent  died  seized  and  possessed,  or  in  which  ..he  had  any  right,  title  or 
interest  at  the  time  of  h . .  death,  or  of  which  . .  he  made  any  deed,  grant, 
bargain,  sale  or  gift  in  contemplation  of  h . .  death,  or  intended  to  take  effect, 
in  possession  or  enjoyment,  at  or  after  h..  death,  or  which  by  reason  thereof 
fell  into  or  became  part  of  the  assets  of  this  estate  by  reversion,  remainder  or 
otherwise,  excepting  such  as  may  have  passed  by  virtue  of  the  exercise  by  the 
decedent  of  any  power  of  appointment  vested  in  h . .  by  the  Will  or  Deed  or 
other  instrument  of  another,  and  enumerated  in  Schedule  C.  It  also  sets  forth 
a  statement  of  the  liens  and  encumbrances  upon  each  parcel  of  real  estate  at 
the  date  of  death,  giving  in  the  case  of  mortgages  the  amount,  date,  place, 
liber  and  page  of  record  thereof.  It  also  sets  forth  in  the  first  marginal  column 
the  assessed  valuation  for  each  of  said  parcels  and  in  the  second  marginal  column 
the  estimated  market  value  thereof  as  of  the  date  of  death  of  said  decedent,  and 
in  the  third  marginal  column  the  value  of  the  decedent's  equity  in  said  property. 

FOURTH:  That  Schedule  B  attached  hereto  and  made  part  hereof  sets  forth 
fully  and  in  detail  all  the  personal  property  wheresoever  situated  owned  by 
the  decedent  or  in  which  said  decedent  had  any  right,  title  or  interest  at  the 
time  of  h . .  death,  or  of  which  .  .  he  made  any  deed,  grant,  bargain,  sale  or 
gift  in  contemplation  of  h . .  death,  or  intended  to  take  effect,  in  possession  or 
enjoyment,  at  or  after  h..  death,  or  which  by  reason  thereof  fell  into  or 
became  part  of  the  assets  of  this  estate,  by  reversion,  remainder  or  otherwise, 
excepting  such  as  may  have  passed  by  virtue  of  the  exercise  by  the  decedent 
of  any  power  of  appointment  vested  in  h . .  by  the  Will  or  Deed  or  other 
instrument  of  another,  and  enumerated  in  Schedule  C.  It  also  sets  forth  all  of 
the  moneys  left  by  the  decedent  at  the  time  of  h..  death,  whether  in  h.. 
immediate  possession,  standing  to  h..  credit  or  in  which  ..he  had  any  right, 
title  or  interest,  in  banks  of  deposit,  savings  banks,  trust  companies,  or  other 
institutions,  whether  individually  or  in  trust  for  or  jointly  with  any  other 
person,  giving  also  separately  the  accrued  interest  thereon,  if  any,  down  to 
the  last  interest  day  prior  to  decedent's  death  in  the  case  of  savings  banks, 
and  down  to  the  date  of  decedent's  death  in  all  other  cases.  It  also  sets  forth 
all  wearing  apparel,  jewelry,  silverware,  pictures,  books,  works  of  art.  house- 
hold furniture,  horses,  carriages,  automobiles,  boats,  and  any  and  all  other 
personal  chattels  of  whatsoever  kind  or  nature,  left  by  decedent,  together  with 
the  fairly  estimated  market  value  thereof.  It  also  sets  forth  a  statement  of 
all  bonds  and  mortgages  held  by  decedent  and  of  all  claims  due  and  owing 
decedent  at  the  time  of  h . .  death,  and  of  all  the  promissory  notes  or  other 
instruments  in  writing  for  the  payment  of  money  of  which  . .  he  died  possessed, 
of  whatsoever  nature,  with  interest  thereon,  if  any,  giving  the  face  values 
and  estimated  fair  market  values  thereof,  and  if  such  estimated  fair  market 
values  be  less  than  the  face  value,  setting  forth  in  brief  the  reason  for  such 
depreciation  as  to  each  item.  It  also  sets  forth  a  statement  of  any  and  all 


NEW  JERSEY  1015 

moneys  payable  to  the  estate  from  life  insurance  policies  carried  by  decedent. 
It  also  sets  forth  all  the  corporate  stocks,  bonds  and  accrued  interest  thereon 
to  the  date  of  decedent's  death,  or  other  investment  securities  owned  by  the 
decedent  at  the  time  of  h . .  death,  with  the  market  value  thereof  at  such  time, 
and  in  the  case  of  rare  and  unlisted  corporate  securities,  giving  the  Stale  of 
incorporation  of  the  corporation  issuing  the  same,  its  capitalization,  the  value 
and  nature  of  its  assets,  its  liabilities,  its  surplus,  the  book  value  of  its  stock, 
the  dividends  paid,  and  any  other  facts  which  may  5"e  pertinent  affecting  the 
value  of  said  securities.  It  also  sets  forth  the  interest  of  decedent  at  the 
time  of  h .  .  death  in  any  copartnership  or  business,  stating  the  nature  and 
location  thereof,  the  total  capital  employed,  the  gross  profits,  expenses  and  net 
profits  of  the  business  for  at  least  three  years  prior  to  decedent's  death,  and 
any  other  facts  pertaining  to  such  business  as  may  be  pertinent  to  a  fair  and 
just  appraisal  of  decedent's  interest  in  said  business  and  good-will  thereof. 
It  also  sets  forth  in  itemized  form,  together  with  the  fair  market  value  thereof, 
any  other  property  owned  or  left  by  the  decedent  at  the  time  of  h .  .  death. 

FIFTH:  That  Schedu'e  C  attached  hereto  and  made  part  hereof  sets  forth 
all  the  property,  real  and  personal,  which  passed  at  decedent's  death  by  virtue 
of  the  exercise  by  h .  .  of  any  power  of  appointment  vested  in  h .  .  by  the 
Will,  Deed  or  instrument  of  another,  together  with  the  fair  market  value  of 
each  and  every  item  thereof  and  a  statement  in  brief  of  the  sources  and  deriva- 
tion of  such  power,  copies  of  which  Will,  Deed  or  other  instrument  are  sub- 
mitted herewith.  It  also  sets  forth  all  sums  by  way  of  commissions  properly 
and  legally  chargeable  against  such  property. 

SIXTH:  That  Schedule  D  attached  hereto  and  made  part  hereof  sets  forth 
the  valid  debts  due  and  owing  by  decedent  at  the  time  of  h . .  death  and 
allowed  as  just  and  fair  by  the  Administrator  Executor,  together  with  any 
and  all  items  claimed  by  the  Administrator  Executor  as  proper  deductions 
herein.  It  does  not  include  any  claims  as  enter  into  the  computation  of 
decedent's  interest  in  any  copartnership  or  business.  It  also  sets  forth  the 
funeral  expenses,  administration  expenses,  counsel  fees  paid  or  estimated. 

SEVENTH:  That  Schedule  E  attached  hereto  and  made  part  hereof  sets  forth 
the  names  and  addresses  of  all  persons  beneficially  interested  in  this  estate,  at 
the  time  of  decedent's  death,  the  nature  of  their  respective  interests,  their 
relationship,  if  any,  to  the  decedent,  together  with  the  ages  at  the  time  of 
decedent's  death  of  all  minors,  annuitants  and  beneficiaries  for  life  under 
decedent's  Will,  if  any.  It  also  contains  a  statement  showing  which  of  the 
beneficiaries  named  in  decedent's  Will,  if  any,  died  prior  to  decedent,  the 
dates  of  their  deaths,  their  survivors,  and  the  relationship  of  such  survivor 
to  decedent. 

EIGHTH:  That  the  deponent  has  made  due  and  diligent  search  for  property 
of  every  kind,  nature  and  description  left  by  the  decedent,  and  has  been  able 
to  discover  only  that  set  forth  in  the  schedules  attached  hereto  and  made  part 
hereof,  and  that  no  information  of  any  other  properly  of  the  decedent  has 
come  to  h . .  knowledge,  and  that  . .  he  verily  believes  that  decedent  left  no 
property  except  as  herein  set  forth.  That  all  the  sums  claimed  as  deductions 
in  the  schedules  hereto  attached  and  made  part  hereof  are  lawful,  just  and 
fair.  Deponent  further  says  that  wherever  in  any  of  the  schedules  the  word 
"  none "  has  been  written  in  or  wherever  such  schedule  has  been  left  blank, 
such  word  or  omission  is  to  be  taken  as  equivalent  to  an  affirmative  allegation 
by  deponent  that  the  decedent  left  no  property  of  the  kind  to  which  said 
schedule  relates. 

Subscribed  and   sworn  to  before  me  this 

day  of   

191.. 


1016 


THE  STATE  STATUTES 


STATE  or  NEW  JEBSEY,  TRANSFER  INHERITANCE  TAX,  RESIDENT  DECEDENT. 

SCHEDULE  "A." 


REAL  PROPERTY   IN    NEW   JERSEY,    WITH    STATEMENT   OF   LIENS    AND   ENCUMBRANCES 

UPON   EACH 

PARCEL   AT   DEATH   OF   DECEDENT. 

DESCRIPTION   OF  REAL  ESTATE 

Give  Lot  and  Block  or  Street 

Assessed 

Number,  or  a  Reference  to 

Value  for 

CAUTION 

the  Record  of  the  Convey- 

Year of 

Estimated 

Value 

(Do  not 

ance  by  Which  the  Dece- 

Decedent's 

Market 

of 

write   in 

dent  Took  Title. 

Death 

Value 

Equity 

this  space) 

. 


SCHEDULE  "  B." 

PERSONAL  PROPERTY. 

CASH    IN    HAND    AND   ON    DEPOSIT,    BONDS    AND    MORTGAGES,    PROMISSORY 

NOTES,   CLAIMS,   INSURANCE,   CORPORATE  BONDS  AND   STOCKS   AND 

ALL    OTHER    PERSONAL    PROPERTY    WHEREVER    SITUATE. 

CAUTION 

Estimated  ( Do  not  write  in 

Market  Value  this  space) 


SCHEDULE  "  C  " 

PROPEETY   PASSING   BY  DECEDENT'S   EXERCISE   OF   ANY   POWER   OF   APPOINTMENT 

VESTED  IN   HIM   UNDER  THE  WILL,   DEED  OR  OTHER 

INSTRUMENT    OF    ANOTHER. 


STATE  OF  NEW  JEBSEY,  TRANSFER  INHERITANCE  TAX,  RESIDENT  DECEDENT. 


SCHEDULE  "D" 

DEDUCTIONS 


Debt  or  Claim  of  Nature  of  Same 

(Funeral  expenses    

[Administration          expenses 

( estimated ) 

Counsel  Fees 

(Executor's     or     Administra- 
tor's Commissions  . 


(Detail  Other  Debts) 


(Commissions  must  not  be 
estimated  and  claimed  un- 
less a  final  account  is  to 
be  filed  with  the  Surro- 
gate. ) 


Amount 


CAUTION 

( Do  not 

write  in 

this  space) 


NEW  JERSEY 


101 


Names 


Relationship 


SCHEDULE  "  E  " 

BENEFICIABIES. 


Survived 
Decedent 
State  Yes 
or  No 


Age  of  Life 
Tenants  or 

Annuitants  at 
Death  of 
Decedent 


Interest  of 
Beneficiary 
in  Estate 


STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  RESIDENT  DECEDENT. 

IN  THE  MATTER  OF  THE  APPRAISEMENT  OF] 

THE  ESTATE  OF 

i  Affidavit  of  Executor 
Administrator. 

Deceased.  ] 

STATE  OF  NEW  JERSEY, 

COUNTY  OF 

,  Administrator 

Executor  of  the  estate  of  the  above-named  decedent  being  duly  sworn  in  this 
proceeding  for  the  determination  of  the  tax.  if  any,  to  be  paid  upon  the  assets 
of  the  said  estate  under  the  Act  in  Relation  to  Taxable  Transfers  of  Property, 
deposes  and  says: 

FIRST  :  That  the  said  decedent  died  a  resident  of  , 

County  of  ,  State  of  New  Jersey,  on  the  day 

of  ,  192...,  Intestate,  leaving  a  Last  Will  and  Testament, 

a  true  copy  of  which  is  hereto  attached  and  made  part  hereof,  which  was  duly 

admitted  to  probate  by  the  Surrogate  of  the  County  of  ,  on 

the day  of ,  192. . .,  and  that  Letters  of 

Administration  Testamentary  were  duly  issued  by  the  said  Surrogate  of  the 

County  of on  the day  of ,  192 . . . , 

to  this  deponent,  whose  post-office  address  is  , 

,  whose  post-office  address  is  , 

and ,  whose  post-office  address  is  

SECOND:  That  as  such  administrator  executor  deponent  is  personally  familiar 
with  the  affairs  of  said  estate,  the  property  constituting  the  assets  thereof  and 
their  fair  market  value,  and  with  the  debts,  expenses  and  charges  properly  and 
legally  allowable  as  deductions  therefrom.  That  the  decedent  at  the  time  of 
h . .  death  had  no  deposit  box  except 

THIRD:  That  Schedule  A  attached  hereto  and  made  part  hereof  sets  forth 
fully  and  in  detail  all  the  real  property  in  the  State  of  New  Jersey  of  which 
decedent  died  seized  and  possessed,  or  in  which  .  .he  had  any  right,  title  or 
interest  at  the  time  of  h. .  death,  or  of  which  ..he  made  any  deed,  grant, 
•  bargain,  sale  or  gift  in  contemplation  of  h..  death,  or  intended  to  take  effect, 
in  possession  or  enjoyment,  at  or  after  h. .  death,  or  which  by  reason  thereof  fell 
into  or  became  part  of  the  assets  of  this  estate  by  reversion,  remainder  or 
otherwise,  excepting  such  as  may  have  passed  by  virtue  of  the  exercise  by  the 
decedent  of  any  power  of  appointment  vested  in  h . .  by  the  Will  or  Deed  or 
other  instrument  of  another,  and  enumerated  in  Schedule  C.  It  also  sets  forth 
a  statement  of  the  liens  and  encumbrances  upon  each  parcel  of  real  estate  at 
the  date  of  death,  giving  in  the  case  of  mortgages  the  amount,  date,  place, 
liber  and  page  of  record  thereof.  It  also  sets  forth  in  the  first  marginal 
column  the  assessed  valuation  of  each  of  said  parcels  and  in  the  second 
marginal  column  the  estimated  market  value  thereof  as  of  the  date  of  death 
of  said  decedent,  and  in  the  third  marginal  column  the  value  of  the  decedent's 
equity  in  said  property. 


1018  THE  STATE  STATUTES 

FOURTH  :  That  Schedule  B  attached  hereto  and  made  part  hereof  sets  forth 
fully  and  in  detail  all  the  personal  property  wheresoever  situated  owned  by 
the  decedent  or  in  which  said  decedent  had  any  right,  title  or  interest  at  the 
time  of  h. .  death,  or  of  which  .  .he  made  any  deed,  grant,  bargain,  sale  or 
gift  in  contemplation  of  h. .  death,  or  intended  to  take  effect,  in  possession  or 
enjoyment,  at  or  after  h. .  death,  or  which  by  reason  thereof  fell  into  or 
became  part  of  the  assets  of  this  estate,  by  reversion,  remainder  or  otherwise, 
excepting  such  as  may  have  passed  by  virtue  of  the  exercise  by  the  decedent 
of  any  power  of  appointment  vested  in  h. .  by  the  Will  or  Deed  or  other 
instrument  of  another,  and  enumerated  in  Schedule  C.  It  also  sets  forth  all 
of  the  moneys  left  by  the  decedent  at  the  time  of  h . .  death,  whether  in  h . . 
immediate  possession,  standing  to  h. .  credit  or  in  which  ..he  had  any  right, 
title  or  interest,  in  banks  of  deposit,  savings  banks,  trust  companies,  or  other 
ininstitutions,  whether  individually  or  in  trust  for  or  jointly  with  any  other 
person,  giving  also  separately  the  accrued  interest  thereon,  if  any,  down  to  the 
last  interest  day  prior  to  decedent's  death  in  the  cases  of  savings  banks, 
and  down  to  the  date  of  decedent's  death  in  all  other  eases.  It  also  sets  forth 
all  wearing  apparel,  jewelry,  silverware,  pictures,  books,  works  of  art,  house- 
hold furniture,  horses,  carriages,  automobiles,  boats,  and  any  and  all  other 
personal  chattels  of  whatsoever  kind  or  nature,  left  by  decedent,  together  with 
the  fairly  estimated  market  value  thereof.  It  also  sets  forth  a  statement  of 
all  bonds  and  mortgages  held  by  decedent  and  of  all  claims  due  and  owing 
decedent  at  the  time  of  h. .  death,  and  of  all  the  promissory  notes  or  other 
instruments  in  writing  for  the  payment  of  money  of  which  ..he  died  possessed, 
of  whatsoever  nature,  with  interest  thereon,  if  any,  giving  the  face  values  and 
estimated  fair  market  values  thereof,  and  if  such  estimated  fair  market  values 
be  less  than  the  face  value,  setting  forth  in  brief  the  reason  for  such  deprecia- 
tion as  to  each  item.  It  also  sets  forth  a  statement  of  any  and  all  moneys 
payable  to  the  estate  from  life  insurance  policies  carried  by  decedent.  It  also 
sets  forth  all  the  corporate  stocks,  bonds  and  accrued  interest  thereon  to  the 
date  of  decedent's  death,  or  other  investment  securities  owned  by  the  decedent 
at  the  time  of  h. .  death,  with  the  market  value  thereof  at  such  time,  and  in 
the  case  of  rare  and  unlisted  corporate  securities,  giving  the  State  of  incor- 
poration of  the  corporation  issuing  the  same,  its  capitalization,  the  value  and 
nature  of  its  assets,  its  liabilities,  its  surplus,  the  book  value  of  its  stock,  the 
dividends  paid,  and  any  other  facts  which  may  be  pertinent  affecting  the  value 
of  said  securities.  It  also  sets  forth  the  interest  of  decedent  at  the  time  of 
h. .  death  in  any  copartnership  or  business,  stating  the  nature  and  location 
thereof,  the  total  capital  employed,  the  gross  profits,  expenses  and  net  profits 
of  the  business  for  at  least  three  years  prior  to  decedent's  death,  and  any 
other  facts  pertaining  to  such  business  as  may  be  pertinent  to  a  fair  and  just 
appraisal  of  decedent's  interests  in  said  business  and  good-will  thereof.  It  also 
sets  forth  in  itemized  form,  together  with  the  fair  market  value  thereof,  any 
other  property  owned  or  left  by  the  decedent  at  the  time  of  h. .  death. 

FIFTH:  That  Schedule  C  attached  hereto  and  made  part  hereof  sets  forth 
all  the  property,  real  and  personal,  which  passed  at  decedent's  death  by  virtue 
of  the  exercise  by  h. .  of  any  power  of  appointment  vested  in  h..  by  the  Will, 
Deed  or  instrument  of  another,  together  with  the  fair  market  value  of  each 
and  every  item  thereof  and  a  statement  in  brief  of  the  sources  and  derivation 
of  such  power,  copies  of  which  Will,  Deed  or  other  instrument  are  submitted 
herewith.  It  also  sets  forth  all  sums  by  way  of  commissions  properly  and  legally 
chargeable  against  such  property. 

SIXTH:  That  Schedule  D  attached  hereto  and  made  part  hereof  sets  forth 
the  valid  debts  due  and  owing  by  decedent  at  the  time  of  h . .  death  and 
allowed  as  just  and  fair  by  the  Administrator  Executor,  together  with  any  and 
all  items  claimed  by  the  Administrator  Executor  as  proper  deductions  herein. 
It  does  not  include  any  claims  as  enter  into  the  computation  of  decedent's 
interest  in  any  copartnership  or  business.  It  also  sets  forth  the  funeral  expenses, 
administration,  expenses,  counsel  fees  paid  or  estimated. 

SEVENTH:  That  Schedule  E  attached  hereto  and  made  part  hereof  sets 
forth  the  names  and  addresses  of  all  persons  beneficially  interested  in  this  estate, 
at  the  time  of  decedent's  death,  the  nature  of  their  respective  interests,  their 
relationship,  if  any,  to  the  decedent,  together  with  ages  at  the  time  of 
decedent's  death  of  all  minors,  annuitants  and  beneficiaries  for  life  under 


NEW  JERSEY 


1019 


decedent's  Will,  if  any.  It  also  contains  a  statement  showing  which  of  the 
beneficiaries  named  in  decedent's  Will,  if  any,  died  prior  to  decedent,  the  dates 
of  their  deaths,  their  survivors,  and  the  relationship  of  such  survivor  to  decedent. 

EIGHTH:  That  the  deponent  has  made  due  and  diligent  search  for  property 
of  every  kind,  nature  and  description  left  by  the  decedent,  and  has  been  able 
to  discover  only  that  set  forth  in  the  schedules  attached  hereto  and  made  part 
hereof,  and  that  no  information  of  any  other  property  of  the  decedent  has  come 
to  h...  knowledge,  and  that  ..he  verily  believes  that  decedent  left  no  property 
except  as  herein  set  forth.  That  all  the  sums  claimed  as  deductions  in  the 
schedules  hereto  attached  and  made  part  hereof  are  lawful,  just  and  fair. 
Deponent  further  says  that  wherever  in  any  of  the  schedules  the  word  "none" 
has  been  written  in  or  wherever  such  schedule  has  been  left  blank,  such  word  or 
omission  is  to  be  taken  as  equivalent  to  an  affirmative  allegation  by  deponent  that 
the  decedent  left  no  property  of  the  kind  to  which  said  schedule  relates. 

Subscribed  and  sworn  to  before  me  this 

day  of  

101.. 


STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  RESIDENT  DECEDENT. 

SCHEDULE  "A" 


REAL    PROPERTY    IN    NEW    JERSEY, 

WITH    STATEMENT   OF   LIENS    AND    ENCUMBRANCES 

UPON  EACH  PARCEL  AT  DEATH  OF  DECEDENT. 

DESCRIPTION  OF  REAL  ESTATE 

Give  Lot  and  Block  or  Street 

Assessed 

number,    or    a    Reference    to 

Value  for 

CAUTION 

the  Record  of  the  Conveyance 

Year  of 

Estimated 

Value 

(Do  not 

by  Which  the  Decedent  Took 

Decedent  's 

Market 

of 

write  in 

Title. 

Death 

Value 

Equity 

this  space) 

STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  RESIDENT  DECEDENT. 

SCHEDULE  "B" 

PERSONAL  PROPERTY. 

CASH   IN   HAND  AND  ON  DEPOSIT,   BONDS   AND   MORTGAGES,   PROMISSORY 

NOTES,  CLAIMS,  INSURANCE,  CORPORATE  BONDS  AND  STOCKS  AND 

ALL  OTHER  PERSONAL  PROPERTY  WHEREVER  SITUATE. 

CAUTION 

Estimated          (Do  not  write  in 
Market  Value  this  space) 


STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  RESIDENT  DECEDENT. 

SCHEDULE  "C" 

PROPERTY   PASSING   BY   DECEDENT'S   EXERCISE   OF  ANY   POWER   OF   APPOINTMENT 

VESTED   IN    HIM   UNDER   THE    WILL,    DEED   OR   OTHER 

INSTRUMENT  OF  ANOTHER. 


1020 


THE  STATE  STATUTES 


STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  RESIDENT  DECEDENT. 

SCHEDULE  "D" 


DEDUCTIONS. 


Debt  or  Claim  of 

Nature  of  Same 
Funeral  expenses 

Amount 

(Do  not 
write  in 
this  space) 

Administration   expenses 
(estimated) 

Counsel    Fees 

Executor  's     or     Administra- 
tor 's   Commissions 

(Detail  Other  Debts) 

(Commissions    must    not    be 
estimated  and  claimed  un- 
less a  final  account  is  to 
be    filed    with    the    Surro- 
gate.) 

STATE  OF  NEW  JERSEY,  TRANSFER  INHERITANCE  TAX,  RESIDENT  DECEDENT. 

SCHEDULE  "E" 

BENEFICIARIES. 


Age  of  Life 

Survived 

Tenants  or 

Decedent 

Annuitants  at 

Interest  of 

State  Yes 

Death  of 

Beneficiary 

Names 

Relationship 

or  No 

Decedent 

in  Estate 

NEW  MEXICO 


1021 


NEW  MEXICO. 

Under  Act  of  1921  taxes  all  property  of  nonresidents  within  the  State. 

TABLE  OF  RATES 


Class  or  Relationship 

Exemption 

Tax 

Parents,  lineal  descendants,  legally  adopted 
children,  daughter-in-law,  son-in-law,  brother 
or  sister. 

$10,000 
Proportioned  to  whole 
estate  in  case  of  non- 
residents. 

1%  on  all 

All  othera 

$500 

5%  on  all 

Note. —  The  exemption  of  $10,000  is  proportioned  to  the  whole  estate  when  part  ia  devised 
to  direct  heirs  and  part  to  collaterals  and  strangers. 


NOTE. — Under  the  Amendments  of  1921  the  body  of  the  act  remained  substantially  unchanged 
but  the  following  rates  and  exemptions  were  substituted  for  those  of  the  act  of  1919: 


BENEFICIARY 

New  Mexico 
exemption 

Tax  rate  on  entire 
amount  over  ex- 
emption 

Additional  tax 
on  grantee  or  donee 
in   conveyance 
taking  effect  upon 
death 

CLASS  1 
Father,    mother,    husband,    wife,   lineal   de- 
scendant, adopted  child. 

$10,000 
On  entire  estate 

1% 

1H% 

CLASS  1A 
Wife  or  widow  of  son,  husband  of  daughter, 
lineal  descendant  of  adopted  child,  brother 
or  sister. 

5% 

3% 

CLASS  2 
Other    collateral    kindred,  strangers    to    the 
blood,  corporations,  voluntary  associations 
or  societies. 

$500 
On    entire    estate 

5% 

3% 

All  gifts  of  paintings,  pictures,  books,  engrav- 
ings,   etc.,   for  free   exhibition   within   the 
state. 

Entirely  exempt 

THE  STATUTE. 

The  Legislature  of  New  Mexico  passed  the  first  inheritance  tax  act  of  that 
State  in  1919,  effective  January  1,  1920.  It  is  known  as  "House  Bill  No.  378," 
L.  1919,  and  is  given  in  full  as  follows: 

HOUSE  BILL  NO.  378. 

An  Act  providing  for  a  tax  on  transfers  of  property;  fixing  the  rate  thereof; 
providing  machinery  for  the  appraisal  of  decedents '  estates ;  for  the  collection 
of  such  taxes,  and  repealing  all  acts  and  parts  of  acts  in  conflict  with  this  act. 
Be  it  enacted  by  the  Legislature  of  the  State  of  New  Mexico  : 

Section  1.  Definitions.  The  words  "estate"  and  "property"  as  used  in  this  act 
shall  be  taken  to  mean  the  property  or  interest  therein  passing  or  transferred  to 
individual  or  corporate  legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees,  or 
vendees,  and  not  as  the  property  or  interest  therein  of  the  decedent,  grantor, 
donor,  or  vendor,  and  shall  include  all  property  or  interest  therein,  whether  situ- 
ated within  or  without  this  State.  The  words  "tangible  property"  as  used  in 
this  act  shall  be  taken  to  mean  corporeal  property  such  as  real  estate  and  goods, 
wares  and  merchandise,  and  shall  not  be  taken  to  mean  money,  deposits  in  banks, 
shares  of  stock,  bonds,  notes,  credits,  or  evidence  of  an  interest  in  property,  or 
evidences  of  debt.  The  words  "intangible  property"  as  used  in  this  act  shall  be 
taken  to  mean  incorporeal  property,  including  money,  deposits  in  banks,  shares 


1022  THE  STATE  STATUTES 

of  stock,  bonds,  notes,  credits,  evidences  of  an  interest  in  property  and  evidences 
of  debt. 

§  2.  The  estate  of  every  deceased  person  to  the  amount  of  ten  thousand  dollars, 
when  said  estate  shall  pass  to  the  parent  or  parents,  lineal  descendants,  legally 
adopted  child,  lineal  descendants  of  any  legally  adopted  child,  the  wife  or  widow 
of  a  son,  whether  such  son  was  born  in  wedlock  or  adopted,  the  husband  of  a 
daughter,  whether  such  daughter  was  born  in  wedlock  or  adopted,  or  the  brother 
or  sister  of  the  decedent,  and,  in  addition  to  said  amount,  all  gifts  of  paintings, 
pictures,  books,  engravings,  bronzes,  curios,  bric-a-brac,  arms,  and  armor,  and 
collection  of  articles  of  beauty  or  interest,  made  by  will  to  any  corporation  or 
institution  located  in  this  State  for  free  exhibition  and  preservation  for  public 
benefit;  also,  in  addition  to  said  amount  every  devise,  bequest  or  inheritance  not 
exceeding  five  hundred  dollars  in  amount  or  appraised  value  passing  to  other 
kindred  or  strangers  to  the  blood,  or  to  a  corporation,  voluntary  association  or 
society,  shall  be  exempt  from  the  payment  of  any  succession  tax;  and,  subject 
to  such  exemption,  the  estate  of  every  deceased  person  shall  be  subject  to  the  tax 
provided  in  section  3  hereof.  When  a  portion  of  the  property  passes  to  or  for  the 
use  of  the  parent  or  parents,  husband,  wife,  lineal  descendants,  legally  adopted 
child,  lineal  descendants  of  any  legally  adopted  child,  the  wife  or  widow  of  a  son, 
whether  such  son  was  born  in  wedlock  or  adopted,  or  the  brother  or  sister  of  the 
decedent  and  the  remaining  portion  to  other  collateral  kindred  or  strangers  to  the 
blood,  or  to  a  corporation,  voluntary  association  or  society,  the  amount  exempted 
from  taxation  shall  be  that  proportion  of  ten  thousand  dollars  which  the  value  of 
the  property  passing  to  those  persons  mentioned  in  the  first  class  bears  to  the 
total  value  of  the  whole  estate.  The  amount  of  the  property  of  estates  of  non- 
resident decedents  which  shall  be  exempt  from  the  payment  of  a  succession  tax 
shall  be  only  that  proportion  of  the  whole  exempted  amount  which  is  provided  for 
the  estates  of  resident  decedents  which  the  amount  of  the  estate  of  the  nonresident 
which  is  actually  or  constructively  in  this  State  bears  to  the  total  value  of  the 
nonresident  decedent's  estate  wherever  situated. 

§  3.  In  all  such  estates  any  property  within  the  jurisdiction  of  this  State,  and 
any  interest  therein,  whether  tangible  or  intangible,  and  whether  belonging  to 
parties  in  this  State  or  not,  which  shall  pass  by  will  or  by  inheritance  or  by  other 
statutes  to  the  parent  or  parents,  husband,  wife,  or  lineal  descendants,  or  legally 
adopted  child  of  the  deceased  person,  shall  be  liable  to,  and  there  is  hereby 
imposed  thereon,  a  tax  of  one  per  centum  of  its  value  for  the  use  of  the  State ;  and 
any  such  estate  or  interest  therein  which  shall  so  pass  to  collateral  kindred,  or  to 
strangers  to  the  blood,  or  to  any  corporation,  voluntary  association,  or  society, 
shall  be  liable  to,  and  there  is  hereby  imposed  thereon,  a  tax  of  five  per  centum 
of  its  value  for  the  use  of  the  State.  All  executors  and  administrators  shall  be 
liable  for  all  such  taxes,  with  interest  thereon  at  the  rate  of  nine  per  centum  per 
annum  from  the  time  when  said  taxes  shall  become  payable  until  the  same  shall 
have  been  paid  as  hereinafter  directed. 

§  4.  The  provisions  of  section  3  hereof,  shall  apply  to  the  following  property 
belonging  to  deceased  persons,  nonresidents  of  this  State,  which  shall  pass  by 
will  or  inheritance  under  the  laws  of  any  other  State  or  country,  and  such  property 
shall  be  subject  to  the  tax  prescribed  in  said  section :  All  real  estate  and  tangible 
personal  property,  including  moneys  on  deposit,  within  this  State;  all  intangible 
personal  property,  including  bonds,  securities,  shares  of  stock,  and  choses  in  action, 
the  evidences  of  ownership  of  which  shall  be  actually  within  this  State ;  shares  of 
the  capital  stock  or  registered  bonds  of  all  corporations  organized  and  existing 
under  the  laws  of  this  State,  the  certificates  of  which  stock  or  which  bonds  shall 
be  without  this  State,  where  the  laws  of  the  State  or  country  in  which  such 
decedent  resided  shall,  at  the  time  of  his  decease,  impose  a  succession,  inheritance, 
transfer,  or  similar  tax  upon  the  shares  of  the  capital  stock  or  registered  bonds 
of  all  corporations  organized  or  existing  under  the  laws  of  such  State  or  country, 
held  under  such  conditions  at  their  decease  by  residents  of  this  State. 

§  5.  When  a  will  conveying  property  situated  in  this  State  has  been  proved 
and  established  out  of  this  State,  in  and  by  a  court  of  competent  jurisdiction,  the 
executor  of  said  will,  or  any  person  interested  in  said  property,  may  produce  to 
the  probate  court  in  the  county  in  which  any  of  said  property  is  situated  a  duly 
authenticated  and  exemplified  copy  of  such  will,  and  of  the  record  of  the  proceed- 
ings proving  and  establishing  the  same,  and  request  that  such  copies  be  filed  and 
recorded,  which  request  shall  be  accompanied  by  a  full  and  correct  statement  in 


NEW  MEXICO  1023 

writing  of  all  property  and  estate  of  the  decedent  in  this  State;  and  if,  upon 
due  hearing  had  after  public  notice  and  such  citation  as  said  court  shall  order, 
no  sufficient  objection  shall  be  shown,  said  court  shall  order  said  copies  to  be  filed 
and  recorded,  and  they  shall  thereupon  become  part  of  the  files  and  records  of 
said  court,  and  shall  have  the  same  effect  upon  the  property  so  conveyed  as  if  said 
will  had  been  originally  proved  and  established  in  said  probate  court,  but  nothing 
in  this  section  shall  give  effect  to  a  will  made  in  this  State  by  an  inhabitant  thereof 
which  is  not  executed  according  to  the  laws  of  this  State.  All  property  so  passing 
shall  be  subject  to  all  laws  of  this  State  relative  to  inheritances  and  successions. 

§  6.  Whenever  ancillary  administration  has  been  taken  out  in  this  State  on  the 
estate  of  any  nonresident  decedent  having  property  subject  to  said  tax  under  the 
provisions  of  this  act,  the  probate  court  having  jurisdiction  shall  have  the  same 
power  in  relation  to  such  tax  and  shall  give  the  same  notice  to  the  State  Treasurer 
of  all  hearings  relating  thereto  as  is  required  in  the  case  of  the  estates  of  resident 
decedents,  and  with  the  same  right  of  appeal.  The  provisions  of  this  act  concern- 
ing notice  to  the  State  Tax  Commission  shall  not  apply  to  cases  where  ancillary 
administration  has  been  taken  out  in  this  State  upon  the  estates  of  nonresident 
decedents. 

§  7.  Where  ancillary  administration  has  not  been  taken  out  in  this  State  on  the 
estate  of  a  nonresident  decedent,  including  any  property  within  the  provisions  of 
section  4  of  this  act,  no  executor,  administrator,  or  trustee  appointed  under  the 
laws  of  any  other  jurisdiction  shall  assign,  transfer,  or  take  possession  of  any 
such  property  standing  in  the  name  or  belonging  to  the  estate  of,  or  held  in  trust 
for,  such  decedent  until  the  tax  prescribed  in  section  3  shall  have  been  paid  to 
the  State  Treasurer  or  retained  as  hereinafter  provided. 

§  8.  No  corporation  or  person  in  this  State  having  possession  of  or  control 
over  any  such  property,  including  any  corporation  any  shares  of  the  capital  stock 
of  which  may  be  subject  to  said  tax,  shall  deliver  or  transfer  the  same  to  such 
foreign  executor,  administrator,  or  trustee,  or  to  the  legal  representative  of  such 
decedent,  or  upon  their  order  or  request,  unless  notice  of  the  time  and  place  of 
such  intended  delivery  or  transfer  be  mailed  to  the  State  Tax  Commission  at  least 
ten  days  prior  to  said  delivery  or  transfer;  nor  shall  any  such  corporation  make 
any  such  delivery  or  transfer  without  retaining  a  sufficient  amount  of  said  prop- 
erty to  pay  any  such  tax  which  may  be  due  or  may  thereafter  become  due  under 
said  section  3,  unless  the  said  State  Tax  Commission  consents  thereto  in  writing. 
Failure  to  mail  such  notice,  or  to  allow  the  State  Tax  Commission  to  examine 
said  property,  or  to  retain  a  sufficient  amount  to  pay  such  tax  shall,  in  the  absence 
of  the  written  consent  of  payment  of  a  penalty  of  three  times  the  amount  of  such 
tax,  which  payment  shall  be  enforced  in  an  action  brought  in  the  name  of  the 
State. 

§  9.  Said  State  Tax  Commission  may  examine  said  property  at  the  time  of  said 
delivery  or  transfer,  and  it  shall  be  the  duty  of  the  said  Commission,  as  speedily 
as  possible  after  receiving  notice  of  said  property  or  of  the  intended  delivery  or 
transfer  thereof,  to  fix  the  valuation  of  such  property  for  the  purpose  of  assessing 
such  tax;  and  it  shall  assess  the  tax,  and  the  amount  thereof,  payable  on  said 
property.  Wherever  a  tax  is  assessed  on  such  property  by  such  State  Tax  Com- 
mission it  shall  forthwith  lodge  with  the  State  Treasurer  a  statement  showing  such 
valuation  with  the  amount  of  said  tax,  and  shall  give  notice  thereof  to  the  person 
or  corporation  having  possession  of  or  control  over  said  property.  Any  adminis- 
trator or  executor  appointed  under  the  laws  of  any  other  jurisdiction  who  is 
aggrieved  by  the  valuation  or  assessment  affixed  as  aforesaid  by  the  Tax  Com- 
mission, may,  within  twenty  days  after  the  date  of  the  filing  of  the  aforesaid 
statement  with  the  Treasurer,  apply  to  the  probate  court  in  any  district  in  which 
any  of  said  property  so  assessed  is  situated,  which  court  shall  have  full  power 
to  cause  a  revaluation  of  all  property  so  assessed  and  a  reassessment  of  the  tax 
thereon,  to  be  made  in  the  manner  provided  by  law  for  the  appraisal  of  and  the 
assessment  of  the  succession  tax  on  estates  of  resident  decedents,  and  subject  to 
the  same  right  of  appeal. 

§  10.  The  probate  court  having  jurisdiction  of  the  settlement  of  any  estate, 
shall,  within  ten  days  after  the  filing  of  a  will  or  the  application  for  letters  of 
administration,  if  in  its  opinion  said  estate  exceeds  in  value  said  sum  of  ten 
thousand  dollars,  send  to  the  Treasurer  of  the  State  a  certificate  of  the  filing  of 
such  will  or  application,  and  shall  within  ten  days  after  the  return  and  acceptance 
of  the  inventory  and  appraisal  of  any  such  estate  send  a  certified  copy  of  said 


1024  THE  STATE  STATUTES 

inventory  and  appraisal  to  the  Treasurer  of  the  State,  together  with  his  certificate 
as  to  the  correctness  in  his  opinion  of  said  inventory  and  appraisal;  and  if  no 
new  appraisal  is  made  as  hereinafter  provided  the  valuation  therein  given  shall  be 
taken  as  the  basis  for  computing  said  taxes.  The  said  probate  court  shall,  on  the 
application  of  the  Treasurer  of  the  State,  or  any  person  interested  in  the  succes- 
sion thereof  and  within  four  months  after  granting  administration,  appoint  three 
disinterested  persons  who  shall  view  and  appraise  such  property  at  its  actual 
value  for  the  purposes  of  said  tax,  and  make  return,  after  notice  and  hearing,  the 
valuation  therein  made  shall  be  binding  upon  the  persons  interested  and  upon  the 
State.  If  any  executor  or  administrator  shall  neglect  or  refuse  to  return  an 
inventory  and  appraisal  within  the  time  now  required  by  law,  unless  said  time 
shall  have  been  extended  by  said  court  for  cause,  after  hearing  and  such  notice 
as  the  probate  court  may  require  the  said  probate  court  may  remove  said  executor 
or  administrator  and  appoint  another  person  administrator  with  the  will  annexed, 
or  administrator,  as  the  case  may  be. 

§  11.  All  taxes  levied  and  collected  under  this  act,  less  necessary  expenses  of 
collection,  shall  be  paid  to  the  State  Treasurer,  for  the  benefit  of  the  general 
revenue  fund,  by  the  executor  or  administrator  within  twelve  months  of  the 
qualification  of  such  executor  or  administrator,  except  as  hereinafter  provided. 
If  for  any  cause  found  by  the  said  probate  court  to  be  reasonable  after  hearing 
and  notice  to  the  State  Treasurer,  the  executor  or  administrator  is  unable  to  pay 
said  tax  within  the  time  limited,  the  said  probate  court  shall  have  power  in  its 
discretion  to  extend  the  time,  not  exceeding  twelve  months,  for  the  payment  of 
said  taxes. 

§  12.  Where  any  estate  or  an  annuity  is  bequeathed  or  devised  to  any  person 
for  life  or  any  limited  period,  with  remainder  over  to  another  or  others,  and  all 
the  beneficiaries  are  within  the  same  class,  the  tax  shall  be  computed  on  and  paid 
as  aforesaid  out  of  the  principal  sum  of  property  so  bequeathed  or  devised.  Where 
a  life  estate  or  an  annuity  is  bequeathed  or  devised  to  a  parent  or  parents,  hus- 
band, wife  or  lineal  descendants,  or  legally  adopted  child,  and  remainder  over 
to  collateral  kindred,  or  to  strangers  to  the  blood,  or  to  a  corporation,  voluntary 
association,  or  society,  then  the  tax  of  one  per  centum  shall  be  paid  out  of  the 
principal  sum  or  estate  so  bequeathed  or  devised  for  life,  or  constituting  the  fund 
producing  said  annuity,  and  the  remaining  four  per  centum  due  from  collateral 
kindred  or  strangers  to  the  blood  shall  be  paid  out  of  the  said  principal  sum  or 
estate  at  the  expiration  of  the  particular  estate  or  annuity.  And  where  a  life 
estate  or  annuity  is  bequeathed  or  devised  to  collateral  kindred  or  strangers  to 
the  blood,  or  to  a  corporation,  voluntary  association,  or  society,  with  remainder 
to  parent  or  parents,  husband,  wife  or  lineal  descendants,  or  legally  adopted  child, 
a  tax  of  five  per  centum  shall  be  paid  as  aforesaid  to  the  Treasurer  of  the  State 
out  of  the  principal  sum  or  estate,  or  fund  producing  such  annuity;  on  the 
termination  of  said  life  estate  or  annuity  the  Treasurer  of  the  State  shall  refund 
and  pay  to  the  persons  or  person  entitled  to  the  remainder  four-fifths  of  said  tax. 
The  said  court  of  probate  shall  send  to  the  Treasurer  of  the  State  a  certificate 
of  the  date  of  the  death  of  said  life  tenant  or  annuitant  within  ten  days  after  the 
same  has  come  to  his  knowledge. 

§  13.  All  administrators  or  executors  shall  have  power  to  sell  so  much  of  the 
estate  as  will  enable  them  to  pay  said  tax.  In  case  specific  estate  or  property  is 
bequeathed  or  devised  to  any  person,  unless  the  legatee  or  devisee  shall  pay  to  the 
executor  the  amount  of  the  tax  due  thereon  under  the  provisions  of  section  3,  the 
executor  shall  sell  said  property  or  so  much  thereof  as  may  be  necessary  to  pay 
said  tax  and  the  fees  and  expenses  of  said  sale. 

§  14.  In  case  of  the  neglect  or  refusal  of  any  person  interested  to  apply  for 
letters  of  administration  within  thirty  days  after  the  death  of  any  intestate,  the 
State  Treasurer  may  apply  to  the  probate  court  having  jurisdiction  for  the 
appointment  of  an  administrator ;  and  thereupon  after  hearing  and  public  notice 
the  said  probate  court  shall  appoint  an  administrator  of  said  estate. 

§  15.  The  probate  court  having  either  principal  or  ancillary  jurisdiction  of  the 
settlement  of  the  estate  of  the  decedent,  shall  have  jurisdiction  to  hear  and 
determine  all  questions  in  relation  to  said  tax  that  may  arise  affecting  any  devise, 
legacy,  or  inheritance  under  section  3,  subject  to  appeal  as  in  other  cases,  and  the 
State  Treasurer  shall  represent  the  interests  of  the  State  in  any  such  proceeding. 

§  16.  No  final  settlement  of  the  account  of  any  executor  or  administrator  shall 
be  accepted  or  allowed  by  any  probate  court,  unless  it  shall  show  and  the  judge 


NEW  MEXICO  1025 

of  said  court  shall  find,  that  all  taxes  imposed  by  the  provisions  of  section  3 
hereof  upon  any  property  or  interest  belonging  to  the  estate  to  be  settled  by  said 
account,  shall  have  been  paid,  and  the  receipt  of  the  State  Treasurer  for  such  tax 
shall  be  the  proper  voucher  for  such  payment.  Settlement  of  account  not  allowed 
till  tax  is  paid. 

§  17.  All  transfers  and  alienations  by  deed,  grant,  or  other  conveyance,  of  real 
or  personal  estate  to  take  effect  upon  the  death  of  the  grantor  or  donor,  shall  be 
testamentary  gifts  within  the  taxation  purposes  of  section  3,  and  all  property 
so  conveyed  shall  be  conveyed  subject  to  the  tax  imposed  by  said  section  and  upon 
the  same  principles  and  percentages  regarding  the  degree  of  relationship;  and 
the  grantee  or  donee  of  any  such  estate,  shall,  upon  the  receipt  thereof,  pay  to 
the  State  Treasurer  a  tax  of  three  per  cent,  or  one-half  of  one  per  cent  of  the 
value  of  such  property,  according  to  his  aforesaid  degree  of  relationship  to  the 
grantor  or  donor,  and  the  executor  or  administrator  of  any  such  grantor  or  donor 
shall  at  once  communicate  to  the  State  Treasurer  his  knowledge  of  any  and  all 
such  conveyances.  No  executor,  administrator,  or  bailee  having  possession  of 
any  deed,  grant,  conveyance  or  other  evidence  of  such  transfer  or  alienation  shall 
deliver  the  same  or  anything  connected  with  the  subject  of  such  transfer  or  aliena- 
tion until  the  tax  aforesaid  has  been  paid  to  the  Treasurer  of  the  State. 

§  18.  Whenever  any  person  or  corporation  shall  exercise  the  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  act,  all  property  under  such  appointment  when  made,  shall  be 
deemed  to  be  taxable  under  the  laws  of  this  State  in  the  same  manner  as  though 
the  property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee 
of  such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will;  and 
whenever  any  person  or  corporation  possessing  such  power  of  appointment  so 
derived  shall  fail  or  omit  to  exercise  the  same  power  within  the  time  provided 
therefor,  in  whole  or  in  part,  the  passing  of  such  property  taxable  under  the  laws 
of  this  State  shall  be  deemed  to  take  place  to  the  extent  of  such  omission  or 
failure,  in  the  same  manner  as  though  the  persons  or  corporations  thereby  becom- 
ing entitled  to  the  possession  or  enjoyment  of  the  property  to  which  such  power 
related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to 
exercise  such  power,  taking  effect  at  the  time  of  such  omission  or  failure. 

§  19.  All  acts  and  parts  of  acts  inconsistent  with  the  provisions  of  this  act  are 
hereby  repealed  as  far  as  they  affect  the  provisions  hereof. 


65 


NEW  YORK. 

See  page  735. 


1026 


THE  STATE  STATUTES 


NORTH  CAROLINA. 

Taxes  all  property  of  nonresidents  within  the  State,  including  stock  in  domestic 
corporations. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OR  RELATIONSHIP 

Amount  of  exemption 

Graded  rates 

First 
$25,000 
above 
ex- 
emption 

$25,000 
to 
§100,000 

?  100,  000 
to 
$250,000 

$250,000 
to 
$500,000 

In 

fXffSS    of 

§500,000 

Lineal  issue,  lineal  ancestor, 
adopted  child,  husband  or 
wife,  son-in-law,  daughter- 
in-law,  stepchild  or  mutual- 
ly acknowledged  child. 

Widow,  $10,000.  Each 
minor  child,  $5,000; 
others,  $2,000; 
grandchildren  divide 
parents'  exemption.. 

1% 

2% 

3% 

4% 

£% 

Brother  or  sister  and  their 
descendants. 

If  less  than  $200  no 
tax. 

3% 

4% 

5% 

6% 

7% 

Other  collaterals  or 
strangers. 

If  less  than  $200  no 
tax. 

5% 

6% 

7% 

8% 

9% 

Religious,  charitable  or  edu- 
cational  corporations 
within  the  State. 

All. 

INHERITANCE  TAX  ACT  OF  1921. 

(With  changes  in  law  as  it  stood  in  1919  in  italics.) 
Rate  of  inheritance  tax. 

Section  6.  From  and  after  the  passage  of  this  act  all  real  and  personal  prop- 
erty of  whatever  kind  and  nature  which  shall  pass  by  will  or  by  the  intestate  laws 
of  this  State  from  any  person  who  may  die  seized  or  possessed  of  the  same  while 
a  resident  of  this  State,  whether  the  person  or  persons  dying  seized  thereof  be 
domiciled  within  or  out  of  the  State  (or  if  the  decedent  was  not  a  resident  of  this 
State  at  the  time  of  his  death,  such  property  or  any  part  thereof  within  this 
State),  or  any  interest  therein  or  income  therefrom  which  shall  be  transferred  by 
deed,  grant,  sale,  or  gift,  made  in  contemplation  of  the  death  of  the  grantor, 
bargainer,  donor,  or  assignor,  or  intended  to  take  effect  in  possession  or  enjoy- 
ment after  such  death,  to  any  person  or  persons  or  to  bodies  corporate  or  politic, 
in  trust  or  otherwise,  or  by  reason  whereof  any  person  or  body  corporate  or  politic 
shall  become  beneficially  entitled  in  possession  or  expectancy  to  any  property  or 
the  income  thereof,  shall  be  and  hereby  is  made  subject  to  a  tax  for  the  benefit 
of  the  State,  as  follows,  that  is  to  say: 

First.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  lineal  issue,  or  lineal  ancestor,  adopted  child,  or  husband  or 
wife,  or  son-in-law  or  daughter-in-law  or  stepchild  of  the  person  who  died  pos- 
sessed of  such  property  aforesaid,  or  any  person  to  whom  the  decedent  stood  in  the 
mutually  acknowledged  relation  of  a  parent,  and  who  began  such  relationship  at 
or  before  such  person's  fifteenth  birthday,  and  whose  relationship  was  continuous 
from  such  age  until  the  date  of  the  decedent 's  death,  at  the  following  rates  of  tax 
for  each  one  hundred  dollars  of  the  clear  market  value  of  such  interest  in  such 
property: 

Bate  of  Tax 

First  $25,000  above  exemption 1  per  cent 

Excess  over  $  25,000  and  up  to  $100,000 2  per  cent 

Excess  over  $100,000  and  up  to  $250,000 3  per  cent 

Excess  over  $250,000  and  up  to  $500,000 4  per  cent 

Excess  over  $500,000 5  per  cent 

The  persons  mentioned  in  this  class  shall  be  entitled  to  the  following  exemp- 
tions: Widows,  ten  thousand  dollars;  each  child  under  twenty-one  (21)  years  of 


NORTH  CAROLINA  1027 

age,  five  thousand  dollars;  all  other  beneficiaries  mentioned  in  this  subsection, 
two  thousand  dollars  each:  Provided,  grandchildren  shall  be  allowed  the  single 
exemption  of  the  child  they  represent,  and  in  case  of  specific  legacy  or  bequest 
the  proportion  of  exemption  to  which  they  would  be  entitled  if  .they  took  as 
representatives  of  the  parent. 

Second.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  or  descendant  of  the  brother  or  sister  or 
uncle  or  aunt  Toy  blood  of  the  person  who  died  possessed  as  aforesaid,  at  the  fol- 
lowing rates  of  tax  for  each  one  hundred  dollars  of  the  clear  market  value  of  such 
interest : 

Rate  of  Tax 

$25,000  or  less  3  per  cent 

Excess  over  $  25,000  and  up  to  $100,000 4  per  cent 

Excess  over  $100,000  and  up  to  $250,000 5  per  cent 

Excess  over  $250,000  and  up  to  $500,000 6  per  cent 

Excess  over  $500,000   7  per  cent 

Third.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  relationship  or  collateral  consanguinity 
than  is  hereinbefore  stated,  or  shall  be  a  stranger  in  blood  to  the  person  who 
died  possessed  as  aforesaid,  or  shall  be  a  body  politic  or  corporate,  at  the  following 
rates  of  tax  for  each  one  hundred  dollars  of  the  clear  market  value  of  such 
interest : 

Rate  of  Tax 

$25,000  or  less 5  per  cent 

Excess  over  $  25,000  and  up  to  $100,000 6  per  cent 

Excess  over  $100,000  and  up  to  $250,000 7  per  cent 

Excess  over  $250,000  and  up  to  $500,000 8  per  cent 

Excess  over  $500,000 9  per  cent 

Provided,  that  no  tax  be  imposed  or  collected  under  this  section  on  legacies  or 
property  passing  by  will  or  otherwise,  or  by  the  laws  of  this  State  to  religious, 
educational,  or  charitable  corporations  (not  conducted  for  profit)  in  this  State,  and 
this  provision  shall  apply  to  all  such  legacies  or  property  passing  by  will  or  by 
the  laws  of  this  State  since  March  twelve,  one  thousand  nine  hundred  and  thirteen ; 
nor  shall  any  tax  be  imposed  in  any  case  where  the  whole  amount  of  such  legacy 
or  devise  does  not  exceed  two  hundred  dollars  in  value. 

Fourth.  That  in  calculating  the  value  of  the  distributive  share  the  following 
deductions,  and  no  others,  shall  be  allowed:  Debts  of  the  decedent,  taxes 
accrued  and  unpaid  Federal  estates  taxes  and  estate  and  inheritance  taxes  paid 
to  other  States,  and  death  duties  paid  to  foreign  countries;  drainage  and  street 
assessments,  funeral  and  burial  expenses,  all  amounts  actually  expended  for 
monuments  not  exceeding  the  sum  of  five  hundred  dollars,  commissions  of  execu- 
tors and  administrators  actually  allowed  and  paid;  and  cost  of  administration, 
including  reasonable  attorneys'  fees. 

Fifth.  That  whenever  an  estate  subject  to  the  tax  under  this  act  shall  be 
settled  or  divided  among  the  heirs  at  law,  legatees,  or  devisees,  without  the 
qualification  and  appointment  of  a  personal  representative,  the  clerk  of  the 
Superior  Court  of  the  county  wherein  the  estate  is  situated  shall  certify  the  same 
to  the  State  Tax  Commission,  and  shall  also  require  such  heirs  at  law,  legatees, 
or  devisees  to  report  to  him  under  oath  the  value  of  said  real  and  personal  estate, 
and  shall  report  said  valuation  to  the  State  Tax  Commission.  The  clerk  is 
authorized  and  required  to  cite  all  interested  parties  to  appear  before  him  and 
make  the  report  herein  required  and  pay  to  him  the  amount  of  the  inheritance 
tax  due  upon  said  property. 

Sixth.  All  advancements  and  gifts  equal  to  or  in  excess  of  five  per  cent  of  the 
decedent's  estate  at  the  time  such  advancements  or  gifts  were  made,  and  made 
within  five  years  of  the  decedent's  death,  shall  be  prima  facie  made  in  con- 
templation of  death.  Any  transfers  or  conveyances  made  upon  consideration 
that  was  grossly  inadequate  within  the  same  period  shall  be  an  inheritance  to 
the  extent  that  the  consideration  was  inadequate  at  the  time  it  was  made. 

Seventh.  All  bonds  and  shares  of  stock  or  interest  therein  held  by  a  nonresi- 
dent of  this  state  in  any  company  incorporated  under  the  laws  of  some  other  State 
or  government,  which  company  owns  property  in  this  State  to  the  amount  of  fifty 


1028  THE  STATE  STATUTES 

per  cent  or  more  of  its  total  property,  shall  be  subject  to  the  tax  imposed  under 
section  six  hereof  computed  upon  a  valuation  which  shall  be  limited  to  that  part 
of  the  total  valuation  thereof  ivhich  tlte  property  owned  in  this  State  bears  to 
the  total  property  of  such  company. 

The  words  "such  property  or  any  part  thereof  or  interest  therein  within  this 
State ' '  shall  include  in  its  meaning  bonds  and  shares  of  stock  in  any  incorporated 
company  incorporated  in  this  State,  regardless  of  whether  or  not  any  such 
incorporated  company  shall  have  any  or  all  of  its  capital  stock  invested  in 
property  outside  of  this  State  and  doing  business  outside  of  this  State,  and  the 
tax  on  the  transfer  of  any  bonds  or  shares  of  stock  in  any  such  incorporated 
company  owning  property  and  doing  business  outside  of  this  State  shall  be 
paid  before  waivers  are  issued  for  the  transfer  of  such  bonds  or  shares  of  stock 
as  hereinabove  provided  for. 

The  words  ' '  estate ' '  and  ' '  property ' '  wherever  used  in  this  act,  except  where 
the  subject  or  context  is  repugnant  to  such  construction,  shall  be  construed  to 
mean  the  interest  of  the  testator,  intestate,  grantor,  bargainer  or  vendor,  passing 
or  transferred  to  the  individual  or  specific  legatee,  devisee,  heir,  next  of  kin, 
grantee,  donee  or  vendee,  not  exempt  under  the  provisions  of  this  act,  whether 
such  property  be  situated  within  or  without  this  State.  The  word  ' '  transfer ' '  as 
used  in  this  act  shall  be  taken  to  include  the  passing  of  property  or  any  interest 
therein,  in  possession  or  enjoyment,  present  or  future,  by  distribution,  by  statute, 
descent,  devise,  bequest,  grant,  deed,  bargain,  sale,  or  gift. 

If  the  incorporated  company  not  incorporated  in  this  State  and  owning  property 
in  this  State  be  a  railroad  company,  the  proportion  under  which  the  tax  shall  be 
paid  shall  be  the  proportion  which  the  miles  of  road  of  such  company  in  this 
State  bear  to  the  total  miles  of  road  of  such  company. 

Any  incorporated  company  not  incorporated  in  this  State  and  owning  property 
in  this  State  which  shall  transfer  on  its  books  the  bonds  or  shares  of  stock  of 
any  decedent  holder  of  shares  of  stock  in  such  company  exceeding  in  par  value 
five  hundred  dollars,  before  the  inheritance  tax,  if  any,  has  been  paid,  shall  become 
liable  for  the  payment  of  the  said  tax,  and  any  property  held  by  such  company 
in  this  State  shall  be  subject  to  execution  to  satisfy  same.  A  receipt  or  waiver 
signed  by  the  State  Tax  Commission  of  North  Carolina  shall  be  full  protection 
for  any  such  company  in  the  transfer  of  any  such  stock  or  bonds. 

The  State  Tax  Commission  shall  prepare  and  furnish,  upon  application,  blank 
forms  covering  such  information  as  may  be  necessary  to  determine  the  amount 
of  inheritance  tax  due  the  State  of  North  Carolina  on  the  transfer  of  any  such 
bonds  or  stock;  it  shall  determine  the  value  of  such  bonds  or  stock,  and  shall 
have  full  authority  to  do  all  things  necessary  to  make  full  and  final  settlement 
of  all  such  inheritance  taxes  due  or  to  become  due,  and  shall  make  prompt  return 
to  the  State  Treasurer  of  all  such  taxes  collected. 

The  State  Tax  Commission  shall  have  authority,  under  penalties  provided  in 
section  82  of  this  act,  to  require  that  any  reports  necessary  to  a  proper  enforce- 
ment of  this  act  be  made  by  any  such  incorporated  company  owning  property  in 
this  State. 

Whenever  any  person  or  corporation  shall  excercise  a  power  of  appointment 
derived  from  any  disposition  of  property  made  either  before  or  after  the  passage 
of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer  taxable 
under  the  provisions  of  this  act,  in  the  same  manner  as  though  the  property  to 
which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power 
and  had  been  bequeathed  or  devised  by  such  donee  by  will,  and  the  rate  shall  be 
determined  by  the  relationship  between  the  beneficiary  under  the  power  and  the 
donor;  and  whenever  any  person  or  corporation  possessing  such  power  of  appoint- 
ment so  derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided 
therefor,  in  whole  or  in  part,  a  transfer  taxable  under  this  provisions  of  this 
act  shall  be  deemed  to  take  place  to  the  extent  of  such  omission  or  failure  in  the 
same  manner  as  though  the  persons  or  corporations  thereby  becoming  entitled  to 
the  possession  or  enjoyment  of  the  property  to  which  such  power  related  had 
succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such 
power,  taking  effect  at  the  time  of  such  omission  or  failure. 

When  all  heirs,  legatees,  etc.,  are  discharged  from  liability. 

§  7.  All  heirs,  legatees,  devisees,  administrators,  executors  and  trustees  shall 
only  be  discharged  from  liability  for  the  amount  of  such  taxes,  the  settlement  of 


•  NORTH  CAROLINA  JQ29 

which  they  may  be  charged  with,  by  paying  the  same  for  the  use  aforesaid  as 
hereinafter  provided. 

Discount  for  payment  in  six  months;  interest  after  twelve  months;  penalty  after 
two  years. 

§  8.  All  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the  death  of  the 
testator,  intestate,  grantor,  donor  or  vendor,  and  if  the  same  are  paid  within 
six  months  from  the  date  of  the  death  of  the  testator,  intestate,  grantor,  donor, 
or  vendor,  a  discount  of  three  per  centum  shallbe  allowed  and  deducted  from  such 
taxes;  if  not  paid  within  one  year  from  the  date  of  the  death  of  the  testator, 
intestate,  grantor,  donor,  or  vendor,  such  tax  shall  bear  interest  at  the  rate  of  six 
per  centum  per  annum,  to  be  computed  from  the  expiration  of  one  year  from  the 
date  of  the  death  of  such  testator,  intestate,  grantor,  donor,  or  vendor,  for  a 
period  of  one  year,  and  ten  per  centum  per  annum  thereafter  until  the  same  is 
paid. 

The  penalty  of  ten  per  cent  herein  imposed  may  be  remitted  to  simple  interest 
by  the  State  Tax  Commission  in  case  of  unavoidable  delay  in  settlement  of  estate 
or  of  pending  litigation.  And  the  State  Tax  Commission  is  further  authorised  in 
case  of  protracted  litigation,  or  other  delay  m  settlement  not  attributable  to 
laches  of  the  party  liable  for  the  tax,  to  remit  all  or  any  portion  of  the  interest 
charges  accruing  under  this  schedule  with  respect  to  so  much  of  the  estate  as  was 
involved  in  such  litigation  or  other  unavoidable  cause  of  delay.  Provided,  that 
time  for  payment  and  collection  of  such  tax  may  be  extended  by  the  State  Tax 
Commission  for  good  reason  shown, 

Collection  to  be  made  by  sheriff  if  not  paid  in  two  years. 

§  8a.  If  taxes  imposed  by  this  act  are  not  paid  within  two  years  after  the  death 
of  the  decedent,  it  shall  be  the  duty  of  the  clerk  to  certify  to  the  sheriff  the 
amount  of  tax  due  upon  such  inheritance,  and  the  sheriff  shall  collect  the  same  as 
other  taxes,  with  an  addition  of  two  and  one-half  per  cent  as  sheriff's  fees  for 
collecting  same;  and  the  sheriff  is  hereby  given  the  same  rights  of  levy  and  sale 
upon  any  property  upon  which  the  said  tax  is  payable  as  is  given  in  the  Machinery 
Act  for  the  collection  of  other  taxes.  The  Sheriff  shall  make  return  to  the  clerk 
of  the  Superior  Court  of  all  such  taxes  within  thirty  days  after  the  collection, 
to  be  accounted  for  by  the  clerk  in  monthly  settlement  with  the  State  Tax  Com- 
mission as  provided  by  law:  Provided,  that  time  for  payment  and  collection 
of  such  tax  may  be  extended  by  the  State  Commission  for  good  reason  shown. 

Executor,  etc.,  shall  deduct  tax. 

§  9.  The  executor  or  administrator  or  other  trustee  paying  any  legacy  or  share 
in  the  distribution  of  any  estate  subject  to  said  tax  shall  deduct  therefrom  at  the 
rate  prescribed,  or  if  the  legacy  or  share  in  the  estate  be  not  money,  he  shall  de- 
mand payment  of  a  sum  to  be  computed  at  the  same  rates  upon  the  appraised 
value  thereof  for  the  use  of  the  State;  and  no  executor  or  administrator  shall  be 
compelled  to  pay  or  deliver  any  specific  legacy  or  article  to  be  distributed,  subject 
to  tax,  except  on  the  payment  into  his  hands  of  a  sum  computed  on  its  value  as 
aforesaid ;  and  in  case  of  neglect  or  refusal  on  the  part  of  said  legatee  to  pay  the 
same  such  specific  legacy  or  article,  or  so  much  thereof  as  shall  be  necessary,  shall 
be  sold  by  such  executor  or  administrator  at  public  sale,  after  notice  to  such 
legatee,  and  the  balance  that  may  be  left  in  the  hands  of  the  executor  or  ad- 
ministrator shall  be  distributed  as  is  or  may  be  directed  by  law;  and  every  sum 
of  money  retained  by  any  executor  or  administrator  or  paid  into  his  hands  on 
account  of  any  legacy  or  distributive  share  for  the  use  of  the  State  shall  be 
paid  by  him  to  the  proper  officer  without  delay. 

Legacy  for  life,  etc.,  tax  to  be  retained,  etc.,  upon  the  whole  amount. 

§  10.  //  the  legacy  or  devise  subject  to  said  tax  be  given  to  a  beneficiary  for 
life  or  for  a  term  of  years,  or  upon  condition  or  contingency  with  remainder  to 
take  effect  upon  the  termination  of  the  life  estate  or  the  happening  of  the  con- 
dition or  contingency,  the  tax  on  the  whole  ammmt  shall  be  due  and  payable  as 
in  other  cases,  and  said  tax  shall  be  apportioned  between  such  life  tenant  and 
the  remainderman,  such  apportionment  to  be  made  by  computation  based  upon 
the  mortuary  and  annuity  tables  set  out  as  sections  1790  and  1791  of  the  Consoli- 


1030  THE  STATE  STATUTES 

dated  Statutes,  and  upon  the  basis  of  six  per  centum  of  the  gross  value  of  the 
estate  for  the  period  of  expectancy  of  the  life  tenant  in  determining  the  value  of 
the  respective  interests. 

Legacy  charged  upon  real  estate,  heir  or  devisee  to  deduct  and  pay  to  executor, 
etc. 

§  11.  Whenever  such  legacy  shall  be  charged  upon  or  payable  out  of  real  estate 
the  heir  or  devisee  of  such  real  estate,  before  paying  the  same  to  such  legatee, 
shall  deduct  therefrom  at  the  rates  aforesaid,  and  pay  the  amount  so  deducted  to 
the  executor  or  administrator,  and  the  same  shall  remain  a  charge  upon  such  real 
estate  until  paid,  and  in  default  thereof  the  same  shall  be  enforced  by  the  decree 
of  the  court  in  the  same  manner  as  the  payment  of  such  legacy  may  be  enforced: 
Provided,  that  all  taxes  imposed  by  this  act  shall  be  a  lien  upon  the  real  and 
personal  property  of  the  estate  on  which  the  tax  is  imposed  or  upon  the  proceeds 
arising  from  the  sale  of  such  property,  from  the  time  said  tax  is  due  and  payable, 
and  shall  continue  a  lien  until  said  tax  is  paid  and  receipted  for  by  the  proper 
officer  of  the  State. 

Computation  of  tax  on  nonresident  decedents. 

§  12.  A  tax  shall  be  assessed  on  the  transfer  of  property  made  subject  to  tax 
as  aforesaid  in  this  State  of  a  nonresident  decedent  if  all  or  any  part  of  the 
estate  of  such  decedent,  wherever  situated,  shall  pass  to  persons  or  corporations 
taxable  under  this  act,  which  tax  shall  bear  the  same  ratio  to  the  entire  tax 
which  the  said  estate  would  have  been  subject  to  under  this  act  if  such  nonresi- 
dent decedent  had  been  a  resident  of  this  State,  and  all  his  property,  real  and 
personal,  had  been  located  within  this  State,  as  such  taxable  property  within  this 
State  bears  to  the  entire  estate,  wherever  situated:  Provided,  that  nothing  in  this 
clause  contained  shall  apply  to  any  specific  bequest  or  devise  of  any  property  in 
this  State. 

Specific  devises  or  bequests  of  nonresident  decedents. 

§  12a.  A  specific  devise  or  bequest  of  a  nonresident  decedent  of  property  within 
this  State  shall  be  taxed  at  the  rate  applicable  to  strangers  in  the  blood,  without 
deduction  or  exemption:  Provided,  that  if  the  executor  of  such  estate  shall  file 
with  the  State  Tax  Commission  a  full  and  complete  report  of  the  entire  estate 
wherever  situate,  and  the  age  and  relationship  of  the  beneficiary  to  said  decedent 
the  proportional  part  of  the  deductions  and  exemptions  shall  be  allowed,  and  at 
the  rate  of  tax  applicable  to  such  relationship  in  accordance  with  section  six  of 
this  act. 

Foreign  executor  or  administrator  transferring  stock  shall  pay  the  tax  on  such 
transfer. 

§  13.  Whenever  any  foreign  executor  or  administrator  or  trustee  shall  assign 
or  transfer  any  stocks  or  bonds  in  this  State  standing  in  the  name  of  the  decedent 
or  in  trust  for  a  decedent,  which  shall  be  liable  for  the  said  tax,  such  tax  shall  be 
paid  on  the  transfer  thereof ;  otherwise  the  corporation  permitting  such  transfer 
shall  become  liable  to  pay  such  tax. 

The  State  Tax  Commission  is  given  authority  to  make  appraisal  of  such  stocks 
or  bonds,  and  settlement  of  taxes  due  under  this  section.  Exemptions  shall  be 
prorated  as  provided  in  subsection  one  of  section  six  of  this  act,  and  receipt  or 
waiver  issued  by  the  State  Tax  Commission  shall  be  complete  protection  to  any 
such  corporation  for  the  transfer  of  such  stocks  or  bonds. 

Information  by  administrators  and  executors. 

§  14.  Every  administrator  shall  prepare  a  statement  in  duplicate,  showing  as 
far  as  can  be  ascertained  the  names  of  all  the  heirs  at  law  and  their  relationship 
to  decedent,  and  every  executor  shall  prepare  a  like  statement  showing  the  rela- 
tionship to  the  decedent  of  all  legatees,  distributees  and  devisees  named  in  the 
will,  and  the  age  at  the  time  of  death  of  the  decedent  of  all  legatees,  distributees, 
and  devisees  to  whom  property  is  bequeathed  or  devised  for  life  or  for  a  term  of 
years,  and  the  names  of  those,  if  any,  who  have  died  before  the  decedent,  together 
with  the  postoffice  address  of  executor,  administrator,  or  trustee.  If  any  of  the 


NORTH  CAROLINA  1Q31 

heirs  at  law,  distributees  and  devisees  are  minor  children  of  the  decedent  such 
statement  shall  also  contain  a  complete  inventory  of  all  the  real  property  of  the 
decedent  located  in  this  State,  and  of  all  personal  property  of  the  estate,  together 
with  an  appraisal  under  oath  of  the  value  of  each  class  of  property  embraced  in 
the  inventory,  and  the  value  of  the  whole,  together  with  any  deductions  permitted 
by  this  statute,  so  far  as  they  may  be  ascertained  at  the  time  of  filing  such  state- 
ment. The  statement  herein  provided  for  shall  be  filed  within  three  months 
after  the  qualification  of  the  executor  or  the  administrator,  upon  blank  forms  to 
be  prepared  by  the  State  Tax  Commission  and  furnished  to  the  clerk  of  the 
Superior  Court  in  each  county.  If  any  administrator  or  executor  fails  or  refuses 
to  comply  with  any  of  the  requirements  of  this  section,  he  shall  be  liable  to  a 
penalty  of  not  more  than  one  thousand  dollars,  which  shall  be  recovered  by  the 
State  Tax  Commission  for  the  use  of  the  State  in  an  action  to  be  brought  in  the 
Superior  Court  of  Wake  County.  Every  executor  or  administrator  may  make  a 
tentative  settlement  of  the  inheritance  tax  with  the  clerk  of  the  Superior  Court 
based  upon  the  sworn  inventory  provided  in  this  section.  One  copy  of  the  dupli- 
cate report  herein  provided  to  be  made  shall  be  mailed  immediately  by  the  clerk 
of  the  Superior  Court  to  the  State  Tax  Commission  and  one  copy  shall  be  bound 
or  copied  in  a  book  to  be  kept  for  that  purpose,  by  the  clerk  of  the  Superior 
Court:  Provided,  that  this  section  shall  not  apply  to  estates  of  less  than  two 
thousand  dollars  in  value  when  the  beneficiaries  are  husband  or  wife  or  children 
or  grandchildren  of  the  decedent. 

§  14a.  Whenever  the  clerk  of  the  Superior  Court  shall  ascertain  that  any  real 
estate  has  passed  by  will  or  by  the  intestate  laws  of  this  State  and  there  shall  be 
no  executor  or  administrator  of  the  deceased  person  the  clerk  shall  ascertain  the 
names  of  the  persons  taking  said  property  and  their  several  interests  therein,  and 
report  the  same  to  the  State  Tax  Commission  and  said  commission  shall  cause  the 
same  to  be  appraised  by  an  attorney,  examiner  or  agent  who  shall  file  a  report  in 
duplicate,  and  the  clerk  shall  enter  the  same  in  the  appraisal  book  herein  provided 
for,  and  shall  collect  the  tax  due  from  the  person  taking  such  property  and  shall 
enforce  payment  as  herein  provided  for  as  fully  as  if  there  were  an  administrator 
or  executor. 

Supervision  by  State  Tax  Commission. 

§  15.  The  State  Tax  Commission  shall  have  complete  supervision  of  the  enforce- 
ment of  all  provisions  of  the  Inheritance  Tax  Act,  and  shall  make  rules  and  regu- 
lations for  the  just  administration  thereof.  It  shall  regularly  employ  such  attor- 
neys, examiners  or  special  agents  as  may  be  necessary  for  the  reasonable  carrying 
out  of  its  full  intent  and  purpose.  Such  attorneys,  examiners  or  special  agents 
shall,  as  often  as  required  to  do  so,  visit  the  several  counties  of  the  State  to  see 
that  all  statements  required  by  this  act  are  filed  with  the  clerks  of  the  Superior 
Court  by  administrators  and  executors,  or  by  beneficiaries  under  wills  where  no 
executor  is  appointed;  to  examine  into  all  statements  filed  by  such  administrators 
and  executors;  to  require  such  administrators  and  executors  to  furnish  any 
additional  information  that  may  be  deemed  necessary  to  determine  the  amount  of 
tax  that  should  be  paid  by  such  estate.  If  not  satisfied,  after  investigation,  with 
valuations  returned  by  the  administrator  or  executor,  the  attorney,  examiner  or 
appraiser  shall  make  an  additional  appraisal,  after  proper  examination  and 
inquiry,  or  may,  in  special  cases,  recommend  the  appointment  by  the  Commission 
of  a  special  appraiser,  who  in  such  case  shall  be  paid  five  dollars  per  day  and 
expenses  for  his  services.  The  administrator  or  executor,  if  not  satisfied  with 
such  additional  appraisal,  may  appeal  within  thirty  days  to  the  State  Tax  Com- 
mission, which  appeal  shall  be  heard  and  determined  as  other  cases.  From  this 
decision  or  any  other  decision  made  after  an  appeal  to  the  State  Tax  Commission 
the  administrator  or  executor  shall  have  the  right  to  appeal  to  the  Superior  Court 
of  the  county  in  which  said  estate  is  situated  for  the  purpose  of  having  said  issue 
tried;  said  appeal  to  be  made  in  the  same  way  and  manner  as  is  now  provided  by 
law  for  appeals  from  the  decisions  of  the  Corporation  Commission;  Provided, 
that  the  tax  shall  first  be  paid,  and  if  it  shall  be  determined  upon  trial  that  said 
tax  or  any  part  thereof  was  illegal  or  excessive,  judgment  shall  be  rendered  there- 
for with  interest  and  the  amount  of  tax  so  adjudged  overpaid  or  declared  invalid 
shall  be  certified  by  the  cleric  of  the  court  to  and  refunded  by  the  State  Treasurer. 
A  sum  not  exceeding  three  per  cent  of  the  inheritance  taxes  collected  and  paid 
into  the  State  Treasury  in  the  previous  year  is  hereby  appropriated  for  the  use 


1032  THE  STATE  STATUTES 

of  the  State  Tax  Commission  in  carrying  out  the  provisions  of  this  act.  Upon 
request  the  State  Tax  Commission  may  designate  an  attorney,  examiner  or  special 
agent  to  make  an  appraisal  before  statement  is  filed  by  an  administrator  or 
executor,  and  to  advise  and  assist  in  the  making  out  of  such  statement. 

Proportion  of  tax  to  be  repaid  upon  certain  conditions. 

§  16.  Whenever  debts  shall  be  proven  against  the  estate  of  a  decedent,  after 
the  distribution  of  legacies  from  which  the  inheritance  tax  has  been  deducted  in 
compliance  with  this  act,  and  the  legatee  is  required  to  refund  any  portion  of  the 
legacy,  a  proportion  of  the  said  tax  shall  be  repaid  to  him  by  the  executor  or 
administrator  if  the  said  tax  has  not  been  paid  into  the  State  Treasury,  or  shall 
be  refunded  by  the  State  Treasurer  if  it  has  been  so  paid  in,  upon  certificate  of 
the  State  Tax  Commission. 

Clerk  to  enter  returns  made  by  appraisers,  etc. 

§  17.  It  shall  be  the  duty  of  the  clerk  of  the  court  to  enter  in  a  book  to  be 
provided  at  the  expense  of  the  State,  to  be  kept  for  that  purpose,  and  which  shall 
be  a  public  record,  the  returns  made  by  all  administrators,  executors  and  appraisers 
under  this  act,  opening  an  account  in  favor  of  the  State  against  the  decedent's 
estate;  and  the  clerk  may  give  certificates  of  payment  of  such  tax  from  such 
record;  and  it  shall  be  the  duty  of  the  clerk  of  the  court  to  transmit  to  the  State 
Tax  Commission  on  the  first  Monday  of  each  month  a  statement  of  all  returns 
made  by  administrators,  executors  and  appraisers  during  the  preceding  month, 
giving  the  name  of  the  estate  and  a  clear  valuation  thereof,  subject  to  the  fore- 
going tax,  and  the  amount  of  the  tax,  together  with  all  taxes  collected,  which 
statement  shall  be  entered  by  the  State  Tax  Commission  in  a  book  to  be  kept  by 
it  for  that  purpose,  and  the  full  amounts  collected  and  so  returned  shall  be  imme- 
diately turned  over  by  the  State  Tax  Commission  to  the  State  Treasurer  with 
report  of  same  to  the  State  Auditor.  Whenever  any  such  tax  shall  have  remained 
due  and  unpaid  for  one  year  it  shall  be  lawful  for  the  clerk  of  the  Superior 
Court  to  apply  to  the  court  by  bill  or  petition  to  enforce  the  payment  of  the  same ; 
whereupon  said  court,  having  caused  due  notice  to  be  given  to  the  owner  or 
owners  of  the  estate  charged  with  the  tax  and  to  such  other  person  or  persons  as 
may  be  interested,  shall  proceed  according  to  equity  to  make  such  decrees  or 
orders  for  the  payment  of  the  said  tax  out  of  such  estates  as  shall  be  just  and 
proper. 

Court  may  order  executor.,  etc.,  to  file  account,  etc. 

§  18.  //  the  cleric  of  the  court  shall  discover  that  reports  and  accounts  have  not 
"been  fled  and  the  tax,  if  any,  has  not  been  paid  as  provided  in  this  chapter,  or 
upon  request  of  the  State  Tax  Commission,  the  cleric  shall  issue  a  citation  to  the 
executor,  administrator  or  trustee  of  the  decedent  whose  estate  is  subject  to  tax, 
to  appear  at  a  tvme  and  place  therein  mentioned,  not  to  exceed  20  days  from  the 
date  thereof,  and  show  cause  why  said  report  and  account  should  not  be  filed  and 
said  tax  paid,  and  when  personal  service  cannot  be  had,  notice  shall  be  given  as 
provided  for  service  of  summons  by  publication;  and  if  said  tax  shall  be  found 
to  be  due,  the  said  delinquent  shall  be  adjudged  to  pay  said  tax,  interest  and  cost. 
If  said  tax  shall  remain  due  and  unpaid  for  a  period  of  30  days  after  notice 
thereof,  the  cleric  shall  certify  the  same  to  the  sheriff,  who  shall  make  collection  of 
said  tax,  cost  and  commissions  for  collection,  as  provided  in  section  8a  of  this 
chapter. 

Clerk  to  be  agent  of  the  State  for  collection  of  inheritance  taxes. 

§  19.  The  clerics  of  the  Superior  Courts  of  the  several  counties  shall  be  the 
agents  of  the  State  Ta-x  Commission  for  the  collection  of  inheritance  taxes  and  for 
services  rendered  in  collecting  and  paying  over  the  same,  the  said  agent  shall  be 
allowed,  in  addition  to  other  fees  or  salary  received  by  them,  fees  and  commis- 
sions according  to  the  following  schedule,  for  each  estate,  to  be  paid  to  the  said 
agents  by  the  State  Auditor  upon  voucher  issued  by  the  State  Tax  Commission, 
and  any  provision  in  any  local  act  in  conflict  with  this  act  is  hereby  repealed: 

For  certifying  a  copy  of  all  inventories  filed  in  any  estate  subject  to  inheritance 
tax,  a  fee  of  three  dollars  for  each  estate  in  his  jurisdiction. 


NORTH  CAROLINA  1033 

For  the  collecting  and  paying  over  taxes,  after  the  assessment  has  been  made  by 
the  State  Tax  Commission,  or  an  agent  thereof,  the  following  commissions  shall 
be  allowed: 

On  the  first  $2,000  of  tax  collected,  2  per  cent. 

Above  $2,000  and  up  to  $10,000,  1  per  cent. 

Above  $10,000  and  up  to  $50, 000,  one-half  of  one  per  cent. 

Over  $50,000,  nothing. 

Provided,  that  when  the  total  fees  paid  to  any  cleric  under  this  schedule  shall  vn 
any  one  year  exceed  one  thousand  dollars,  the  excess  above  one  thousand  dollars 
shall  be  retained  i/n  the  General  Fund  of  the  State  Treasury  for  the  benefit  of  the 
State;  Provided,  however,  on  estates  now  m  process  of  settlement  on  which  the 
"final  settlement  of  inheritance  taxes  is  made  prior  to  December  the  first,  1921,  the 
rate  of  fees  or  commissions  shall  be  as  provided  under  chapter  90,  Public  Laws  of 
1919:  Provided  further,  that  upon  estates  becoming  liable  after  the  passage  of 
this  act,  clerics  shall  receive  no  commissions  upon  tentative  settlements  until  final 
settlement  is  made. 

§  20.  Any  administrator,  executor  or  trustee  who  shall  fail  to  pay  the  lawful 
inheritance  taxes  due  upon  any  estate  in  his  hands  or  under  his  control  within  two 
years  from  the  time  of  his  qualification  shall  be  liable  for  the  amount  of  said 
taxes,  and  the  same  may  be  recovered  in  an  action  against  such  administrator, 
executor  or  trustee  and  the  sureties  on  his  official  bond.  Any  clerk  of  the  court 
who  shall  allow  any  administrator,  executor  or  trustee  to  make  a  final  settlement 
of  his  estate  without  collecting  the  inheritance  taxes  due  by  law  shall  be  liable 
upon  his  official  bond  for  the  amount  of  such  taxes. 

Failure  of  clerk  to  collect  and  pay  over  tax. 

§  21.  If  the  State  Tax  Commission  shall  ascertain  that  any  clerk  has  failed  to 
collect  or  pay  over  any  inheritance  tax  which  he  should  have  collected,  the  State 
Tax  Commission  shall  demand  payment  of  the  same  by  said  clerk  at  once,  and  if 
such  clerk  shall  fail  to  account  for  or  pay  over  such  tax  within  sixty  days  from 
such  demand,  or  to  shaw  that  he  has  not  been  negligent  and  has  made  diligent 
effort  to  collect  the  same,  he  shall  be  liable  on  his  official  bond  for  double  the 
said  tax,  to  be  recovered  by  the  State  Tax  Commission  in  an  action  in  the  Superior 
Court  of  Wake  County:  Provided,  that  this  section  shall  not  apply  to  clerks 
where  the  estates  have  been  settled  and  final  account  of  the  estate  approved  prior 
to  the  adoption  hereof. 

|  21a.  That  whenever  the  word  "executor"  appears  in  this  section  entitled 
"Inheritance  Tax,"  that  it  shall  include  executors,  administrators,  collectors, 
committees,  trustees  and  all  fiduciaries. 

Prior  Statutes:  Collateral  inheritances  have  been  taxed  since  1847.  Statutes 
for  the  last  twenty  years  are  as  follows:  Code  of  1883,  §  2867;  L.  1897,  ch.  168; 
L.  1901,  ch.  9;  L.  1903,  Revenue  Act,  ch.  247;  L.  1905,  ch.  588;  L.  1907,  ch.  256; 
L.  1909,  ch.  438;  L.  1911,  ch.  46;  L.  1913,  ch.  203;  L.  1915,  ch.  285;  L.  1919, 
ch.  90. 


1034 


THE  STATE  STATUTES 


NORTH  DAKOTA. 

Intangibles  of  nonresidents  exempt  from  tax  by  amendment  of  March  8,  1921. 

TABLE  OP  RATES  AND  EXEMPTION'S  IN  FORCE   AFTER  MARCH  25,  1919 


c, 

c 

£-2 

o 

_ 

Class  or  Relationship 

"c. 

X  C-g 

o 

_o 

It 

of 

la 

c  o^ 

a 

J'BSs- 

10  8 

§"§• 

§"§ 

80 
«§• 

§M 

e«e- 

8 

•< 

& 

«e- 

S5- 

1-1  0 

$10,000 

5,000 

Lineal    issue,     lineal     ancestor, 

2,000 

l% 

1%% 

2% 

2%% 

3% 

3%% 

4% 

adopted  or  mutually  acknowl- 

edged child  or  its  issue. 

J 

Brother    or   sister    or    their    de- 

$500 

l%% 

2%% 

3% 

3%% 

4%% 

5V*% 

6% 

scendants,   son-in-law,    daugh- 

ter-in-law. 

Aunt    or    uncle    and    their    de- 

$250 

3% 

4%% 

6% 

7%% 

9% 

10%% 

12% 

scendants. 

Brother     or    sister     of     grand- 
parents and  their  descendants. 

None 

4% 

6% 

8% 

10% 

12% 

14% 

16% 

All  others,   except   local   chari- 
table,   educational,    etc.,    cor- 

None 

5% 

7%% 

10% 

12%% 

15% 

17%% 

20% 

porations,    as    to    which,    see 

section  4. 

TABLE  OP  RATES  AND  EXEMPTIONS    IN    FORCE    FROM    MAY    1,    1917,    TO 

MARCH  25,  1919. 


CLASS  OB  RELATIONSHIP 

Amount 
exempt 

Rates  of  tax 

Above 
exemp- 
tion to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

3100,000 
to 
$500,000 

In  excess 
of 
$500,000 

$10,000 

1% 

11% 

2% 

2}% 

3% 

Lineal  issue,  lineal  ancestor,  adopted  or 
mutually  acknowledged  child. 

$2,000 

Brother  or  sister  or  their  descendants, 
son-in-law,  daughter-in  law. 

$500 

ii% 

2i% 

3% 

31% 

7i% 

Aunt  or  uncle  or  their  descendants  .... 

$250 

3% 

4J% 

6% 

71% 

9% 

Brother  or  sister  of  grandparents  or 
their  descendants. 

$150 

4% 

6% 

8% 

10% 

12% 

All  others  except  exempt  corporations  .  . 

$100 

5% 

7J% 

10% 

12*% 

15% 

Municipal  corporations  within  the  State 
for  strictly  municipal  purposes,  relig- 
ious, charitable  and  educational  in- 
stitutions or  organized  by  the  laws  of 
the  State  for  such  purposes  within  the 
State. 

All 

No  tax 

NORTH  DAKOTA 


1035 


TABLE  OF  RATES  AND  EXEMPTIONS  FROM  MARCH  15,  1913,  TO  MAY  1,  1917 


CLASS  on  RELATIONSHIP 

Amount 
of  ex- 
emption 

Graded  rates 

Above 
exemption  up  to 
$100,000 

$100,000 
to 
$250,000 

$250,000 
to 
$500,000 

In  excess 
of 
$500,000 

Husband  or  wife  

820,000 

1 
1% 

2% 

2J% 

3% 

Father,  mother,  _  lineal  descendant, 
adopted  child  or  its  lineal  descendant. 

$10,000 

Brother,  sister,  son-in-law,  daughter- 
in-law. 

$500 

Above 
exemp- 
tion to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

$100,000 
to 
$500,000 

In  excess 
of 
$500,000 

li% 

2i% 

3% 

31% 

41% 

Aunt  or  uncle  and  their  descendants  .  .  . 

None 

3% 

4i% 

6% 

7J% 

9% 

All  others  except  aliens,  nonresidents 
and  charitable  bequests  exempted  by 
section  24. 

None 

5% 

6% 

9% 

12% 

15% 

Collaterals  or  strangers  who  are  aliens 
not  residing  in  the  United  States,  or 
corporations  with  alien  charters. 

None 

25%  on  entire  legacy. 

THE  STATUTE. 

CHAPTER  185,  LAWS  OF  1913,  AS  AMENDED  AND  RE-ENACTED  BY 
CHAPTER  231,  LAWS  OF  1917,  IN  FORCE  MAY  1,  1917,  AND  AGAIN 
AMENDED  AND  RE  ENACTED  BY  LAWS  OF  1919,  IN  FORCE  MARCH 
25,  1919. 

HOUSE  BILL  NO.  84. 
Taxation  of  Transfers  of  Property  by  Will. 

An  Act  to  Amend  and  re-enact  Chapter  231,  Laws  of  North  Dakota,  1917,  Relating 
to  the  taxation  of  transfers  of  property  by  will,  gift  or  by  intestate  law. 

Se  it  enacted  by  the  Legislative  Assembly  of  the  State  of  North  Dakota: 

Section  1.  Amendment.  Chapter  231,  Laws  of  North  Dakota,  1917,  is  hereby 
amended  and  re-enacted  to  read  as  follows: 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  of  property, 
real,  personal  or  mixed,  or  any  interest  therein,  or  income  therefrom  in  trust  or 
otherwise,  to  any  person,  association  or  corporation,  except  county,  town  or 
municipal  corporations  within  the  State,  for  strictly  county,  town  or  municipal 
purposes,  and  corporations  of  this  State  organized  under  its  laws  solely  for 
religious  or  educational  purposes  which  shall  use  the  property  so  transferred 
exclusively  for  the  purposes  of  their  organization  within  the  State,  in  the 
following  cases,  except  as  hereinafter  provided: 

(1)  When  the  transfer  is  by  will  or  by  intestate  laws  of  this  State  from  any 
person  dying  possessed  of  the  property  while  a  resident  of  the  State;  provided, 
that  no  tax  shall  be  imposed  upon  any  tangible  personal  property  of  a  resident 
decedent  when  such  property  is  located  without  this  State,  and  when  the  transfer 
of  such  property  is  subject  to  an  inheritance  or  transfer  tax  in  the  State  where 
located,   and  which  tax  has  actually  been  paid,  provided  such  property  is  not 
without  this  State  temporarily,  nor  for  the  sole  purpose  of  deposit  or  safe  keep- 
ing ;  and  provided,  that  the  laws  of  the  State  where  such  property  is  located  allow 
a  like  exemption  in  relation  to  such  property  left  by  a  resident  of  that  State  and 
located  in  this  State. 

(2)  When  the  transfer  is  by  will  or  intestate  law,  of  property  within  this  State, 
and  the  decedent  was  a  nonresident  of  the  State  at  the  time  of  his  death;  pro- 
vided, that  for  the  purposes  of  the  tax  herein  imposed,  the  term  property  shall 
include  all  contracts,  mortgages,  shares  of  stock  or  bonds  or  other  interest  in 
tangible  personal,  or  real  property  existing  in  this  State,  however  evidenced  or 
expressed. 


1036  THE  STATE  STATUTES 

(3)  When  the  transfer  is  made  by  a  resident  or  nonresident  of  property  within 
the  State  or  within  its  jurisdiction,  by  deed,  grant,  bargain,  sale  or  gift,  made  in 
contemplation  of  the  death  of  the  grantor,  vendor,  or  donor,  or  intended  to  take 
effect  in  possession  or  enjoyment  at  or  after  such  death.    Every  transfer  by  deed, 
grant,  bargain,  sale  or  gift,  made  within  six  years  prior   to   the   death  of  the 
grantor,  vendor  or  donor  of  a  material  part  of  his  estate,  or  in  the  nature  of  a 
final  disposition  or  distribution  thereof,  and  without  an  adequate  valuable   con- 
sideration,  shall   be   construed   to   have   been   made   in   contemplation    of    death 
within  the  meaning  of  this  section. 

(4)  When  any  such  person  or  corporation  shall  exercise  a  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  act,  such  appointment,  when  made,  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  act,  in  the  same  manner  as  though  the  prop- 
erty to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such 
power,  and  has  been  bequeathed  or  devised  by  such  donee  by  will;  and  whenever 
any  person  or  corporation  possessing  such  a  power  of  appointment  so  derived 
shall  omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole 
or  in  part,  a  transfer  taxable  under  the  provisions  of  this  act  shall  be  deemed  to 
take  place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner  as  though 
the  persons  or  corporations  thereby  becoming  entitled  to  the  possession  or  enjoy- 
ment of  the  property  to  which  such  power  related  had  succeeded  thereto  by  a  will 
of  the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the  time 
of  such  omission  or  failure. 

(6)  The  tax  so  imposed  shall  be  upon  the  clear  market  value  of  such  property 
at  the  rates  hereinafter  prescribed,  and  only  upon  the  amount  in  excess  of  the 
debts  of  such  decedent,  costs  of  administration  and  the  exemptions  hereinafter 
granted;  providing  that  in  computing  said  clear  market  value  all  inheritance 
taxes  paid  to  the  Federal  Government  shall  be  deducted. 

§  2.  When  the  property  or  any  beneficial  interest  therein  passes  by  any  such 
transfer,  where  the  amount  of  the  property  shall  exceed  in  value  the  exemption 
hereinafter  specified  and  shall  not  exceed  in  value  $15,000  the  tax  herein  imposed 
shall  be : 

(1)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  husband,  wife,  lineal  issue,  lineal  ancestor  of  the  decedent 
or  any  child  adopted  as  such  in  conformity  with  the  laws  of  this  State,  or  any 
child  to  whom  such  decedent  for  not  less  than  ten  years  prior  to  such  transfer, 
stood  in  the  mutually  acknowledged  relation  of  a  parent,  provided,  such  relation- 
ship began  at  or  before  the  child's  fifteenth  birthday,  and  was  continuous  for 
said   ten   years   thereafter,    or    any   lineal   issue    of    such    adopted    or   mutually 
acknowledged  child,  at  the  rate  of  one  per  cent  of  the  clear  value  of  such  interest 
in  such  property. 

(2)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister,  or  a  descendant  of  a  brother  or  sister 
of  the  decedent,  a  wife  or  a  widow  of  a  son,  or  the  husband  of  a  daughter  of  the 
decedent,  at  the  rate  of  one  and  one-half  per  centum  of  the  clear  value  of  such 
interest  in  such  property. 

(3)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  father  or  mother,  or  a  descendant 
of  a  brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the  rate  of  three 
per  centum  of  the  clear  value  of  such  interest  in  such  property. 

(4)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  grandfather  or  grandmother,  or  a 
descendant  of  the  brother  or  sister  of  the  grandfather  or  grandmother  of  the 
decedent,  at  the  rate  of  four  per  centum  of  the  clear  value  of  such  interest  in  such 
property. 

(5)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a  body 
politic  or  corporate,  at  the  rate  of  five  per  centum  of  the  clear  value  of  such 
interest  in  such  property. 

§  3.  The  foregoing  rates  in  section  2  are  for  convenience  termed  the  primary 
rates. 

When  the  amount  of  clear  value  of  such  property  or  interest  exceeds  $15,000, 
the  rate  of  tax  upon  such  excess  shall  be  as  follows: 


NORTH  DAKOTA  1037 

(1)  Upon  all  in  excess  of  $15,000  and  up  to  $30,000  one  and  one-half  times  the 
primary  rates. 

(2)  Upon  all  in  excess  of  $30,000  and  up  to  $50,000  two  times  the  primary 
rates. 

(3)  Upon  all  in  excess  of  $50,000  and  up  to  $100,000  two  and  one-half  times 
the  primary  rates. 

(4)  Upon  all  in  excess  of  $100,000  up  to  $300,000  three  times  the  primary 
rates. 

(5)  Upon  all  in  excess  of  $300,000  up  to  $500,000  three  and  one-half  times  the 
primary  rates. 

(6)  Upon  all  in  excess  of  $500,000  four  times  the  primary  rates. 

§  4.  The  following  exemptions  from  the  tax,  to  be  taken  out  of  the  first  $15,000 
are  hereby  allowed: 

(1)  All  property  transferred  to  municipal  corporations  within  the  State  for 
strictly   county,  town  or  municipal  purposes,   or  to   corporations   of   this   State 
organized  under  its  laws  solely  for  religious,  charitable,  or  educational  purposes, 
which  shall  use  the  property  so  transferred  exclusively  for  the  purposes  of  their 
organization  within  the  State  shall  be  exempt. 

(2)  Property  of  the  clear  value  of  $10,000  transferred  to  the  husband  or  wife 
of  the  decedent,  and  $5,000  to  each  minor  of  the  decedent  and  $2,000  transferred 
to  each  of  the  other  persons  described  in  the  first  sub-division  of  section  2  shall 
be  exempt. 

(3)  Property  of  the  clear  value  of  $500  transferred  to  each  of  the  persons 
described  in  the  second  sub-division  of  section  2  shall  be  exempt. 

(4)  Property  of  the  clear  value  of  $250  transferred  to  each  of  the  persons 
described  in  the  third  sub-division  of  section  2  shall  be  exempt. 

§  5.  All  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the  time  of 
the  transfer,  except  as  hereinafter  provided;  and  every  such  tax  shall  be  and 
remain  a  lien  upon  the  property  transferred  until  paid,  and  the  person  to  whom 
the  property  is.  transferred  and  the  administrators,  executors,  and  trustees  of 
every  estate  so  transferred  shall  be  personally  liable  for  such  tax  until  its 
payment. 

§  6.  The  tax  shall  be  paid  to  the  treasurer  of  the  county  in  which  the 
County  Court  is  situated  having  jurisdiction  as  herein  provided;  and  said 
treasurer  shall  make  duplicate  receipts  of  such  payment,  one  of  which  he  shall 
immediately  send  to  the  State  Treasurer,  whose  duty  it  shall  be  to  charge  .the 
county  treasurer  so  receiving  the  tax  with  the  amount  thereof,  and  the  other 
receipt  shall  be  delivered  to  the  executor,  administrator,  or  trustee,  whereupon 
it  shall  be  a  proper  voucher  in  the  settlement  of  his  account. 

§  7.  But  no  executor,  administrator,  or  trustee  shall  be  entitled  to  a  final 
accounting  of  an  estate  in  settlement  of  which  a  tax  is  due  under  the  provisions 
of  this  act,  unless  he  shall  produce  such  receipts. 

§  8.  If  such  tax  is  not  paid  within  one  year  from  the  accruing  thereof,  interest 
shall  be  charged  and  collected  thereon  at  the  rate  of  ten  per  centum  per  annum 
from  the  time  the  tax  accrued;  unless  by  reason  of  claims  made  upon  the  estate, 
necessary  litigation  or  other  unavoidable  cause  of  delay,  such  tax  shall  not  be 
determined  and  paid  as  herein  provided,  in  which  case  interest  at  the  rate  of 
six  per  centum  per  annum  shall  be  charged  upon  such  tax  from  the  accrual 
thereof  until  the  cause  of  such  delay  is  removed,  after  which  ten  per  centum 
shall  be  charged. 

§  9.  Every  executor,  administrator,  or  trustee  shall  have  full  power  to  sell 
so  much  of  the  property  of  the  decedent  as  will  enable  him  to  pay  such  tax 
in  the  same  manner  as  he  might  be  entitled  by  law  to  do  for  the  payment  of 
the  debts  of  the  testator  or  intestate.  Any  such  administrator,  executor,  or 
trustee,  having  in  charge  or  in  trust  any  legacy  or  property  for  distribution, 
subject  to  such  tax,  shall  deduct  the  tax  therefrom;  and  within  thirty  days 
therefrom  shall  pay  over  the  same  to  the  county  treasurer  as  herein  provided. 
If  such  legacy  or  property  be  not  in  money,  he  shall  collect  the  tax  thereon 
upon  the  appraisal  value  thereof,  from  the  person  entitled  thereto.  He  shall 
not  deliver  or  be  compelled  to  deliver  any  specific  legacy  or  property  subject  to 
tax  under  this  act  to  any  person  until  he  shall  have  collected  the  tax  thereon. 
If  any  legacy  shall  be  charged  upon  or  payable  out  of  real  property,  the  heir 
or  devisee  shall  deduct  such  tax  therefrom  and  pay  it  to  the  administrator, 
executor,  or  trustee,  and  the  tax  shall  remain  a  lien  or  charge  on  such  real 


1038  THE  STATE  STATUTES 

property  until  paid.  If  any  such  legacy  shall  be  given  in  money  to  any  such 
person  for  a  limited  period,  the  administrator,  executor,  or  trustee  shall  retain 
the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money,  he  shall  make 
application  to  the  court  having  jurisdiction  of  an  accounting  to  him  to  make 
an  apportionment  if  the  case  require  it,  of  the  sum  to  be  paid  into  the  hands  of 
such  legatees,  and  for  such  further  order  relative  thereto  as  the  case  may 
require. 

§  10.  If  any  debt  shall  be  proved  against  the  estate  of  the  decedent  after 
the  payment  of  any  legacy  or  distributive  share  thereof,  from  which  any  such 
tax  has  been  deducted,  or  upon  which  it  has  been  paid  by  the  person  entitled 
to  such  legacy  or  distributive  share,  and  such  person  is  required  by  the  order  of 
the  County  Court  having  jurisdiction  thereof  on  notice  of  the  State  Treasurer 
to  refund  the  amount  of  such  debts  or  any  part  thereof,  an  equitable  propor- 
tion of  the  tax  shall  be  repaid  to  such  person  by  the  executor,  administrator, 
trustee  or  officer  to  whom  said  tax  has  been  paid. 

§  11.  When  any  amount  of  said  tax  shall  have  been  paid  erroneously  into  the 
State  Treasury,  it  shall  be  lawful  for  the  State  Treasurer  upon  receiving  a 
transcript  from  the  County  Court  record  showing  the  facts  to  refund  the 
amount  of  such  erroneous  or  illegal  payment  to  the  executor,  administrator, 
trustee,  person  or  persons,  who  have  paid  any  such  tax  in  error,  from  the  treasury; 
or  the  said  State  Treasurer  may  order,  direct,  and  allow  the  treasurer  of  any 
county  to  refund  the  amount  of  any  illegal  or  erroneous  payment  of  such  tax 
out  of  the  funds  in  his  hands  or  custody  to  the  credit  of  such  taxes,  and  credit 
him  with  the  same  in  his  account  rendered  to  the  State  Treasurer  under  this 
act.  Provided,  however,  that  all  applications  for  such  refunding  of  erroneous 
taxes  shall  be  made  within  one  year  from  the  payment  thereof,  or  within  one 
year  after  the  reversal  or  modification  of  the  order  fixing  such  tax. 

§  12.  If  a  testator  bequeaths  property  to  one  or  more  executors  or  trustees 
in  lieu  of  their  commissions  or  allowances,  or  makes  them  his  legatees  to  any 
amount  exceeding  the  commissions  or  allowances  prescribed  by  law  for  an 
executor  or  trustee,  the  excess  in  value  of  the  property  so  bequeathed,  above 
the  amount  of  commissions  or  allowances  prescribed  by  law  in  similar  cases, 
shall  be  taxable  by  this  act. 

§  13.  Every  executor  or  administrator  of  the  estate  of  a  nonresident  decedent 
shall  file  with  the  State  Tax  Commissioner  a  list  of  the  property  owned  by  him 
in  this  State;  provided,  that  said  list  need  not  be  filed  in  cases  in  which 
ancillary  probate  proceedings  are  instituted  in  the  courts  of  this  State  for  the 
purpose  of  probating  said  estate. 

§  13a.  Said  list  shall  be  in  the  form  of  an  affidavit  and  shall  be  sworn  to  by 
the  executor  or  administrator  of  said  estate,  and  shall  contain  a  detailed  de- 
scription of  the  property  and  the  value  thereof,  owned  by  said  nonresident 
decedent  in  this  State  as  of  the  date  of  his  death.  If  such  property  consists 
in  whole  or  in  part  of  mortgages  secured  upon  real  or  personal  property  situated 
in  this  State,  said  list  shall  enumerate  each  mortgage  separately,  stating  the 
name  and  postoffice  address  of  the  mortgagor,  the  county  in  which  the  mortgagor 
resides,  the  county  in  which  the  mortgaged  property  is  situated,  the  date  of  the 
execution  of  said  mortgage,  the  amount  for  which  said  mortgage  was  given, 
the  rate  of  interest  and  the  amount  due  on  said  mortgage  at  the  time  of  the 
death  of  the  decedent,  and  in  addition,  if  said  mortgaged  property  consists  of 
real  estate,  the  legal  description  of  the  same.  If  such  property  consists  in  whole 
or  in  part  of  the  shares  of  stock  or  bonds  of  any  corporation  organized,  doing 
business  or  owning  property  in  this  State,  wherever  such  corporation  has  been 
created  or  organized,  said  list  shall  enumerate  each  corporation  issuing  any  of 
said  shares  of  stock  or  bonds,  giving  in  each  case  the  name  of  the  corporation 
and  of  the  State  or  county  in  which  it  was  created  or  organized,  and  shall 
enumerate  under  each  the  bonds  and  shares  of  stock  issued  by  it  and  owned  by 
the  decedent,  giving  the  par  and  the  market  value  of  said  shares  of  stock.  If 
such  property  consists  in  whole  or  in  part  of  the  debt  of  or  interest  in  any 
property  existing  within  this  State  in  any  other  manner,  the  said  list  shall 
contain  the  name  of  the  debtor,  the  amount  of  the  debt  or  other  interest  in  such 
property  as  of  the  date  of  the  death  of  the  decedent  and  the  nature  of  such 
debt  or  other  interest.  Said  list  shall  be  filed  with  the  State  Tax  Commissioner 
within  thirty  days  after  the  issuing  of  the  letters  testamentary  or  letters  of  ad- 
ministration, as  the  case  may  be.  Upon  receipt  of  said  list  in  proper  form  the 


NORTH  DAKOTA  £039 

Commissioner  shall  proceed  to  determine  the  amount  of  inheritance  tax,  if  any, 
due  the  State  of  North  Dakota,  from  said  estate,  and  upon  such  determination 
shall  notify  the  administrator  or  executor  of  said  estate  immediately  whether  the 
same  is  taxable  or  exempt,  and  if  taxable,  the  amount  for  which  said  estate  is 
liable,  and  the  manner  in  which  the  tax  shall  be  paid. 

§  13b.  The  State  Treasurer  shall,  upon  receipt  of  the  total  amount  of  the 
tax  due  from  said  estate,  issue  to  the  administrator  or  executor  paying  the 
same,  his  receipt  therefor,  and  in  addition  to  said  receipt  shall  at  the  same 
time  issue  to  said  administrator  or  executor  a  certified  statement,  bearing  the 
seal  of  his  office,  to  the  effect  that  the  full  amount  of  the  inheritance  tax  due 
from  the  said  estate  to  the  State  of  North  Dakota  has  been  paid.  Where  the 
total  amount  of  the  tax  is  paid  to  the  State,  the  State  Treasurer  shall  pay  into 
the  county  treasury  of  the  county  in  which  the  estate  was  probated  twenty-five 
per  cent  of  the  amount  received ;  provided,  that  in  a  case  where  the  estate  ia 
settled  outside  of  the  State,  or  the  property  thereof  exists  in  more  than  one 
county,  the  total  amount  of  the  tax  shall  be  paid  into  the  State  treasury. 

§  13c.  The  State  Tax  Commissioner  shall,  upon  determining  that  any  such 
estate  is  exempt  from  the  payment  of  any  inheritance  tax  to  the  State  of 
North  Dakota,  execute  a  certified  statement  of  such  fact,  and  send  it  to  the 
executor  or  administrator  of  said  estate. 

§  14.  No  register  of  deeds  shall  cause  to  be  recorded  or  filed  in  this  office  any 
satisfaction  or  assignment  of  any  real  or  personal  property  mortgage,  executed 
by  a  foreign  executor  or  administrator  of  any  estate,  unless  said  satisfaction  or 
assignment  shall  be  accompanied  for  his  inspection  either  by  the  certified  state- 
ment of  the  State  Treasurer  that  the  inheritance  tax  due  the  State  of  North 
Dakota  from  such  estate  has  been  paid,  or  by  the  certified  statement  of  the  Tax 
Commissioner  that  said  estate  has  been  determined  to  be  exempt  from  the 
payment  of  any  inheritance  tax  to  the  State  of  North  Dakota;  provided,  that, 
in  his  discretion,  in  case  where  in  his  opinion  strict  compliance  with  the  pro- 
visions of  this  section  would  impose  an  undue  burden  upon  the  mortgagor,  the 
Tax  Commissioner  may  authorize  the  recording  of  such  satisfaction  before  the 
tax  has  been  paid. 

§  14.  No  safe  deposit  company,  trust  company,  corporation,  bank,  or  other 
institution,  person  or  persons  having  in  their  possession  or  under  their  con- 
trol securities,  deposits  or  other  assets  belonging  to  the  estate  of  any  nonresident 
decedent  shall  deliver  or  transfer  any  such  assets  to  the  administrator  or  execu- 
tor of  such  estate,  or  to  any  other  person  or  persons  upon  the  order  of  said 
administrator  or  executor,  unless  said  administrator  or  executor  or  such  other 
person  holding  such  order  for  the  transfer  or  delivery  of  such  assets  shall  submit 
to  said  safe  deposit  company,  trust  company,  corporation,  bank  or  other  institu- 
tion, person  or  persons  having  in  their  possession  or  under  their  control  auch 
assets  belonging  to  the  estate  of  the  decedent,  either  the  certified  statement  of 
the  State  Treasurer  to  the  effect  that  the  inheritance  tax  due  the  State  of 
North  Dakota  from  said  estate  is  exempt  from  the  payment  of  such  tax,  or  the 
certificate  of  the  Tax  Commissioner  that  no  tax  is  due  thereon. 

§  14b.  Any  register  of  deeds,  safe  deposit  company,  trust  company,  corpora- 
tion, bank  or  other  institution,  person  or  persons,  violating  any  of  the  pro- 
visions of  this  act  shall  be  liable  to  the  State  for  the  amount  of  the  tax  due  in 
each  case. 

§  15.  Where  stocks,  bonds,  mortgages  or  other  securities  of  corporations, 
doing  business  or  owning  property  partly  within  and  partly  without  the  State, 
shall  have  been  transferred  by  a  resident  or  a  nonresident  decedent,  the  tax 
shall  be  upon  such  proportion  of  the  value  thereof  as  the  property  or  business  of 
such  corporation  in  this  State  bears  to  its  total  property  or  business  within 
and  without  this  State. 

§  16.  If  any  stocks,  bonds,  mortgages  or  other  securities  of  a  holding  com- 
pany or  other  corporation  are  based  upon  or  represent  in  whole  or  in  part  the 
value  of  any  stocks,  bonds,  mortgages,  or  other  securities  of  any  corporation 
organized,  doing  business  or  owning  property  in  this  State,  either  directly  or 
indirectly,  the  transfer  of  such  stocks,  bonds,  mortgages  or  other  securities  of 
such  holding  company  or  other  corporation  shall  be  subject  to  the  inheritance 
tax  in  the  proportion  which  the  business  or  property  of  such  corporation  organ- 
ized or  doing  business  in  this  State  bears  to  its  total  property  or  business  within 
the  State  or  elsewhere. 


1040  THE  STATE  STATUTES 

§  17.  Whenever  the  estate  of  a  decedent  consists  of  property  which  is  located 
within  this  State  and  also  property  which  is  located  without  this  State,  there 
shall  be  deducted  from  the  value  of  such  property  within  this  State,  only  that 
proportion  of  the  debts,  expenses  of  administration  and  exemptions  which  equals 
the  proportion  that  the  North  Dakota  property  bears  to  the  entire  property  of 
the  estate. 

§  18.  Authorizes  the  State  Tax  Commissioner  to  require  reports  from  corpora- 
tions both  domestic  and  foreign. 

§  19.  Provides  that  corporations  violating  provisions  of  the  act  may  forfeit 
charter  or  license  to  do  business  within  the  State. 

§  20.  Gives  the  County  Court  having  jurisdiction  to  grant  letters  jurisdic- 
tion of  tax  proceedings. 

§  21.  Eequires  an  inventory  to  be  filed  with  petition  for  ancillary  letters. 

§  22.  Gives  the  County  Court  at  the  seat  of  government  jurisdiction  in  non- 
resident cases. 

§  23.  Authorizes  the  County  Court  to  appoint  appraisers. 

§  24.  Provides  for  the  usual  notice  by  appraisers  and  proceedings  before  him. 

§  25.  Requires  the  appraiser  to  report  to  the  County  Court,  which  thereupon 
assesses  the  tax. 

§  26.  Provides  for  notice  of  the  proceedings  before  the  County  Court. 

§  27.  Provides  for  computing  value  of  life  estates  and  remainders  on  American 
experience  tables  at  6%. 

§  28.  Provides  that  contingent  incumbrances  upon  an  estate  shall  be  ignored, 
but  gives  a  refund  if  they  ultimately  accrue,  as  provided  in  section  10. 

§  29.  Where  any  property  shall,  after  the  passage  of  this  act,  be  transferred 
subject  to  any  charge,  estate,  or  interest  determinable  by  the  death  of  any 
person  or  at  any  period  ascertainable  only  by  reference  to  death,  the  increase 
or  benefit  accruing  to  any  person  or  corporation  upon  the  extinction  or  determina- 
tion of  such  charge,  estate  or  interest  shall  be  deemed  a  transfer  of  property 
taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though  the  person 
or  corporation  beneficially  entitled  thereto  had  then  acquired  such  increase  of 
benefit  from  the  person  from  whom  the  title  to  their  respective  estate  or  interests 
is  derived. 

§  30.  When  property  heretofore  or  hereafter  is  transferred  in  trust  or  other- 
wise, and  the  rights,  interests  or  estates  of  the  transferees  are  dependent  upon 
contingencies  or  conditions  whereby  they  may  be  wholly  or  in  part  created, 
defeated,  extended  or  abridged,  a  tax  shall  be  imposed  upon  such  transfer  at 
the  lowest  rate  which,  on  the  happening  of  any  of  the  said  contingencies  or 
conditions,  would  be  possible  under  the  provisions  of  this  act;  and  such  taxes  so 
imposed  shall  be  due  and  payable  out  of  the  property  transferred;  provided, 
however,  that  on  the  happening  of  any  contingency  or  condition  whereby  the 
said  property  or  any  part  thereof  is  transferred  to  a  person  or  corporation  which 
under  the  provisions  of  this  act  is  required  to  pay  a  tax  at  a  higher  rate  than 
the  tax  imposed,  then  such  transferee  shall  pay  the  difference  between  the  tax 
imposed  and  the  tax  at  the  higher  rate,  and  the  amount  of  such  increased  tax 
shall  be  enforced  and  collected  as  herein  provided. 

§  31.  Provides  for  the  taxation  of  contingent  remainders  where  they  accrue  at 
full  undiminished  value. 

§  32.  Provides  form  of  taxing  order  to  be  entered  by  County  Court. 

§  33.  Provides  for  rehearing  before  County  Court. 

§§  34,  35,  36.  Provide  for  collection  of  delinquent  taxes. 

§  37.  Provides  for  investigations  by  the  public  administrator. 

§§  38,  39.  Prescribe  the  duties  and  powers  of  the  State  Tax  Commissioner. 

§§  40  to  45.  Regulate  details  of  administration. 

§  46.  The  words  "estate"  and  "property,"  as  used  in  this  act  shall  be 
taken  to  mean  the  real  and  personal  property  or  interest  therein  of  the  testator, 
intestate,  grantor,  bargainer,  vendor,  or  donor,  passing  or  transferred  to  indi- 
vidual legatees,  devisees,  heirs,  next  of  kin,  grantees,  donees,  vendees,  or  suc- 
cessors, and  shall  include  all  personal  property  within  or  without  the  State. 
The  word  "transfer"  as  used  in  this  act  shall  be  taken  to  include  all  the 
passing  of  property  or  any  interest  therein,  in  possession  or  enjoyment,  present 
or  future,  by  inheritance,  descent,  devise,  succession,  bequest,  grant,  deed, 
bargain,  sale,  gift  or  appointment  in  the  manner  herein  prescribed.  The  word 
"decedent,"  as  used  in  this  act,  shall  include  the  testator,  intestate,  grantor, 


NORTH  DAKOTA  1041 

bargainer,  vendor,  or  donor.  The  words  "county  treasurer,"  "public  admin- 
istrator," and  "attorney,"  as  used  in  this  act,  shall  be  taken  to  mean  the 
treasurer,  public  administrator  or  attorney  of  the  County  Court  having  juris- 
diction. All  money  invested  in  this  State,  including  the  stock  or  bonds  of  any 
corporation,  shall  be  deemed  to  be  property  within  the  jurisdiction  of  the  State. 

§  47.  Provides  for  oaths  of  witnesses. 

§  48.  Is  a  saving  clause  as  to  former  acts  repealed. 

§  49.  Repeals  sections  of  former  statutes. 

AMENDMENTS  OF  1921. 

An  Act  to  amend  and  re-enact  section  13b  and  section  43  of  chapter  225,  Laws 
of  North  Dakota,  1919,  relating  to  the  taxation  of  transfer  of  property  by 
will,  gift  or  by  Intestate  Law. 

Be  it  enacted  by  the  Legislative  Assembly  of  the  State  of  North  Dakota: 

Section  1.  That  section  13b  of  chapter  225,  Laws  of  North  Dakota,  1919, 
relating  to  the  taxation  of  transfers  of  property  by  will,  gift  or  by  intestate 
law  be  and  the  same  hereby  is  amended  to  read  as  follows: 

§  13b.  The  State  Treasurer  shall,  upon  receipt  of  the  total  amount  of  the  tax 
due  from  said  estate,  issue  to  the  administrator  or  executor  paying  the  same, 
his  receipt  therefor,  and  in  addition  to  said  receipt  shall  at  the  same  time  issue  to 
said  administrator  or  executor  a  certified  statement,  bearing  the  seal  of  his  office, 
to  the  effect  that  the  full  amount  of  the  inheritance  tax  due  from  the  said  estate 
to  the  State  of  North  Dakota  has  been  paid.  Where  the  total  amount  of  the 
tax  is  paid  to  the  State,  the  State  Treasurer  shall  pay  into  the  County  Treasury 
of  the  county  in  which  the  estate  was  probated  fifty  per  cent  of  the  amount 
received;  provided,  that  in  a  ease  where  the  estate  is  settled  outside  of  the  State, 
or  the  property  thereof  exists  in  more  than  one  county,  the  total  amount  of  the 
tax  shall  be  paid  into  the  State  Treasury. 

§  2.  That  section  43  of  chapter  225,  Laws  of  North  Dakota,  1919,  aforesaid, 
be  and  the  same  is  hereby  amended  and  re-enacted  to  read  as  follows: 

§  43.  The  County  Treasurer  shall  retain  for  the  use  of  the  county,  out  of  all 
taxes  paid  and  accounted  for  by  him  each  year  under  this  act,  fifty  per  cent  on 
all  sums  so  collected  by  or  paid  to  said  treasurer. 

Approved  March  9,  1921. 

An  Act  to  repeal  section  14  of  chapter  225,  Laws  of  North  Dakota,  1919,  relating 
to  the  Taxation  of  transfers  of  property  by  will,  gift  or  by  intestate  law. 
Be  it  enacted  by  the  Legislative  Assembly  of  the  State  of  North  Dakota: 

Section  1.  That  section  14,  section  14a  and  section  14b  of  chapter  225,  Session 
Laws  of  North  Dakota,  for  the  year  1919,  relating  to  the  taxation  of  transfers 
of  property  by  will,  gift,  or  by  intestate  laws,  be  and  the  same  is  hereby  repealed. 

§  2.  The  intention  of  this  law  is  to  exempt  from  inheritance  tax  all  intangibles 
of  non-resident  decedents. 

Approved  March  3,  1921. 

Prior  Statutes:  Ch.  171,  L.  1903,  ch.  10,  L.  1905;  ch.  185,  L.  1913,  ch.  231, 
L.  1917. 

66 


1042 


THE  STATE  STATUTES 


OHIO. 

Taxes  property  of  nonresidents  within  the  State,  including  transfers  of  stock 
in  domestic  corporations  where  death  occurred  after  June  5,  1919. 

Under  the  General  Code  of  1910,  as  amended  by  act  of  1913,  page  463,  Ohio 
taxed  only  collateral  transfers  at  the  flat  rate  of  5%. 

The  present  Inheritance  Tax  Law  took  effect  June  5,  1919,  and  imposes  the 
following  rates  and  exemptions: 


CLASS  OB  RELATIONSHIP 

Exemption 

Above 
exemption 
up  to 
$25,000 

$25,000 
to 
$100,000 

$100,000 
to 
$200,000 

On  all 
above 
$200,000 

Wife  or  minor  child. 

$5,000 

1% 

2% 

3% 

4% 

Father,  mother,  husband,  adult,  child, 
adopted  child  and  its  lineal  descen- 
dants. 

$3,500 

1% 

1% 

2% 

3% 

Brother,  sister,  niece,  nephew,  wife  or 
widow  of  a  son,  son-in-law,  mutually 
acknowledged  child. 

$500 

5% 

'      6% 

7% 

8% 

All  others.     (Except  municipal,  chari- 
table or  educational  corporations 
within  the  State.) 

None 

7% 

8% 

9% 

10% 

THE   STATUTE. 

See  1920  amendment  as  to  procedure  and  exemptions,  page  1051. 

Ohio  is  now  in  line  with  the  majority  of  her  sister  States.  Her  new  inheritance 
tax  statute  is  in  full  as  follows: 

Section  1.  The  second  subdivision  of  chapter  2,  title  1,  part  2d,  of  the  General 
Code  heretofore  designated  "Collateral  Inheritance"  and  consisting  of  sections 
5331  to  5349  of  the  General  Code,  shall  be  hereafter  known  and  designated  by  the 
title  ' '  Inheritances. ' ' 

§  5331.  As  used  in  this  subdivision  of  this  chapter: 

1.  The  words  "estate"  and  "property"  include  everything  capable  of  owner- 
ship, or  any  interest  therein  or  income  therefrom,  whether  tangible  or  intangible, 
and,  except  as  to  real  estate,  whether  within  or  without  this  State,  which  passes 
to  any  one  person,  institution  or  corporation,  from  any  one  person,  whether  by 
a  single  succession  or  not. 

2.  "Succession"  means  the  passing  of  property  in  possession  or  enjoyment, 
present  or  future. 

3.  "Within  this  State,"  when  predicated  of  tangible  property,  means  physically 
located  within  this  State;  when  predicated  of  intangible  property,  that  the  suc- 
cession thereto  is,  for  any  purpose,  subject  to,  or  governed  by  the  law  of  this 
State. 

4.  ' '  Decedent ' '  includes  a  testator,  intestate,  grantor,  assignor,  vendor  or  donor. 

5.  "Contemplation  of  death"  means  that  expectation  of  death  which  actuates 
the  mind  of  a  person  on  the  execution  of  his  will. 

§  5332.  A  tax  is  hereby  levied  upon  the  succession  to  any  property  passing, 
in  trust  or  otherwise,  to  or  for  the  use  of  a  person,  institution  or  corporation,  in 
the  following  cases: 

1.  When  the  succession  is  by  will  or  by  the  intestate  laws  of  this  State  from  a 
person  who  was  a  resident  of  this  State  at  the  time  of  his  death. 

2.  When  the  succession  is  by  will  or  by  the  intestate  laws  of  this  State  or 
another  State  or  country,  to  property  within  this  State,  from  a  person  who  was 
not  a  resident  of  this  State  at  the  time  of  his  death. 

3.  When  the  succession  is  to  property  from  a  resident,  or  to  property  within 
this  State  from  a  nonresident,  by  deed,  grant,  sale,  assignment  of  gift,  made 
without  a  valuable  consideration  substantially  equivalent  in  money  or  money 'a 
worth  to  the  full  value  of  such  property: 

(a)  In  contemplation  of  the  death  of  the  grantor,  vendor,  assignor,  or  donor,  or 


OHIO  1043 

(b)  Intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 

4.  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived   from   any   disposition   of   property   heretofore   or   hereafter   made,   such 
appointment  when  made  shall  be  deemed  a  succession  taxable  under  the  provisions 
of  this  subdivision  of  this   chapter  in  the   same  manner  as   if   the   property   to 
which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power, 
and  had  been  bequeathed  or  devised  by  said  donee  by  will;   and  whenever  any 
such  person  or  corporation  possessing  such  power  of  appointment  shall  omit  or 
fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or  in  part, 
a  succession  taxable  under  the  provisions  of  this  act  shall  be  deemed  to  take 
place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner  as  if  the 
persons,  institutions  or  corporations  thereby  becoming  entitled  to  the  possession 
or  enjoyment  of  the  property  to  which  such  power  related  had  succeeded  thereto 
by  a  will  of  the  donee  of  the  power  failing  to  exercise  the  same,  taking  effect  at 
the  time  of  such  omission  or  failure. 

5.  Whenever  property  is  held  by  two  or  more  persons  jointly,  so  that  upon  the 
death  of  one  of  them  the  survivor  or  survivors  have  a  right  to  the  immediate 
ownership  or  possession  and  enjoyment  of  the  whole  property,  the  accrual  of  such 
right  by  the  death  of  one  of  them  shall  be  deemed  a  succession  taxable  under  the 
provisions   of  this   subdivision   of   this   chapter   in   the   same   manner   as   if   the 
enhanced  value  of  the  whole  property  belonged  absolutely  to  the  deceased  person, 
and  had  been  by  him  bequeathed  to  the  survivor  or  survivors  by  will. 

6.  When  a  decedent  appoints  one  or  more  executors  or  trustees,  and  instead 
of  their  lawful  allowance  makes  a  bequest  or  devise  of  property  to  them,  which 
would  otherwise  be  liable  to  such  taxes,  or  appoints  them  as  residuary  legatees, 
and  such  bequest,  devise  or  residuary  legacy  exceeds  what  would  be  a  reasonable 
compensation  for  their  services,  such  excess  shall  be  a  succession  and  liable  to 
such  tax,  and  the  probate  court  having  jurisdiction  of  their  accounts  shall  fix 
such  compensation. 

7.  When  any  property   shall  pass  subject   to   any   charge,   estate   or   interest, 
determinable  by  the  death  of  any  person,  or  at  any  period  ascertainable  only  by 
reference  to  death,  the  increase  accruing  to  any  person,  institution  or  corporation, 
on  the  extinction  and  determination  of  such  charge,  estate  or  interest,  shall  be 
deemed  a  succession   taxable  under   the   provisions   of   this   subdivision   of   this 
chapter,  in  the  same  manner  as  if  the  person,  institution  or  corporation  bene- 
!!••;, lly  entitled  thereto  had  then  acquired  such  increase  from  the  person  from 
whom  the  title  to  their  respective  estates  or  interests  is  derived. 

Such  tax  shall  be  upon  the  excess  of  the  actual  market  value  of  such  property 
over  and  above  the  exemptions  made  and  at  the  rates  prescribed  in  this  subdivision 
of  this  chapter. 

§  5333.  If  the  succession  to  property-  which  is  not  within  this  State  is  locally 
subject  in  another  State  or  country  to  a  tax  of  like  character  and  amount  to  that 
hereby  levied,  and  if  such  tax  be  actually  paid  or  guaranteed  or  secured  in 
accordance  with  law  in  such  other  State  or  country,  such  succession  shall  not  be 
subject  to  the  tax  hereby  levied;  if  locally  subject  in  any  State  or  country  to  a 
tax  of  like  character  but  of  less  amount  than  that  hereby  levied  and  such  tax 
be  actually  paid  or  guaranteed  or  secured,  as  aforesaid,  such  succession  shall  be 
taxable  under  this  subdivision  of  this  chapter  to  the  extent  of  the  difference 
between  the  taxes  actually  paid,  guaranteed  or  secured,  and  the  amount  for  which 
such  succession  would  otherwise  be  taxable  hereunder. 

§  5334.  The  succession  to  any  property  passing  to  or  for  the  use  of  the  State 
of  Ohio,  or  to  or  for  the  use  of  a  municipal  corporation  or  other  political  sub- 
division thereof  for  exclusively  public  purposes,  or  public  institutions  of  learning, 
or  to  or  for  the  use  of  an  institution  for  purposes  only  of  public  charity,  carried 
on  in  whole  or  in  substantial  part  within  this  State,  shall  not  be  subject  to  the 
provisions  of  the  next  preceding  section.  Successions  passing  to  other  persons 
shall  be  subject  to  the  provisions  of  said  section  to  the  extent  only  of  the  value 
of  the  property  transferred  above  the  following  exemptions: 

1.  When  the  property  passes  to  or  for  the  use  of  the  wife  or  a  child  of  the 
decedent  who  is  a  minor  at  the  death  of  the  decedent,  the  exemptions  shall  be  five 
thousand  dollars. 

2.  When  the  property  passes  to  or  for  the  use  of  the  father,  mother,  husband, 
adv.lt  child,  adopted  child,  or  person  recognized  as  an  adopted  child  and  made  a 
legal  heir  under  the  provisions  of  a  statute  of  this  or  any  other  State  or  country, 


1044  THE  STATE  STATUTES 

or  the  lineal  descendants  thereof,  or  a  lineal  descendant  of  an  adopted  child,  the 
exemption  shall  be  three  thousand  five  hundred  dollars. 

3.  When  the  property  passes  to  or  for  the  use  of  a  brother,  or  sister,  niece, 
nephew,  the  wife  or  widow  of  a  son,  the  husband  of  a  daughter  of  the  decedent, 
or  to  any  child  to  whom  the  decedent,  for  not  less  than  ten  years  prior  to  the 
succession  stood  in  the  mutually  acknowledged  relation  of  a  parent,  the  exemption 
shall  be  five  hundred  dollars. 

§  5335.  The  rates  at  which  such  tax  is  levied  are  as  follows: 

1.  On  successions  passing  to   any  person  mentioned  in   the   first   and   second 
sub-paragraphs  of  the  preceding  section: 

(a)  1%  on  the  excess  of  the  value  of  the  property  over  the  exemptions  up  to 
and  including  the  sum  of  twenty-five  thousand  dollars. 

(b)  2%  on  the  next  seventy-five  thousand  dollars,  or  any  part  thereof; 

(c)  3%  on  the  next  one  hundred  thousand  dollars,  or  any  part  thereof; 

(d)  4%  on  the  amount  representing  the  balance  of  the  value  of  each  individual 
succession. 

2.  On  successions  passing  to  any  person  mentioned  in  the  third  sub-paragraph 
of  the  preceding  section: 

(a)  5%  on  the  excess  of  the  value  of  the  property  over  the  exemptions  up  to 
and  including  twenty- five  thousand  dollars; 

(b)  6%  on  the  next  seventy-five  thousand  dollars,  or  any  part  thereof; 

(c)  7%  on  the  next  one  hundred  thousand  dollars,  or  any  part  thereof; 

(d)  8%  on  the  amount  representing  the  balance  of  the  value  of  each  individual 
succession. 

3.  On  all  successions  passing  to  persons  other  than  those  hereinbefore  mentioned, 
or  to  institutions  or  corporations: 

(a)  7%  on  the  value  of  the  property  up  to  and  including  the  sum  of  twenty- 
five  thousand  dollars; 

(b)  8%  on  the  next  seventy- five  thousand  dollars,  or  any  part  thereof; 

(c)  9%  on  the  next  one  hundred  thousand  dollars,  or  any  part  thereof; 

(d)  10%  on  the  amount  representing  the  balance  of  the  value  of  each  individual 
succession. 

§  5336.  Taxes  levied  under  this  subdivision  of  this  chapter  shall  be  due  and 
payable  at  the  time  of  the  succession,  except  as  herein  otherwise  provided,  but  in 
no  case  prior  to  the  death  of  the  decedent.  Taxes  upon  the  succession  of  any 
estate  or  property,  or  interest  therein  limited,  dependent  or  determinable  upon 
the  happening  of  any  contingency  or  future  event,  and  not  vested  at  the  death 
of  the  decedent,  by  reason  of  which  the  actual  market  value  thereof  cannot  be 
ascertained  at  the  time  of  such  death,  as  provided  in  this  subdivision  of  this 
chapter,  shall  accrue  and  become  due  and  payable  when  the  persons  or  corporations 
then  beneficially  entitled  thereto  shall  come  into  actual  possession  or  enjoyment 
thereof.  Such  taxes  shall  be  and  remain  a  lien  upon  the  property  passing  until 
paid,  and  the  successor  and  the  executors,  of  the  general  estate  of  the  decedent, 
and  the  trustees  of  such  property  shall  be  personally  liable  for  all  such  taxes, 
with  interest  as  hereinafter  provided,  until  they  shall  have  been  paid  as  herein- 
after directed.  Such  an  administrator,  executor  or  trustee,  having  in  charge  or 
in  trust  for  distribution  any  property  the  succession  to  which  is  subject  to  such 
taxes,  shall  deduct  the  taxes  therefrom,  or  collect  the  same  from  the  person 
entitled  thereto.  He  shall  not  deliver,  or  be  compelled  to  deliver,  any  specific 
legacy  or  property,  the  succession  to  which  is  subject  to  said  taxes,  to  any  person, 
until  he  shall  have  collected  the  taxes  thereon.  He  may  sell  so  much  of  the  estate 
of  the  decedent  as  will  enable  him  to  pay  said  taxes  in  like  manner  as  he  would 
be  empowered  to  do  for  the  payment  of  the  debts  of  the  decedent. 

§  5337.  If  a  legacy  subject  to  such  taxes  is  charged  upon  or  payable  out  of  real 
estate,  the  heir  or  devisee,  before  paying  it,  shall  deduct  the  taxes  therefrom  and 
pay  such  taxes  to  the  executor,  administrator  or  trustee,  and  the  taxes  shall  remain 
a  charge  upon  the  real  estate  until  it  is  paid;  and  the  payment  thereof  shall  be 
enforced  by  the  executor,  administrator  or  trustee,  in  like  manner  as  the  payment 
of  the  legacy  itself  may  be  enforced,  or  by  the  prosecuting  attorney  as  provided 
in  this  subdivision  of  this  chapter.  If  such  legacy  shall  be  given  in  money  to  a 
person  for  a  limited  period,  such  administrator,  executor  or  trustee  shall  'retain 
the  tax  on  the  whole  amount ;  and  if  it  be  not  in  money  he  shall  make  an  appli- 
cation to  the  court  having  jurisdiction  of  his  accounts  to  make  an  ascertainment,. 


OHIO  1045 

if  the  case  require  it,  of  the  sum  to  be  paid  into  his  hands  by  such  legatee  on 
account  of  the  taxes,  and  for  such  further  order  as  the  case  may  require. 

§  5338.  Taxes  levied  by  this  subdivision  of  this  chapter  shall  be  paid  to  the 
treasurer  of  the  county  in  which  the  court  having  jurisdiction  of  proceedings 
under  this  subdivision  of  this  chapter  is  held  by  the  person  or  persons  charged 
with  the  payment  thereof.  If  such  taxes  are  not  paid  within  one  year  after  the 
accrual  thereof,  interest  at  the  rate  of  8%  per  annum  shall  thereafter  be  charged 
and  collected  thereon;  unless  by  reason  of  claims  made  upon  the  estate  necessary 
litigation,  or  other  unavoidable  causes  of  delay,  such  taxes  cannot  be  determined 
and  paid  as  hereinbefore  provided,  in  which  case  interest  at  the  rate  of  5%  per 
annum  shall  be  charged  upon  such  taxes  from  the  accrual  thereof  until  the  cause 
of  such  delay  is  removed,  after  which  8%  shall  be  charged.  If  such  taxes  are 
paid  before  the  expiration  of  one  year  after  the  accrual  thereof,  a  discount  of 
1%  per  month  for  each  full  month  that  payment  has  been  made  prior  to  the 
expiration  of  the  year,  shall  be  allowed  on  the  amount  of  such  taxes. 

§  5339.  If  any  debts  shall  be  proven  against  the  general  estate  of  a  decedent 
after  the  payment  of  any  legacy  or  distributive  share  thereof,  from  which  any 
such  tax  has  been  deducted  or  upon  which  it  has  been  paid  by  the  person  entitled 
to  such  legacy  or  distributive  share,  and  such  person  is  required  by  order  of  the 
probate  court  having  jurisdiction,  on  notice  of  the  Tax  Commission  of  Ohio,  to 
refund  the  amount  of  such  debts,  or  any  part  thereof,  an  equitable  proportion  of 
the  tax  shall  be  repaid  to  him  by  the  executor,  administrator  or  trustee,  if  the  tax 
has  not  been  paid  to  the  county  treasurer;  or  if  such  tax  has  been  paid  to  the 
county  treasurer,  he  shall,  on  the  warrant  of  the  county  auditor,  refund  out  of 
the  funds  in  his  hands  or  custody  to  the  credit  of  inheritance  taxes,  such  equitable 
proportion  of  the  tax,  without  interest,  and  be  credited  therewith  in  his  accounts. 
If  after  the  payment  of  any  tax,  in  pursuance  of  an  order  fixing  such  tax,  made 
by  the  probate  court  having  jurisdiction,  such  order  be  modified  or  reversed  on 
due  notice  to  the  Tax  Commission  of  Ohio,  the  said  commission  shall,  unless 
further  proceedings  on  appeal  or  in  error  are  pending  or  contemplated  by  order 
direct  the  county  auditor  to  refund  such  amount  in  the  same  manner;  but  no 
such  application  for  such  ref under  shall  be  made  after  one  year  from  such  reversal 
or  modification,  by  the  highest  court  to  which  error  may  be  prosecuted.  The  fees 
theretofore  allowed  upon  such  over-payment  shall  be  adjusted  in  accordance  with 
such  refunder.  Where  it  shall  be  shown  to  the  satisfaction  of  the  probate  court 
that  deductions  for  debts  were  erroneously  allowed,  such  probate  court  may  enter 
an  order  assessing  the  taxes  upon  the  amount  wrongfully  or  erroneously  deducted. 

§  5340.  The  probate  court  of  any  county  of  the  State  having  jurisdiction  to 
grant  letters  testamentary  or  of  administration  upon  the  estate  of  a  decedent, 
on  the  succession  of  whose  property  a  tax  is  levied  by  this  subdivision  of  this 
chapter,  or  to  appoint  a  trustee  of  such  estate,  or  any  part  thereof,  or  to  give 
ancillary  letters  thereon,  shall  have  jurisdiction  to  hear  and  determine  the  ques- 
tions arising  under  the  provisions  of  this  subdivision  of  this  chapter,  and  to  do 
any  act  in  relation  thereto  authorized  by  law  to  be  done  by  a  probate  court  in 
other  matters  or  proceedings  coming  within  its  jurisdiction;  and  if  two  or  more 
probate  courts  shall  be  entitled  to  exercise  such  jurisdiction,  the  court  first 
acquiring  jurisdiction  hereunder  shall  retain  the  same  to  the  exclusion  of  every 
other  probate  court.  Such  jurisdiction  shall  exist  not  only  with  respect  to 
successions  in  which  the  jurisdiction  of  such  court  would  otherwise  be  invoked, 
but  shall  extend  to  all  cases  covered  by  this  act,  to  the  end  that  succession  inter 
vivos,  taxable  under  the  provisions  of  this  subdivision  of  this  chapter,  may  be 
reached  thereby. 

§  5341.  The  county  auditor  shall  be  the  inheritance  tax  appraiser  for  his 
county.  The  probate  court,  upon  its  own  motion  may,  or  upon  the  application 
of  any  interested  person,  including  the  Tax  Commission  of  Ohio,  shall  by  order 
direct  the  county  auditor  to  fix  the  actual  market  value  of  any  property  the 
succession  to  which  is  subject  to  the  tax  levied  by  this  subdivision  of  this 
chapter.  Such  auditor  shall  forthwith  give  notice  by  mail  to  all  persons  known 
to  him  to  have  a  claim  or  interest  in  the  property  to  be  appraised,  including  the 
Tax  Commission  of  Ohio,  and  to  such  persons  as  the  probate  court  may  by  order 
direct,  of  the  time  and  place  when  he  will  appraise  such  property.  He  shall  at 
such  time  and  place  appraise  the  same  at  its  actual  market  value  as  of  the  date  of 
the  accrual  of  the  tax,  except  as  hereinafter  provided,  and  subject  to  the  rules 
hereinafter  prescribed.  Such  county  auditor  for  such  purpose  is  hereby  author- 


1046  THE  STATE  STATUTES 

ized  to  issue  subpoenas  and  to  compel  the  attendance  of  witnesses  and  the  pro- 
duction of  books  and  papers  before  him,  and  to  examine  such  witnesses  under 
oath  concerning  such  property,  the  value  thereof,  and  the  nature  and  circum- 
stances of  the  succession.  Disobedience  of  such  subpoena,  or  refusal  to  testify 
on  such  examination  shall  be  punished  as  a  contempt  of  the  probate  court.  The 
county  auditor  shall  report  his  findings  in  writing,  together  with  the  depositions 
of  the  witnesses  examined,  and  such  other  facts  in  relation  thereto  as  the  probate 
court  may  order.  Such  report  shall  be  made  in  duplicate;  one  copy  thereof  shall 
be  filed  with  the  probate  court,  and  the  other  with  the  Tax  Commission  of  Ohio. 

The  fees  of  the  sheriff  or  other  officer,  serving  such  subpoenas,  and  the  actual 
and  necessary  traveling  and  other  expenses  incurred  by  the  county  auditor  in 
making  the  appraisement  shall  be  certified  by  the  county  auditor  on  such  report. 
If  the  probate  judge  finds  such  fees  and  expenses  to  be  correct,  he  shall  allow 
such  fees,  and  so  much  of  such  expenses  as  he  may  find  to  have  been  reasonable, 
having  regard  to  the  amount  of  the  State's  shares  of  the  taxes,  and  certify  the 
amount  so  allowed  for  each  on  the  order  fixing  the  taxes.  For  the  purpose  of 
this  and  succeeding  sections  of  this  subdivision  of  this  chapter  relating  to  the 
assessment  of  the  tax,  the  entire  estate  of  a  decedent,  though  passing  to  several 
persons,  institutions  or  corporations,  shall  be  the  subject  of  inquiry  in  a  single 
proceeding. 

§  5342.  The  value  of  a  future  or  limited  estate,  income,  interest  or  annuity 
for  any  life  or  lives  in  being,  shall  be  determined  by  the  rule,  method  and 
standard  of  mortality  and  value  employed  by  the  Superintendent  of  Insurance 
in  ascertaining  the  value  of  annuities  for  the  determination  of  liabilities  of  life 
insurance  companies,  except  that  the  rate  of  interest  shall  be  5%  per  annum. 
The  Superintendent  of  Insurance  shall,  without  a  fee,  on  the  application  of  any 
probate  court  or  of  any  county  auditor,  determine  the  value  of  any  such  estate, 
income,  interest  or  annuity,  upon  the  facts  contained  in  any  such  application, 
and  other  facts  to  him  submitted  by  such  court  or  auditor  and  certify  the  same 
in  duplicate  to  such  court  or  auditor,  and  his  certificate  thereof  shall  be  conclusive 
evidence  that  the  method  of  computation  therein  is  correct. 

In  estimating  the  value  of  any  estate  or  interest  in  property,  to  the  beneficial 
enjoyment  or  possession  whereof  there  are  persons  or  corporations  presently 
entitled,  no  allowance  shall  be  made  on  account  of  any  contingent  encumbrance 
thereon,  nor  on  account  of  any  contingecy  upon  the  happening  of  which  the 
estate,  or  some  part  thereof,  or  interest  therein,  may  be  abridged,  defeated  or 
diminished;  but  in  the  event  of  such  encumbrance  taking  effect  as  an  actual 
burden  upon  the  interest  of  the  beneficiary,  or  in  the  event  of  the  abridgement, 
defeat  or  diminution  of  such  estate,  or  interest  therein,  as  aforesaid,  a  refunder 
shall  be  made  in  the  manner  provided  by  section  5339  of  the  General  Code,  to 
the  person  properly  entitled  thereto  of  a  proportionate  amount  of  such  tax  on 
account  of  the  encumbrance  when  taking  effect,  or  so  much  as  will  reduce  the 
same  to  the  amount  which  would  have  been  assessed  on  account  of  the  actual 
duration  or  extent  of  the  estate  enjoyed. 

§  5343.  When,  upon  any  succession,  the  rights,  interests,  or  estates  of  the 
successors  are  dependent  upon  contingencies  or  conditions  whereby  they  may 
be  wholly  or  in  part  created,  defeated,  extended  or  abridged,  a  tax  shall  be 
imposed  upon  such  successions  at  the  highest  rate  which,  on  the  happening  of  any 
such  contingencies  or  conditions,  would  be  possible  under  the  provisions  of  this 
subdivision  of  this  chapter,  and  such  taxes  shall  be  due  and  payable  forthwith 
out  of  the  property  passing,  and  the  probate  court  shall  enter  a  temporary  order 
determining  the  amount  of  such  taxes  in  accordance  with  this  section;  but  on  the 
happening  of  any  contingency  whereby  the  said  property,  or  any  part  thereof, 
passes  so  that  such  ultimate  succession  would  be  exempt  from  taxation  under  the 
provisions  of  this  subdivision  of  this  chapter,  or  taxable  at  a  rate  less  than  that 
so  imposed  and  paid,  the  successor  shall  be  entitled  to  a  refunder  of  the  differ- 
ence between  the  amount  so  paid  and  the  amount  payable  on  the  ultimate  suc- 
cession under  the  provisions  of  this  chapter,  without  interest;  and  the  executor 
or  trustees  shall  immediately  upon  the  happening  of  such  contingencies  or  con- 
ditions apply  to  the  probate  court  of  the  proper  county,  upon  a  verified  petition 
setting  forth  all  the  facts,  and  giving  at  least  ten  days'  notice  by  mail  to  all 
interested  parties,  for  an  order  modifying  the  temporary  order  of  said  probate 
court  so  as  to  provide  for  a  final  assessment  and  determination  of  the  taxes  in 


OHIO  1047 

accordance  with  such  ultimate  succession.  Such  refunder  shall  be  made  in  the 
manner  provided  by  section  5339  of  the  General  Code. 

§  5344.  Estates  in  expectancy  which  are  contingent  or  defeasible,  and  in  which 
proceedings  for  the  determination  of  the  taxes  have  not  been  taken,  or  have  been 
held  in  abeyance,  shall  be  appraised  at  their  full  undiminished  value  when  the 
persons  entitled  thereto  shall  come  into  the  beneficial  enjoyment  or  possession 
thereof,  without  diminution  for  or  on  account  of  any  valuation  theretofore  made 
of  the  particular  estates  for  the  purpose  of  this  subdivision  of  this  chapter,  upon 
which  such  estate  in  expectancy  may  have  been  limited.  An  estate  for  life  or  for 
years  which  can  be  divested  by  the  act  or  omission  of  the  legatee,  or  devisee, 
shall  be  appraised  and  taxed  as  if  there  were  no  possibility  of  any  such  divesting. 

§  5345.  From  the  report  of  appraisal  and  other  evidence  relating  to  any  such 
estate  before  the  probate  court,  such  court  shall  forthwith  upon  the  filing  of  such 
report,  by  order  entered  upon  the  journal  thereof,  find  and  determine,  as  of 
course,  the  actual  market  value  of  all  estates,  the  amount  of  taxes  to  which  the 
succession  or  successions  thereto  are  liable,  the  successors  and  legal  representa- 
tives liable  therefor;  and  the  townships  or  municipal  corporations  in  which  the 
same  originated.  Provided,  however,  that  in  case  no  application  for  appraise- 
ment is  made  the  probate  court  may  make  and  enter  such  findings  and  determina- 
tions without  such  appraisement.  Thereupon  the  judge  of  such  court  shall  imme- 
diately give  notice  of  such  order  to  all  persons  known  to  be  interested  therein, 
and  shall  immediately  forward  a  copy  thereof  to  the  Tax  Commission  of  Ohio, 
together  with  copies  of  all  orders  entered  by  him  in  relation  to  or  affecting  in 
any  way  the  taxes  on  any  such  estate,  including  orders  of  exemption.  If  it  shall 
appear  at  any  stage  of  the  proceedings  that  any  of  such  persons  known  to  be 
interested  in  the  estate  is  an  infant  or  of  unsound  mind,  the  probate  court  may 
if  the  interest  of  such  person  is  presently  involved  and  is  adverse  to  that  of  any 
of  the  other  persons  interested  therein,  exercise  the  powers  provided  for  in  sections 
11249  and  11253,  inclusive,  of  the  General  Code. 

§  5346.  The  Tax  Commission  of  Ohio,  or  any  person  dissatisfied  with  the 
appraisement  and  determination  of  taxes,  may  file  exceptions  thereto  in  writing 
with  the  probate  court  within  sixty  days  from  the  entry  of  the  order,  stating  the 
grounds  upon  which  such  exceptions  are  taken.  The  probate  court  shall  thereupon 
by  order  fix  a  time  not  less  than  ten  days  thereafter  for  the  hearing  of  such 
exceptions,  and  shall  give  notice  thereof  as  it  may  deem  necessary;  provided, 
that  a  copy  of  such  notice  and  of  such  exceptions  shall  be  forthwith  mailed  to 
the  Tax  Commission  and  the  county  auditor.  Upon  the  hearing  of  such  excep- 
tions, said  court  may  make  such  order  as  to  it  may  seem  just  and  proper  in  the 
premises.  No  costs  shall  be  allowed  by  the  probate  court  on  such  exceptions. 

§  5347.  At  the  expiration  of  such  period  of  sixty  days  if  no  exceptions  be  filed, 
or  at  any  time  within  such  period,  on  the  application  of  all  parties,  including  the 
Tax  Commission  of  Ohio,  the  probate  judge  shall  make  and  certify  to  the  county 
auditor  a  copy  of  the  order  provided  for  in  section  5345  of  the  General  Code.  If 
such  exceptions  are  filed  within  such  period  the  probate  judge  shall,  within  five 
days  after  the  entry  of  the  final  order,  make  and  certify  such  copy  of  the  original 
finding  and  determination,  together  with  any  modifications  thereof  ordered  upon 
the  hearing  of  such  exceptions. 

The  county  auditor  shall  thereupon,  on  a  form  to  be  prescribed  for  him  by 
the  auditor  of  the  State,  make  a  charge  based  upon  such  order  and  certify  a 
duplicate  thereof  to  the  county  treasurer,  who  shall  collect  the  taxes  so  charged. 

|  5348.  An  appeal  may  be  taken  by  any  party,  including  the  Tax  Commission 
of  Ohio,  from  the  final  order  of  the  probate  court  under  section  5346  of  the 
General  Code  in  the  manner  provided  by  law  for  appeals  from  orders  of  the  pro- 
bate court  in  other  cases.  An  appeal  to  the  Tax  Commission  of  Ohio  may  be 
perfected  in  the  manner  provided  oy  section  11209  of  the  General  Code. 

§  2624-1.  On  all  inheritance  tax  moneys  collected  by  the  county  treasurer,  the 
county  auditor  on  settlement  semi-annually  with  the  auditor  of  State  shall  be 
allowed  as  compensation  for  his  services  under  the  inheritance  tax  law  the 
following  percentages: 

3%  on  the  first  fifty  thousand  dollars;  2%  on  the  next  fifty  thousand  dol- 
lars, and  one-half  of  1%  on  all  additional  sums.  Such  percentages  shall  be 
computed  upon  the  amount  collected  in  a  calendar  year,  and  shall  be  for  the  use 
of  the  fee  fund  of  the  county  auditor. 

§  2685-1.  On    settlement    semi-annually   with    the    county    auditor,   the   county 


1048  THE  STATE  STATUTES 

treasurer  shall  be  allowed  as  fees  on  all  moneys  collected  by  him  on  inheritance 
tax  duplicates  the  following  percentages:  1%  on  the  first  fifty  thousand  dol- 
lars, five-tenths  of  1%  on  the  next  fifty  thousand  dollars,  and  one-tenth  of  1% 
on  all  additional  sums.  Such  percentages  shall  be  computed  upon  the  amount 
collected  in  the  calendar  year  and  shall  be  for  the  use  of  the  fee  fund  of  the 
county  treasurer. 

§  5348-1.  Upon  the  payment  to  the  county  treasurer  of  any  tax  due  under 
this  subdivision  of  this  chapter,  such  treasurer  shall  issue  a  receipt  therefor 
in  triplicate.  One  copy  thereof  he  shall  deliver  to  the  person  paying  such  taxes; 
and  the  original  and  one  copy  thereof  he  shall  immediately  send  to  the  auditor 
of  State  who  shall  certify  the  original  and  immediately  transmit  it  to  the 
judge  of  the  court  fixing  the  tax.  An  executor,  administrator  or  trustee  shall 
not  be  entitled  to  credits  in  his  accounts,  nor  be  discharged  from  liability 
for  such  taxes,  nor  shall  the  estate  under  his  control  be  distributed,  unless 
such  certified  receipt  shall  have  been  filed  with  the  court.  Any  person  shall, 
upon  the  payment  of  ten  cents  to  the  county  treasurer  issuing  such  receipt, 
be  entitled  to  a  duplicate  thereof,  to  be  signed  and  certified  in  the  same  manner 
as  the  original. 

§  5348-2.  No  corporation  organized  or  existing  under  the  laws  of  this  State, 
shall  transfer  on  its  books  or  issue  a  new  certificate  for  any  share  or  shares  of 
its  capital  stock  belonging  to  or  standing  in  the  name  of  a  decedent  or  in 
trust  for  a  decedent,  or  belonging  to  or  standing  in  the  joint  names  of  a 
decedent  and  one  or  more  persons,  without  the  written  consent  of  the  Tax 
Commission  of  Ohio.  No  safe  deposit  company,  trust  company,  corporation, 
bank  or  other  institution,  person  or  persons,  having  in  possession  or  in  control 
or  custody,  in  whole  or  in  part,  securities,  deposits,  assets  or  property  belonging 
to  or  standing  in  the  name  of  a  decedent,  or  belonging  to  or  standing  in  the 
joint  names  of  a  decedent  and  one  or  more  persons,  including  the  shares  of  the 
capital  stock  of,  or  other  interest  in,  such  safe  deposit  company,  trust  com- 
pany, corporation,  bank  or  other  institution,  shall  deliver  or  transfer  the  same 
to  any  person  whatsoever  whether  in  a  representative  capacity  or  not,  or  to 
the  survivor  or  survivors  when  held  in  the  joint  names  of  a  decedent  and  one 
or  more  persons,  without  retaining  a  sufficient  portion  or  amount  thereof  to 
pay  any  taxes  or  interest  which  would  thereafter  be  assessed  thereon  under  this 
subdivision  of  this  chapter,  and  unless  notice  of  the  time  and  place  of  such 
delivery  or  transfer  be  served  upon  the  Tax  Commission  of  Ohio  and  the 
county  auditor  at  least  ten  days  prior  to  such  delivery  or  transfer;  but  the 
Tax  Commission  of  Ohio  may  consent  in  writing  to  such  delivery  or  transfer, 
and  such  consent  shall  relieve  said  safe  deposit  company,  trust  company, 
corporation,  bank  or  other  institution,  person  or  persons,  from  the  obligation 
to  give  such  notice  or  to  retain  such  portion.  The  Tax  Commission  or  the 
county  auditor,  personally  or  by  representatives,  may  examine  such  securi- 
ties, deposits  or  other  assets  at  the  time  of  such  delivery  or  otherwise.  Failure 
to  comply  with  the  provisions  of  this  section  shall  render  such  safe  deposit 
company,  trust  company,  corporation,  bank  or  other  institution,  person  or 
persons,  liable  for  the  amount  of  the  taxes  and  interest  due  under  this  sub- 
division of  this  chapter  on  the  succession  of  such  securities,  deposits,  assets 
or  property.  Such  liability  may  be  enforced  by  action  brought  by  the  county 
treasurer  in  the  name  of  the  State  in  any  court  of  competent  jurisdiction. 

§  5348-3.  If,  after  the  expiration  of  eighteen  months  from  the  accrual  of 
any  tax  under  this  subdivision  of  this  chapter,  such  tax  shall  remain  unpaid, 
the  auditor  of  State  shall  notify  the  prosecuting  attorney  of  the  proper 
county,  in  writing,  of  such  failure  or  neglect.  If  the  determination  of  the  tax 
has  been  delayed  for  more  than  one  year  after  the  accrual  thereof  such  notice 
may  be  issued  at  any  time  after  six  months  from  the  date  of  the  order  deter- 
mining such  tax.  Such  prosecuting  attorney  shall  thereupon  apply  to  the 
probate  judge  in  the  name  of  the  county  auditor  on  behalf  of  the  State  for  a 
transcript  of  the  order  fixing  the  tax.  Such  transcript  shall  be  filed  in  the 
office  of  the  clerk  of  the  common  pleas  court  of  the  county,  and  the  same 
proceedings  shall  be  had  with  respect  thereto  as  are  provided  by  section  11659 
of  the  General  Code  with  respect  to  transcripts  of  judgments  rendered  by 
justices  of  the  peace  and  mayors,  except  that  the  prosecuting  attorney  shall 
not  be  required  to  pay  the  costs  thereof  accruing  at  the  time  of  filing  the 
same.  Thereupon  the  same  effect  shall  be  given  to  such  transcript  for  all 


OHIO  1049 

purposes  as  is  given  to  such  transcripts  of  judgments  of  justices  of  the  peace 
or  mayors  filed  in  like  manner.  Provided,  however,  that  nothing  in  this  section 
shall  be  construed  to  affect  the  date  of  the  lien  of  such  taxes  on  the  property 
passing,  nor  to  divest  such  lien  before  the  payment  of  such  tax  in  the  event  of 
failure  to  sue  out  execution  within  the  period  prescribed  by  section  11663  of 
the  General  Code. 

§  5384-4.  The  prosecuting  attorney  shall  represent  the  county  auditor  of 
his  county  in  his  capacity  as  inheritance  tax  appraiser  when  called  upon  by  him 
for  that  purpose.  He  shall  also  represent  the  interests  of  the  State  in  any 
and  all  proceedings  under  this  subdivision  of  this  chapter.  The  Attorney- 
General  shall,  when  requested  by  the  Tax  Commission  in  writing,  appear  for  the 
State  in  any  such  proceeding. 

§  5348-5.  The  county  auditor  may,  and  when  directed  by  the  Tax  Commission  of 
Ohio,  shall  appoint  such  number  of  deputies  as  the  Tax  Commission  of  Ohio  may 
prescribe  for  him,  who  shall  be  qualified  to  assist  him  in  the  performance  of  his 
duties  as  inheritance  tax  appraiser  under  the  provisions  of  this  subdivision  of 
this  chapter. 

§  5348-6.  The  Tax  Commission  of  Ohio  may  designate  such  of  its  examiners, 
experts,  accountants  and  other  assistants  as  it  may  deem  necessary  for  the 
purpose  of  aiding  in  the  administration  of  the  provisions  of  this  subdivision 
of  this  chapter ;  and  such  provisions  shall  be  deemed  and  held  to  be  a  law 
which  the  Tax  Commission  is  required  to  administer  for  the  purposes  of  sections 
1465-9,  and  1465-12  to  1465-30,  inclusive,  section  1465-32,  and  section  1465-34 
of  the  General  Code.  It  shall  be  the  duty  of  the  Tax  Commission  of  Ohio  in 
the  administration  of  this  subdivision  of  this  chapter  to  see  that  the  proceedings 
provided  for  herein  shall  be  instituted  and  carried  to  determination  in  all  cases 
in  which  a  tax  is  due  hereunder. 

§  5348-7.  Each  probate  judge  shall  keep  a  book,  the  form  thereof  shall 
be  prescribed  by  the  auditor  of  State  which  shall  be  a  public  record,  and  in 
which  such  probate  judge  shall  enter  the  name  of  every  decedent  upon  whose 
estate  an  application  to  him  has  been  made  for  an  issue  of  letters  of  ad- 
ministration, or  letters  testamentary,  or  ancillary  letters,  the  date  and  place 
of  death  of  said  decedent,  the  estimated  value  of  his  real  and  personal  prop- 
erty, the  names,  places  of  residence  and  relationship  to  him  of  his  heirs  at 
law,  the  names  and  places  of  residence  of  the  legatees  or  devisees  in  any  will 
of  any  such  decedent,  the  amount  of  each  legacy,  and  the  estimated  value  of 
any  real  property  devised  therein,  and  to  whom  devised.  Such  entry  shall  be 
made  from  the  data  contained  in  the  papers  filed  on  any  such  application, 
or  in  any  proceeding  relating  to  the  estate  of  the  decedent.  The  probate 
judge  shall  also  enter  in  such  book  the  amount  of  the  personal  property  of 
any  such  decedent,  as  shown  by  the  inventory  thereof  when  made  and  filed  in 
his  office,  and  the  returns  made  by  the  county  auditor  under  this  subdivision 
of  this  chapter,  and  the  value  of  annuities,  life  estates,  terms  of  years  and 
other  property  of  said  decedent,  or  given  by  him  in  his  will  or  otherwise,  as 
fixed  by  the  probate  court,  and  the  taxes  assessed  thereon,  and  the  township 
or  municipal  corporation  in  which  the  same  originated,  and  the  amounts  of 
any  receipts  for  payment  of  any  taxes  on  the  estate  of  such  decedent  under 
this  subdivision  of  this  chapter,  filed  with  him.  The  auditor  of  State  shall 
also  prescribe  forms  for  the  reports  to  be  made  by  each  probate  judge  and 
county  auditor,  which  shall  correspond  with  the  entries  to  be  made  in  such  book. 

§  5348-8.  Each  probate  judge  shall,  at  the  time  the  county  auditor  makes 
his  semi-annual  settlement  with  the  auditor  of  the  State,  make  a  report,  upon 
the  form  prescribed  by  the  auditor  of  State,  containing  all  the  matters  re- 
quired to  be  entered  on  such  book,  which  shall  be  immediately  forwarded  to 
the  auditor  of  State.  The  county  recorder  of  each  county  in  the  State  shall, 
at  the  same  time  make  reports  containing  a  statement  of  any  deed  or  other 
conveyance  filed  or  recorded  in  his  office,  of  any  property,  which  appears  to 
have  been  made  in  contemplation  of  death,  or  intended  to  take  effect  in  pos- 
session or  enjoyment  after  the  death  of  the  grantor  or  vendor,  with  the  name 
and  place  of  residence  of  such  grantor  or  vendor,  the  name  and  place  of 
residence  of  such  grantee  or  vendee,  of  the  description  of  the  property  trans- 
ferred, which  shall  be  immediately  forwarded  to  the  Tax  Commission  of  Ohio. 

§  5348-9.  The  county  treasurer  shall  keep  an  account  showing  the  amount 
of  all  taxes  and  interest  by  him  received  under  the  provisions  of  this  sub- 


1050  THE  STATE  STATUTES 

division  of  this  chapter.  On  the  twenty-fifth  day  of  February  and  the  twentieth 
day  of  August  of  each  year  he  shall  settle  with  the  county  auditor  for  all  such 
taxes  and  interest  so  received  at  the  time  of  making  such  settlement,  not  in- 
cluded in  any  preceding  settlement,  showing  for  what  estate,  and  by  whom  and 
when  paid.  At  each  such  settlement  the  auditor  shall  allow  to  the  treasurer  and 
himself  on  all  moneys  so  collected  and  accounted  for  by  him,  their  respective  fees, 
at  the  percentage  allowed  by  law.  The  correctness  thereof,  together  with  a 
statement  of  the  fees  allowed  at  such  settlement  and  the  fees  and  expenses 
allowed  to  probate  judge  and  other  officers  under  this  subdivision  of  this  chapter 
shall  be  certified  by  the  county  auditor. 

§  5348-10.  Such  fees  as  are  allowed  by  law  to  the  probate  judge  for  services 
performed  under  the  provisions  of  this  subdivision  of  this  chapter,  shall  be 
fixed  in  each  case  and  certified  by  him  on  the  order  fixing  the  taxes,  together  with 
the  fees  of  the  sheriff  or  other  officers  and  the  expenses  of  the  county  auditor. 
The  county  auditor  shall  allow  such  fees  and  expenses  out  of  said  taxes  when 
paid  and  credit  the  same  to  such  fee  funds,  and  draw  his  warrants  on  the 
treasurer  in  favor  of  the  officers  personally  entitled  thereto,  payable  from  such 
taxes,  as  the  case  may  require. 

§  5348-11.  50%  of  the  gross  amount  of  any  taxes  levied  and  paid  under  the 
provisions  of  this  subdivision  of  this  chapter  shall  be  for  the  use  of  the  munici- 
pal corporation  or  township  in  which  the  tax  originates,  and  shall  be  credited, 
one-half  to  the  sinking  fund,  if  any,  of  such  municipal  corporation  or  town- 
ship, and  the  residue  to  the  general  revenue  fund  thereof;  the  remainder  of 
such  taxes,  after  deducting  the  fees  and  costs  charged  against  the  proceeds 
thereof  under  this  subdivision  of  this  chapter,  shall  be  for  the  use  of  the 
State,  and  shall  be  paid  into  the  State  treasury  to  the  credit  of  the  general 
revenue  fund  therein. 

§  5348-12.  At  each  semi-annual  settlement  provided  for  under  this  sub- 
division of  this  chapter,  the  county  auditor  shall  certify  to  the  auditor  of  any 
other  county  in  which  may  be  located  in  whole  or  in  part,  any  municipal  cor- 
poration or  township,  to  which  any  part  of  the  taxes  collected  under  this  sub- 
division of  this  chapter,  and  not  previously  accounted  for,  is  due,  a  statement 
of  the  amount  of  such  taxes  due  to  each  municipal  corporation  or  township 
in  such  county  entitled  to  share  in  the  distribution  thereof.  The  amount 
respectively  due  upon  such  settlement  to  each  such  municipal  corporation  or 
township,  and  to  each  municipality  and  township  in  the  county  in  which  the 
taxes  are  collected  shall  be  paid  upon  the  warrant  of  the  county  auditor  to  the 
treasurer  or  other  proper  officer  of  such  municipal  corporation  or  township. 
The  amount  of  any  refunder  chargeable  against  any  such  municipal  corpora- 
tion or  township  at  the  time  of  making  such  settlement,  shall  be  adjusted  in 
determining  the  amount  due  to  such  municipal  corporation  or  township  at 
such  settlement;  provided,  however,  that  if  the  municipal  corporation  or  town- 
ship against  which  such  refunder  is  chargeable  is  not  entitled  to  share  in  the 
fund  to  be  distributed  at  such  settlement,  the  county  auditor  shall  draw  his 
warrant  for  the  amount  thereof  in  favor  of  the  county  treasurer  payable  from 
any  undivided  general  taxes  in  the  possession  of  such  treasurer,  unless  such 
municipal  corporation  or  township  is  located  in  another  county,  in  which  event 
the  county  auditor  shall  issue  a  certificate  for  such  amount  to  the  auditor  of 
the  proper  county,  who  shall  draw  a  like  warrant  therefor  payable  from  any 
undivided  general  taxes  in  the  possession  of  the  treasurer  of  such  county;  and 
in  either  case  at  the  next  semi-annual  settlement  of  such  undivided  general 
taxes,  the  amount  of  such  warrant  shall  be  deducted  from  the  distribution  of 
taxes  of  such  municipal  corporation  or  township  and  charged  against  the  pro- 
ceeds of  levies  for  the  general  revenue  fund  of  such  municipal  corporation  or 
township. 

§  5348-13.  When  the  property  passing  is  real  estate  or  tangible  personal 
property  within  this  State  the  tax  on  the  succession  thereto  shall  be  deemed  to 
have  originated  in  the  municipal  corporation  or  township  in  which  such  prop- 
erty is  physically  located.  In  case  of  real  estate  located  in  more  than  one 
municipal  corporation  or  township  the  tax  on  the  succession  thereto,  or  to  any 
interest  therein,  shall  be  apportioned  between  the  municipal  corporation  or 
townships  in  which  it  is  located  in  the  proportions  in  which  the  tract  is  assessed 
for  general  property  taxation  in  such  townships  or  municipal  corporations  re- 
spectively. 


OHIO  1051 

§  5348-14.  The  tax  on  the  succession  to  tangible  property  or  tangible  personal 
property  not  within  the  State  from  a  resident  of  this  State  shall  be  deemed  to 
have  originated  in  the  municipal  corporation  or  township  in  which  the  decedent 
resided. 

The  municipal  corporation  or  township  in  which  the  tax  on  the  succession  to 
the  intangible  property  of  a  non-resident  accruing  under  the  provisions  of 
this  subdivision  of  this  chapter,  shall  be  deemed  to  have  originated,  shall  be 
determined  as  follows: 

1.  In    the    case   of    shares    of    stock    in    a    corporation    organized    or    existing 
under  the  laws  of  this   State,   such  taxes  shall  be   deemed  to   have   originated 
in   the   municipal    corporation    or    township    in    which    such    corporation    has    its 
principal  place  of  business  in  this  State. 

2.  In  case  of  bonds,  notes,  or  other  securities  or  assets,  in  the  possession  or 
in  the  control  or  custody  of  a  corporation,  institution  or  person  in  this   State, 
such  taxes  shall  be  deemed  to  have  originated  in  the  municipal  corporation  or 
township  in  which  such  corporation,  institution  or  person  had  the  same  in  pos- 
session, control  or  custody  at  the  time  of  the  succession. 

3.  In  the   case   of  moneys   on  deposit   with   any   corporation,   bank,    or   other 
institution,  person  or  persons,  such  tax  shall  be  deemed  to  have  originated  in 
the    municipal    corporation    or    township    in    which    such    corporation,    bank    or 
other  institution   had  its  principal   place   of   business,   or   in   which   such   person 
or  persons  resided  at  the  time  of  such  succession. 

§  3.  Said  original  sections  2624,  2685,  2689,  and  5331  to  5348,  inclusive,  are 
hereby  repealed. 

§  4.  This  act  shall  not  affect  pending  proceedings  for  the  assessment  and 
collection  of  collateral  inheritance  taxes  under  the  original  sections  hereby 
amended,  nor  the  duty  to  pay,  nor  the  right  to  collect  any  such  tax  which  has 
accrued  prior  to  the  approval  of  this  act,  nor  the  rights  or  duties  of  any  officer 
with  respect  to  the  assessment  and  collection  of  such  collateral  inheritance 
taxes;  nor  shall  this  act  affect  successions  taking  place  prior  to  its  approval, 
whether  the  death  of  the  decedent  occurred  prior  to  such  approval  or  not; 
but  all  successions  occurring  subsequently  to  the  approval  of  this  act  shall 
be  affected  by  and  taxable  under  it,  whether  the  death  of  the  decedent  occurred 
prior  to  its  approval  or  not,  unless  a  tax  has  already  accrued  thereon  under  the 
provisions  of  the  original  sections  hereby  amended. 

AMENDMENT  OF  1920,  IN  EFFECT  FEB.  16,  1920. 

An  Act  to  correct  errors  and  supply  omissions  in  the  inheritance  tax  law  and  to 
change  certain  procedure  relating  to  the  collection  and  distribution  of  in- 
heritance taxes,  and  for  such  purpose  amending  sections  2624-1,  2685-1,  2689, 
5333,  5334,  5336,  5338,  5342,  5348-7,  5348-8  and  5348-10  of  the  General  Code 
and  enacting  supplemental  sections  to  be  designated  as  sections  1465-24a, 
5332-1,  5348-2a  and  5348-8a  of  the  General  Code,  respectively. 
Be  it  enacted  by  the  General  Assembly  of  the  State  of  Ohio: 

Section  1.  Sections  2624-1,  2685-1,  2689,  5333,  5334,  5336,  5338,  5342,  5348-7, 
5348-8  and  5348-10  of  the  General  Code  are  hereby  amended  to  read  as  follows, 
and  sections  1465-24,  5332,  5348-2  and  5348-8  of  the  General  Code  are  hereby 
supplemented  by  the  enactment  of  sections  to  be  designated  as  sections  1465-24a, 
5332-1,  5348-2a  and  5348-8a  of  the  General  Code,  respectively,  as  follows: 

§  2624-1.  On  all  inheritance  tax  moneys  collected  by  the  county  treasurer, 
the  county  auditor  on  settlement  semi-annually  with  the  auditor  of  state  shall  be 
allowed  as  compensation  for  his  services  under  the  inheritance  tax  law  the 
following  percentages : 

Three  per  cent  on  the  first  fifty  thousand  dollars;  two  per  cent  on  the  next 
fifty  thousand  dollars,  and  one-half  of  one  per  cent  on  all  additional  sums.  Such 
percentages  shall  be  computed  upon  the  amount  collected  and  reported  at  each 
semi-annual  settlement,  and  shall  be  for  the  use  of  the  fee  fund  of  the  county 
auditor. 

§  2685-1.  On  settlement  semi-annually  with  the  county  auditor,  the  county 
treasurer  shall  be  allowed  as  fees  on  all  moneys  collected  by  him  on  inheritance 
tax  duplicates  the  following  percentages:  one  per  cent  on  the  first  fifty  thousand 
dollars,  five-tenths  of  one  per  cent  on  the  next  fifty  thousand  dollars,  and  one- 
tenth  of  one  per  cent  on  all  additional  sums.  Such  percentages  shall  be  computed 


1052  THE  STATE  STATUTES 

upon  the  amount  collected  and  reported  at  each  semi-annual  settlement,  and 
shall  be  for  the  use  of  the  fee  fund  of  the  county  treasurer. 

§  2689.  Immediately  after  each  semi-annual  settlement  with  the  county  auditor, 
on  demand,  and  presentation  of  the  warrant  of  the  county  auditor  therefor,  the 
county  treasurer  shall  pay  to  the  township  treasurer,  city  treasurer,  or  other 
proper  officer  thereof,  all  moneys  in  the  county  treasury  belonging  to  such 
township,  city,  village,  or  school  district. 

§  5333.  If  the  succession  to  any  property  from  a  resident  of  this  state  is 
locally  subject  to  another  state  or  county  to  a  tax  of  like  character  and  amount 
to  that  hereby  levied,  and  if  such  tax  be  actually  paid  or  guaranteed  or  secured 
in  accordance  with  law  in  such  other  state  or  county,  such  succession  shall  not  be 
subject  to  the  tax  hereby  levied;  if  locally  subject  in  any  state  or  county  to  a 
tax  of  like  character  but  of  less  amount  than  that  hereby  levied  and  such  tax 
be  actually  paid  or  guaranteed  or  secured,  as  aforesaid,  such  succession  shall  be 
taxable  under  this  subdivision  of  this  chapter  to  the  extent  of  the  difference 
between  the  taxes  actually  paid,  guaranteed  or  secured,  and  the  amount  for 
which  such  succession  would  otherwise  be  taxable  hereunder. 

§  5334.  The  succession  to  any  property  passing  to  or  for  the  use  of  the  state  of 
Ohio,  or  to  or  for  the  use  of  municipal  corporation  or  other  political  subdivision 
thereof  for  exclusively  public  purposes,  or  public  institutions  of  learning,  or  to  or 
for  the  use  of  an  institution  for  purposes  only  of  public  charity,  carried  on  in 
whole  or  in  substantial  part  within  this  state,  shall  not  be  subject  to  the  pro- 
visions of  the  preceding  sections  of  this  subdivision  of  this  chapter.  Successions 
passing  to  other  persons  shall  be  subject  to  the  provisions  of  said  sections  to  the 
extent  only  of  the  value  of  the  property  transferred  above  the  following  exemp- 
tions. 

1.  When  the  property  passes  to  or  for  the  use  of  the  wife  or  a  child  of  the 
decedent  who  is  a  minor  at  the  death  of  the  decedent,  the  exemption  shall  be  five 
thousand  dollars. 

2.  When  the  property  passes  to  or  for  the  use  of  the  father,  mother,  husband, 
adult  child  or  other  lineal  descendant  of  the  decedent,  or  an  adopted  child,  or 
person  recognized  by  the  decedent  as  an  adopted  child  and  made  a  legal  heir 
under  the  provisions  of  a  statute  of  this  or  any  other  state  or  country,  or  the 
lineal    descendants    thereof,    or    a   lineal    descendant    of    an    adopted    child,    the 
exemption  shall  be  three  thousand  five  hundred  dollars. 

3.  When  the  property  passes  to  or  for  the  use  of  a  brother,  or  sister,  niece, 
nephew,  the  wife  or  widow  of  a  son,  the  husband  of  a  daughter  of  the  decedent, 
or  to  any  child  to  whom  the  decedent,  for  not  less  than  ten  years  prior  to  the 
succession  stood  in  the  mutually  acknowledged  relation  of  a  parent,  the  exemption 
shall  be  five  hundred  dollars. 

§  5336.  Taxes  levied  under  this  subdivision  of  this  chapter  shall  be  due  and 
payable  at  the  time  of  the  succession,  except  as  herein  otherwise  provided,  but 
in  no  case  prior  to  the  death  of  the  decedent.  Taxes  upon  the  succession  to 
any  estate  or  property,  or  interest  therein  limited,  dependent  or  determinable  upon 
the  happenings  of  any  contingency  or  future  event,  and  not  vested  at  the  death 
of  the  decedent,  by  reason  of  which  the  actual  market  value  thereof  cannot  be 
ascertained  at  the  time  of  such  death,  as  provided  in  this  subdivision  of  this 
chapter,  shall  accrue  and  become  due  and  payable  when  the  persons  or  corpora- 
tions then  beneficially  entitled  thereto  shall  come  into  actual  possession  or 
enjoyment  thereof.  Such  taxes  shall  be  and  remain  a  lien  upon  the  property 
passing  until  paid,  and  the  successor  and  the  executors  or  administrators  of  the 
general  estate  of  the  decedent,  and  the  trustees  of  such  property  shall  be  per- 
sonally liable  for  all  such  taxes,  with  interest  as  hereinafter  provided,  until  they 
shall  have  been  paid  as  hereinafter  directed.  Such  an  administrator,  executor  or 
trustee,  having  in  charge  or  in  trust  for  distribution  any  property  the  succession 
to  which  is  subject  to  such  taxes,  shall  deduct  the  taxes  therefrom,  or  collect  the 
same  from  the  person  entitled  thereto.  He  shall  not  deliver,  or  be  compelled  to 
deliver,  any  specific  legacy  or  property,  the  succession  to  which  is  subject  to 
said  taxes,  to  any  person,  until  he  shall  have  collected  the  taxes  thereon.  He 
may  sell  so  much  of  the  estate  of  the  decedent  as  will  enable  him  to  pay  said 
taxes  in  like  manner  as  he  would  be  empowered  to  do  for  the  payment  of  the 
debts  of  the  decedent. 

§  5338.  Taxes  levied  by  this  subdivision  of  this  chapter  shall  be  paid  to  the 
treasurer  of  the  county  in  which  the  court  having  jurisdiction  of  proceedings 


OHIO  1053 

under  this  subdivision  of  this  chapter  is  held  by  the  person  or  persons  charged 
with  the  payment  thereof.  If  such  taxes  are  not  paid  within  one  year  after  the 
accrual  thereof,  interest  at  the  rate  of  eight  per  centum  per  annum  shall  there- 
after be  charged  and  collected  thereon;  unless  by  reason  of  claims  made  upon 
the  estate,  necessary  litigation,  or  other  unavoidable  causes  of  delay,  such  taxes 
cannot  be  determined  and  paid  as  hereinbefore  provided,  in  which  case  interest 
at  the  rate  of  five  per  centum  per  annum  shall  be  charged  upon  such  taxes  from 
the  expiration  of  one  year  after  the  accrual  thereof  until  the  cause  of  such  delay 
is  removed,  after  which  eight  per  centum  shall  be  charged.  If  such  taxes  are 
paid  before  the  expiration  of  one  year  after  the  accrual  thereof,  a  discount  of 
one  per  centum  per  month  for  each  full  month  that  payment  has  been  made 
prior  to  the  expiration  of  the  year,  shall  be  allowed  on  the  amount  of  such  taxes. 

§  5342.  The  value  of  a  future  or  limited  estate,  income,  interest  or  annuity  for 
any  life  or  lives  in  being,  or  of  any  dower  interest  or  other  estate  or  interest 
upon  which  any  estate  or  interest  the  succession  to  which  is  taxable  under  this 
chapter  is  limited,  shall  be  determined  by  the  rule,  method  and  standard  of 
mortality  and  value  employed  by  the  superintendent  of  insurance  in  ascertaining 
the  value  of  annuities  for  the  determination  of  liabilities  of  life  insurance 
companies,  except  that  the  rate  of  interest  shall  be  five  per  centum  per  annum. 
The  superintendent  of  insurance  shall,  without  a  fee,  on  the  application  of  any 
probate  court  or  of  any  county  auditor,  determine  the  value  of  any  such  estate, 
income,  interest  or  annuity,  upon  the  facts  contained  in  any  such  application,  and 
other  facts  to  him  submitted  by  such  court  or  auditor  and  certify  the  same  in 
duplicate  to  such  court  or  auditor,  and  his  certificate  thereof  shall  be  conclusive 
evidence  that  the  method  of  computation  therein  is  correct. 

In  estimating  the  value  of  any  estate  or  interest  in  property,  to  the  beneficial 
enjoyment  or  possession  whereof  there  are  persons  or  corporations  presently  en- 
titled, no  allowance  shall  be  made  on  account  of  any  contingent  encumbrance 
thereon,  nor  on  account  of  any  contingency  upon  the  happening  of  which  the 
estate,  or  some  part  thereof,  or  interest  therein,  may  be  abridged,  defeated  or 
diminished;  but  in  the  event  of  such  encumbrance  taking  effect  as  an  actual 
burden  upon  the  interest  of  the  beneficiary,  or  in  the  event  of  the  abridgement, 
defeat,  or  diminution  of  such  estate,  or  interest  therein,  as  aforesaid,  a  refunder 
shall  be  made  in  the  manner  provided  by  section  5339  of  the  General  Code,  to 
the  person  properly  entitled  thereto  of  a  proportionate  amount  of  such  tax  on 
account  of  the  encumbrance  when  taking  effect,  or  so  much  as  will  reduce  the 
same  to  the  amount  which  would  have  been  assessed  on  account  of  the  actual 
duration  or  extent  of  the  estate  enjoyed 

§  5348-7.  In  connection  with  the  estates  of  decedents  on  the  succession  to 
which  any  inheritance  tax  is  found  to  be  due,  each  probate  judge  shall  keep  a 
docket,  the  form  whereof  shall  be  prescribed  by  the  auditor  of  state,  which  shall 
be  a  public  record,  and  in  which  such  probate  judge  shall  enter  the  name  of 
every  such  decedent  upon  whose  estate  an  application  to  him  has  been  made  for 
an  issue  of  letters  of  administration,  or  letters  testamentary,  or  ancillary  letters, 
the  date  and  place  of  death  of  said  decedent,  the  estimated  value  of  his  real 
and  personal  property,  the  names,  places  of  residence  and  relationship  to  him  of 
his  heirs  at  law,  the  names  and  places  of  residence  of  the  legatees  or  devisees  in 
any  will  of  any  decedent,  the  amount  of  each  legacy,  and  the  estimated  value  of 
any  real  property  devised  therein,  and  to  whom  devised.  Such  entry  shall  be 
made  from  the  data  contained  in  the  papers  filed  on  any  application,  or  in  any 
proceeding  relating  to  the  estate  of  the  decedent.  The  probate  judge  shall  also 
enter  in  such  docket  the  amount  of  the  personal  property  of  any  such  decedent, 
as  shown  by  the  inventory  thereof  when  made  and  filed  in  his  office,  and  the  re- 
turns made  by  the  county  auditor  under  the  subdivision  of  this  chapter,  and  the 
value  of  annuities,  life  estates,  terms  of  years  and  other  property  of  said  decedent, 
or  given  by  him  in  his  will  or  otherwise,  as  fixed  by  the  probate  court,  and 
the  taxes  assessed  thereon,  and  the  township  or  municipal  corporation  in  which 
the  same  originated,  and  the  amounts  of  any  receipts  for  payment  of  any  taxes 
on  the  estate  of  such  decedent  under  this  subdivision  of  this  chapter,  filed  with 
him.  The  auditor  of  state  shall  also  prescribe  forms  for  the  reports  to  be  maUe 
by  each  probate  judge  and  county  auditor,  which  shall  correspond  with  the 
entries  to  be  made  in  such  docket. 

§  5348-8.  Each  probate  judge  shall  make  a  report  monthly  to  the  auditor  of 
state,  upon  a  form  prescribed  by  such  auditor.  Such  report  shall  contain  all 


1 054  THE  STATE  STATUTES 

the  matters  required  to  be  entered  on  the  docket  provided  for  in  the  foregoing 
section  and  shall  be  filed  at  such  date  in  each  month  as  may  be  required  by  the 
auditor  of  state.  The  reports  made  in  the  months  of  February  and  August  of 
each  year  shall  be  filed  by  each  probate  judge  at  the  same  time  that  the  county 
auditor  of  his  county  makes  his  semi-annual  settlement. 

§  5348-10.  Such  fees  as  are  allowed  by  law  to  the  probate  judge  for 
services  performed  under  the  provisions  of  this  subdivision  of  this  chapter,  shall 
be  fixed  in  each  case  and  certified  by  him  on  the  order  fixing  the  taxes,  together 
with  the  fees  of  the  sheriff  or  other  officers  and  the  expenses  of  the  county 
auditor.  The  county  auditor  shall  pay  such  fees  and  expenses  out  of  the  state's 
share  of  the  undivided  inheritance  taxes  in  the  county  treasury  and  draw  his 
warrants  on  the  treasurer  in  favor  of  the  fee  funds  or  officers  personally  entitled 
thereto,  payable  from  such  taxes,  as  the  case  may  require. 

§  1465-24a.  The  commission  may  order  any  officer  or  officers  in  whom  any 
powers  are  vested  or  upon  whom  any  duties  are  imposed  by  any  laws  which  the 
commission  is  required  to  administer,  to  appear  before  it  for  conference  con- 
cerning the  administration  of  such  laws.  Excepting  as  provided  in  the  next 
preceding  section,  the  commission  shall  allow  and  pay  from  any  appropriation  to 
the  commission,  available  for  such  purpose,  the  actual  and  necessary  traveling 
expenses  of  each  officer  so  appearing. 

§  5332-1.  The  value  of  any  property  set  off  and  allowed  to  a  widow  and  children 
under  the  provisions  of  section  ten  thousand  six  hundred  and  fifty-six  of  the 
General  Code  in  excess  of  three  thousand  dollars,  shall  be  deemed  a  succession 
taxable  under  the  provisions  of  this  subdivision  of  this  chapter.  The  widow,  if 
any,  shall  be  deemed  the  successor  of  such  entire  succession;  but  if  there  be  no 
widow,  each  child  shall  be  deemed  a  successor  of  his  share  thereof. 

§  5348-2a.  In  any  action  brought  under  the  preceding  section  it  shall  be  a 
sufficient  defense  that  the  transfer  of  shares  of  capital  stock,  or  delivery  or 
transfer  of  securities,  deposits,  assets  or  property,  was  made  in  good  faith, 
without  knowledge  of  the  death  of  the  decedent  and  without  knowledge  of 
circumstances  sufficient  to  place  the  defendant  on  inquiry. 

§  5348-8a.  On  the  first  day  of  July  annually  the  county  recorder  of  each 
county  in  the  state  shall  make  report  to  the  tax  commission  of  Ohio,  on  a  form 
prescribed  by  such  commission,  containing  a  statement  of  any  deed  or  other 
conveyance  of  property  filed  in  his  office  during  the  preceding  six  months,  which 
appears  to  have  been  made  in  contemplation  of  death,  or  intended  to  take  effect 
in  possession  or  enjoyment  after  the  death  of  the  grantor  or  vendor,  with  the 
name  and  place  of  residence  of  such  grantor  or  vendor,  the  name  and  place  of 
residence  of  the  grantee  or  vendee,  and  a  description  of  the  property  transferred. 

§  2.  Said  original  sections  2624-1,  2685-1,  2689,  5333,  5334,  5336,  5338,  5342, 
5348-7,  5348-8  and  5348-10  of  the  General  Code,  are  hereby  repealed. 


OKLAHOMA 


1055 


OKLAHOMA. 

Taxes  only  the  tangible  property  of  nonresidents  within  the  State  including 
stocks  and  bonds  of  corporations. 

TABLE  OF   RATES  AND  EXEMPTIONS  UNDER  ACT  OP  1915 


CLASS  on  RELATIONSHIP 

Amount  of 
exemption 

Graded  rates 

Above 
exempt- 
tion  to 
$25,000 

$25,000 
to 

$50,000 

$50,000 
to 
$100,000 

In  excess 
of 
$100,000 

Father,  mother,  husband,  wife, 
child,  brother,  sister,  son-in-law, 
daughter-in-law,  adopted  or  mu- 
tually acknowledged  child,  iawfu! 
lineal  descendants. 

Widow,  $15,000; 
each     child. 
$10,000;      all 
others,  $5,000. 

1% 

2% 

3% 

4% 

All  others  except  for  religious, 
charitable  or  educational  pur- 
poses which  are  exempted. 

$2,500 

5% 

6% 

8% 

10% 

TA"BLE  OF  RATES   AND*  EXEMPTIONS   SUBSEQUENT  TO   MARCH   14,    1919 


Above 

Class  or  Relationship 

Exemption 

exemp- 
tion to 

$25,000 
to 

$50,003 
to 

In  ex- 
cess of 

$25,000 

$50,000 

$100,OCO 

$1U),000 

Father,    mother,    hubasnd,    wife,    child, 

Widow,  $15,000; 

1% 

2% 

3% 

4% 

adopted     or    mutually    acknowledged 

each  child,  $10,- 

child. 

000;  others,  $5,- 

000. 

Brother,  sister,  son-in-law,   daughter-in- 
law. 

$1,000 

1% 

9% 

4% 

5% 

All  others,  except  for  religious,    chari- 

$500 

6% 

1% 

8% 

10% 

table   or  educational   purposes. 

LAWS  OF  1915,  CHAPTER  162,  BECAME  A  LAW  MARCH  15,  1915. 

Section  1.  Imposes  a  tax  on  all  transfers  by  will  or  the  intestate  laws  and 
by  deed,  grant,  bargain,  sale  or  gift  made  in  contemplation  of  death  or 
intended  to  take  effect  in  possession  or  enjoyment  at  or  after  such  death,  when 
the  transferee  becomes  beneficially  entitled  in  possession  or  expectancy  either 
before  or  after  the  passage  of  the  act. 

§  2.  When  property  is  not  specifically  devised  it  is  deemed  transferred  pro- 
portionately among  all  the  general  legatees. 

§  3.  Whenever  any  person  or  corporation  shall  exercise  power  of  appoint- 
ment derived  from  any  disposition  of  property  made  either  before  or  after  the 
passage  of  this  act,  such  appointment  when  made  shall  be  deemed  a  transfer 
taxable  under  the  provisions  of  this  act  in  the  same  manner  as  though  the 
property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of 
such  power,  and  had  been  transferred  to  such  donee  by  will. 

§  4.  That  this  act  shall  not  apply  to  transfers,  such  as  above  mentioned, 
made  in  good  faith  for  religious,  charitable  or  educational  purposes  and  uses. 
The  words  "tangible  property"  shall  mean  corporeal  property  such  as  real 
estate,  and  goods,  wares,  and  merchandise  and  shares  of  stock,  bonds,  indebted- 
ness of,  or  pecuniary  interest  in  the  property  of  any  domestic  or  foreign 


1056  THE  STATE  STATUTES 

corporations,  associations,  joint  stock  companies  or  trusts  whose  ownership  is 
held  or  represented  by  shares  engaged  solely  in  interstate  commerce  or  busi- 
ness done  within  this  State,  and  that  proportion  of  the  value  of  the  property 
represented  by  the  stock,  bonds,  indebtedness  of,  or  pecuniary  interests  in  the 
property  of  any  domestic  or  foreign  corporations,  associations,  joint  stock 
companies,  or  trusts  whose  ownership  is  held  or  represented  by  shares  engaged  in 
interstate  or  intrastate  commerce,  plus  that  portion  of  such  business  done 
or  property  employed  in  this  State  in  interstate  commerce,  bears  to  the  total 
business  done,  or  property  employed;  and  in  the  case  of  transportation  and 
transmission  companies  doing  interstate  as  well  as  intrastate  commerce  in 
this  State,  that  portion  of  the  value  of  the  stock,  bonds,  indebtedness  of  or 
pecuniary  interest  in  the  property  in  any  such  corporation  shall  be  deemed 
tangible,  as  the  sum  of  the  lines  in  this  State  bears  to  the  entire  extent  of  the 
lines  operated  by  the  corporation,  association,  joint  stock  companies,  or  trusts 
whose  ownership  is  held  or  represented  by  shares,  the  same  being  deemed  to  have 
a  situs  in  this  State  for  the  purposes  of  this  act. 

§  5.  The  words  "intangible  property"  as  used  herein  shall  be  taken  to 
mean  incorporated  property,  other  than  that  named  as  tangible,  and  to  include 
bonds,  notes,  credit  and  evidence  of  debts  and  such  shares  of  stock  of  such 
corporations,  associations,  joint  stock  companies  or  trusts  whose  ownership 
is  held  represented  by  shares  as  is  not  to  be  deemed  tangible  and  such  por- 
tions of  such  shares  of  stock,  bonds,  indebtedness  of,  or  pecuniary  interest  in 
the  property  of  any  corporations,  associations,  joint  stock  companies,  or  trusts 
whose  ownership  is  held  or  represented  by  shares  as  are  not  to  be  deemed  tangible. 

§§6  and  7.  Fix  the  rates  and  exemptions  of  the  foregoing  table. 

§  8.  Every  such  tax  shall  be  paid  and  remain  a  lien  upon  the  property 
transferred  until  paid,  and  the  person  to  whom  the  property  is  so  transferred, 
and  the  administrator,  executor,  and  trustees  of  every  estate  so  transferred, 
shall  be  personally  liable  for  such  tax  until  its  payment;  and  as  to  transfers  of 
stock,  bonds,  indebtedness  of,  or  pecuniary  interest  in  the  property  of  any  herein, 
declared  taxable  there  shall  be  a  lien  upon  the  property  located  and  business 
transacted  within  this  State  of  such  corporation,  prior  to  all  other  liens,  and  unless 
paid  by  such  transferee,  shall  be  enforced  against  the  corporation.  When  paid 
by  the  corporation  it  shall,  within  the  State,  have  a  lien  therefor  upon  the 
shares  of  stock,  bonds,  indebtedness  of  or  pecuniary  interest  in  the  property  of 
any  so  transferred  which  shall  be  superior  to  all  other  liens  thereon.  And  all 
corporations,  associations,  joint  stock  companies  or  trusts,  whose  ownership  is 
held  or  represented  by  shares  which  do  business  within  this  State  and  have  property 
here  or  have  property  used  in  this  State,  shall  keep  a  record  at  some  convenient 
place  in  this  State  showing  all  transfers  of  stocks,  shares,  indebtedness,  bonds 
or  other  pecuniary  interest  in  their  property  as  come  to  their  notice  at  any  time 
and  shall  have  the  right  before  paying  off  any  sum  attributable  to  such  share  of 
stock,  bond,  indebtedness  or  pecuniary  interest  to  charge  the  same  and  recoup 
itself  for  the  sums  payable  in  that  behalf  by  such  company  hereunder.  The  tax 
shall  be  paid  to  the  State  Treasurer,  who  shall  give,  and  every  executor,  admin- 
istrator or  trustee  shall  take  duplicate  receipts  from  him  for  such  payments,  one 
of  which  he  shall  immediately  send  to  the  State  Auditor,  whose  duty  it  shall  be 
to  charge  the  treasurer  so  receiving  the  tax,  with  the  amount  thereof,  and  to  seal 
said  receipt  with  the  seal  of  his  office,  and  countersign  the  same  and  return  it  to 
the  executor,  administrator  or  trustee,  whereupon  it  shall  be  a  proper  voucher  in 
the  settlement  of  his  accounts;  but  no  executor,  administrator  or  trustee  shall 
be  entitled  to  a  final  accounting  of  an  estate,  in  settlement  of  which  a  tax  is  due 
under  the  provisions  of  this  act,  unless  he  shall  produce  a  receipt  so  sealed  and 
countersigned  by  the  State  Auditor  or  a  copy  thereof  certified  by  him  (unless  a 
bond  shall  have  been  filed  as  hereinafter  prescribed).  And  all  taxes  imposed  by 
this  act  shall  be  due  and  payable  at  the  time  of  the  transfer,  except  as  hereinafter 
provided.  Taxes  upon  the  transfer  of  any  estate,  property  or  interest  therein, 
limited,  conditioned,  dependent  or  determinable  upon  the  happenings  of  any 
contingency  or  future  event,  by  reason  of  which  the  fair  market  value  thereof 
cannot  be  ascertained  at  the  time  of  the  transfer,  as  herein  provided,  shall  accrue 
and  become  due  and  payable  when  the  beneficiaries  shall  come  into  actual 
possession  or  enjoyment  thereof. 

§  9.  Imposes  interest  at  10%  from  time  the  tax  is  due  and  payable. 

§  10.  Requires  the  executor  or  administrator  to   deduct  the  tax  or  collect  it 


OKLAHOMA  1057 

from  the  beneficiary,  to  whom  he  must  not  deliver  the  property  until  the  tax  has 
been  collected.  Requires  the  heir  to  deduct  the  tax  when  the  legacy  is  charged 
on  real  estate,  and  the  tax  may  be  enforced  against  it  in  the  same  manner  as  a 
legacy.  If  property  is  given  for  a  limited  period  the  executor  must  apply  to  the 
court  for  an  apportionment  of  the  tax  among  the  beneficiaries. 

§  11.  Makes  provision  for  a  proportionate  refund  where  debts  are  proved 
against  the  estate  after  distribution. 

§  12.  Taxes  bequests  to  executors  in  lieu  of  commissions  when  in  excess  of 
reasonable  compensation. 

§  13.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer 
any  property  taxable  under  this  act,  the  tax  shall  be  paid  to  the  State  Treasurer 
on  the  transfer  thereof.  No  safe  deposit  company,  bank,  or  other  institution  in. 
this  State,  or  person  or  persons  holding  securities  or  assets  of  a  decedent  shall 
deliver  or  transfer  the  same  to  the  executor,  administrator,  or  legal  representa- 
tives of  said  decedent,  or  upon  their  order  or  request,  unless  notice  of  the  time 
and  place  of  such  intended  transfer  be  served  upon  the  State  Auditor  at  least 
ten  days  prior  to  the  said  transfer;  nor  shall  such  safe  deposit  company,  bank 
or  other  institution,  person  or  persons  deliver  or  transfer  any  securities  or  assets 
of  the  estate  of  a  nonresident  decedent  without  retaining  a  sufficient  portion  or 
amount  thereof  to  pay  any  tax  which  may  thereafter  be  assessed  on  account  of 
the  transfer  of  such  securities  or  assets  under  the  provisions  of  this  act,  unless 
the  State  Auditor  consents  thereto  in  writing ;  and  it  shall  be  lawful  for  the  State 
Treasurer  or  State  Auditor  personally  or  by  representative,  to  examine  said 
securities  or  assets  at  the  time  of  such  delivery  or  transfer.  Failure  to  serve  such 
notice  or  to  allow  such  examination  or  to  retain  a  sufficient  portion  of  the  amount 
to  pay  such  tax  as  herein  provided,  shall  render  such  safe  deposit  company,  trust 
company,  bank  or  other  institution,  person  or  persons,  liable  to  the  payment  of 
the  tax  due  upon  said  securities  or  assets  in  pursuance  of  the  provisions  of  this  act. 

§  14.  Gives  the  county  court  having  jurisdiction  of  the  estate  jurisdiction  in 
the  tax  proceedings. 

§§  15  to  28.  Provide  for  the  appointment  of  appraisers,  the  valuation  of  the 
estate,  appeal  and  collection  of  delinquent  taxes,  closely  following  the  New  York 
practice.  Life  estates  and  remainders  are  computed  by  the  Commissioner  of 
Insurance  on  mortality  tables  on  the  basis  of  5%. 

AMENDMENT  OF  1919,  EFFECTIVE  MARCH   14,   1919. 

Section  1.  Section  4  of  chapter  162  of  the  Session  Laws  of  Oklahoma,  1915,  is 
hereby  amended  to  read  as  follows: 

§  4.  That  this  act  shall  not  apply  to  transfers,  such  as  above  mentioned,  made 
in  good  faith  for  religious,  charitable  or  educational  purposes  and  uses.  The 
words  "tangible  property"  shall  mean  corporeal  property,  such  as  real  estate, 
and  goods,  wares  and  merchandise,  the  words  real  estate,  and  goods,  wares  and 
merchandise  shall  be  construed  to  mean  all  property,  real,  personal  or  mixed, 
situated  within  the  State  of  Oklahoma,  or  within  its  jurisdiction,  and  shares  of 
stock,  bonds,  indebtedness  of,  or  pecuniary  interest  in  the  property  of  any  domestic 
or  foreign  corporations,  association,  joint  stock  companies  or  trusts  whose  owner- 
ship is  held  or  represented  by  shares  engaged  solely  in  interstate  commerce  or 
business  done  within  this  State,  and  that  proportion  of  the  value  of  the  property 
represented  by  the  stock,  bonds,  indebtedness  of  or  pecuniary  interest  in  the 
property  of  any  domestic  or  foreign  corporations,  associations,  joint  stock  com- 
panies or  trusts  whose  ownership  is  held  or  represented  by  shares  engaged  in 
interstate  or  intrastate  commerce  plus  that  portion  of  such  business  done  or 
property  employed;  and  in  the  case  of  transportation  and  transmission  companies 
doing  interstate  as  well  as  intrastate  commerce  in  this  State,  that  portion  of  the 
value  of  the  stocks,  bonds,  indebtedness  of  or  pecuniary  interest  in  the  property 
of  any  such  corporation  shall  be  deemed  tangible,  as  the  sum  of  the  lines  in 
this  State  bears  to  the  entire  extent  of  the  lines  operated  by  the  corporation, 
association,  joint  stock  companies,  or  trusts  whose  ownership  is  held  or  repre- 
sented by  shares,  the  same  being  deemed  to  have  a  situs  in  this  State  for  the 
purpose  of  this  act. 

§  2.  Section  5  of  chapter  162  of  the  Session  Laws  of  Oklahoma,  1915,  be 
amended  to  read  as  follows: 

§  5.  The  word  "intangible  property"  as  used  herein  shall  be  taken  to  mean 
incorporeal  property  other  than  that  named  as  tangible. 

67 


1058  THE  STATE  STATUTES 

§  3.  Section  6  of  chapter  162  of  the  Session  Laws  of  Oklahoma,  1915,  be 
amended  to  read  as  follows: 

§  6.  Upon  the  transfer  taxable  under  this  act,  of  property  or  any  beneficial 
interest  therein,  of  an  amount,  as  hereinafter  stated,  to  any  father,  mother, 
husband,  wife,  child,  brother,  sister,  wife  or  widow  of  a  son  or  the  husband  of  a 
daughter,  or  any  child  or  children  adopted  as  such  in  conformity  with  the  laws 
of  this  State,  of  the  descendant,  grantor,  vendor  or  donor,  or  to  any  child  to 
whom  any  such  decedent,  grantor,  vendor  or  donor  for  not  less  than  ten  (10) 
years  prior  to  such  transfer  stood  in  the  mutually  acknowledged  relation  of  a 
parent:  Provided,  however,  that  such  relationship  began  at  or  before  the  child's 
fifteenth  birthday,  and  was  continuous  for  said  ten  (10)  years  thereafter,  or  to 
any  lineal  descendant  of  such  decedent,  grantor,  vendor,  or  donor,  born  in  lawful 
wedlock,  the  tax  on  such  transfer  shall  be  at  the  rate  of: 

One  per  cent  (1%)  of  any  amount  up  to  and  including  the  sum  of  twenty- 
five  thousand  dollars  ($25,000.00).  There  shall  be  exempt  from  any  tax  here- 
under:  to  the  wife  fifteen  thousand  dollars  ($15,000.00);  to  each  child  of  the 
decedent  ten  thousand  dollars  ($10,000.00),  and  to  each  other  relative  mentioned 
above  five  thousand  dollars  ($5,000.00),  except  to  any  brother,  sister,  wife  or 
widow  of  son,  or  the  husband  of  a  daughter,  there  shall  be  exempt  one  thousand 
dollars  ($1,000.00). 

Two  per  cent  (2%)  on  any  amount  in  excess  of  twenty-five  thousand  dollars 
($25,000.00)  up  to  and  including  the  sum  of  fifty  thousand  dollars  ($50,000.00), 
except  to  any  brother,  sister,  wife  or  widow  of  a  son,  or  the  husband  of  a  daughter 
the  rate  shall  be  three  (3%)  per  cent. 

Three  (3%)  per  cent  on  any  amount  in  excess  of  fifty  thousand  dollars 
($50,000.00)  up  to  and  including  the  sum  of  one  hundred  thousand  dollars 
($100,000.00),  except  to  any  brother,  sister,  wife  or  widow  of  a  son,  or  the 
husband  of  a  daughter,  the  rate  shall  be  four  (4%)  per  cent. 

Four  (4%)  per  cent  of  any  amount  in  excess  of  one  hundred  thousand  dollars 
($100,000.00),  except  to  any  brother,  sister,  wife  or  widow  of  a  son,  or  the 
husband  of  a  daughter,  the  rate  shall  be  five  (5%)  per  cent. 

§  4.  Section  7  of  chapter  162,  Session  Laws  of  Oklahoma  of  1915,  is  hereby 
amended  to  read  as  follows: 

§  7.  Upon  a  transfer  taxable  this  act  of  property  of  any  beneficial  interest 
therein  of  an  amount  in  excess  of  five  hundred  dollars  ($500.00)  to  any  person 
or  corporation  other  than  those  enumerated  in  section  6,  the  tax  shall  be  at  the 
rate  of: 

Six  (6%)  per  cent  on  any  amount  in  excess  of  five  hundred  dollars  ($500.00) 
up  to  and  including  the  sum  of  twenty-five  thousand  dollars  ($25,000.00). 

Seven  (7%)  per  cent  on  any  amount  in  excess  of  twenty- five  thousand  dollars 
($25,000.00)  up  to  and  including  the  sum  of  fifty  thousand  dollars  ($50,000.00). 

Eight  (8%)  per  cent  on  any  amount  in  excess  of  fifty  thousand  dollars 
($50,000.00)  up  to  and  including  the  sum  of  one  hundred  thousand  dollars 
($100,000.00). 

Ten  (10%)  per  cent  on  any  amount  in  excess  of  one  hundred  thousand  dollars 
($100,000.00). 

Provided,  that  the  exemptions  mentioned  in  this  chapter  when  one  or  more 
shares  of  an  estate  shall  consist  of  property  within  and  property  without  the 
State,  only  such  percentage  of  the  exemptions  named  in  this  act,  shall  be  allowed 
as  is  the  percentage  within  the  State  of  the  total  value  of  the  shares. 

§  5.  Section  8  of  chapter  162,  Session  Laws,  1915,  is  hereby  amended  to  read 
as  follows : 

§  8.  Every  such  tax  shall  be  and  remain  a  lien  upon  the  property  transferred 
until  paid,  and  the  person  to  whom  the  property  is  so  transferred  and  the 
administrator,  executor  and  trustees  of  every  estate  so  transferred,  shall  be  per- 
sonally liable  for  such  tax  until  its  payment;  and  as  to  transfers  of  stock,  bonds, 
indebtedness  of,  or  pecuniary  interest  in  the  property  of  any  herein,  declared 
taxable,  there  shall  be  a  lien  upon  the  property  located  and  business  transacted 
within  this  State  of  such  corporation,  prior  to  all  other  liens,  and  unless  paid  by 
such  transferee,  shall  be  enforced  against  the  corporation.  When  paid  by  a  cor- 
poration it  shall,  within  this  State,  have  a  lien  therefor  upon  the  shares  of  stocks, 
bonds,  indebtedness  of  or  pecuniary  interest  in  the  property  of  any  so  transferred 
which  shall  be  superior  to  all  other  liens  thereon.  And  all  corporations,  associ- 
ations, joint  stock  companies,  or  trusts  whose  ownership  is  filed  is  held  or  repre- 
sented by  shares  which  do  business  within  this  State  and  have  property  here  or 


OKLAHOMA  1059 

have  property  used  in  this  State,  shall  keep  a  record  at  some  convenient  place  in 
this  State  showing  all  transfers  of  stock,  shares,  indebtedness,  bonds  or  other  pe- 
cuniary interest  in  their  property  as  come  to  their  notice  at  any  time  and  shall  have 
the  right  before  paying  off  any  sum  attributable  to  such  share  of  stock,  bonds, 
indebtedness  or  pecuniary  interest  to  charge  to  the  same  and  recoup  itself  for 
the  sums  payable  in  that  behalf  by  such  company  hereunder.  The  tax  shall  be 
paid  to  the  State  Auditor,  who  shall  seal  said  receipt  with  the  seal  of  his  office, 
and  countersign  the  same  and  return  it  to  the  executor,  administrator  or  trustee, 
whereupon  it  shall  be  a  proper  voucher  in  the  settlements  of  his  accounts;  but  no 
executor,  administrator  or  trustee  shall  be  entitled  to  a  final  accounting  of  an 
estate,  in  settlement  of  which  a  tax  is  due  under  the  provisions  of  this  act, 
unless  he  shall  produce  a  receipt  so  sealed  and  countersigned  by  the  State  Auditor 
or  a  copy  thereof  certified  by  him  (or  unless  a  bond  shall  have  been  filed  as  here- 
inafter prescribed).  All  taxes  imposed  by  this  act  shall  be  due  and  payable  at 
the  time  of  the  transfer,  except  as  hereinafter  provided.  Taxes  upon  the  transfer 
of  any  estate,  property  or  interest  therein,  limited,  conditioned,  dependent  or 
determinable  upon  the  happening  of  any  contingency  or  future  event,  by  reason 
of  which  the  fair  market  value  thereof  cannot  be  ascertained  at  the  time  of  the 
transfer,  as  herein  provided,  shall  accrue  and  become  due  and  payable  when  the 
beneficiaries  shall  come  into  actual  possession  or  enjoyment  thereof. 

§  6.  Section  9,  chapter  162,  Session  Laws  of  Oklahoma,  1915,  is  hereby  amended 
to  read  as  follows: 

§  9.  The  taxes  herein  provided  shall  bear  ten  per  cent  (10%)  interest  from 
date  when  due  and  payable.  The  taxes  herein  provided  shall  be  due  and  payable 
within  twelve  (12)  months  from  the  appointment  of  the  executor,  administrator 
or  trustee,  except  as  provided  in  section  8. 

§  7.  Section  10,  chapter  162,  Session  Laws  of  Oklahoma,  1915,  is  hereby 
amended  to  read  as  follows: 

§  10.  Every  executor,  administrator  or  trustee  shall  have  full  power  to  sell  so 
much  of  the  property  of  the  decedent  as  will  entitle  him  to  pay  such  taxes  in  the 
same  manner  as  he  might  be  entitled  by  law  to  do  for  the  payment  of  the  debts 
of  the  decedent.  Any  such  administrator,  executor  or  trustee  having  in  charge 
or  in  trust  any  legacy  or  property  for  the  distribution,  subject  to  such  tax,  shall 
dedxict  the  tax  therefrom,  and  shall  pay  over  the  same  to  the  State  Auditor.  If 
such  legacy  or  property  be  not  in  money,  he  shall  collect  the  tax  thereon  upon  the 
appraisal  value  from  the  person  entitled  thereto.  He  shall  not  deliver  or  be  com- 
pelled to  deliver  any  specific  legacy  or  property  subject  to  the  tax  under  this  act, 
to  any  person  until  he  shall  have  collected  the  tax  thereon.  If  any  such  legacy 
shall  be  charged  upon  or  payable  out  of  real  property,  the  heir  or  devisees  shall 
deduct  such  tax  therefrom  and  pay  it  to  the  administrator,  executor  or  trustees, 
and  the  tax  shall  remain  a  lien  or  charge  on  such  real  property  until  paid,  and 
the  payment  thereof  shall  be  enforced  by  the  executor,  administrator  or  trustee 
in  the  same  manner  that  payment  of  the  legacy  might  be  enforced  or  in  the 
manner  hereinafter  provided.  If  any  such  legacy  shall  be  given  in  money  to  any 
such  person  for  a  limited  period,  the  administrator,  executor  or  trustee  shall 
retain  the  tax  upon  the  whole  amount,  but  if  it  be  not  in  money,  he  shall  make 
application  to  the  court  having  jurisdiction  of  an  accounting  by  him  to  make  an 
apportionment  if  the  case  require  it,  of  the  sum  to  be  paid  into  his  hands  by  such 
legatee,  and  for  such  further  order  relative  thereto  as  the  case  may  require. 

§  8.  Section  14  of  chapter  162,  Session  Laws  of  Oklahoma,  1915,  is  hereby 
amended  to  read  as  follows: 

§  14.  The  County  Court  of  every  county  in  the  State  having  jurisdiction  to 
grant  letters  testamentary  or  of  administration  upon  the  estate  of  decedent 
whose  property  is  taxable  with  any  tax  upon  the  inheritance  tax  laws,  or  to 
appoint  a  trustee  of  such  estate,  or  any  part  thereof  or  to  give  ancillary  letters 
thereon,  shall  have  jurisdiction  to  hear  and  determine  all  questions  arising  under 
the  provisions  of  this  act,  and  to  do  any  act  in  relation  thereto  authorized  by  law 
to  be  done  by  the  County  Court  in  other  matters  or  proceedings  coming  within  its 
jurisdiction,  and  if  two  or  more  County  Courts  shall  be  entitled  to  exercise  any 
such  jurisdiction,  the  County  Court  first  acquiring  jurisdiction  thereunder  shall 
retain  the  same  to  the  exclusion  of  every  other  County  Court.  Every  petition  for 
ancillary  letters,  testamentary  or  of  administration,  shall  include  a  true  and 
correct  statement  of  all  the  decedent  property  both  within  and  without  the  State, 
and  the  value  hereof,  and,  upon  presentation  thereof  the  County  Court  shall  issue 


1060  THE  STATE  STATUTES 

a  notice  of  hearing  directed  to  the  State  Auditor,  and  at  the  time  therein  stated 
the  County  Court  shall  proceed  to  determine  the  amount  of  the  tax  which  may  be 
or  become  due  under  the  provisions  of  this  act,  and  the  decree  awarding  the  letters 
may  contain  provisions  for  the  payment  of  such  tax  or  the  giving  of  security 
therefor,  which  might  be  made  by  such  County  Court  if  the  State  Auditor  were  a 
creditor  of  deceased. 

§  9.  Section  16  of  chapter  162,  Session  Laws  of  Oklahoma,  1915,  is  hereby 
amended  to  read  as  follows: 

§  16.  The  appraiser  appointed  under  the  provisions  of  the  foregoing  section, 
shall  forthwith  give  notice  by  mail  to  all  persons  known  to  have  a  claim  or 
interest  in  the  property  to  be  appraised,  including  the  State  Auditor,  and  such 
persons  as  the  County  Court  may  by  order  direct,  of  the  time  and  place  when  he 
will  appraise  such  property.  He  shall  at  said  time  and  place  appraise  the  same 
at  its  fair  market  value  as  herein  prescribed,  and  for  that  purpose  the  said 
appraiser  is  authorized  to  issue  subpoenas  and  to  compel  the  attendance  of 
witnesses  before  him,  and  to  take  the  evidence  of  such  witnesses  under  oath 
concerning  such  property  and  the  value  thereof,  and  he  shall  make  report  thereof, 
and  of  such  value  in  writing,  to  the  County  Court,  and  such  other  facts  in  relation 
thereto  and  to  the  said  matters  as  the  said  County  Court  may  order  or  require. 

The  appraiser  shall  be  paid  a  reasonable  compensation  for  his  service,  and  the 
witnesses  before  him  shall  be  paid  fees  in  the  same  amount  as  in  other  civil  cases. 
The  claims  for  all  fees  or  expenses  incurred  under  this  section  shall  be  a  charge 
against  the  estate,  and  when  approved  by  the  county  judge,  allowed-  as  other 
claims  against  the  estate. 

§  10.  Section  21  of  chapter  162,  Session  Laws  of  Oklahoma,  1915,  is  hereby 
amended  to  read  as  follows: 

§  21.  If  the  State  Auditor  shall  have  reason  to  believe  that  any  tax  is  due 
and  unpaid  under  this  act  for  any  reason,  he  shall  notify  the  Attorney-General 
of  such  fact,  who  may,  if  the  facts  warrant,  apply  to  the  County  Court  for  a 
citation  directed  to  the  person  liable  to  pay  such  tax,  citing  him  to  appear  and 
show  cause,  at  the  time  named  herein,  why  the  tax  should  not  be  paid.  The 
judge  of  the  County  Court  shall  upon  proper  application  issue  a  citation,  the 
service  whereof,  and  the  time,  manner  and  proof  thereon,  shall  conform  as  near 
as  may  be  to  the  provisions  of  the  laws  governing  probate  practice  of  this  State. 
The  Attorney-General  may  direct  the  proceedings  for  and  on  behalf  of  the  State, 
when  he  deems  it  necessary,  and  it  shall  be  the  duty  of  the  county  attorney  to 
appear  in  such  proceedings  for  the  State  when  required  so  to  do  by  the  Attorney- 
General.  The  State  Examiner  and  Inspector  and  the  State  Auditor  shall  as  often 
as  may  be  practicable,  inspect  the  files  and  records  of  the  County  Courts  of  this 
State  in  all  cases  where  an  inheritance  tax  is  or  may  be  due. 

§  11.  Section  28  of  chapter  162,  Session  Laws  of  Oklahoma,  1915,  is  hereby 
amended  to  read  as  follows: 

§  28.  The  State  Auditor  shall  promulgate  reasonable  rules  and  regulations  for 
the  conveying  of  this  act  into  effect  and  for  the  circulation  of  the  proportions 
taxable  hereunder  upon  the  transfer  of  any  interests  in  any  company  doing  busi- 
ness as  a  unit  within  this  State  and  outside  thereof  so  that  any  property  held 
outside  of  the  State  and  not  owned,  held,  used  or  operated  for  or  in  connection 
with  the  property  owned,  held  or  used  in  this  State,  shall  be  omitted  from  the 
tax  hereunder  laid. 

All  reports  as  to  heirs,  relationship,  amount  inherited,  amount  taxed,  and 
amount  of  tax  and  any  other  information  which  the  State  Auditor  shall  require 
shall  be  made  under  oath  by  the  executor,  administrator  or  trustee. 

§  12.  It  being  immediately  necessary  for  the  preservation  of  the  public  peace, 
health  and  safety,  an  emergency  is  hereby  declared  to  exist,  by  reason  whereof 
this  act  shall  take  effect  and  be  in  full  force  from  and  after  its  passage  and 
approval. 

Passed  by  the  House  of  Eepresentatives  on  the  14th  day  of  March,  A.  D.  1919. 

Prior  Statutes:     L.  1907-8,  ch.  81. 

1921  AMENDMENT. 

Empowered  the  State  Auditor  to  institute  proceedings  in  the  several  counties 
of  the  State  for  the  appointment  of  administrators  of  estates  when  the  next  of 
kin  or  creditors  have  failed  to  ask  for  such  appointment  and  the  Auditor  believes 
that  there  is  probably  a  transfer  tax  due. 


OREGON 


1061 


OREGON. 

Taxes  all  property  of  nonresident  decedents  within  the  State,  including  stock 
in  domestic  corporations. 

TABLE  OF  RATES  AND  EXEMPTIONS,  PRIOR  TO  MAY  21,  1917 


CLASS  OB  RELATIONSHIP 

Amount  of 
exemption 

Rates 

Grandparents,  parents,  husband,  wife, 
child,  brother,  sister,  son-in-law, 
daughter-in-law,  adopted  or  mutually 
acknowledged  child,  lawful  lineal  de- 
scendants. 

$5,000  to  each; 
no  tax  where 
entire  estate 
is  less  than 
$10,000. 

1%  on  all  above  $5,000. 

Aunt,  uncle,  niece,  nephew  and  their 
lineal  descendants. 

$2,000  to  each; 
no  tax  on  es- 
tates less  than 
$5,000. 

2%  on  all  above  $2,000. 

Benevolent,  charitable  or  benevolent  in- 
stitutions incorporated  within  the 
state  or  carrying  out  those  purposes 
within  the  State. 

All  exempt.  .  .  . 

No  tax. 

On  all      $10,000 
up  to           to 
$10,000     $20,000 

$20,000   In  excess 
to              of 
$50,000     $50,000 

If  less  than  $500 
to  each,  no  tax. 

3%            4% 

5%              6% 

TABLE  OF  RATES  AND  EXEMPTIONS   AS  PRESCRIBED   BY  CHAPTER  372 

In  effect  after  May  21,  1917,  to  May  29,  1919. 


Rates 

CLASS  on  RELATIONSHIP 

Amount 
exempt 

$5,000 

$25,000 

$50,000 

$100,000 

$200,000 

$400,000 

In 

to 

to 

to 

to 

to 

to 

excpss 
of 

$25,000 

$50,000 

$100,000 

$200,000 

$400,000 

$600,000 

$600,000 

Grandfather,  grandmother, 

$5,000 

1% 

1J% 

2% 

2i% 

3% 

3J% 

4% 

father,  mother,  husband, 

wife,  child,  brother,  sis- 

ter, wife,  or  widow  of  a 
son,  or  the  husband  of  a 

daughter. 

In 

$1,000 

$5,000 

$10,000 

$25,000 

$50,000 

$100,000 

excess 

to 

to 

to 

to 

to 

to 

of 

$5,000 

$10,000 

$25,000 

$50,000 

$100,000 

1200,000 

$200,000 

Aunt,  uncle,  niece,  nephew 
or   lineal   descendant   of 

$1,000 

2% 

3% 

4% 

5% 

6% 

7% 

8% 

the  same. 

In 

$500 

$2,500 

$5,000 

$10,000 

$25,000 

$50,000 

$100,000 

excess 

to 

to 

to 

to 

to 

to 

to 

of 

$2,500 

$5,000 

$10,000 

$25,000 

$50,000 

$100,000 

$200,000 

$200,000 

All     other     cases     except 

$500 

3% 

4% 

5% 

6% 

7% 

8% 

9% 

10% 

exempt    charitable    cor- 

porations, mentioned  in 

table  of  rates,  prior  to 

May  21,  191? 

1062  THE  STATE  STATUTES 

TABLE  OF  RATES  AND  EXEMPTION'S  EFFECTIVE  MAY  29,  1919 


n 

|| 

c? 

^_ 

Class  or  Relationship 

"a. 

9>  3, 

ll 

Ii 

ii 

ii 

i~- 

|»" 

o 

>  *^ 

*1-S 

|| 

ii 

°.c" 

ss 

§sl 

x  o 

H 

<•£ 

«-*" 

^-^ 

SJ-^ 

l» 

E«- 

•5**" 

Grandparents,    father, 
mother,      husband, 

$10,000 

1% 

l** 

2% 

3% 

5% 

7% 

10% 

wife,    child    or    lineal 

descendant. 

o 

.So 

c 

5 

5 

ii 

89 

g8 

8§ 

§°- 

C      » 

£•** 

«* 

g:I 

o| 

ia 

|S 

Brother,     sister,     uncle, 

$1,000 

1% 

2% 

4% 

v% 

10% 

15% 

aunt,  niece,  nephew  or 

lineal     descendant     of 

of  same. 

0 

o 

0 

-So 

cs 

"o 

O  o 

|8 

•2s 

8  o 

§» 

§e 

O  L-" 

c  o" 

o-S- 

§•••" 

x-^r 

_o 

2"*- 

gfJJ 

^2- 

Ui 

«&"• 

«e- 

«• 

ae-36" 

8 

«- 

M 

All    others,    except     be- 

None 

2% 

4% 

6% 

8% 

10% 

15% 

20% 

•25% 

nevolent,        charitable 

and   educational   insti- 

tutions      within       the 

State. 

LAWS  OF  1903,  PAGE  49.  AS  AMENDED  BY  LAWS  OF  1905.  CHAPTER 
178;  LAWS  OF  1909.  CHAPTERS  15  AND  211;  LAWS  OF  1915.  CHAPTER 
42  AND  CHAPTER  372;  LAWS  OF  1917  AND  ACT  OF  1919. 

§  1191,  L.  O.  L. 

All  property  within  the  jurisdiction  of  the  State,  and  any  interest  therein 
whether  belonging  to  the  inhabitants  of  this  State  or  not,  and"  whether  tangible 
or  intangible,  which  shall  pass  or  vest  by  dower,  curtesy,  will,  or  by  statutes  or 
inheritance  of  this  or  any  other  State,  or  by  deed,  grant,  bargain,  sale  or  gift, 
or  as  an  advancement  or  division  of  his  or  her  estate  made  in  contemplation  of 
the  death  of  the  grantor,  or  bargainer,  or  intended  to  take  effect  in  possession  or 
enjoyment  after  the  death  of  the  grantor,  bargainer  or  donor  to  any  person  or 
persons,  or  to  any  body  or  bodies,  politic  or  corporate,  in  trust  or  otherwise,  or 
by  reason  whereof  any  person  or  body  politic  or  corporate,  shall  become  bene- 
ficially entitled,  in  possession  or  expectation,  to  any  property  or  income  thereof, 
shall  be  and  is  subject  to  a  tax  at  the  rate  hereinafter  specified  in  section  1192, 
to  be  paid  to  the  Treasurer  of  the  State  for  the  use  of  the  State ;  and  all  heirs, 
legatees,  and  devisees,  administrators,  executors  and  trustees,  and  such  grantee 
under  a  conveyance,  and  any  such  donee  under  a  gift  made  during  the  grantor 
or  donor's  life,  shall  be  respectively  liable  for  any  and  all  such  taxes,  with  interest 
thereon,  until  the  same  shall  have  been  paid,  as  hereinafter  provided;  provided, 
however,  that  devises,  bequests,  legacies  and  gifts  to  benevolent,  charitable,  or 
educational  institutions  incorporated  within  this  State  and  actually  engaged  in 
this  State  in  carrying  out  the  objects  and  purposes  for  which  so  incorporated  or 
to  any  person  or  persons  to  be  held  in  trust  for  any  such  institution  in  lieu 
thereof,  shall  be  exempt  from  any  taxation  under  the  provisions  of  this  act. 

The  rest  of  the  section  and  all  of  section  2  fix  the  rates  and  exemptions  of  the 
foregoing  tables. 

§  3.  All  taxes  imposed  by  this  act  shall  take  effect  at  and  accrue  upon  the 
death  of  the  decedent,  or  donor,  and  shall  be  due  and  payable,  at  the  expiration 


OREGON  1063 

of  eight  months  from  such  death,  except  as  otherwise  provided  in  this  act; 
provided,  however,  that  taxes  upon  any  devise,  bequest,  legacy,  or  gift,  limited, 
conditioned,  dependent,  or  determinable  upon  the  happening  of  any  contingency 
or  future  event,  by  reason  of  which  the  full  and  true  value  thereof  can  not  be 
ascertained  at  or  before  the  time  when  the  taxes  become  due  and  payable  as 
aforesaid,  shall  accrue  and  become  due  and  payable  when  the  person  or  corpora- 
tion beneficially  entitled  thereto  shall  come  into  actual  possession  or  enjoyment 
thereof. 

§  4.  Any  administrator,  executor,  or  trustee  having  in  charge,  or  in  trust,  any 
property  for  distribution,  embraced  in  or  belonging  to  any  inheritance,  devise, 
bequest,  legacy,  or  gift,  subject  to  the  tax  thereon  as  imposed  by  this  act,  shall 
deduct  the  tax  therefrom,  and  within  thirty  days  thereafter  he  shall  pay  over  the 
same  to  the  State  Treasurer,  as  herein  provided.  If  such  property  be  not  in 
money,  he  shall  collect  the  tax  on  such  inheritance,  devise,  bequest,  legacy,  or 
gift,  upon  the  appraised  value  thereof  from  the  person  entitled  thereto.  He  shall 
not  deliver,  or  be  compelled  to  deliver  any  property  embraced  in  any  inheritance, 
devise,  bequest,  legacy,  or  gift,  subject  to  tax  under  this  act,  to  any  person  until 
he  shall  have  collected  the  tax  thereon. 

§  5.  Provides  for  receipts  which  must  be  produced  on  final  settlement. 

§  6.  Every  tax  imposed  by  this  act  shall  be  a  lien  upon  the  property  embraced 
in  any  inheritance,  devise,  bequest,  legacy  or  gift,  until  paid,  and  the  person  to 
whom  such  property  is  transferred,  and  the  administrators,  executors  and  trustees 
of  every  estate  embracing  such  property  shall  be  personally  liable  for  such  tax 
until  its  payment,  to  the  extent  of  the  value  of  such  property;  provided,  however, 
that  in  all  estates,  excepting  those  of  nonresident  deceased,  all  inheritance  taxes 
shall  be  sued  for  within  five  years  after  they  have  become  due  and  legally  demand- 
able,  otherwise  they  shall  be  conclusively  presumed  to  be  paid  and  cease  to  be  a 
lien  as  against  the  estate,  or  any  part  thereof,  of  the  decedent;  provided,  further, 
that  in  estates  of  nonresident  deceased,  such  limitation  period  shall  not  apply 
until  at  least  one  year  shall  have  elapsed  after  official  notice  of  the  death  of  said 
nonresident  deceased,  with  description  and  probable  value  of  the  estate,  shall  have 
been  filed  with  the  State  Treasurer.  [As  amended  by  chap.  42,  L.  1915.] 

§  7.  Allows  a  discount  of  5%  if  tax  is  paid  within  eight  months.  After  eight 
months  8%  interest  charged  from  time  when  due,  except  in  case  of  unavoidable 
delay,  when  it  may  be  reduced  to  6%  until  cause  of  delay  is  removed;  then  8%. 

§  8.  Gives  power  of  sale  to  pay  tax  in  the  same  way  as  to  pay  debts. 

§  9.  Requires  the  heir  to  deduct  the  tax  when  legacy  is  charged  on  real  estate, 
makes  tax  a  lien  and  enforceable  in  same  manner  as  a  legacy.  Where  property 
is  given  for  a  limited  period  must  apportion  tax  among  beneficiaries. 

§  10.  Provides  for  a  refund  of  taxes  erroneously  paid  when  application  is  made 
within  three  years  of  payment. 

§  11.  If  a  foreign  executor,  administrator,  or  trustee  shall  assign  or  transfer 
any  stock  or  obligations  in  this  State  standing  in  the  name  of  the  decedent,  or  in 
trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  State 
Treasurer  on  or  before  the  transfer  thereof,  and  no  such  assignment  or  transfer 
shall  be  valid  unless  such  tax  is  paid. 

§  12.  No  safe  deposit  company,  trust  company,  bank,  corporation,  or  other 
institution,  person  or  persons,  holding  securities  or  assets  of  a  decedent,  or  cor- 
poration in  which  said  decedent,  at  the  time  of  his  death,  owned  any  stock,  shall 
deliver  or  transfer  the  same  to  the  executors,  administrators,  or  legal  representa- 
tives of  said  decedent,  or  upon  their  order  or  request,  unless  notice  of  the  said 
time  and  place  of  such  intended  transfer  be  served  upon  the  State  Treasurer  in 
writing  at  least  five  days  prior  to  the  said  transfer;  and  it  shall  be  lawful  for  the 
said  State  Treasurer,  personally  or  by  representative,  to  examine  said  securities 
prior  to  the  time  of  such  delivery  or  transfer.  If  upon  such  examination  the 
State  Treasurer,  or  his  said  representative,  shall,  for  any  cause,  deem  it  advisable 
that  such  securities  or  assets  should  not  be  immediately  delivered  or  transferred, 
he  may  forthwith  notify,  in  writing,  such  company,  bank,  institution,  or  person 
to  defer  delivery  or  transfer  thereof  for  a  period  not  to  exceed  ten  days  from  the 
date  of  such  notice,  and  thereupon  it  shall  be  the  duty  of  the  party  notified  to 
defer  such  delivery  until  the  time  stated  in  such  notice,  or  until  the  revocation 
thereof  within  such  ten  days;  failure  to  serve  the  notice  first  above-mentioned  or 
allow  such  examination,  or  to  defer  the  delivery  of  such  securities  or  assets  for 
the  time  stated  in  the  second  of  said  notices,  shall  render  said  safe  deposit  com- 


1064  THE  STATE  STATUTES 

pany,  trust  company,  corporation,  bank,  or  other  institution,  person  or  persons, 
liable  to  the  payment  of  the  tax  due  on  said  securities  or  assets,  pursuant  to  the 
provisions  of  this  act. 

§  13.  Provides  that  remaindermen  may  defer  payment  of  tax  until  they  receive 
the  property  by  filing  a  bond  with  sworn  inventory  within  six  months  in  three 
times  the  amount  of  the  tax  and  renewing  it  every  five  years. 

§  14.  Gives  the  County  Court  granting  letters  jurisdiction  in  tax  proceedings. 

§§  16  to  37.  Make  the  usual  provisions  for  inventory,  appraisal,  appeal,  reports 
and  collection  of  delinquent  taxes,  the  compromise  of  uncertain  tax  claims,  and 
the  valuation  of  life  estates  and  remainders,  using  combined  experience  tables  on 
the  4%  basis. 

§  38.  Except  as  to  real  property  located  outside  of  the  State  passing  in  fee 
from  the  decedent  owner,  the  tax  imposed  under  section  2  shall  hereafter  be 
assessed  against  and  be  collected  from  property  of  every  kind,  which,  at  the  death 
of  the  decedent  owner,  is  subject  to,  or  thereafter,  for  the  purpose  of  distribution, 
is  brought  into  this  State  and  becomes  subject  to  the  jurisdiction  of  the  courts  of 
this  State  for  distributive  purposes,  or  which  was  owned  by  any  decedent  domi- 
ciled within  the  State  at  the  time  of  the  death  of  such  decedent,  even  though  the 
property  of  said  decedent  so  domiciled  was  situated  outside  of  the  State. 

§  39.  In  case  of  any  property  belonging  to  a  foreign  estate,  which  estate  in 
whole  or  in  part  is  liable  to  pay  an  inheritance  tax  in  this  State,  the  said  tax 
shall  be  assessed  upon  the  market  value  of  said  property  remaining  after  the 
payment  of  such  debts  and  expenses  as  are  chargeable  to  the  property  under  the 
laws  of  this  State.  In  the  event  that  the  executor,  administrator,  or  trustee  of 
such  foreign  estates  filed  with  the  clerk  of  the  court  having  ancillary  jurisdiction, 
and  with  the  State  Treasurer,  duly  certified  statements  exhibiting  the  true  market 
value  of  the  entire  estate  of  the  decedent  owner,  and  the  indebtedness  for  which 
the  said  estate  has  been  adjudged  liable,  which  statements  shall  be  duly  attested 
by  the  judge  of  the  court  having  original  jurisdiction,  the  beneficiaries  of  said 
estate  shall  then  be  entitled  to  have  deducted  such  proportion  of  the  said  indebted- 
ness of  the  decedent  from  the  value  of  the  property  as  the  value  of  the  property 
within  this  State  bears  to  the  value  of  the  entire  estate. 

§§  40,  41,  42  and  43.  Provide  for  the  compensation  of  officers,  impose  a  penalty 
for  accepting  a  fee  or  reward,  and  repeal  all  inconsistent  statutes. 

AMENDMENT  OF  1921. 

§  1225,  L.  O.  L.  Any  person  who  shall  wilfully  sequester  or  secrete  any  last 
will  and  testament  of  a  person  then  deceased,  or  who  having  the  custody  of  any 
such  will  and  testament,  shall  wilfully  fail  or  neglect  to  produce  and  deliver  the 
same  to  the  judge  of  the  county  court  having  jurisdiction  of  its  probate,  or  to  any 
executor  named  therein,  within  a  reasonable  time  after  the  death  of  the  testator 
thereof,  with  intention  to  injure  or  defraud  any  person  interested  therein,  or  any 
person  in  possession  or  control  of  any  record,  file  or  paper  containing  information 
relating  to  the  estate  of  a  deceased  person  or  any  interest  therein  and  who  fails, 
neglects  or  refuses  to  exhibit  the  same  upon  the  written  request  of  the  State 
Treasurer  or  his  representative,  specifying  and  describing  said  instrument,  shall  be 
punished  by  imprisonment  in  the  county  jail  not  more  than  one  year  or  by  a  fine 
not  exceeding  $500.  The  term  ' '  person ' '  as  used  in  this  section  shall  'include 
individuals,  firms,  copartnerships,  associations,  corporations  and  other  organiza- 
tions of  every  kind  or  nature.  [Laws  1921,  chap.  150,  sec.  1.  Effective  from  and 
after  May  25,  1921.] 

Prior  Statutes:     None  prior  to  1903. 


PENNSYLVANIA  1Q65 


PENNSYLVANIA. 

Taxes  transfer  of  stock  in  domestic  corporations  owned  by  nonresident  decedents 
dying  after  June  20,  1919. 

From  1887  until  July  11,  1917,  this  State  imposed  a  flat  tax  of  5%  on  the 
estate  of  all  decedents  dying  seized  of  more  than  $250,  except  on  transfers  to  the 
father,  mother,  children,  lawful  lineal  descendants  and  wife  or  widow  of  a  son, 
who  were  exempt. 

The  act  of  July  11,  1917,  added  a  flat  tax  of  2%  on  all  transfers  to  father, 
mother,  husband,  wife,  children,  lawful  lineal  descendants,  step  children  and 
wife  or  widow  of  a  son;  all  others  being  taxed  at  5%  as  under  the  former 
statute.  This  act  included  the  property  of  nonresidents  within  the  State,  but 
under  the  construction  of  the  courts  it  was  confined  to  tangibles. 

The  act  of  1919,  in  effect  June  20,  1919,  does  not  change  these  rates,  and 
allows  no  exemptions.  But  there  is  slight  alteration  in  the  list  of  persons  in  the 
2%  class.  This  list  under  the  1919  act  includes:  father,  mother,  husband,  wife, 
children,  children  of  a  former  husband  or  wife,  wife  or  widow  of  a  son,  also 
on  transfers  from  the  mother  to  an  illegitimate  child  or  from  such  child  to  its 
mother. 

The  act  of  1919  taxes  the  transfer  of  stock  held  by  nonresidents  in  domestic 
corporations  and  provides  that  the  taxes  imposed  by  other  States  and  the  Federal 
Government  shall  not  be  a  deduction,  thus  reversing  by  legislation  the  decision  of 
the  Pennsylvania  courts  on  this  subject. 

[NOTE:  In  1921  the  rate  as  to  collaterals  and  strangers  was  increased  to  10 
per  cent.] 

All  three  of  the  Pennsylvania  statutes  are  given  below: 

ACT  OF  1887. 
In  Effect  Until  July  11,  1917.     Chapter  37,  Laws  of  1887. 

Section  1.  Be  it  enacted,  etc.,  that  all  estates,  real,  personal  and  mixed,  of 
every  kind  whatsoever,  situated  within  this  State,  whether  the  person  or  persons 
dying  seized  thereof  be  domiciled  within  or  out  of  this  State,  and  all  such 
estates  situated  in  another  State,  territory  or  country,  when  the  person,  or  persons, 
dying  seized  thereof,  shall  have  their  domicile  within  this  Commonwealth,  passing 
from  any  person,  who  may  die  seized  or  possessed  of  such  estates,  either  by  will, 
or  under  the  intestate  laws  of  this  State,  or  any  part  of  such  estate,  or  estates, 
or  interest  therein,  transferred  by  deed,  grant,  bargain,  or  sale,  made  or  intended 
to  take  effect,  in  possession  or  enjoyment  after  the  death  of  the  grantor,  or 
bargainer  to  any  person  or  persons,  or  to  bodies  corporate  or  politic,  in  trust  or 
otherwise,  other  than  to  or  for  the  use  of  father,  mother,  husband,  wife,  children 
and  lineal  descendants  born  in  lawful  wedlock,  or  the  wife,  or  widow  of  the  son 
of  the  person  dying  seized  or  possessed  thereof,  shall  be  and  they  are  hereby 
made  subject  to  a  tax  of  five  dollars  on  every  hundred  dollars  of  the  clear  value 
of  such  estate  or  estates,  and  at  and  after  the  same  rate  for  any  less  amount,  to 
be  paid  to  the  use  of  the  Commonwealth;  and  all  owners  of  such  estates,  and  all 
executors  and  administrators  and  their  sureties,  shall  only  be  discharged  from 
liability  for  the  amount  of  such  taxes  or  duties,  the  settlement  of  which  they 
may  be  charged  with,  by  having  paid  the  same  over  for  the  use  aforesaid,  as 
hereinafter  directed;  provided,  that  no  estate  which  may  be  valued  at  less  than 
two  hundred  and  fifty  dollars  shall  be  subject  to  the  duty  or  tax. 

§  2.  Taxes  bequests  to  executors  in  lieu  of  commissions  in  excess  of  reasonable 
compensation. 

§  3.  In  all  cases  where  there  has  been  or  shall  be  a  devise,  descent  or  bequest 
to  collateral  relatives  or  strangers,  liable  to  the  collateral  inheritance  tax,  to  take 
effect  in  possession,  or  to  come  into  actual  enjoyment  after  the  expiration  of  one 
or  more  life  estates,  or  a  period  of  years,  the  tax  on  such  estate  shall  not  be  pay- 
able, nor  interest  begin  to  run  thereon,  until  the  person  or  persons  liable  for  the 
same  shall  come  into  actual  possession  of  such  estate,  by  the  termination  of  the 
estates  for  life  or  years,  and  the  tax  shall  be  assessed  upon  the  value  of  the  estate 
at  the  time  the  right  of  possession  accrues  to  the  owner  as  aforesaid;  provided, 


1066  THE  STATE  STATUTES 

that  the  owner  shall  have  the  right  to  pay  the  tax  at  any  time  prior  to  his  coming 
into  possession,  and  in  such  cases,  the  tax  shall  be  assessed  on  the  value  of  the 
estate  at  the  time  of  the  payment  of  the  tax,  after  deducting  the  value  of  the  life 
estate  or  estates  for  years;  and  provided  further,  that  the  tax  on  real  estate 
shall  remain  a  lien  on  the  real  estate  on  which  the  same  is  chargeable  until  paid. 
And  the  owner  of  any  personal  estate  shall  make  a  full  return  of  the  same  to  the 
register  of  wills  of  the  proper  county  within  one  year  from  the  death  of  the 
decedent,  and  within  that  time  enter  into  security  for  the  payment  of  the  tax  to 
the  satisfaction  of  such  register ;  and  in  case  of  failure  so  to  do  the  tax  shall  be 
immediately  payable  and  collectible. 

§  4.  If  the  collateral  inheritance  tax  shall  be  paid  within  three  months  after 
the  death  of  the  decedent,  a  discount  of  5  per  centum  shall  be  made  and  allowed, 
and  if  the  said  tax  is  not  paid  at  the  end  of  one  year  from  the  death  of  the 
decedent,  interest  shall  then  be  charged  at  the  rate  of  12  per  centum  per  annum 
on  such  tax;  but  where  from  claims  made  upon  the  estate,  litigation,  or  other 
unavoidable  cause  of  delay,  the  estate  of  any  decedent  or  a  part  thereof  cannot 
be  settled  up  at  the  end  of  the  year  from  his  or  her  decease,  6  per  centum  per 
annum  shall  be  charged  upon  the  collateral  inheritance  tax,  arising  from  the 
unsettled  part  thereof,  from  the  end  of  such  year  until  there  be  default;  pro- 
vided, further,  that  where  real  or  personal  estate  withheld  by  reason  of  litigation 
or  other  cause  of  delay  in  manner  aforesaid  from  the  parties  entitled  thereto, 
subject  to  said  tax,  has  not  been,  or  shall  not  be  productive  to  the  extent  of 
6  per  centum  per  annum,  they  shall  not  be  compelled  to  pay  a  greater  amount 
as  interest  to  the  Commonwealth  than  they  may  have  realized,  or  shall  realize 
from  such  estate  during  the  time  the  same  has  been  or  shall  be  withheld  as 
aforesaid. 

§  5.  Eequires  the  executor  or  administrator  to  deduct  the  tax  if  in  money; 
if  in  property  to  collect  from  beneficiary,  and  gives  power  of  sale  in  case  of 
neglect  or  refusal;  must  not  deliver  property  until  the  tax  has  been  paid. 

§  6.  If  the  legacy  subject  to  collateral  inheritance  tax  be  given  to  any  person 
for  life,  or  for  a  term  of  years,  or  for  any  other  limited  period,  upon  a  condition 
or  contingency,  if  the  same  be  money,  the  tax  thereon  shall  be  retained  upon  the 
whole  amount ;  but  if  not  money,  application  shall  be  made  to  the  orphan 's  court 
having  jurisdiction  of  the  accounts  of  the  executors  or  administrators  to  make 
apportionment,  if  the  case  requires  it,  of  the  sum  to  be  paid  by  such  legatees, 
and  for  such  further  order  relative  thereto  as  equity  shall  require. 

§  7.  Eequires  the  heir  to  deduct  the  tax  where  legacy  is  charged  on  real  estate, 
makes  it  a  lien,  and  payment  may  be  enforced  in  same  manner  as  payment  of  a 
legacy. 

§  8.  Whenever  any  real  estate  of  which  any  decedent  may  die  seized  shall  be 
subject  to  the  collateral  inheritance  tax,  it  shall  be  the  duty  of  executors  and 
administrators  to  give  information  thereof  to  the  register  of  the  county,  where 
administration  has  been  granted,  within  six  months  after  they  undertake  the 
execution  of  their  respective  duties,  or  if  the  fact  be  not  known  to  them  within 
that  period,  within  one  month  after  the  same  shall  have  come  to  their  knowledge, 
and  it  shall  be  the  duty  of  the  owners  of  such  estate,  immediately  upon  the  vesting 
of  the  estate,  to  give  information  thereof  to  the  register  having  jurisdiction  of 
the  granting  of  administration. 

§  9.  It  shall  be  the  duty  of  any  executor  or  administrator,  on  the  payment  of 
collateral  inheritance  tax,  to  take  duplicate  receipts  from  the  register,  one  of 
which  shall  be  forwarded  forthwith  to  the  Auditor-General,  whose  duty  it  shall 
be  to  charge  the  register  receiving  the  money  with  the  amount,  and  seal  with  the 
seal  of  his  office,  and  countersign  the  receipt  and  transmit  it  to  the  executor  or 
administrator,  whereupon  it  shall  be  a  proper  voucher  in  the  settlement  of  the 
estate;  but  in  no. event  shall  an  executor  or  administrator  be  entitled  to  a  credit 
in  his  account  by  the  register,  unless  the  receipt  is  so  sealed  and  countersigned 
by  the  Auditor-General. 

§  10.  Whenever  any  foreign  executor,  or  administrator,  or  trustee,  shall  assign 
or  transfer  any  stocks  or  loans  in  this  Commonwealth,  standing  in  the  name  of  the 
decedent,  or  in  trust  for  a  decedent,  which  shall  be  liable  for  the  collateral 
inheritance  tax,  such  tax  shall  be  paid,  on  the  transfer  thereof,  to  the  register  of 
the  county  where  such  transfer  is  made;  otherwise  the  corporation  permitting 
such  transfer  shall  become  liable  to  pay  such  tax. 

§  11.  Whenever  debts  shall  be  proven  against  the  estate  of  a  decedent,  after 


PENNSYLVANIA  1067 

distribution  of  legacies  from  which  the  collateral  inheritance  tax  has  been 
deducted,  in  compliance  with  this  act,  and  the  legatee  is  required  to  refund  any 
portion  of  a  legacy,  a  portion  of  the  said  tax  shall  be  repaid  to  him  by  the 
executor  or  administrator,  if  the  said  tax  has  not  been  paid  into  the  State  or 
county  treasury,  or  by  the  county  treasurer,  if  it  has  been  so  paid. 

§  12.  It  shall  be  the  duty  of  the  register  of  wills  of  the  county,  in  which 
letters  testamentary,  or  of  administration  are  granted,  to  appoint  an  appraiser 
as  often  as  and  whenever  occasion  may  require  to  fix  the  valuation  of  estates 
which  are,  or  shall  be,  subject  to  collateral  inheritance  tax,  and  it  shall  be  the 
duty  of  such  appraiser  to  make  a  fair  and  conscionable  appraisement  of  such 
estates,  and  it  shall  further  be  the  duty  of  such  appraiser  to  assess  and  fix  the 
cash  value  of  all  annuities  and  life  estates  growing  out  of  said  estates,  upon  which 
annuities  and  life  estates  the  collateral  inheritance  tax  shall  be  immediately  pay- 
able out  of  the  estate  at  the  rate  of  such  valuation:  provided,  that  any  person  or 
persons  not  satisfied  with  said  appraisement  shall  have  the  right  to  appeal,  within 
thirty  days,  to  the  orphans'  court  of  the  proper  county  or  city,  on  paying,  or 
giving  security  to  pay,  all  costs,  together  with  whatever  tax  shall  be  fixed  by  said 
court,  and  upon  such  appeal  said  courts  shall  have  jurisdiction  to  determine  all 
questions  of  valuation,  and  of  the  liability  of  the  appraised  estate  for  such  tax, 
subject  to  the  right  of  appeal  to  the  Supreme  Court  as  in  other  cases. 

§  13.  It  shall  be  a  misdemeanor  in  any  appraiser,  appointed  by  the  register 
to  make  an  appraisement  in  behalf  of  the  Commonwealth,  to  take  any  fee  or 
reward  from  any  executor  or  administrator,  legatee,  next  of  kin,  or  heir  of  any 
decedent,  and  for  any  such  offense  the  register  shall  dismiss  him  from  such 
service,  and  upon  conviction  in  the  quarter  sessions,  he  shall  be  fined  not  exceed- 
ing five  hundred  dollars,  and  imprisoned  not  exceeding  one  year,  or  both,  or  either, 
at  the  discretion  of  the  court. 

§  14.  It  shall  be  the  duty  of  the  register  of  wills  to  enter  in  a  book,  to  be 
provided  at  the  expense  of  the  Commonwealth,  to  be  kept  for  that  purpose,  and 
which  shall  be  a  public  record,  the  returns  made  by  all  appraisers  under  this  act, 
opening  an  account  in  favor  of  the  Commonwealth  against  the  decedent's  estate, 
and  the  register  may  give  a  certificate  of  payment  of  such  tax  from  said  record; 
and  it  shall  be  the  duty  of  the  register  to  transmit  to  the  Auditor-General,  on 
the  first  day  of  each  month,  a  statement  of  all  returns  made  by  appraisers  during 
the  preceding  month,  upon  which  the  taxes  remain  unpaid  which  statement  shall 
be  entered  by  the  Auditor-General  in  a  book  to  be  kept  by  him  for  that  purpose. 
And  whenever  any  such  tax  shall  have  remained  due  and  unpaid  for  one  year,  it 
shall  be  lawful  for  the  register  to  apply  to  the  orphans'  court,  by  bill  or  petition, 
to  enforce  the  payment  of  the  same;  whereupon  said  court,  having  caused  due 
notice  to  be  given  to  the  owner  of  the  real  estate  charged  with  the  tax,  and  to 
such  other  persons  as  may  be  interested,  shall  proceed,  according  to  equity,  to 
make  such  decrees,  or  orders,  for  the  payment  of  the  said  tax,  out  of  such  real 
estate,  as  shall  be  just  and  proper. 

§  15.  If  the  register  shall  discover  that  any  collateral  inheritance  tax  has 
not  been  paid  over,  according  to  law,  the  orphans'  court  shall  be  authorized  to 
cite  the  executors  or  administrators  of  the  decedent,  whose  estate  is  subject  to 
the  tax,  to -file  an  account  or  to  issue  a  citation  to  the  executors,  administrators, 
or  heirs,  citing  them  to  appear  on  a  certain  day  and  show  cause  why  the  said 
tax  should  not  be  paid;  and  when  personal  service  cannot  be  had,  notice  shall  be 
given  for  four  weeks,  once  a  week,  in  at  least  one  newspaper  published  in  said 
county;  and  if  the  said  tax  shall  be  found  to  be  due  and  unpaid,  the  said  delin- 
quent shall  pay  said  tax  and  costs.  And  it  shall  be  the  duty  of  the  register,  or 
the  Auditor-General,  to  employ  an  attorney,  of  the  proper  county,  to  sue  for  the 
recovery  and  amount  of  such  tax,  and  the  Auditor-General  is  authorized  and 
empowered,  in  settlement  of  accounts  of  any  register,  to  allow  him  costs  of 
advertising  and  other  reasonable  fees  and  expenses  incurred  in  the  collection 
of  tax. 

§  16.  The  registers  of  wills,  of  the  several  counties  of  this  Commonwealth, 
upon  their  filing  with  the  Auditor-General  the  bond  hereinafter  required  shall 
be  the  agents  of  the  Commonwealth  for  the  collection  of  the  collateral  inheritance 
tax ;  and  for  services  rendered  in  collecting  and  paying  over  the  same,  the  said 
agents  shall  be  allowed  to  retain,  for  their  own  use,  such  percentage  as  may  be 
allowed  by  the  Auditor-General,  not  exceeding  five  per  centum  on  all  taxes  paid 


1068  THE  STATE  STATUTES 

and  accounted  for:  Provided,  That  this  section  shall  not  apply  to  the  fees  of 
registers  elected  prior  to  the  passage  of  this  act. 

§  17.  The  said  register  shall  give  bond  to  the  Commonwealth  in  such  penal 
sum  as  the  orphans'  court  of  the  county  may  direct  with  two  or  more  sufficient 
sureties  for  the  faithful  performance  of  the  duties  hereby  imposed,  and  for  the 
regular  accounting  and  paying  over  of  the  amounts  to  be  collected  and  received, 
and  said  bond,  on  its  execution  and  approval,  by  the  said  orphans'  court,  to  be 
forwarded  to  the  Auditor-General. 

§  18.  Until  bond  and  security  be  given,  as  required  by  the  preceding  section, 
the  said  collateral  inheritance  tax  shall  be  received  and  collected  by  the  county 
treasurer  as  heretofore,  and  in  such  cases  all  the  provisions  of  this  act,  relating 
to  collection  and  payment  by  registers,  shall  apply  to  the  county  treasurer. 

§  19.  It  shall  be  "the  duty  of  the  register  of  wills,  of  each  county,  to  make 
returns  and  payment  to  the  State  Treasurer  of  all  the  collateral  inheritance  taxes 
he  shall  have  received,  stating  for  what  estate  paid,  on  the  first  Monday  of  April, 
July,  October,  and  January,  in  each  year;  and  for  all  taxes  collected  by  him  and 
not  paid  over  within  one  month,  after  his  quarterly  return  of  the  same,  he  shall 
pay  interest  at  the  rate  of  twelve  per  centum  per  annum  until  paid. 

§  20.  The  lien  of  the  collateral  inheritance  tax  shall  continue  until  the  said 
tax  is  settled  and  satisfied:  Provided,  That  the  said  lien  shall  be  limited  to  the 
property  chargeable  therewith:  and  provided  further,  That  all  collateral  inherit- 
ance taxes  shall  be  sued  for  within  five  years  after  they  are  due  and  legally 
demandable,  otherwise  they  shall  be  presumed  to  have  been  paid,  and  cease  to  be 
a  lien  as  against  any  purchasers  of  real  estate;  and  provided  further,  That  all 
taxes  due  and  legally  demandable  at  the  date  of  the  passage  of  this  act,  the 
collection  of  which  would  be  barred  by  the  provisions  hereof,  shall  not  be  barred 
if  suit  shall  be  brought  therefor  within  one  year  from  the  date  of  the  passage  of 
this  act. 

§  21.  All  laws,  or  parts  of  laws,  heretofore  approved,  relating  to  the  collection 
of  the  collateral  inheritance  tax,  and  inconsistent  herewith,  be  and  the  same  are 
hereby  repealed. 

ACT  OF   1917. 
In  Effect  from  July  11,  1917.  Until  June  20.  1919. 

An  Act  for  the  imposition  and  collection  of  certain  inheritance  taxes. 

Section  1.  Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the 
Commonwealth  of  Pennsylvania  in  General  Assembly  met  and  it  is  hereby  enacted 
by  the  authority  of  the  same  that  all  estates  real,  personal  and  mixed  of  every 
kind  whatsoever  situated  within  this  Commonwealth  whether  the  person  dying 
seized  thereof  be  domiciled  within  or  without  this  Commonwealth  and  all  such 
estates  situated  in  another  State,  territory  or  country  when  the  person  dying 
seized  thereof  shall  have  his  domicile  within  this  Commonwealth  passing  from 
any  person  who  may  die  seized  or  possessed  of  such  estates  either  by  will  or  under 
the  intestate  laws  of  this  Commonwealth  or  any  part  of  such  estates  or  interests 
therein  transferred  by  deed,  grant,  bargain,  or  sale  made  or  intended  to  take 
effect  in  possession  or  enjoyment  after  the  death  of  the  grantor  or  bargainer  to 
or  for  the  use  of  father,  mother,  husband,  wife,  children,  lineal  descendants  born 
in  lawful  wedlock,  children  of  a  former  husband  or  wife,  or  the  wife  or  widow 
of  the  son  of  a  person  dying  seized  or  possessed  thereof  or  to  legally  adopted 
children  are  hereby  made  subject  to  a  tax  of  two  ($2)  dollars  on  every  hundred 
dollars  of  the  clear  value  of  such  estates  and  at  the  same  rate  for  any  less  amount 
to  be  paid  for  the  use  of  the  Commonwealth. 

The  tax  hereinbefore  provided  is  also  imposed  on  any  estate  passing  from  the 
mother  of  an  illegitimate  child  or  from  any  person  of  whom  the  mother  is  a  lineal 
descendant  to  such  illegitimate  child,  his  wife  or  widow.  Such  tax  also  applies 
to  any  estate  passing  from  an  illegitimate  child  to  his  mother. 

§  2.  The  register  of  wills  of  the  county  in  which  letters  testamentary  or  of 
administration  are  granted  shall  appoint  an  appraiser  whenever  occasion  may 
require  to  fix  the  value  of  the  estates  hereinbefore  subjected  to  tax.  Such 
appraiser  shall  make  a  fair  conscionable  appraisement  of  such  estates  and  assess 
and  fix  the  cash  value  of  all  annuities  and  life  estates  growing  out  of  said  estates 


PENNSYLVANIA  1069 

upon  which  annuities  and  life  estates,  the  tax  imposed  by  this  act  shall  be 
immediately  payable  out  of  the  estate  at  the  rate  of  such  valuation. 

§  3.  The  compensation  of  such  appraisers  shall  be  as  follows,  namely:  For 
each  day  during  which  an  appraiser  shall  actually  be  engaged  in  making  appraise- 
ments of  property  subject  to  the  tax  he  shall  receive  the  sum  of  five  dollars. 
If  it  shall  be  necessary  for  the  appraiser  to  travel  from  his  place  of  residence  to 
appraise  property  subject  to  the  tax  he  shall  be  allowed  such  actual  necessary 
traveling  expenses  as  he  may  incur,  which  expenses  shall  be  itemized  in  a  sworn 
statement  to  be  returned  to  the  register  and  subject  to  the  final  approval  of  the 
Auditor-General. 

§  4.  Whenever  because  of  the  complicated  nature  of  an  estate  subject  to  the 
payment  of  such  tax  the  interest  of  the  Commonwealth  shall  require  the  appoint- 
ment as  appraiser  of  such  estate  of  a  person  possessed  of  expert  or  technical 
knowledge  to  ascertain  the  value  thereof;  reasonable  additional  compensation 
shall  be  allowed  such  appraiser  for  the  exercise  of  such  expert  or  technical  knowl- 
edge. In  case  where  after  the  appointment  of  an  appraiser  it  shall  appear  that 
the  proper  appraisement  of  said  estate  will  require  the  services  of  a  person 
possessed  of  expert  or  technical  knowledge,  whereof  the  appraiser  appointed  is 
not  possessed,  the  appraiser  may  employ  the  services  of  a  person  possessed  of 
expert  or  technical  knowledge  to  assist  him  in  the  appraisement,  and  for  such 
services  the  person  so  employed  shall  receive  reasonable  compensation.  In  all 
such  cases  the  register  of  wills  appointing  the  appraiser  shall  certify  to  the 
Auditor-General  that  there  is  an  actual  necessity  for  the  appointment  of  an 
appraiser  possessed  of  expert  or  technical  knowledge  or  that  the  appraiser  already 
appointed  to  appraise  the  estate  in  question  should  be  assisted  by  a  person  pos- 
sessed of  such  knowledge.  No  person  shall  be  appointed  as  such  expert  appraiser 
or  as  expert  assistant  to  the  appraiser  until  the  approval  of  the  Auditor-General 
of  said  appointment  is  first  obtained,  nor  shall  any  payment  be  made  to  any 
appraiser  or  to  any  person  employed  by  him  under  this  section  until  an  itemized 
statement  of  the  services  performed  and  the  compensation  recommended  shall 
have  been  rendered  under  oath  or  affirmation  to  the  Auditor-General  for  his 
approval  and  shall  have  received  the  same.  No  clerk  or  other  person  employed 
in  the  office  of  a  register  of  wills  shall  be  appointed  as  an  expert  appraiser  of  an 
estate  subject  to  the  payment  of  such  tax  nor  as  an  expert  to  assist  the  appraiser 
of  such  estate. 

§  5.  It  shall  be  a  misdemeanor  for  an  appraiser  to  take  any  fee  or  reward 
from  any  executor  or  administrator,  legatee,  lineal  descendant,  or  heir  of  any 
decedent,  and  for  any  such  offense  the  register  shall  dismiss  him  from  such 
service.  Upon  conviction  of  such  misdemeanor  such  appraiser  shall  be  fined  not 
exceeding  five  hundred  dollars  or  imprisoned  not  exceeding  one  year  or  both. 

§  6.  Any  person  not  satisfied  with  an  appraisement  may  appeal  within  thirty 
days  to  the  orphans'  court  on  paying  or  giving  security  to  pay  all  costs,  together 
with  whatever  tax  shall  be  fixed  by  the  court.  Upon  such  appeal  the  court  may 
determine  all  questions  of  valuation  and  of  the  liability  of  the  appraised  estate 
for  such  tax  subject  to  the  right  of  appeal  to  the  Supreme  or  Superior  Court. 

§  7.  The  register  of  wills  shall  enter  in  a  book  to  be  provided  at  the  expense 
of  the  Commonwealth,  which  shall  be  a  public  record,  the  returns  made  by  all 
appraisers  under  the  provisions  of  this  act  opening  an  account  in  favor  of  the 
Commonwealth  against  each  decedent's  estate.  The  register  may  give  certificates 
of  payment  of  such  tax  from  such  record.  The  register  shall  transmit  to  the 
Auditor-General  on  the  first  day  of  each  month  a  statement  of  all  returns  made 
by  appraisers  during  the  preceding  month  upon  which  the  taxes  have  been  paid 
or  remain  unpaid,  which  statement  shall  be  entered  by  the  Auditor-General  in  a 
book  to  be  kept  for  that  purpose.  Whenever  any  such  tax  shall  have  remained 
due  and  unpaid  for  one  year  the  register  may  apply  to  the  orphans'  court  by  bill 
or  petition  to  enforce  the  payment  of  the  same,  whereupon  the  court  having 
caused  notice  to  be  given  to  the  owner  of  the  real  estate  charged  with  the  tax 
and  to  such  other  person  as  may  be  interested  shall  proceed  according  to  equity 
to  make  such  decree  or  orders  for  the  payment  of  the  tax  out  of  such  real  estate 
as  shall  be  just  and  proper. 

§  8.  If  the  register  shall  discover  that  any  tax  imposed  by  this  act  has  not  been 
paid  the  orphans'  court  may  cite  the  executors  or  administrators  of  the  decedent 
whose  estate  is  subject  to  the  tax  to  file  an  account  or  to  appear  on  a  certain  day 
and  show  cause  why  the  tax  should  not  be  paid.  When  personal  service  cannot  be 


1070  THE  STATE  STATUTES 

had  notice  shall  be  given  for  four  weeks,  once  a  week  in  at  least  one  newspaper 
published  in  the  county  and  in  the  legal  periodical  designated  by  the  rules  of 
court  of  the  county  for  the  publication  of  legal  notices.  If  the  tax  shall  be 
found  to  be  due  the  delinquent  shall  pay  the  tax  and  costs.  The  Auditor-General 
is  authorized  to  employ  an  attorney  of  the  county  to  sue  for  the  recovery  of  the 
amount  of  such  tax.  The  Auditor-General  is  authorized  to  employ  a  resident 
attorney  in  all  counties  having  a  population  of  one  hundred  thousand  and  less 
than  five  hundred  thousand  and  in  counties  having  a  population  of  five  hundred 
thousand  and  more,  such  additional  resident  attorneys  as  may  be  necessary  to 
protect  the  Commonwealth's  interests  in  all  matters  relating  to  enforcing  the 
provisions  of  this  act.  Said  resident  attorney  or  attorneys  shall  be  allowed  such 
reasonable  compensation  as  may  be  fixed  by  the  Auditor-General,  which  shall  be 
paid  from  the  moneys  realized  from  such  taxes.  The  Auditor- General  in  the 
settlement  of  accounts  of  any  register  may  allow  him  costs  of  advertising  and 
other  reasonable  fees  and  expenses  incurred  in  the  collection  of  the  tax. 

§  9.  Where  there  is  a  devise,  descent,  or  bequest  liable  to  the  tax  hereinbefore 
imposed,  which  devise,  descent,  or  bequest  is  to  take  effect  in  possession  or  to 
come  into  actual  enjoyment  after  the  expiration  of  one  or  more  life  estates  or  a 
period  of  years,  the  tax  on  such  estate  shall  not  be  payable  nor  shall  interest 
begin  to  run  thereon  until  the  person  liable  for  the  same  shall  come  into  actual 
possession  of  such  estate  by  the  termination  of  the  estates  for  life  or  years.  The 
tax  shall  be  assessed  upon  the  value  of  the  estate  at  the  time  the  right  of  pos- 
session accrues  to  the  owner,  but  the  owner  may  pay  the  tax  at  any  time  prior  to 
his  coming  into  possession.  In  such  cases  the  tax  shall  be  assessed  on  the  value 
of  the  estate  at  the  time  of  the  payment  of  the  tax  after  deducting  the  value  of 
the  life  estate  or  estates  for  years.  The  tax  on  real  estate  shall  remain  a  lien 
on  the  real  estate  on  which  the  same  is  chargeable  until  paid.  The  owner  of  any 
personal  estate  shall  make  a  full  return  of  the  same  to  the  register  of  wills 
within  one  year  from  the  death  of  the  decedent  and  within  that  time  enter  into 
security  for  the  payment  of  the  tax  to  the  satisfaction  of  such  register.  In  case 
of  failure  so  to  do  the  tax  shall  be  immediately  payable. 

§  10.  If  the  tax  is  paid  within  three  months  after  the  death  of  the  decedent 
a  discount  of  five  per  centum  shall  be  allowed.  If  the  tax  is  not  paid  at  the  end 
of  one  year  from  the  death  of  the  decedent  interest  shall  be  charged  at  the  rate 
of  twelve  per  centum  per  annum  on  such  tax.  Where  because  of  claims  made 
upon  the  estate  litigation  or  other  unavoidable  cause  of  delay  the  estate  of  any 
decedent  or  any  part  thereof  cannot  be  settled  up  at  the  end  of  the  year  interest 
at  the  rate  of  six  per  centum  per  annum  shall  be  charged  upon  the  tax  arising 
from  the  unsettled  part  thereof  from  the  end  of  such  year  until  there  be  default. 
Where  real  or  personal  estate  withheld  by  reason  of  litigation  or  other  cause  of 
delay  in  manner  aforesaid  from  the  parties  entitled  thereto,  subject  to  such  tax, 
has  not  been  productive  to  the  extent  of  six  per  centum  per  annum,  the  proper 
parties  shall  not  pay  a  greater  amount  as  interest  to  the  Commonwealth  than  they 
have  realized  or  shall  realize  from  such  estate  during  the  time  the  same  has  been 
or  shall  be  withheld  as  aforesaid. 

11.  The  executor  or  administrator  or  other  trustee  paying  any  legacy  or 
share  in  the  distribution  of  any  estate  subject  to  the  said  tax  shall  deduct  there- 
from at  the  rate  of  two  dollars  in  every  hundred  dollars  upon  the  whole  legacy  or 
*um  paid,  or  if  not  money  he  shall  demand  payment  of  a  sum  to  be  computed  at 
the  same  rate  upon  the  appraised  value  thereof.  No  executor  or  administrator 
shall  be  compelled  to  pay  or  deliver  any  specific  legacy  or  article  to  be  distributed 
subject  to  tax  except  on  the  payment  into  his  hands  of  a  sum  computed  on  its 
value  as  aforesaid.  In  case  of  neglect  or  refusal  on  the  part  of  such  legatee  to 
pay  the  same  such  specific  legacy  or  article  or  so  much  thereof  as  shall  be  neces- 
sary shall  be  sold  by  such  executor  or  administrator  at  public  sale  after  notice  to 
such  legatee  and  the  balance  that  may  be  left  in  the  hands  of  the  executor  or 
administrator  shall  be  distributed  as  is  or  may  be  directed  by  law.  Every  sum 
of  money  retained  by  any  executor  or  administrator  or  paid  into  his  hands  on 
account  of  any  legacy  or  distributive  share  for  the  use  of  the  Commonwealth 
shall  be  paid  by  him  without  delay. 

§  12.  When  a  legacy  subject  to  tax  under  this  act  is  given  to  any  person  for 
life  or  for  a  term  of  years,  or  for  any  other  limited  period  upon  the  condition 
or  contingency  if  the  same  be  money  the  tax  thereon  shall  shall  be  retained  upon 
the  whole  amount,  but  if  not  money,  application  shall  be  made  to  the  orphans' 


PENNSYLVANIA  1071 

court  to  make  apportionment,  if  the  case  require  il,  of  the  sum  to  be  paid  by 
such  legatees  and  for  such  further  order  relative  thereto  as  equity  shall  require. 
Whenever  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real  estate 
the  heir  or  devise  before  paying  the  same  shall  deduct  therefrom  at  the  rate 
aforesaid  and  pay  the  amount  so  deducted  to  the  executor  and  the  same  shall 
remain  a  charge  upon  such  real  estate  until  paid  and  the  payment  thereof  shall 
be  enforced  by  the  decree  of  the  orphans'  court  in  the  same  manner  as  the 
payment  of  such  legacy  may  be  enforced. 

§  13.  Whenever  any  real  estate  of  which  any  decedent  may  die  seized  shall 
be  subject  to  the  tax,  the  executors  and  administrators  shall  give  information 
thereof  to  the  register  of  the  county  where  administration  has  been  granted 
within  six  months  after  they  undertake  the  execution  of  their  respective  duties, 
or  if  the  fact  be  not  known  to  them  within  that  period  then  within  one  month 
after  the  same  shall  have  come  to  their  knowledge.  The  owners  of  such  estate 
immediately  upon  its  vesting  shall  give  information  thereof  to  the  register  having 
jurisdiction  of  the  granting  of  administration. 

§  14.  Any  executor  or  administrator  on  the  payment  of  said  tax  shall  take 
duplicate  receipts  from  the  register,  both  of  which  shall  be  forwarded  forthwith 
to  the  Auditor-General,  who  shall  charge  the  register  receiving  the  money  with 
the  amount  and  seal  with  the  seal  of  his  office  and  countersign  the  original  receipt 
and  transmit  it  to  the  executor  or  administrator  whereupon  it  shall  be  a  proper 
voucher  in  the  settlement  of  the  estate.  In  no  event  shall  an  executor  or  adminis- 
trator be  entitled  to  a  credit  in  his  account  by  the  register  unless  the  receipt  is  so 
sealed  and  countersigned  by  the  Auditor-General. 

§  15.  Whenever  any  foreign  executor  or  administrator,  or  trustee,  shall  assign 
or  transfer  any  stocks  or  loans  in  this  Commonwealth  standing  in  the  name  of  the 
decedent,  or  in  trust  for  the  decedent,  which  shall  be  liable  for  the  tax  imposed 
by  this  act,  such  tax  shall  be  paid  on  the  transfer  thereof  to  the  register  of  the 
county  where  such  transfer  is  made,  otherwise  the  corporation  permitting  such 
transfer  shall  become  liable  to  pay  such  tax. 

§  16.  Whenever  debts  shall  be  proved  against  the  estate  of  a  decedent  after 
distribution  of  legacies  from  which  the  tax  has  been  deducted,  in  compliance  with 
this  act,  and  the  legatee  is  required  to  refund  any  portion  of  a  legacy,  a  portion 
of  the  said  tax  shall  be  repaid  to  him  by  the  executor  or  administrator  if  the  tax 
has  not  been  paid  into  the  State  or  county  treasury,  or  by  the  county  treasurer 
if  it  has  been  so  paid. 

§  17.  The  registers  of  wills  upon  their  filing  with  the  Auditor-General  the  bond 
hereinafter  required  shall  be  the  agents  of  the  Commonwealth  for  the  collection 
of  the  said  tax.  For  services  rendered  in  collecting  and  paying  over  the  same 
they  shall  be  allowed  to  retain  for  their  own  use  upon  the  gross  amount  during 
any  year,  five  per  centum  upon  the  tax  collected  if  such  tax  shall  amount  to  a 
sum  of  fifty  thousand  ($50,000)  dollars  or  less,  three  per  centum  on  the  amounts 
collected  in  excess  of  fifty  thousand  ($50,000)  dollars  and  not  exceeding  one 
hundred  thousand  ($100,000)  dollars,  two  per  centum  on  the  amounts  collected 
in  excess  of  one  hundred  thousand  ($100,000)  dollars  and  not  over  two  hundred 
thousand  ($200,000)  dollars,  and  one  per  centum  on  the  amounts  collected  in 
excess  of  two  hundred  thousand  ($200,000)  dollars. 

|  18.  Each  register  shall  give  bond  to  the  Commonwealth  in  such  penal  sum 
as  the  orphans'  court  may  direct  with  two  or  more  sufficient  sureties  for  the 
faithful  performance  of  the  duties  hereby  imposed  and  for  the  regular  accounting 
and  paying  over  of  the  amounts  to  be  collected  and  received.  This  bond  when 
executed  and  approved  shall  be  forwarded  to  the  Auditor-General. 

Until  such  bond  and  security  be  given  the  said  tax  shall  be  collected  by  the 
county  treasurer.  In  such  cases  all  the  provisions  of  this  act  relating  to  collection 
and  payment  by  registers  shall  apply  to  the  county  treasurer. 

§  19.  Each  register  of  wills  shall  on  the  first  Monday  of  each  month  make 
return  to  the  Auditor-General  and  return  and  payment  to  the  State  Treasurer  of 
all  taxes  imposed  under  this  act  received  stating  for  what  estate  paid.  All  taxes 
collected  by  him  and  not  paid  over  within  one  month  after  his  quarterly  return 
of  the  same  he  shall  pay  interest  at  the  rate  of  twelve  per  centum  per  annum 
until  paid. 

§  20.  The  lien  of  the  said  tax  shall  continue  until  the  tax  is  settled  and  satisfied 
and  shall  be  limited  to  the  property  chargeable  therewith.  All  such  taxes  shall 
be  sued  for  within  five  years  after  they  are  due,  otherwise  they  shall  be  presumed 


;[()72  THE  STATE  STATUTES 

to  have  been  paid  and  cease  to  be  a  lien  as  against  any  purchasers  of  real  estate. 

§  21.  In  all  cases  where  any  amount  of  such  tax  is  paid  erroneously  to  the 
register  of  wills  the  State  Treasurer  on  satisfactory  proof  rendered  to  him  by 
said  register  of  wills  of  such  erroneous  payment  may  refund  and  pay  over  to  the 
person  paying  such  tax  the  amount  erroneously  paid.  All  such  applications  for 
the  repayment  of  such  tax  erroneously  paid  in  the  treasury  shall  be  made  within 
two  years  from  the  date  of  payment  except  when  the  estate  upon  which  such  tax 
has  been  erroneously  paid  shall  have  consisted  in  whole  or  in  part  of  a  partner- 
ship or  other  interest  of  uncertain  value  or  shall  have  been  involved  in  litigation 
by  reason  whereof  there  shall  have  been  an  over-valuation  of  that  portion  of  the 
estate  on  which  the  tax  has  been  assessed  and  paid  which  over-valuation  could  not 
have  been  ascertained  within  said  period  of  two  years,  in  such  case  the  application 
for  repayment  shall  be  made  to  the  State  Treasurer  within  one  year  from  the 
termination  of  such  litigation  or  ascertainment  of  such  over-valuation. 

§  22.  This  act  does  not  repeal  or  affect  the  tax  imposed  and  collected  under 
the  act  approved  May  sixth,  one  thousand  eight  hundred  eighty-seven,  entitled 
"An  act  to  provide  for  the  better  collection  of  collateral  inheritance  taxes,"  it? 
amendments  and  supplements. 

§  23.  All  acts  or  parts  of  acts  inconsistent  with  this  act  are  hereby  repealed. 

§  24.  The  provisions  of  this  act  are  sever  able  and  in  the  event  of  any  provision 
hereof  being  declared  unconstitutional,  it  is  hereby  declared  as  the  legislative 
intent  that  such  unconstitutional  provision  shall  not  affect  the  validity  of  any  other 
provision  of  this  act. 

GOVERNOR'S  MEMORANDUM. 

The  Governor  long  withheld  his  approval  but  finally  affixed  his  signature  and 
the  act  became  a  law  July  11,  1917. 

The  Governor  appended  the  following  memorandum: 

Approved:  The  llth  day  of  July,  1917. — This  bill  is  approved  with  the  great- 
est reluctance.  I  am  constrained  to  do  so  solely  because  the  necessities  of  the 
Commonwealth  require  the  raising  of  additional  revenue. 

The  Assembly  of  1917,  which  concluded  its  lengthy  session  on  June  28,  appro- 
priated a  total  of  $87,164,430.73.  The  responsible  fiscal  officers  of  the  Common- 
wealth on  December  28,  1916,  advised  me  that  the  sum  available  for  appropriation 
at  this  session  was  $70,091,178.22,  and  on  January  2,  1917,  I  so  advised  the 
General  Assembly.  I  am  now  advised  by  the  responsible  fiscal  officers  of  the 
Commonwealth  that,  exclusive  of  unexpended  balances,  the  predictable  available 
sum  for  appropriation  is  $72,558,054.71,  and  much  less  if  these  balances  were  all 
drawn  from  the  treasury. 

I  repeatedly  urged  the  responsible  leaders  in  charge  of  the  legislative  program 
that  it  was  imperative  to  provide  additional  revenue  if  the  business  of  the  State 
were  to  be  adequately  cared  for.  We  had  revenue  bills  prepared  imposing  a 
small  and  entirely  reasonable  tax  upon  coal,  oil,  and  natural  gas.  These  natural 
commodities,  the  gift  of  Providence  to  our  people,  are  being  rapidly  depleted. 
They  are  consumed  more  largely  without  than  within  the  State,  and  our  people 
are  denied  any  revenue  from  these  disappearing  sources  of  wealth.  We  also  had 
a  bill  prepared  placing  a  tax  of  one  mill  upon  the  capital  stock  of  manufacturing 
corporations.  This  tax  would  in  no  important  way  have  affected  the  State's  well- 
known  policy  of  fostering  industry  and  manufacture.  This  was  not  opposed  by 
many  leading  manufacturers.  We  had  reason  to  believe  that  these  measures 
would  pass.  Had  they  passed,  this  unjustifiably  drastic  tax  on  direct  inheritance 
would  have  been  unnecessary  and  would  not  have  been  approved. 

The  bills  above-named  were  passed  by  a  large  vote  in  the  House  and  met  an 
untimely  death  in  the  committees  of  the  Senate. 

The  same  influences  that  clamored  for  large  appropriations  steadily  opposed 
these  taxes  upon  natural  resources  and  upon  the  capital  stock  of  manufacturing 
corporations.  The  Senate  committees  thus  chose  deliberately  to  tax  the  estates 
of  poor  and  rich  alike,  rather  than  to  tax  these  natural  resources  which  to-day 
are  selling  at  such  an  advanced  price  as  to  make  the  owners  abnormally  rich  in 
dividends  and  in  profits,  and  rather  than  to  tax  manufacturing  corporations  now 
extraordinarily  prosperous  and  abundantly  able  to  pay  the  proposed  tax.  The 
whole  procedure  was  most  unfair  and  against  the  welfare  of  all  the  people. 

Some  of  the  increased  expenditures  authorized  by  the  Assembly  are  in  this 
national  crisis  necessary.  They  cannot  be  refused  or  withheld.  To  reconvene 


PENNSYLVANIA  1073 

the  Assembly  to  enact  revenue  producing  laws  is  a  costly  procedure  and  might 
not  result  in  any  substantial  service  to  the  people  since  the  same  potential 
influences  that  so  carefully  guarded  certain  special  interests  would  again,  doubt- 
less, assert  themselves.  But  it  may  well  be  that  a  lesson  of  this  sort  is  necessary 
to  teach  the  people  the  truth. 

This  direct  inheritance  tax  applies  to  all  property  of  decedents  going  to  direct 
heirs.  It  covers  estates  of  every  size,  even  to  the  smallest.  There  are  no  exemp- 
tions. In  some  States  there  is  a  graded  tax,  with  exemptions  to  the  small  estates. 
Under  our  Constitution  this  is  forbidden,  and  the  approval  of  this  bill  is,  in  its 
last  analysis,  based  upon  the  fact  that  this  Assembly  has  passed  a  resolution  pro- 
viding for  an  amendment  to  the  Constitution  which  will  correct  the  injustices  of 
this  measure.  This  can  be  and  should  be  adopted  by  the  people  in  1919,  and  the 
Assembly  should  then  so  amend  this  act  as  to  bring  the  relief  that  all  fair-minded 
and  unselfish  men  will  approve. 

MARTIN  G.  BRUMBAUGH. 

The  foregoing  is  a  true  and  correct  copy  of  the  act  of  the  General  Assembly 
No.  318. 

CYRUS  E.  WOODS, 
Secretary  of  the  Commonwealth. 

ACT  OF  1919. 
In  Effect  as  to  All  Persons  Dying  After  June  20,  1919. 

An  Act  Providing  for  the  imposition  of  and  collection  of  certain  taxes  upon  the 
transfer  of  property  passing  from  a  decedent  who  was  a  resident  of  this 
Commonwealth  at  the  time  of  his  death  and  of  property  within  this  Common- 
wealth of  a  decedent  who  was  a  nonresident  of  the  Commonwealth  at  the 
time  of  his  death  and  making  it  unlawful  for  any  corporation  of  this 
Commonwealth  or  national  banking  association  located  therein  to  transfer  the 
stock  of  such  corporation  or  banking  association  standing  in  the  name  of  any 
such  decedent  until  the  tax  on  the  transfer  thereof  has  been  paid  and 
providing  penalties  and  citing  certain  acts  for  repeal. 

ARTICLE  I. 

Imposition  and  Bate  of  Ta<c. 

Section  1.  Be  it  enacted  by  the  Senate  and  House  of  Eepresentatives  of  the 
Commonwealth  of  Pennsylvania  in  General  Assembly  met  and  it  is  hereby  enacted 
by  the  authority  of  the  same  That  a  tax  shall  be  and  is  hereby  imposed  upon  the 
transfer  of  any  property  real  or  personal  or  of  any  interest  therein  or  income 
therefrom  in  trust  or  otherwise  to  persons  or  corporations  in  the  following  cases: 

(a)  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  Commonwealth 
from  any  person  dying  seized  or  possessed  of  the  property  while  a  resident  of  the 
Commonwealth  whether  the  property  be  situated  within  this  Commonwealth  or 
elsewhere. 

(b)  When  the  transfer  is  by  will  or  intestate  laws  of  real  property  within  this 
Commonwealth  or  of  goods  wares  or  merchandise  within  this  Commonwealth  or  of 
shares  of  stock  of  corporations  of  this  Commonwealth  or  of  national  banking 
associations  located  in  this  Commonwealth  and  the  decedent  was  a  nonresident 
of  the  Commonwealth  at  the  time  of  his  death. 

(c)  When  the  transfer  is  of  property  made  by  a  resident  or  is  of  real  property 
within  this  Commonwealth  or  of  goods  wares  and  merchandise  within  this  Com- 
monwealth or  of  shares  of   stock   of   corporations   of  this   Commonwealth   or   of 
national  banking  associations  located  in  this  Commonwealth  made  by  a  nonresi- 
dent by  deed  grant  bargain  sale  or  gift  made  in  contemplation  of  the  death  of 
the  grantor  vendor  or  donor  or  intended  to  take  effect  in  possession  or  enjoyment 
at  or  after  such  death. 

(d)  When  any  person  or  corporation  comes  into  the  possession  or  enjoyment  by 
a    transfer    from    a    resident    or    nonresident    decedent    when    such    nonresident 
decedent's  property   consists   of  real  property  within   this   Commonwealth   or  of 
shares  of  stock  of  corporations  of  this  Commonwealth  or  of  national  banking 
associations  located  in  this  Commonwealth  of  an  estate  in  expectancv  of  any  kind 

68 


1074  THE  STATE  STATUTES 

or  character  which  is  contingent  or  defeasible  transferred  by  an  instrument  taking 
effect  after  the  passage  of  this  act  or  of  any  property  transferred  pursuant  to  a 
power  of  appointment  contained  in  any  instrument  taking  effect  after  the  passage 
of  this  act. 

§  2.  All  taxes  imposed  by  this  act  shall  be  at  the  rate  of  two  per  centum  upon 
the  clear  value  of  the  property  subject  to  such  tax  passing  to  or  for  the  use  of 
father  mother  husband  wife  children  lineal  descendants  born  in  lawful  wedlock 
legally  adopted  children  children  of  a  former  husband  or  wife  or  the  wife  or 
widow  of  the  son  of  a  person  dying  seized  or  possessed  thereof  and  also  on  the 
clear  value  of  such  property  passing  from  the  mother  of  an  illegitimate  child  or 
from  any  person  of  whom  the  mother  is  a  lineal  descendant  to  such  child  his  wife 
or  widow  and  passing  from  an  illegitimate  child  to  his  mother  and  at  the  rate  of 
five  per  centum  upon  the  clear  value  of  the  property  subject  to  such  tax  passing 
to  or  for  the  use  of  any  other  person  or  persons  bodies  corporate  or  politic  to  be 
paid  for  the  use  of  the  Commonwealth.  In  ascertaining  the  clear  value  of  such 
estates  the  only  deductions  to  be  allowed  from  the  gross  values  of  such  estates 
shall  be  the  debts  of  the  decedent  and  the  expenses  of  the  administration  of  such 
estates  and  no  deductions  whatsoever  shall  be  allowed  for  or  on  account  of  any 
taxes  paid  on  such  estate  to  the  Government  of  the  United  States  or  to  any  other 
State  or  territory. 

[NOTE:  Bate  as  to  collaterals  and  strangers  increased  to  ten  per  cent  by 
amendment  of  1921.] 

§  3.  Where  there  is  a  transfer  of  property  by  a  devise  descent  bequest  gift 
or  grant  liable  to  the  tax  hereinbefore  imposed  which  devise  descent  bequest 
gift  or  grant  is  to  take  effect  in  possession  or  to  come  into  actual  enjoyment 
after  the  expiration  of  any  one  or  more  life  estates  or  a  period  of  years  the  tax 
on  such  estate  shall  not  be  payable  nor  shall  interest  begin  to  run  thereon  until 
the  person  liable  for  the  same  shall  come  into  actual  possession  of  such  estate 
by  the  termination  of  the  estates  for  life  or  years.  The  tax  shall  be  assessed 
upon  the  value  of  the  estate  at  the  time  the  right  of  possession  accrues  to  the 
owner  but  the  owner  may  pay  the  tax  at  any  time  prior  to  his  coming  into  pos- 
session. In  such  cases  the  tax  shall  be  assessed  on  the  value  of  the  estate  at  the 
time  of  the  payment  of  the  tax  after  deducting  the  value  of  the  life  estate  or 
estates  for  years  the  tax  on  real  estate  shall  remain  a  lien  on  the  real  estate  on 
which  the  same  is  chargeable  until  paid.  The  owner  of  any  such  personal  estate 
passing  to  him  from  a  resident  decedent  shall  make  a  full  return  of  the  same  to 
the  register  of  wills  within  one  year  from  the  death  of  the  decedent  and  within 
that  time  enter  into  security  for  the  payment  of  the  tax  to  the  satisfaction  of 
such  register.  In  case  of  failure  so  to  do  the  tax  shall  be  immediately  payable. 

The  owner  of  any  such  personal  estate  passing  to  him  from  a  nonresident 
decedent  shall  make  a  full  return  of  the  same  to  the  Auditor-General  within  one 
year  from  the  death  of  the  decedent  and  within  that  time  enter  into  security  for 
the  payment  of  the  tax  to  the  satisfaction  of  the  Auditor-General.  In  case  of 
failure  so  to  do  the  tax  shall  be  immediately  payable  and  collectible. 

ARTICLE  II. 
Payment  of  Tax  in  cases  of  Besident  Decedents. 

§  10.  The  register  of  wills  of  the  county  in  which  letters  testamentary  or  of 
administration  are  granted  upon  the  estate  of  any  person  dying  seized  or  pos- 
sessed of  property  while  a  resident  of  the  Commonwealth  shall  appoint  an 
appraiser  whenever  occasion  may  require  to  appraise  the  value  of  the  property  or 
estate  of  which  such  decedent  died  seized  or  possessed  and  hereinbefore  subjected 
to  tax.  Such  appraiser  shall  make  a  fair  conscionable  appraisement  of  such 
estates  and  assess  and  fix  the  cash  value  of  all  annuities  and  life  estates  growing 
out  of  said  estates  upon  which  annuities  and  life  estates  the  tax  imposed  by  this 
act  shall  be  immediately  payable  out  of  the  estate  at  the  rate  of  such  valuation. 

§  11.  The  compensation  of  such  appraisers  shall  be  as  follows  namely:  For 
each  day  during  which  an  appraiser  shall  actually  be  engaged  in  making  appraise- 
ments of  property  subject  to  the  tax  he  shall  receive  the  sum  of  five  dollars.  If 
it  shall  be  necessary  for  the  appraiser  to  travel  from  his  place  of  residence  to 
appraise  property  subject  to  the  tax  he  shall  be  allowed  such  actual  necessary 
traveling  expenses  as  he  may  incur  which  expenses  shall  be  itemized  in  a  sworn 


PENNSYLVANIA  1075 

statement  to  be  returned  to  the  re'gister  and  subject  to  the  final  approval  of  the 
Auditor-General. 

§  12.  Whenever  because  of  the  complicated  nature  of  an  estate  subject  to  the 
payment  of  such  tax  the  interest  of  the  Commonwealth  shall  require  the  appoint- 
ment as  appraiser  of  such  estate  of  a  person  possessed  of  expert  or  technical 
knowledge  to  ascertain  the  value  thereof  reasonable  additional  compensation  shall 
be  allowed  such  appraiser  for  the  exercise  of  such  expert  or  technical  knowledge. 
In  case  where  after  the  appointment  of  an  appraiser  it  shall  appear  that  the 
proper  appraisement  of  said  estate  will  require  the  services  of  a  person  possessed 
of  expert  or  technical  knowledge  whereof  the  appraiser  appointed  is  not  pos- 
sessed the  appraiser  may  employ  the  services  of  a  person  possessed  of  expert  or 
technical  knowledge  to  assist  him  in  the  appraisement  and  for  such  services  the 
person  so  employed  shall  receive  reasonable  compensation.  In  all  such  cases  the 
register  of  wills  appointing  the  appraiser  shall  certify  to  the  Auditor-General 
that  there  is  an  actual  necessity  for  the  appointment  of  an  appraiser  possessed 
of  expert  or  technical  knowledge  or  that  the  appraiser  already  appointed  to 
appraise  the  estate  in  question  should  be  assisted  by  a  person  possessed  of  such 
knowledge.  No  person  shall  be  appointed  as  such  expert  appraiser  or  an  expert 
assistant  to  the  appraiser  until  the  approval  of  the  Auditor-General  of  said 
appointment  is  first  obtained  nor  shall  any  payment  be  made  to  any  appraiser  or 
to  any  person  employed  by  him  under  this  section  until  an  itemized  statement  of 
the  services  performed  and  the  compensation  recommended  shall  have  been  ren- 
dered under  oath  or  affirmation  to  the  Auditor-General  for  his  approval  and  shall 
have  received  the  same.  No  clerk  or  other  person  employed  in  the  office  of  a 
register  of  wills  shall  be  appointed  as  an  expert  appraiser  of  an  estate  subject 
to  the  payment  of  such  tax  nor  as  an  expert  to  assist  the  appraiser  of  such  estate. 

§  13.  Any  person  not  satisfied  with  any  appraisement  of  the  property  of  a 
resident  decedent  may  appeal  within  thirty  days  to  the  orphans'  court  on  paying 
or  giving  security  to  pay  all  costs  together  with  whatever  tax  shall  be  fixed  by 
the  court.  Upon  such  appeal  the  court  may  determine  all  questions  of  valuation 
and  of  the  liability  of  the  appraised  estate  for  such  tax  subject  to  the  right  of 
appeal  to  the  Supreme  or  Superior  Court. 

§  14.  The  register  of  wills  shall  enter  in  a  book  to  be  provided  at  the  expense 
of  the  Commonwealth  which  shall  be  a  public  record  the  returns  made  by  all 
appraisers  appointed  by  him  under  the  provisions  of  this  act  opening  an  account 
in  favor  of  the  Commonwealth  against  each  decedent's  estate.  The  register  may 
give  certificates  of  payment  of  such  tax  from  such  record.  The  register  shall 
transmit  to  the  Auditor-General  on  the  first  day  of  each  month  a  statement  of  all 
returns  made  by  appraisers  during  the  preceding  month  upon  which  the  taxes 
have  been  paid  or  remain  unpaid  which  statement  shall  be  entered  by  the  Auditor- 
General  in  a  book  to  be  kept  for  that  purpose.  Whenever  any  such  tax  shall  have 
remained  due  and  unpaid  for  one  year  the  register  may  apply  to  the  orphans' 
court  by  bill  or  petition  to  enforce  the  payment  of  the  same  whereupon  the  court 
having  caused  notice  t'o  be  given  to  the  owner  of  the  real  estate  charged  with  the 
tax  and  to  such  other  person  as  may  be  interested  shall  proceed  according  to 
equity  to  make  such  decrees  or  orders  for  the  payment  of  the  tax  out  of  such  real 
estate  as  shall  be  just  and  proper. 

§  15.  If  the  register  shall  discover  upon  the  transfer  of  any  property  of  a 
resident  decedent  that  any  tax  imposed  by  this  act  has  not  been  paid  the 
orphans'  court  may  cite  the  executors  or  administrators  of  the  decedent  whose 
estate  is  subject  to  the  tax  to  file  an  account  or  to  appear  on  a  certain  day 
and  show  cause  why  the  tax  should  not  be  paid.  When  personal  service  can- 
not be  had  notice  shall  be  given  for  four  weeks  once  a  week  in  at  least  one 
newspaper  published  in  the  county  and  in  the  legal  periodical  designated  by 
the  rules  of  the  court  of  the  county  for  the  publication  of  legal  notices.  If  the 
tax  shall  be  found  to  be  due  the  delinquent  shall  pay  the  tax  and  costs.  The 
Auditor-General  in  the  settlement  of  accounts  of  any  register  may  allow  him 
costs  of  advertising  and  other  reasonable  fees  and  expenses  incurred  in  the 
collection  of  the  tax. 

§  16.  The  executor  or  administrator  or  other  trustee  paying  any  legacy  or 
share  in  the  distribution  of  any  estate  of  a  resident  decedent  subject  to  the 
said  tax  shall  deduct  therefrom  at  the  rate  of  two  per  centum  upon  the  whole 
legacy  or  sum  paid  to  or  for  the  use  of  father  mother  husband  wife  children 
lineal  descendants  born  in  lawful  wedlock  legally  adopted  children  children  of 


|076  THE  STATE  STATUTES 

a  former  husband  or  wife  or  the  wife  or  widow  of  the  son  of  a  person 
dying  seized  or  possessed  thereof  and  upon  the  whole  legacy  from  the  mother 
of  an  illegitimate  child  or  from  any  person  of  whom  the  mother  is  a  lineal 
descendant  to  such  illegitimate  child  his  wife  or  widow  or  from  an  illegitimate 
child  to  his  mother  and  at  the  rate  of  five  per  centum  upon  the  whole  legacy 
or  sum  paid  to  or  for  the  use  of  any  other  person  or  persons  or  bodies  cor- 
porate or  politic  or  if  not  money  he  shall  demand  payment  of  a  sum  to  be 
computed  at  the  same  rate  upon  the  appraised  value  thereof.  No  executor 
or  administrator  shall  be  compelled  to  pay  or  deliver  any  specific  legacy  or 
article  to  be  distributed  subject  to  tax  except  on  the  payment  into  his  hands 
of  a  sum  computed  on  its  value  as  aforesaid.  In  case  of  neglect  or  refusal 
on  the  part  of  such  legatee  to  pay  the  same  such  specific  legacy  or  article  or 
so  much  thereof  as  shall  be  necessary  shall  be  sold  by  such  executor  or  admin- 
istrator at  public  sale  after  notice  to  such  legatee  and  the  balance  that  may  be 
left  in  the  hands  of  the  executor  or  administrator  shall  be  distributed  as  is 
or  may  be  directed  by  law.  Every  sum  of  money  retained  by  any  executor 
or  administrator  or  paid  into  his  hands  on  account  of  any  legacy  or  dis- 
tributive share  for  the  use  of  the  Commonwealth  shall  be  paid  by  him  without 
delay. 

§  17.  Whenever  any  real  estate  of  which  any  resident  decedent  may  die 
seized  shall  be  subject  to  the  tax  the  executors  and  administrators  shall  give 
information  thereof  to  the  register  of  the  county  where  administration  has 
been  granted  within  six  months  after  they  undertake  the  execution  of  their 
respective  duties  or  if  the  fact  be  not  known  to  them  within  that  period  then 
within  one  month  after  the  same  shall  have  come  to  their  knowledge.  The 
owners  of  such  estate  immediately  upon  its  vesting  shall  give  information 
thereof  to  the  register  having  jurisdiction  of  the  granting  of  administration. 

§  18.  Any  executor  or  administrator  on  the  payment  of  said  tax  shall  take 
duplicate  receipts  from  the  register  both  of  which  shall  be  forwarded  forth- 
with to  the  Auditor-General  who  shall  charge  the  register  receiving  the  money 
with  the  amount  and  seal  with  the  seal  of  his  office  and  countersign  the 
original  receipt  and  transmit  it  to  the  executor  or  administrator  whereupon  it 
shall  be  a  proper  voucher  in  the  settlement  of  the  estate.  In  no  event  shall 
an  executor  or  administrator  be  entitled  to  credit  in  his  account  by  the  register 
unless  the  receipt  is  so  sealed  and  countersigned  by  the  Auditor-General. 

§  19.  When  a  legacy  subject  to  tax  under  this  act  is  given  to  any  person 
for  life  or  for  a  term  of  years  or  for  any  other  limited  period  upon  a  con- 
dition or  contingency  if  the  same  be  money  the  tax  thereon  shall  be  retained 
upon  the  whole  amount  but  if  not  money  application  shall  be  made  to  the 
orphan's  court  to  make  apportionment  if  the  case  require  it  of  the  sum  to 
be  paid  by  such  legatees  and  for  such  further  order  relative  thereto  as  equity 
shall  require. 

Whenever  any  such  legacy  shall  be  charged  upon  or  payable  out  of  real 
estate  the  heirs  or  devisee  before  paying  the  same  shall  deduct  therefrom  at 
the  rates  aforesaid  and  pay  the  amount  so  deducted  to  the  executor  and  the 
same  shall  remain  a  charge  upon  such  real  estate  until  paid  and  the  payment 
thereof  shall  be  enforced  by  the  decree  of  the  orphan's  court  in  the  same 
manner  as  the  payment  of  such  legacy  may  be  enforced. 

§  20.  Whenever  debts  shall  be  proved  against  the  estate  of  a  resident  decedent 
after  distribution  of  legacies  from  which  the  tax  has  been  deducted  in  compliance 
with  this  act  and  the  legatee  is  required  to  refund  any  portion  of  a  legacy  a 
portion  of  the  said  tax  shall  be  repaid  by  the  executor  or  administrator  if  the 
tax  has  not  been  paid  into  the  State  or  county  treasury  or  by  the  county  treasurer 
if  it  has  been  so  paid. 

§  21.  The  registers  of  wills  upon  their  filing  with  the  Auditor-General  the 
bond  hereinafter  required  shall  be  the  agents  of  the  Commonwealth  for  the 
collection  of  the  said  tax  in  the  case  of  resident  decedents.  For  services 
rendered  in  collecting  and  paying  over  the  same  they  shall  be  allowed  to  retain 
for  their  own  use  upon  the  gross  amount  collected  during  any  year  five  per  centum 
upon  the  tax  collected  if  such  tax  shall  amount  to  a  sum  of  fifty  thousand 
($50,000)  dollars  or  less  three  per  centum  on  the  amounts  collected  in  excess 
of  fifty  thousand  ($50,000)  dollars  and  not  exceeding  one  hundred  thousand 
($100,000)  dollars  one  per  centum  on  the  amounts  collected  in  excess  of  one 


PENNSYLVANIA  1077 

hundred  thousand  ($100,000)  dollars  and  not  over  two  hundred  thousand 
($200,000)  dollars  and  one-half  of  one  per  centum  on  the  amounts  collected  in 
excess  of  two  hundred  thousand  ($200,000)  dollars  and  not  over  one  million 
($1,000,000)  dollars  and  one-quarter  of  one  per  centum  on  the  amounts  collected 
in  excess  of  one  million  ($1,000,000)  dollars. 

§  22.  Each  register  shall  give  bond  to  the  Commonwealth  in  such  penal  sum 
as  the  orphans'  court  may  direct  with  two  or  more  sufficient  sureties  for  the 
faithful  performance  of  the  duties  hereby  imposed  and  for  the  regular  accounting 
and  paying  over  of  the  amounts  to  be  collected  and  received.  This  bond  when 
executed  and  approved  shall  be  forwarded  to  the  Auditor-General. 

Until  such  bond  and  surety  shall  be  given  the  said  tax  shall  be  collected  by  the 
county  treasurer.  In  such  cases  all  the  provisions  of  this  act  relating  to  collection 
and  payment  by  registers  shall  apply  to  the  county  treasurer. 

§  23.  Each  register  of  wills  shall  on  the  first  Monday  of  each  month  make 
return  to  the  Auditor-General  and  return  and  payment  to  the  State  Treasurer 
of  all  taxes  imposed  and  received  under  this  act  stating  for  what  estate  paid 
upon.  All  taxes  collected  by  him  and  not  paid  over  within  one  month  after 
his  quarterly  return  of  the  same  he  shall  pay  interest  at  the  rate  of  twelve 
per  centum  per  annum  until  paid. 

ARTICLE  III. 
Pay'ment  of  taxes  in  cases  of  nonresident  decedents. 

§  25.  Whenever  the  transfer  is  of  property  within  the  Commonwealth  from 
a  decedent  who  was  a  nonresident  of  the  Commonwealth  at  the  time  of  his 
death  the  Auditor-General  whenever  occasion  may  require  on  the  application 
of  any  interested  party  or  upon  his  own  motion  shall  appoint  an  appraiser  to 
appraise  the  value  of  such  property  hereinbefore  subjected  to  tax.  Every  such 
appraiser  shall  forthwith  give  notice  by  mail  to  such  persons  as  the  Auditor- 
General  shall  direct  of  the  time  and  place  when  and  where  he  will  appraise 
such  property.  He  shall  at  such  time  and  place  make  a  fair  conscionable 
appraisement  of  said  property  and  assess  and  fix  the  cash  value  of  all  annuities 
and  life  estates  growing  out  of  said  estates  upon  which  annuities  and  life  estates 
the  tax  imposed  by  this  act  shall  be  immediately  payable  out  of  the  estate  and 
he  shall  make  report  thereof  and  of  such  value  in  writing  to  the  said  Auditor- 
General  which  report  shall  be  filed  in  the  office  of  the  Auditor-General  and  the 
Auditor-General  shall  immediately  give  notice  thereof  by  mail  to  all  parties  known 
by  him  to  be  interested  therein. 

§  26.  Whenever  the  interest  of  the  Commonwealth  may  require  it  the  Auditor- 
General  is  hereby  authorized  to  appoint  such  additional  appraisers  or  employ 
such  expert  services  as  he  may  deem  best  to  appraise  the  property  of  any  non- 
resident decedent  subject  to  the  tax  hereinbefore  imposed.  The  compensation 
of  all  appraisers  appointed'  and  of  all  persons  employed  by  the  Auditor-General 
in  making  such  appraisement  shall  be  fixed  by  him  and  together  with  all  neces- 
sary expenses  incurred  by  them  in  the  performance  of  their  duties  shall  be  paid 
out  of  any  unexpended  funds  appropriated  to  the  department  of  the  Auditor- 
General  upon  his  warrant. 

§  27.  Any  person  not  satisfied  with  such  appraisement  as  made  by  an 
appraiser  appointed  by  the  Auditor-General  may  appeal  within  thirty  days  to 
the  Court  of  Common  Pleas  of  Dauphin  county  on  paying  or  giving  security 
to  pay  all  costs  together  with  whatever  tax  shall  be  fixed  by  the  court.  Upon 
such  appeal  the  court  may  determine  all  questions  of  valuation  and  the  liability 
of  the  appraised  estate  for  such  tax  subject  to  the  right  of  appeal  to  the 
Supreme  or  Superior  Court. 

§  28.  Every  corporation  or  person  to  whom  any  property  within  this  Com- 
monwealth passes  from  a  nonresident  decedent  subject  to  the  tax  herein- 
before imposed  or  the  executor  administrator  trustee  of  such  a  decedent  or 
other  party  in  interest  shall  immediately  upon  the  death  of  the  decedent  give 
notice  to  the  Auditor-General  of  such  property  and  the  location  thereof. 

§  29.  Whenever  any  tax  imposed  by  this  act  upon  the  transfer  of  property 
of  a  nonresident  decedent  within  this  Commonwealth  shall  have  remained  due 
and  unpaid  for  one  year  the  Auditor-General  may  apply  to  the  Court  of 
Common  Pleas  of  Dauphin  county  or  of  any  county  in  which  such  property 


1078  THE  STATE  STATUTES 

may  be  situated  by  bill  or  petition  to  enforce  the  payment  of  the  same  where- 
upon the  court  having  caused  notice  to  be  given  to  the  owner  of  the  property 
subject  to  the  tax  or  to  the  executor  administrator  or  trustee  of  the  decedent 
and  to  such  other  parties  as  may  be  interested  shall  proceed  according  to  equity 
to  make  such  decree  or  order  for  the  payment  of  the  tax  out  of  such  property  as 
shall  be  just  and  proper. 

And  the  Auditor-General  is  hereby  further  authorized  and  empowered  to  bring 
suit  or  suits  in  the  name  of  the  Commonwealth  of  Pennsylvania  in  any  court  of 
this  Commonwealth  or  elsewhere  for  the  recovery  of  any  sum  or  sums  due 
owing  or  payable  for  or  on  account  of  any  tax  imposed  by  the  provisions  of  this 
act  upon  the  transfer  of  property  within  this  Commonwealth  of  which  a  non- 
resident of  the  Commonwealth  may  have  died  seized  or  possessed  with  costs  of 
suit. 

§  30.  The  Auditor-General  shall  enter  in  a  book  which  shall  be  a  public  record 
the  returns  made  by  all  appraisers  appointed  by  him  to  appraise  the  property  of 
a  nonresident  decedent  within  this  Commonwealth  subject  to  the  tax  hereinbefore 
imposed  opening  on  account  in  favor  of  the  Commonwealth  against  each  said 
decedent's  estate.  The  Auditor-Geueral  may  give  certificates  of  payment  of 
said  tax  from  said  record  and  upon  payment  thereof  shall  give  a  receipt  therefor 
to  the  party  paying  the  same. 

§  31.  The  Auditor-General  shall  collect  all  the  taxes  due  or  owing  the  Com- 
monwealth on  account  of  the  tax  upon  the  transfer  of  the  property  of  a  non- 
resident decedent  as  hereinbefore  imposed  and  shall  on  the  first  Monday  of 
each  month  make  a  report  to  the  State  Treasurer  of  all  taxes  so  collected  by 
him  under  the  provisions  of  this  act  during  the  preceding  month  stating  for 
what  estate  paid  upon. 

§  32.  On  the  transfer  of  property  in  this  Commonwealth  of  a  nonresident 
decedent  if  all  or  any  part  of  the  estate  of  such  decedent  wherever  situated 
shall  pass  to  persons  or  corporations  who  would  have  been  taxable  under  this 
act  if  such  decedent  had  been  a  resident  of  this  Commonwealth  such  property 
located  within  this  Commonwealth  shall  be  subject  to  a  tax  which  said  tax 
shall  bear  the  same  ratio  to  the  entire  tax  which  the  said  estate  of  such  decedent 
would  have  been  subjected  to  under  this  act  if  such  nonresident  decedent  had 
been  a  resident  of  this  Commonwealth  as  such  property  located  in  this  Common- 
wealth bears  to  the  entire  estate  of  such  nonresident  decedent  wherever  situated 
Provided  That  nothing  in  this  clause  contained  shall  apply  to  any  specific  be- 
quest or  devise  of  property  in  this  Commonwealth. 

AKTICLE  IV. 

Provisions  Relating  to  the  Collection  of  the  Tax  Both  in  the  Case  of  Resident 
and  Nonresident  Decedents. 

§  35.  No  executor  administrator  or  trustee  of  any  decedent  resident  or 
nonresident  shall  assign  or  transfer  any  stock  of  any  corporation  of  this  Com- 
monwealth or  of  any  national  banking  association  located  in  this  Common- 
wealth standing  in  the  name  of  such  decedent  or  in  the  joint  names  of  such 
decedent  and  one  or  more  other  persons  or  in  trust  for  a  decedent  subject  to  the 
tax  hereinbefore  imposed  until  such  tax  has  been  paid  unless  the  Auditor-General 
consents  to  such  transfer  prior  to  such  payment  in  manner  hereinafter  provided. 

§  36.  No  corporation  of  this  Commonwealth  or  national  banking  association 
located  in  this  Commonwealth  shall  transfer  any  stock  of  such  corporation  or  of 
such  banking  association  standing  in  the  name  of  a  decedent  whether  resident  or 
nonresident  or  in  the  joint  names  of  a  decedent  and  one  or  more  persons  or  in 
trust  for  such  decedent  unless  the  Auditor-General  has  filed  with  said  corpora- 
tion or  national  banking  association  a  certificate  that  the  tax  imposed  by  this 
act  on  the  transfer  of  such  stock  has  been  fully  paid  or  otherwise  consents 
thereto  in  writing  and  it  shall  be  lawful  for  the  Auditor-General  either  personally 
or  by  representative  to  examine  the  shares  of  stock  of  such  decedent  at  the  time 
of  such  transfer.  Any  such  corporation  or  association  making  any  transfer  of 
the  stock  standing  in  the  name  of  a  decedent  resident  or  nonresident  or  in  the 
joint  names  of  a  decedent  and  one  or  more  other  persons  or  in  trust  for  such 
decedent  in  violation  of  the  foregoing  provisions  shall  be  liable  for  the  payment 
of  the  amount  of  the  taxes  to  which  the  property  so  transferred  is  subject  under 


PENNSYLVANIA  107  0 

the  provisions  of  this  act  and  in  addition  thereto  to  a  penalty  of  one  thousand 
dollars  which  liability  for  such  tax  and  interest  or  the  penalty  above  prescribed  or 
both  shall  be  enforced  in  an  action  of  debt  in  the  name  of  the  Commonwealth  of 
Pennsylvania  brought  by  the  Auditor-General  thereof  and  the  same  when  re- 
covered shall  be  paid  into  the  treasury  of  the  Commonwealth  of  Pennsylvania  for 
use  of  the  Commonwealth. 

§  37.  Whenever  the  tax  imposed  by  this  act  upon  the  transfer  of  the  stock 
of  any  corporation  of  this  Commonwealth  or  national  banking  association 
located  in  this  Commonwealth  standing  in  the  name  of  a  decedent  resident  or 
nonresident  or  in  the  joint  names  of  the  decedent  and  one  or  more  persons  or 
in  trust  for  such  decedent  has  been  paid  it  shall  be  the  duty  of  the  Auditor- 
General  upon  the  request  of  any  interested  party  or  of  said  corporation  or 
association  or  upon  his  own  motion  to  file  with  the  said  corporation  or  banking 
association  a  certificate  of  such  payment  and  the  Auditor-General  is  hereby 
further  authorized  and  empowered  in  his  discretion  to  consent  to  the  transfer 
of  such  stock  prior  to  the  payment  of  the  said  taxes  whenever  he  deems  such 
transfer  may  be  so  made  without  prejudice  or  peril  to  the  rights  of  the 
Commonwealth. 

§  38.  If  the  tax  is  paid  within  three  months  after  the  death  of  the  decedent 
a  discount  of  five  per  centum  shall  be  allowed.  If  the  tax  is  not  paid  at  the 
end  of  one  year  from  the  death  of  the  decedent  interest  shall  be  charged  at 
the  rate  of  twelve  per  centum  per  annum  on  such  tax.  Where  because  of 
claims  made  upon  the  estate  litigation  or  other  unavoidable  cause  of  delay 
the  estate  of  any  decedent  or  any  part  thereof  cannot  be  settled  up  at  the  end 
of  the  year  interest  at  the  rate  of  six  per  centum  per  annum  shall  be  charged 
upon  the  tax  arising  from  the  unsettled  part  thereof  from  the  end  of  such 
year  until  there  be  default.  Where  real  or  personal  estate  withheld  by  reason 
of  litigation  or  other  cause  of  delay  in  manner  aforesaid  from  the  parties 
entitled  thereto  subject  to  such  tax  has  not  been  productive  to  the  extent  of 
six  per  centum  per  annum  the  proper  parties  shall  not  pay  a  greater  amount 
as  interest  to  the  Commonwealth  than  they  have  realized  or  shall  realize  from 
such  estate  during  the  time  the  same  has  been  or  shall  be  withheld  as  aforesaid. 

§  39.  The  lien  of  all  taxes  imposed  by  this  act  shall  continue  until  the  tax 
is  settled  and  satisfied  and  shall  be  limited  to  the  property  chargeable  therewith. 
All  such  taxes  shall  be  sued  for  within  five  years  after  they  are  due  otherwise 
they  shall  be  presumed  to  have  been  paid  and  cease  to  be  a  lien  as  against  any 
purchasers  of  real  estate. 

§  40.  In  all  cases  where  any  amount  of  such  tax  is  paid  erroneously  the 
State  Treasurer  on  satisfactory  proof  rendered  to  him  by  the  register  of  wills 
or  Auditor-General  of  such  erroneous  payment  may  refund  and  pay  over  to 
the  person  paying  such  tax  the  amount  erroneously  paid.  All  such  applications 
for  the  repayment  of  such  tax  erroneously  paid  in  the  treasury  shall  be  made 
within  two  years  from  the  date  of  payment  except  when  the  estate  upon  which 
such  tax  has  been  erroneously  paid  shall  have  consisted  in  whole  or  in  part  of  a 
partnership  or  other  interest  of  uncertain  value  or  shall  have  been  involved  in 
litigation  by  reason  whereof  there  shall  have  been  an  over-valuation  of  that 
portion  of  the  estate  on  which  the  tax  has  been  assessed  and  paid  which  over- 
valuation could  not  have  been  ascertained  within  said  period  of  two  years  in 
such  case  the  application  for  repayment  shall  be  made  to  the  State  Treasurer 
within  one  year  from  the  termination  of  such  litigation  or  ascertainment  of 
such  over- valuation. 

§  41.  Where  a  testator  appoints  or  names  one  or  more  executors  or  trustees 
and  makes  a  bequest  or  devise  of  property  to  them  in  lieu  of  their  commissions 
or  allowances  or  appoints  them  his  residuary  legatees  and  said  bequests  deyise  or 
residuary  legacy  exceeds  what  would  be  a  fair  compensation  for  their  services 
such  excess  shall  be  subject  to  the  payment  of  the  tax  at  the  rate  in  each  case 
provided  for  in  this  act. 

§  42.  It  shall  be  a  misdemeanor  for  an  appraiser  to  take  any  fee  or  reward 
from  any  executor  or  administrator  legatee  lineal  descendant  or  heir  of  any 
decedent  and  for  any  such  offense  the  register  or  Auditor-General  as  the  case  may 
be  shall  dismiss  him  from  such  service.  Upon  conviction  of  such  misdemeanor 
such  appraiser  shall  be  fined  not  exceeding  five  hundred  dollars  or  imprisonment 
not  exceeding  one  year  or  both. 


1080  THE  STATE  STATUTES 

ARTICLE  V. 
Definitions  and  Eepeals. 

§  45.  The  words  "estate"  and  "property"  wherever  used  in  this  act 
except  where  the  subject  or  context  is  repugnant  to  such  construction  shall  be 
construed  to  mean  the  interest  of  the  testator  intestate  grantor  bargainer 
or  vendor  passing  or  transferred  to  the  individual  or  specific  legatee  devisee 
heir  next  of  kin  grantee  donee  or  vendee  not  exempt  under  the  provisions  of 
this  act  whether  such  property  be  situated  within  or  without  this  Common- 
wealth. 

The  word  "transfer"  as  used  in  this  act  shall  be  taken  to  include  the  passing 
of  property  or  any  interest  therein  in  possession  or  enjoyment  present  or  future 
by  distribution  by  statute  descent  devise  bequest  grant  deed  bargain  sale  or 
gift. 

§  46.  The  provisions  of  this  act  are  severable  and  in  the  event  of  any  provision 
hereof  being  declared  unconstitutional  provision  shall  not  affect  the  validity  of 
this  act. 

§  47.  The  act  approved  May  sixth  one  thousand  eight  hundred  and  eighty- 
seven  entitled  "An  act  to  provide  for  the  better  collection  of  collateral  inher- 
itance taxes"  and  the  amendments  and  supplements  thereto  and  the  act 
approved  the  eleventh  day  of  July  one  thousand  nine  hundred  and  seventeen 
entitled  "An  act  for  the  imposition  and  collection  of  certain  inheritance  taxes" 
and  all  other  acts  or  parts  of  acts  inconsistent  with  the  provisions  of  this 
act  are  hereby  repealed  but  nothing  in  this  repealer  shall  affect  or  impair  the 
lien  of  any  taxes  heretofore  assessed  or  any  tax  due  owing  or  payable  or  any 
remedies  for  the  collection  of  the  same  or  to  surrender  any  remedies  powers 
rights  or  privileges  acquired  by  the  Commonwealth  under  said  act  approved 
May  sixth  one  thousand  eight  hundred  and  eighty-seven  entitled  "An  act  to 
provide  for  the  better  collection  of  collateral  inheritance  taxes"  its  amendments 
and  supplements  and  the  act  approved  the  eleventh  day  of  July  one  thousand 
nine  hundred  and  seventeen  entitled  "An  act  for  the  imposition  and  collection  of 
certain  inheritances  taxes"  or  to  relieve  any  person  or  corporation  from  any 
tax  or  penalty  imposed  by  said  acts. 


RHODE  ISLAND 


1081 


RHODE  ISLAND. 

Imposes  two  taxes:     First  upon  the  entire  estate  for  the  right  to  transfer; 
second,  upon  each  beneficiary  for  the  right  to  receive. 
Taxes  only  real  estate  of  nonresidents  within  the  State. 
First  tax. — For  right  to  transfer: 

On  the  entire  estate  one-half  of  1%  in  excess  of  $5,000. 
Second  tax: 
On  each  beneficiary — for  the  right  to  receive. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OB  RELATIONSHIP 

Exemption 

In  excess 
of  ex- 
emption 
to 
$50,000 

$50,000 
to 
$250,000 

$250,000 
to 
$500,000 

$500,000 
to 
$750,000 

$750,000 
to 
$1,000,000 

In  excess 
of 
$1.000,000 

Grandparent,  parent, 
husband,  wife,  child, 
brother,  sister,  nephew, 
niece,  son-in-law, 
daughter-  in-  law, 
adopted  or  mutually 
acknowledged  child, 
lineal  descendant. 

$25,000   to    widow   or 
minor  child. 
Others     $25,000,     but 
when  two  or  more  of 
class  mentioned  they 
divide  exemption  and 
descendants    allowed 
exemption  per  stirpes, 
not  per  capita. 

1% 

2% 

3% 

AH  others  excepting  cor- 
porations and  institu- 
tions except  by  charter 
cr  laws  of  state  and 
similar  foreign  corpora- 
tions which  are  exempt 
altogether. 

$1,000;  but  descendants 
take  interest  in  ex- 
emption per  etirpes, 
not  per  capita. 

5% 

6% 

7% 

7% 

7% 

8% 

LAWS  OF  1916,  CHAPTER  1339,  BECAME  A  LAW  FEB.  22,  1916. 
(As  Amended  May  5,  1920.) 

An   Act    taxing   the    net    estates    of    decedents    and    inheritances,    legacies    and 

gifts. 
It  is  enacted  "by  the  General  Assembly  as  follows: 

Section  1.  A  tax  shall  be  and  is  hereby  imposed  upon  the  net  estate  of  every 
resident  decedent,  and  upon  the  net  estate  of  every  nonresident  decedent,  con- 
sisting of  real  property  located  within  this  state,  or  any  interest  therein,  as  a 
tax  upon  the  right  to  transfer.  Such  tax  shall  be  imposed  at  the  rate  of  one- 
half  of  one  per  centum  upon  the  excess  value  of  each  said  estate  over  $5,000: 
Provided,  that  in  the  case  of  the  estate  of  a  nonresident  decedent  only  such 
proportion  of  said  exemption  of  $5,000  shall  be  allowed,  as  the  value  of  the  real 
property  located  in  Rhode  Island,  or  any  interest  therein,  bears  to  the  value  of 
the  entire  estate  wherever  located;  and  provided,  further,  that  the  executor, 
administrator  or  trustee  of  such  nonresident  decedent's  estate  shall  file  with  the 
board  of  tax  commissioners  a  sworn  statement  showing  the  full  and  fair  cash 
value  of  the  entire  estate.  If  said  statement  is  not  filed  as  herein  provided,  no 
exemption  shall  be  allowed. 

§  2.  The  value  of  the  net  estate  of  a  resident  decedent  for  the  assessment  of 
the  tax  imposed  by  section  1  of  this  act  shall  be  ascertained  by  taking  the  full 
and  fair  cash  value  of  the  real  property  located  within  this  State  and  of  any 
interest  therein,  and  of  the  tangible  and  intangible  personal  property  of  the 
decedent  at  the  date  of  his  decease,  including  the  property  and  interests  de- 
scribed in  paragraphs  2,  3  and  4  of  section  5  of  this  act,  and  adding  thereto 
all  gains  made  during  the  settlement  of  the  estate  in  reducing  the  intangible 
personal  property  thereof  to  possession,  except  so  much  of  such  intangible  per- 
sonal property  as  is  represented  by  bonds  and  stocks  in  any  corporation,  and 
income  accruing  after  death.  From  the  value  thus  obtained  there  shall  be 
deducted  the  amount  of  all  claims  allowed  against  the  estate,  all  funeral 
expenses  and  expenses  of  administraton,  the  amount  of  the  allowance  made 
for  the  support  of  the  widow  and  family  of  the  decedent  by  the  probate  court 
in  accordance  with  law,  and  the  amount  at  the  death  of  the  decedent  of  all  unpaid 


1082  THE  STATE  STATUTES 

mortgages,  except  mortgages  on  real  property  not  located  within  this  State,  not 
deducted  in  the  appraisal  of  the  property  mortgaged;  and  there  shall  be  also 
deducted  all  losses  incurred  during  the  settlement  of  the  estate  in  the  reduction 
of  the  intangible  property  to  possession,  except  so  much  of  such  intangible 
personal  property  as  is  represented  by  bonds  and  stock  in  any  corporation. 

The  value  of  the  net  estate  of  a  nonresident  decedent  for  the  assessment  of 
the  tax  imposed  by  section  1  of  this  act  shall  be  ascertained  by  taking  the  full 
and  fair  cash  value  of  the  real  property  located  in  Ehode  Island,  and  any 
interest  therein,  including  such  real  property  and  interests  in  real  property  as 
are  described  in  paragraphs  2,  3  and  4  of  section  5  of  this  act,  and  deducting 
therefrom  such  proportion  of  the  indebtedness  of  the  entire  estate  of  such  non- 
resident decedent  as  the  value  of  said  real  property  and  interests  therein,  and 
of  any  tangible  personal  property  of  such  decedent  located  within  this  State 
bears  to  the  value  of  the  entire  estate:  Provided,  that  only  the  excess  of  such 
proportion  of  indebtedness  over  and  above  the  value  of  said  tangible  personal 
property  shall  be  deducted  from  the  appraised  value  of  said  real  property; 
and  provided,  further,  that  the  executor  administrator,  or  trustee,  of  such  non- 
resident decedent 's  estate  shall  file  with  the  board  of  tax  commissioners  a 
sworn  statement  showing  the  full  and  fair  cash  value  of  the  entire  estate  and 
the  indebtedness  of  said  estate.  If  said  statement  is  not  filed  as  herein  provided, 
only  such  debts  and  expenses  as  are  chargeable  to  the  said  real  property  under 
the  laws  of  this  State  shall  be  deducted.  The  full  and  fair  cash  value  of  the  net 
estate  of  a  decedent  shall  be  determined  by  the  board  of  tax  commissioners  as 
aforesaid  in  accordance  with  provisions  of  sections  22,  23,  24  and  31  of  this  act. 

§  3.  The  tax  imposed  by  section  1  of  this  act  shall  be  assessed  upon  the  full 
and  fair  cash  value  of  the  net  estate  determined  by  the  board  of  tax  com- 
missioners as  hereinbefore  provided  and  notice  of  the  amount  of  said  tax  shall 
be  mailed  to  the  executor,  administrator,  or  trustee  by  said  board,  but  failure  to 
receive  said  notice  shall  not  excuse  the  nonpayment  of  or  invalidate  said  tax. 
The  board  of  tax  commissioners  shall  certify  the  amount  of  such  tax  to  the 
General  Treasurer,  who  shall  receive  and  collect  the  taxes  so  assessed  in  the 
same  manner  and  with  the  same  powers  as  are  prescribed  for  and  given  to  the 
collectors  of  taxes  by  chapter  60  of  the  General  Laws  and  by  any  acts  in 
amendment  thereof  or  in  addition  thereto.  Such  tax  shall  be  due  and  payable  by 
the  executor,  administrator,  or  trustee  of  the  estate  immediately  upon  notification 
of  the  amount  thereof,  and  if  not  paid  within  thirty  days  thereafter  shall  bear 
interest  at  the  rate  of  eight  per  centum  per  annum  from  the  date  of  such 
notification.  Provided,  however,  that  nothing  herein  contained  shall  be  construed 
to  postpone  the  charging  of  said  interest  for  a  greater  period  than  fifteen 
months  from  the  date  the  first  appointed  executor  or  administrator  shall  file 
his  bond,  or  fifteen  months  from  the  date  of  death  of  the  decedent  in  case 
letters  testamentary  are  not  issued.  Said  tax  shall  be  paid  direct  to  the 
general  treasurer  of  the  state  for  the  use  of  the  state,  and  shall  be  and  remain 
a  lien  upon  the  estate  until  the  same  shall  be  paid,  and  the  executors,  adminis- 
trators or  trustees  shall  be  personally  liable  for  such  tax  until  the  same  is  paid. 
An  executor,  administrator  or  trustee  may  deposit  with  the  general  treasurer  a 
sum  of  money  sufficient  in  the  opinion  of  the  board  of  tax  commissioners  to 
pay  the  tax  which  may  become  due  under  the  provisions  of  Section  1  of  this  act, 
and  when  said  tax  has  been  determined  and  certified  as  aforesaid  the  general 
treasurer  shall  repay  to  said  executor,  administrator  or  trustee  the  difference 
between  the  tax  certified  and  the  amount  deposited,  and  the  lien  upon  the  estate 
hereinbefore  imposed  shall  be  discharged  by  the  acceptance  of  said  deposit. 
Whenever  an  inventory  is  filed  with  the  board  of  tax  commissioners,  showing  the 
ownership  of  real  property,  said  board  shall  notify  the  recorder  of  deeds  or  the 
town  clerk  of  the  city  or  town,  as  the  ease  may  be,  in  which  such  real  property 
is  located,  and  said  recorder  of  deeds  shall  note  in  the  land  records  of  his  office 
the  decedent's  name,  and  the  fact  that  all  real  property  belonging  to  said 
decedent  is  impressed  with  a  lien  under  the  provisions  of  the  Inheritance  Tax  Act 
of  1916.  Upon  the  discharge  of  said  lien,  said  board  of  tax  commissioners  shall 
send  said  recorder  of  deeds  a  further  notice,  showing  such  discharge  and  the 
manner  thereof.  Said  recorder  of  deeds  shall  be  paid  by  said  board  of  tax 
commissioners  out  of  any  money  appropriated  for  the  expenses  of  said  board,  a 
fee  of  twenty-five  cents  for  a  completed  entry. 

§  4.  Whenever  claims  shall  be  allowed  against  the  estate  of  a  decedent  after 
the  payment  of  the  tax  imposed  by  section  1  of  this  act  the  General  Treasurer 


RHODE  ISLAND  1Q83 

shall  upon  receiving  a  certified  copy  of  the  records  of  the  probate  court  or  other 
court  of  competent  jurisdiction  showing  the  proof  of  the  allowance  of  such  claims, 
or  upon  receipt  of  such  other  proof  thereof  as  may  be  satisfactory  to  the  board 
of  tax  commissioners,  refund  such  equitable  proportion  of  the  tax  represented  by 
such  claims  to  the  executor,  administrator,  or  trustee  of  such  estate,  without  any 
further  act  or  resolution  making  appropriation  therefor.  Any  executor,  adminis- 
trator, or  trustee  may  appeal  from  the  assessment  of  said  tax  as  provided  in 
section  26  of  this  act. 

§  5.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  by  a  resident  of 
this  State  of  any  real  property  within  the  State,  or  any  tangible  or  intangible 
personal  property,  or  interest  therein  or  income  therefrom,  and  by  a  nonresident 
of  this  State  of  any  real  property  within  the  State  or  any  interest  therein,  to 
any  person  or  persons,  in  trust  or  otherwise,  as  a  tax  upon  the  right  to  receive,  in 
the  following  cases: 

(1)  When   the  transfer   is   under   a   will   or   by  the   statutes   of   descent    and 
distribution  of  this  State. 

(2)  When  the  transfer  is  made  by  deed,  grant,  bargain,  sale  or  gift,  without 
valuable  and  adequate  consideration,  and  in  contemplation  of  the  death  of  the 
grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession  or  enjoyment 
at  or  after  such  death.     Such  tax  shall  be  imposed  when  any  such  person  becomes 
beneficially  entitled,  in   possession   or   expectancy,   to   any  property,   or   interest 
therein,  or  the  income  therefrom  by  any  such  transfer,  whether  made  before  or 
after  the  passage  of  this  act. 

(3)  Whenever  any  person  shall  exercise  a  power  of  appointment,  derived  from 
any  disposition  of  property  made  whether  before  or  after  the  passage  of  this  act, 
such  appointment  when  made  shall  be  deemed  a  transfer  taxable  under  the  pro- 
visions of  this  act  in  the  same  manner  as   though  the   property  to   which  such 
appointment  relates  belonged  absolutely  to  the  donee  of  such  power  and  had  been 
bequeathed  or  devised  by  such  donee  by  will;  and  whenever  any  person  possessing 
such  a  power  of  appointment  so  derived  shall  omit  or  fail  to  exercise  the  same 
within  the  time  provided  therefor  in  whole  or  in  part,  a  transfer  taxable  under 
the  provisions  of  this  act  shall  be  deemed  to  take  place  to  the  extent  of  such 
omission  or  failure,  in  the  same  manner  as  though  the  person  thereby  becoming 
entitled  to  the  possession  or  enjoyment   of  the   property  to   which   such  power 
related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to 
exercise  such  power,  and  shall  take  effect  at  the  time  of  such  omission  or  failure. 

(4)  Whenever  any  person  during  his  life  shall  appoint  a  trustee  naming  him- 
self or  others  as  beneficiaries,  and  providing  for  the  administration  of  said  trust 
after  his  death  or  providing  for  a  termination  of  said  trust  and  a  distribution 
of  the  trust  estate  or  any  part  thereof  at  his  death,  a  transfer  taxable  under  the 
provisions  of  this  act  shall  be  deemed  to  take  place  upon  the  death  of  the  creator 
of  said  trust. 

(5)  Dower  and  curtesy  in  property  located  within  the  State  shall  be  deemed  to 
be  interests  in  real  property  subject  to  the  tax  imposed  by  this  section. 

§  6.  All  taxes  imposed  by  section  5  of  this  act  shall  be  assessed  by  the  board 
of  tax  commissioners  upon  the  full  and  fair  cash  value  of  the  property  transferred 
at  the  rate  hereinafter  described  and  only  upon  the  excess  of  the  exemption  herein- 
after granted,  to  be  paid  direct  to  the  general  treasurer  of  the  State,  for  the 
use  of  the  State,  and  all  executors,  administrators,  or  trustees  shall  be  personally 
liable  for  any  and  all  such  taxes  until  the  same  are  paid.  Notice  of  the  amount 
of  said  taxes  shall  be  mailed  to  the  executor,  administrator,  or  trustee  liable 
therefor,  by  said  board,  and  upon  request  made  to  them  to  any  other  person  by 
whom  said  taxes  are  payable,  but  failure  to  receive  said  notice  shall  not  excuse  the 
non-payment  of  or  invalidate  said  taxes;  and  unless  appeal  is  taken  from  such 
assessment,  as  hereinafter  provided,  the  amount  of  taxes  so  assessed  shall  be  final. 
Said  board  shall  certify  the  amount  of  such  taxes  to  the  general  treasurer  who 
shall  receive  and  collect  the  taxes  so  assessed  in  the  same  manner  and  with  the 
same  powers  as  are  prescribed  for  and  given  to  the  collectors  of  taxes  by  chapter 
60  of  the  General  Laws,  and  by  any  acts  in  amendment  thereof  or  in  addition 
thereto.  Payment  of  the  amount  so  certified  shall  be  a  discharge  of  the  tax. 
Said  taxes  shall  be  and  remain  a  lien  upon  the  property  transferred,  and  upon 
all  property  acquired  by  the  executor,  administrator,  or  trustee  in  substitution 
therefor  while  the  same  remains  in  his  hands,  until  the  said  taxes  are  paid  or  a 
bond  given  as  hereinafter  provided,  but  said  lien  shall  not  affect  any  tangible  or 
intangible  personal  property  after  it  has  passed  to  a  bona  fide  purchaser  for 


1084  THE  STATE  STATUTES 

value:  Provided,  however,  that  nothing  herein  contained  shall  give  the  owner  of 
any  securities  specified  in  section  27  of  this  act  the  right  to  have  the  same  trans- 
ferred to  him  by  the  corporation,  association,  company  or  trust  issuing  the  same, 
until  the  permit  required  by  said  section  27  shall  have  been  filed  as  therein  pro- 
vided. The  lien  charged  as  aforesaid  upon  any  real  estate  or  separate  parcel 
thereof  may  be  discharged  by  the  payment  of  all  taxes  due  and  to  become  due 
upon  said  real  estate  or  separate  parcel,  or  by  the  filing  and  acceptance  of  a  bond 
as  provided  in  section  11  of  this  act,  or  by  an  order  of  the  board  of  tax  com- 
missioners transferring  such  lien  to  other  real  estate  owned  by  the  person  to  whom 
said  real  estate  or  separate  parcel  thereof  passes.  The  heir,  devisee  or  other  donee 
shall  be  personally  liable  for  the  tax  on  such  real  estate,  as  well  as  the  executor, 
administrator,  or  trustee;  and  if  the  executor,  administrator,  or  trustee  pays 
such  tax,  he  shall,  unless  the  same  is  made  an  expense  of  administration  by  the 
will  or  other  instrument,  have  the  right  to  recover  such  tax  from  the  heir,  devisee 
or  other  donee  of  such  real  estate. 

§  7.  When  any  property  or  any  beneficial  interest  therein  or  income  therefrom 
shall  pass  to  or  for  the  use  of  any  grandparent,  parent,  husband,  wife,  child, 
brother,  sister,  nephew,  niece,  wife  or  widow  of  the  son,  or  husband  or  widower  of 
the  daughter,  or  any  child  adopted  in  conformity  with  the  laws  of  Rhode  Island, 
or  the  laws  of  any  other  State  or  country,  or  any  person  to  whom  the  deceased 
for  not  less  than  ten  years  prior  to  death  stood  in  the  acknowledged  relation  of 
a  parent,  or  to  any  lineal  descendant  born  in  lawful  wedlock,  the  tax  so  imposed 
upon  the  full  and  fair  cash  value  of  such  property,  beneficial  interest  therein  or 
income  therefrom  shall  be  as  follows:  At  the  rate  of  one-half  of  one  per  centum 
upon  all  amounts  in  excess  of  the  exemption  hereinafter  specified  and  not  exceed- 
ing $50,000;  at  the  rate  of  one  per  centum  upon  all  amounts  in  excess  of  $50,000 
and  not  exceeding  $250,000 ;  at  the  rate  of  one  and  one-half  per  centum  upon  all 
amounts  in  excess  of  $250,000  and  not  exceeding  $500,000;  at  the  rate  of  two  per 
centum  upon  all  amounts  in  excess  of  $500,000  and  not  exceeding  $750,000;  at 
the  rate  of  two  and  one-half  per  centum  upon  all  amounts  in  excess  of  $750,000 
and  not  exceeding  $1,000,000;  at  the  rate  of  three  per  centum  upon  all  amounts 
in  excess  of  $1,000,000. 

§  8.  When  any  property  or  any  beneficial  interest  therein  or  income  therefrom 
shall  pass  to  or  for  the  use  of  any  person  not  mentioned  in  section  7  of  this  act, 
the  tax  so  imposed  upon  the  full  and  fair  cash  value  of  such  property,  beneficial 
interest  therein  or  income  therefrom,  shall  be  as  follows:  At  the  rate  of  five 
per  centum  upon  all  amounts  in  excess  of  the  exemption  hereinafter  specified  and 
not  exceeding  $50,000 ;  at  the  rate  of  six  per  centum  upon  all  amounts  in  excess 
of  $50,000  and  not  exceeding  $250,000;  at  the  rate  of  seven  per  centum  upon  all 
amounts  in  excess  of  $250,000  and  not  exceeding  $1,000,000;  at  the  rate  of  eight 
per  centum  upon  all  amounts  in  excess  of  $1,000,000. 

§  9.  The  following  exemptions  from  the  taxes  imposed  under  the  provisions 
of  section  5  of  this  act  are  hereby  allowed: 

(1)  All  property   or  interests  transferred   to   any   corporation,   association,   or 
institution,  located  in  Rhode  Island,  which  is  exempt  from  taxation  by  charter  or 
under  the  laws  of  this  State,  or  to   any  corporation,  association,   or  institution, 
located  outside  of  this  State,  which  if  located  within  this  State  would  be  exempt 
as  aforesaid,  or  to  any  person  in  trust  for  the  same,  or  to  any  city  or  town  in 
this  State  for  public  purposes,  shall  be  exempt. 

(2)  Property  or  interests  therein  of  a  clear  value  of  $25,000,  to  be  taken  out 
of  the  first  $50,000  transferred  to  each  of  the  persons  mentioned  in  section  7  of 
this  act,  shall  be  exempt:     Provided,  that  whenever  two  or  more  persons  men- 
tioned in  section   7  of  this  act,  other  than  the  wife  and  minor  children  of  a 
decedent,  are  beneficially  interested,  in  possession,  enjoyment,  or  expectancy,  in 
one  and  the  same  transfer  of  property,  only  such  proportion  of  $25,000  shall  be 
allowed  as  an  exemption  to  one  such  person  as  the  value  of  his  share  or  interest 
bears  to  the  total  value  of  such  property;  and  provided,  further,  that  the  descend- 
ants of  any  person  mentioned  in  section  7  shall  be  allowed  the  exemption  of  the 
person  they  represent,  per  stirpes  and  not  per  capita. 

(3)  Property  or  interests  therein  of  a  clear  value  of  $1,000,  to  be  taken  out 
of  the  first  $50,000  transferred  to  any  person  other  than  the  persons  mentioned 
in  section  7  of  this  act,  shall  be  exempt:     Provided,  that  the  descendants  of  any 
such  person  shall  be  allowed  the  exemption   of  the  person  they  represent,   per 
stirpes  and  not  per  capita. 

(4)  In  the   case   of   the  transfer   of   a  nonresident   decedent's   real   property 


.    RHODE  ISLAND  1085 

located  within  this  State,  or  of  any  interest  therein,  only  such  proportion  of  the 
exemptions  herein  specified  shall  be  allowed  as  the  value  of  the  transferee's 
share  in  said  real  property,  or  any  interest  therein,  bears  to  the  value  of  said 
transferee's  share  in  the  entire  estate  of  said  nonresident  decedent:  Provided, 
that  the  executor,  administrator,  or  trustee  of  such  nonresident  decedent's  estate 
or  the  transferee  shall  file  with  the  board  of  tax  commissioners  a  sworn  state- 
ment exhibiting  the  full  and  fair  cash  value  of  the  entire  estate.  If  said  statement 
is  not  filed  as  herein  provided,  no  exemption  shall  be  allowed. 

§  10.  Makes  taxes  imposed  by  section  5  due  six  months  after  executor  or 
administrator  has  filed  his  bond  and  allows  a  discount  of  4%  if  they  are  paid 
within  that  time.  If  not  paid  within  nine  months  interest  charged  at  8%,  which 
may  be  reduced  at  6%  in  case  of  unavoidable  delay  from  accrual  to  time  when 
cause  of  delay  is  removed,  after  that  8%.  In  case  of  trust  deeds  taxed  under 
subdivision  4  of  section  5  the  tax  is  due  when  the  amount  thereof  is  certified  by 
the  board  of  tax  commissioners  and  if  paid  within  thirty  days  thereafter  a 
discount  of  4%  is  allowed,  after  the  thirty  days'  interest  at  8%  is  charged. 

§  11.  Provides  that  if  remaindermen  wish  to  defer  payment  until  they  receive 
the  property  they  may  file  a  bond,  with  the  approval  of  the  board  of  tax  com- 
missioners, in  three  times  the  amount  of  the  tax,  conditioned  for  the  payment 
of  the  tax  with  interest  at  4%  from  date  of  accrual.  The  bond  must  be  renewed 
every  five  years  and  the  obligor  undertakes  to  notify  the  board  of  tax  commis- 
sioners when  he  comes  into  actual  possession  of  the  property.  The  filing  and 
acceptance  of  the  bond  discharges  the  lien  of  the  tax  and  frees  personal 
representatives  from  liability. 

§  12.  Provides  for  a  proportionate  refund  of  the  tax  when  claims  have  been 
proved  against  the  estate  after  distribution. 

§  13.  Provides  for  the  computation  of  life  estates  and  remainders  on  American 
experience  tables  at  rate  of  5%. 

§  14.  Provides  that  no  allowance  shall  be  made  for  contingencies  or  conditions 
that  may  defeat,  diminish  or  abridge  the  estate  of  one  presently  entitled  in  fixing 
its  value  but  refund  is  made  if  the  event  happens,  but  this  does  not  apply  to  a 
life  estate  which  may  be  diminished  or  defeated  by  the  act  of  the  beneficiary,  such 
estates  are  taxed  as  if  there  were  no  such  possibility. 

§  15.  Provides  that  the  tax  shall  be  fixed  at  the  lowest  possible  rate  on  con- 
tingent remainders,  but  if  the  remaindermen  who  ultimately  succeed  are  taxable 
at  a  higher  rate  they  must  then  pay  the  difference. 

§  16.  Provides  that  where  the  tax  has  not  been  collected  or  has  been  suspended 
on  contingent  remainders  they  shall  be  taxed  at  full  cash  value  when  they  fall  in 
without  deducting  value  of  expired  life  interest. 

§  17.  (As  amended  by  Pub.  Laws,  1946,  May  5,  1920.)  Whenever  a  decedent 
appoints  one  or  more  executors  or  trustees  and  in  lieu  of  their  allowances  or 
commissions  makes  a  bequest  or  devise  of  property  to  them  which  would  other- 
wise be  liable  to  a  tax  under  this  act,  or  appoints  them  his  residuary  legatees, 
and  said  bequests,  devises  or  residuary  legacies  exceed  what  would  be  a  reason- 
able compensation  for  their  services,  as  determined  by  the  board  of  tax  com- 
missioners, such  excess  shall  be  taxable  as  a  transfer  under  the  provisions  of 
section  5  of  this  act. 

§  18.  Provides  that  unless  the  will  directs  the  tax  to  be  paid  from  the  residue 
as  an  expense  of  administration  and  that  residue  is  sufficient,  the  executor  or 
administrator  must  deduct  the  tax  from  the  legacy  if  in  money  and  shall  not 
deliver  any  specific  legacy  or  property  until  the  tax  has  been  paid  thereon  by  the 
legatee.  If  the  legacy  is  charged  on  real  estate  the  heir  must  deduct  the  tax, 
the  tax  remains  a  lien  and  its  payment  may  be  enforced  in  the  same  manner  as 
the  legacy.  If  money  is  given  for  a  limited  period  the  tax  must  be  deducted 
from  the  whole  amount,  but  if  property  is  so  given  the  board  of  tax  commissioners 
must  make  an  apportionment  among  the  beneficiaries. 

§  19.  Provides  for  settlement  and  compromise  of  tax  claims  by  the  board  of 
tax  commissioners  with  the  approval  of  the  Attorney-General. 

§  20.  Provides  for  suspending  the  whole  or  proportionate  part  of  tax  where 
claims  against  the  estate  are  in  litigation. 

§  21.  Gives  power  of  sale  for  payment  of  the  tax  in  the  same  way  as  to  pay 
debts. 

§  22.  Requires  the  executor  or  administrator  within  thirty  days  to  file  an 
inventory  on  oath  of  the  fair  cash  value  of  the  estate  and  within  one  year  there- 
after a  further  sworn  statement  showing  gain  or  loss  in  value  during  settlement 


1086  THE  STATE  STATUTES 

and  the  amounts  paid  for  funeral  expenses,  administration  and  the  support  of  a 
widow  and  the  family  of  decedent  as  fixed  by  the  probate  court.  Trustees  under 
taxable  trusts  created  by  decedent  must  file  similar  statements.  Upon  application 
the  board  of  tax  commissioners  may  extend  the  time  for  filing  such  statements. 
§  23.  Requires  probate  clerks  to  notify  the  board  of  tax  commissioners  of  the 
granting  of  letters  and  fixes  the  fees  of  such  clerks. 

§  24.  Provides  that  if  the  board  of  tax  commissioners  is  dissatisfied  with  the 
inventory  they  may  summon  the  executor  or  administrator  to  furnish  further 
information.  They  then  appraise  the  estate  or  appoint  an  appraiser  before  whom 
the  usual  proceedings  are  held. 

§  25.  Imposes  a  penalty  for  failure  to  furnish  information  as  to  estates  by 
persons  required  to  do  so  by  the  act. 

§  26.  Provides  for  appeal. 

§  27.  No  banking  association  organized  under  the  laws  of  the  United  States 
and  located  within  this  State,  no  corporation  incorporated  within  this  State,  and 
no  unincorporated  association,  joint  stock  company  or  business  trust  having  cer- 
tificates representing  shares  of  stock  and  carrying  on  business  in  this  State  shall 
record  a  transfer  of  its  stock  made  by  any  executor,  administrator  or  trustee,  or 
issue  a  new  certificate  for  any  such  share  of  its  stock  at  the  instance  of  any 
executor,  administrator  or  trustee,  or  transfer  any  registered  bond  or  other 
registered  evidence  of  indebtedness  at  the  instance  of  any  executor,  adminis- 
trator or  trustee  until  a  permit  authorizing  such  transfer  has  been  issued  by  the 
board  of  tax  commissioners  and  filed  with  the  said  corporation,  association,  com- 
pany or  trust  making  such  a  transfer  before  a  permit  authorizing  such  transfer 
as  aforesaid  has  been  issued  shall  be  liable  for  any  tax  which  may  be  assessed  on 
account  of  the  bequest  or  gift  of  such  stock,  bond  or  other  evidence  of  indebted- 
ness, together  with  the  interest  thereon  to  be  collected  in  an  action  to  be  brought 
by  the  General  Treasurer.  The  board  of  tax  commissioners  shall  not  issue  such  a 
permit  until  all  taxes  imposed  on  account  of  such  bequest  or  gift  has  been  paid 
or  the  payment  thereof  secured  by  bond  or  deposit  as  herein  before  provided. 

§  28.  The  amount  due  upon  the  claim  of  any  creditor  against  the  estate  of  a 
decedent  arising  under  a  contract  made  after  the  passage  of  this  act,  if  payable 
by  the  terms  of  such  contract  at  or  after  the  death  of  the  deceased  shall  be 
subject  to  the  same  tax  imposed  by  section  5  of  this  act  upon  a  legacy  of  like 
amount.  The  value  of  net  estates  of  decedents  or  the  value  of  legacies  or  dis- 
tribution shares  in  the  estate  of  decedents,  for  the  purposes  of  taxation  under  the 
provisions  of  section  1  and  section  5  of  this  act,  shall  not  be  diminished  by  reason 
of  any  claim  against  the  estate  based  upon  such  a  contract  except  in  so  far  as  it 
may  be  shown  affirmatively  by  competent  evidence  that  such  a  claim  was  legally 
due  and  payable  in  the  lifetime  of  decedent. 

§  29.  Provides  that  no  final  accounting  shall  be  allowed  unless  the  tax  is 
shown  to  have  been  paid  or  a  bond  filed  as  provided. 

§  30.  Except  as  otherwise  provided  the  value  of  all  estates  is  to  be  appraised 
as  of  the  date  of  death. 

§  31.  If  no  will  or  administration  has  been  applied  for  within  three  months  the 
tax  commission  may  move  to  fix  the  tax  or  apply  for  administration. 

§  32.  Defines  the  word  "person"  to  include  corporations,  associations,  joint 
stock  companies  and  business  trusts. 

§  33.  Sections  20  to  32  inclusive  of  this  act  shall  apply  to  the  taxes  imposed 
under  the  provisions  of  section  1  and  section  5  of  this  act. 

§  34.  This  act  shall  take  effect  upon  its  passage  and  may  be  cited  as  "The 
Inheritance  Tax  Act  of  1916." 

Prior  Statutes:     None. 

Amendment  of  1921  adds  section  35  as  follows: 

§  35.  The  board  of  tax  commissioners  in  their  discretion  may  employ,  and 
designate  officially  by  appropriate  title,  some  person  who  shall  exercise  such 
authority  in  connection  with  the  administration  of  the  provisions  of  this  act  and 
perform  such  other  duties  as  said  board  may  prescribe.  Said  board  shall  fix  the 
compensation  of  such  person  at  a  sum  not  exceeding  three  thousand  dollars 
annually,  and  a  sum  not  exceeding  three  thousand  dollars  shall  annually  be 
appropriated  for  that  purpose;  and  the  state  auditor  is  hereby  directed  to  draw 
his  orders  upon  the  general  treasurer  for  the  payment  of  said  sum,  or  so  much 
thereof  as  may  be  from  time  to  time  required,  for  the  payment  of  said  compen- 
sation upon  receipt  by  him  of  proper  vouchers  approved  by  the  chairman  of  said 
board. 


SOUTH  CAROLINA 


1087 


SOUTH  CAROLINA. 

Taxes  all   property  of  nonresidents  within  the  State. 

For  the  first  time  in  its  history  South  Carolina  has  adopted  an  Inheritance 
Tax  Statute  taking  effect  Feb.  23,  1922. 


TABLE  OF  RATES  AND  EXEMPTIONS  UNDER  SOUTH  CAROLINA  ACT  OF  1922. 


Above 

In 

CLASS  OR  RELATIONSHIP 

Exemp- 
tion 

exemp- 
tion up  to 
$20,000 

$20,000 
to 
$40,000 

$40,000 
to 
$80,000 

$80,000 
to 
$150,000 

$150,000 
to 
$300,000 

excess 
of 

$300,00(1 

Husband  or  wife        

$10,000 
7,500 

1    1% 

2% 

3% 

4% 

5% 

6% 

Minor  child  or  grandchild    

Father,   mother,    adult   children 

or  grandchildren    

5  000 

f 

Other    lineal    ancestors    or    de- 

scendants, uncle,  aunt,  niece, 

nephew,  son-in-law,  daughter- 

in-law. 

500 

2% 

3% 

4% 

5% 

6% 

7% 

All     others     except     charitable, 

religious,  etc.,  corporations. 

4% 

6% 

8% 

10% 

12% 

14% 

AN  ACT 

To  Raise  Revenue  for  the  Support  of  the  State  Government  by  Levy  and 
Collection  of  a  Tax  on  Gifts,  Inheritances,  Devises,  Bequests,  and  Legacies, 
in  Certain  Cases. 


What  transfers  are  taxable;  rates  of  taxation. 

Section  1.  Be  it  enacted  by  the  General  Assembly  of  the  State  of  South 
Carolina:  A  tax  shall  be  and  is  hereby  imposed  upon  the  transfer  of  any  prop- 
erty, real,  personal  or  mixed,  or  of  any  interest  therein  or  income  therefrom,  in 
trust  or  otherwise,  to  persons,  institutions  or  corporations,  not  hereinafter 
exempted,  for  the  support  of  the  State  Government  in  the  following  cases: 

a.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  State  from  any 
person  dying,  seized  or  possessed  of  the  property  while  a  resident  of  the  State. 

b.  When  the  transfer  is  by  will  or  intestate  laws  of  property  within  the  State, 
and  the  decedent  was  a  non-resident  of  the  State  at  the  time  of  his  death. 

c.  When  the  transfer  is  of  property  made  by  a  resident,  or  by  a  non-resident 
when  such  non-resident's  property  is  within  this  State,  by  deed,  grant,  bargain, 
sale  or  gift,  made  in  contemplation  of  death  of  the  grantor,  vendor  or  donor,  or 
intended   to    take    effect    in    possession    or    enjoyment    at    or    after    such    death. 
Transfers  of  property  by  gift  or  deed,  between  parties  related  by  blood  or  mar- 
riage,  made  and   completed  within   five  years   prior   to   death,    and   without    an 
adequate,  valuable  consideration,  shall  be  considered  made  in  contemplation  of 
death. 

d.  Whenever  any  person,  institution  or  corporation  shall  exercise  a  power  of 
appointment  derived   from  any  disposition   of   property  made   either  before   or 
after  the  passage  of  this  Act,  such  appointment,  when  made,  shall  be  deemed  a 
taxable  transfer  under  the  provisions  of  this  Act,  in  the  same  manner  as  though 
the  property  to  which  such  appointment  relates  belonged  absolutely  to  the  donee 
of  such  power  and  had  been  bequeathed  or  devised  by  such  donee  by  will;  and 
whenever   any   person   or   corporation  possessing   such   power   of   appointment   so 
derived  shall  omit  or  fail  to  exercise  the  same  within  the  time  provided  therefor, 
in  whole  or  in  part,  a  transfer  taxable  under  the  provisions  of  this  Act  shall  be 
deemed  to  take  place  to  the  extent   of   such   omission   or  failure,   in  the   same 
manner  as  though  the  person  or  corporations  thereby  becoming  entitled  to  the 
possession  or  enjoyment  of  the  property  to  which  such  power  related  had  sue- 


1088  THE  STATE  STATUTES 

ceeded  thereto  by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  power, 
taking  effect  at  the  time  of  such  omission  or  failure. 

e.  Whenever  property,  real  or  personal,  is  held  in  the  joint  names  of  two  or 
more  persons,  or  is  deposited  in  banks  or  other  institutions  or  depositories  in  the 
joint  names  of  two  or  more  persons  and  payable  to  either  or  the  survivor,  upon 
the  death  of  one  of  such  persons  the  right  of  the  surviving  joint  tenant  or  joint 
tenants,  person  or  persons  to  the  immediate  ownership  or  possession  and  enjoy- 
ment of  such  property,  shall  be  deemed  a  transfer  taxable  under  the  provisions  of 
this  Act  in  the  same  manner  as  though  the  whole  property  to  which  such  transfer 
relates  was  owned  by  said  parties  as  tenants  in  common  and  had  been  bequeathed 
to  the  surviving  joint  tenant  or  joint  tenants,  person  or  persons,  by  such  deceased 
joint  tenant  or  joint  depositor  by  will. 

Whenever  the  beneficial  interests  to  any  property  or  income  therefrom  shall 
pass  to  or  for  the  use  of  any  husband,  wife,  minor  child,  minor  grandchild,  adult 
child,  children,  adult  grandchildren,  father  or  mother,  in  every  such  case  the  rate 
of  tax  shall  be  1%  on  any  amount  up  to  and  including  the  sum  of  $20,000  in 
excess  of  the  exemption;  2%  on  all  sums  in  excess  of  $20,000  and  not  exceeding 
$40,000;  3%  on  all  sums  in  excess  of  $40,000,  and  not  exceeding  $80,00;  4%  on 
all  sums  in  excess  of  $80,000,  and  not  exceeding  $150,000;  5%  on  all  sums  in 
excess  of  $150,000,  and  not  exceeding  $300,000;  6%  on  all  sums  in  excess  of 
$300,000:  Provided,  That  any  legacy,  inheritance,  transfer,  appointment  or 
interest  passing  to  a  husband  or  wife  which  may  be  valued  at  less  than  $10,000 
shall  not  be  subject  to  any  such  duty  or  taxes,  and  the  tax  is  to  be  levied  in  such 
cases  only  upon  the  excess  of  $10,000  received  by  each  such  person:  And  pro- 
vided, further,  That  any  gift,  legacy,  inheritance,  transfer,  appointment,  or 
interest  passing  to  each  minor  child  which  may  be  valued  at  a  sum  less  than 
$7,500,  shall  not  be  subject  to  any  such  duty  or  taxes,  and  the  tax  shall  be  levied 
in  such  cases  only  upon  the  excess  of  $7,500  received  by  each  such  person:  And 
provided,  further,  That  any  gift,  legacy,  inheritance,  transfer,  appointment  or 
interest  passing  to  adult  children  and  father  and  mother  which  may  be  valued  at 
less  than  $5,000  shall  not  be  subject  to  any  such  duty  or  taxes,  and  the  tax  shall 
be  levied  in  such  cases  upon  the  excess  of  $5,000  received  by  each  such  person. 
The  term  child  or  children,  wherever  used  in  this  Act,  shall  be  so  construed  to 
include  a  child  or  children  legally  adopted  in  conformity  with  the  laws  of  this 
or  any  other  State. 

"Beneficial  interest,"  wherever  it  appears  in  this  Act  shall  mean  the  net  value 
of  the  estate,  real  and  personal  or  mixed,  devised,  inherited,  or  otherwise  passing 
under  the  provisions  of  this  Act.  After  deducting  all  valid  and  subsisting 
mortgages,  liens,  or  other  debts  due  thereon  by  the  deceased. 

Whenever  the  beneficial  interest  to  any  property  or  income  therefrom  shall  pass 
to  or  for  the  use  of  any  lineal  ancestors,  or  lineal  descendants,  other  than  herein- 
above  specified,  or  to  brothers,  sisters,  uncles,  aunts,  nieces  or  nephews,  or  the 
wife  or  widow  of  a  son,  or  the  husband  of  a  daughter,  in  every  such  case  the 
rate  of  tax  shall  be  as  follows: 

2%  on  any  amount  up  to  and  including  $20,000. 

3%  on  all  sums  in  excess  of  $20,000,  and  not  exceeding  $40,000. 

4%  on  all  sums  in  excess  of  $40,000,  and  not  exceeding  $80,000. 

5%  on  all  sums  in  excess  of  $80,000,  and  not  exceeding  $150,000. 

6%  on  all  sums  in  excess  of  $150,000,  and  not  exceeding  $300,000. 

7%  on  all  sums  in  excess  of  $300,000. 

Provided,  That  any  gift,  legacy,  inheritance,  transfer,  appointment,  or  interest 
passing  to  any  lineal  ancestors,  lineal  descendants  other  than  above  specified, 
and  brothers,  sisters,  uncles,  aunts,  nieces  and  nephews,  and  the  wife  or  widow  of 
a  son,  or  the  husband  of  a  daughter,  which  may  be  valued  at  less  than  $500,  shall 
not  be  subject  to  any  such  duty  or  taxes,  and  the  tax  is  to  be  levied  in  such  cases 
only  upon  the  excess  of  $500  received  by  each  person. 

In  all  other  cases  the  rate  of  tax  shall  be  as  follows: 

4%  on  any  amount  up  to  and  including  the  sum  of  $20,000. 
6%  on  all  sums  in  excess  of  $20,000,  and  not  exceeding  $40,000. 
8%  on  all  sums  in  excess  of  $40,000,  and  not  exceeding  $80,000. 
10%  on  all  sums  in  excess  of  $80,000,  and  not  exceeding  $150,000. 
12%  on  all  sums  in  excess  of  $150,000,  and  not  exceeding  $300,000. 
14%  on  all  sums  in  excess  of  $300,000. 


SOUTH  CAROLINA  1Q89 

Provided,  further,  That  any  gift,  legacy,  inheritance,  transfer,  appointment,  or 
interest  passing  to  any  person  or  corporation  in  the  preceding  and  last  above 
mentioned  class  which  may  be  valued  at  less  than  $200  shall  not  be  subject  to 
any  duty  or  taxes,  and  the  tax  is  to  be  levied  in  such  eases  only  upon  the  excess 
of  $200  received  by  each  person:  Provided,  further,  That  all  property  which 
shall  so  pass  to  or  for  the  use  of  any  educational,  religious,  cemetery,  or  other 
institutions,  societies  or  public  charities  in  this  State,  at,  for  or  upon  trust  for 
any  charitable  purpose  in  this  State,  or  for  the  care  of  cemetery  lots,  or  for  a 
city  or  town  in  this  State  for  public  purposes,  shall  not  be  subject  to  any  tax 
under  the  provisions  of  this  Act. 

An  interest  in  property  less  than  an  estate  in  fee. 

§  2.  When  any  interest  in  property  less  than  an  estate  in  fee  shall  pass  by 
will  or  otherwise,  as  set  forth  in  section  1,  to  one  or  more  beneficiaries,  with 
remainder  to  others,  the  several  interests  of  such  beneficiaries,  except  as  may  be 
entitled  to  exemption  under  the  provisions  of  section  1,  shall  be  subject  to  said 
tax.  The  value  of  the  annuity  or  life  estate  shall  be  determined  by  the  actuaries' 
combined  experience  tables  at  4%  compound  interest,  and  the  value  of  any 
intermediate  estate  less  than  a  fee  shall  be  so  determined  whenever  possible.  The 
value  of  a  remainder  after  such  estate  shall  be  determined  by  subtracting  the 
value  of  the  intermediate  estate  from  the  total  value  of  the  bequest  or  devise. 
Whenever  such  intermediate  estate  or  remainder  is  conditioned  upon  the  happen- 
ing of  a  contingency  or  dependent  upon  the  exercise  of  a  discretion,  so  that  the 
value  of  either  cannot  be  determined  by  the  tables  as  hereinabove  provided,  the 
value  of  the  property  which  is  the  subject  of  the  bequest  shall  be  determined  as 
provided  in  section  13,  and  such  value  having  thus  been  ascertained,  the  South 
Carolina  Tax  Commission  shall,  upon  such  evidence  as  may  be  furnished  by  the 
will  and  the  executor's  statement,  or  by  the  beneficiaries  or  otherwise,  determine 
the  value  of  the  interest  of  the  several  beneficiaries,  and  the  values  thus  deter- 
mined shall  be  deemed  to  be  the  values  of  such  several  interests  for  the  purpose 
of  the  assessment  of  the  tax  except  in  so  far  as  they  shall  be  changed  by  the 
Supreme  Court  upon  appeal.  The  executor  or  any  beneficiary  aggrieved  by  such 
determination  of  the  value  of  any  such  interest  by  the  South  Carolina  Tax  Com- 
mission may  at  any  time  within  thirty  days  after  notice  thereof  appeal  therefrom 
to  the  Supreme  Court,  which  Court  shall  determine  such  value  as  well  as  the 
lawful  tax  thereon.  Whenever  the  identity  of  the  beneficiary  who  is  to  take 
such  a  remainder  is  conditioned  upon  the  happening  of  a  contingency  or  dependent 
upon  the  exercise  of  a  discretion,  the  South  Carolina  Tax  Commission  shall  assess 
the  tax  upon  such  remainder  at  the  highest  rate  and  amount,  which,  on  the  hap- 
pening of  any  of  the  said  contingencies  or  conditions,  or  by  the  exercise  of  such 
discretion,  would  be  possible  under  the  provisions  of  section  1,  and  the  executors 
shall  be  liable  for  such  tax  as  in  other  cases:  Provided,  however,  That  if  at  the 
termination  of  the  intermediate  estate,  such  remainder  or  any  portion  thereof 
shall  pass  to  a  person  or  corporation  which  at  the  time  of  the  death  of  the 
decedent  was  exempt  from  such  tax,  such  person  or  corporation  may  at  any  time 
within  one  year  after  the  termination  of  the  intermediate  estate,  but  not  after- 
wards, apply  to  the  South  Carolina  Tax  Commission  for  an  abatement  of  the 
tax  on  such  remainder  as  provided  in  section  12,  and  the  State  Treasurer,  upon 
the  order  of  the  South  Carolina  Tax  Commission,  shall  repay  the  amount  adjudged 
to  have  been  illegally  exacted  as  provided  in  section  12,  with  interest  thereon  at 
the  rate  of  three  per  cent,  per  annum,  from  the  date  of  the  payment  of  the  tax. 

Bequest  or  legacy  to  an  executor  or  trustee. 

§  3.  If  a  testator  gives,  bequeaths,  or  devises  to  his  executors  or  trustees  any 
property  otherwise  liable  to  said  tax,  in  lieu  of  their  compensation,  the  value 
thereof  in  excess  of  their  lawful  compensation,  as  determined  by  the  Probate 
Court,  upon  the  application  of  any  interested  party  or  the  South  Carolina  Tax 
Commission  shall  nevertheless  be  subject  to  the  provisions  of  this  Act. 

Payment  of  tax. 

§  4.  All  taxes  imposed  by  the  provisions  of  this  Act,  including  taxes  on  inter- 
mediate estates  and  remainders  as  set  forth  in  section  2,  shall  be  due  and  payable 

69 


1090  THE  STATE  STATUTES 

to  the  State  Treasurer  by  the  executors,  administrators  or  trustees,  at  the 
expiration  of  one  year  after  the  date  of  their  qualification.  If  the  Probate  Court, 
or  other  court  having  jurisdiction  has  ordered  the  executor  or  administrator  to 
retain  funds  to  satisfy  a  claim  of  a  creditor,  the  payment  of  the  tax  may  be 
suspended  by  the  court  to  await  the  disposition  of  such  claim.  If  the  taxes  are 
not  paid  when  due,  interest  at  the  rate  of  seven  per  cent,  per  annum  for  the  first 
year  and  ten  per  cent,  for  subsequent  years  shall  be  charged  and  collected  from 
the  time  the  same  became  payable;  and  said  taxes  and  interest  thereon  shall  be 
and  remain  a  lien  on  the  property  subject  to  the  taxes  until  the  same  are  paid. 

Executor,  administrator,  or  trustee  to  deduct  tax. 

§  5.  An  executor,  or  administrator,  or  trustee  holding  property  subject  to 
said  tax  shall  deduct  the  tax  therefrom,  or  collect  it  from  the  legatee  or  person 
entitled  to  said  property,  and  he  shall  not  deliver  property  or  a  specific  legacy 
subject  to  the  said  tax  until  he  has  collected  the  tax  thereon.  When  a  specific 
bequest  of  personal  property  other  than  money  is  subject  to  a  tax  under  the 
provisions  of  this  Act,  and  the  legatee  neglects  or  refuses  to  pay  the  tax  upon 
demand,  the  executor  or  trustee  may,  upon  such  notice  as  the  Probate  Court  may 
direct,  be  authorized  to  sell  such  property,  or  if  the  same  can  be  divided,  such 
portion  thereof  as  may  be  necessary,  and  shall  deduct  the  tax  from  the  proceeds 
of  such  sale,  and  shall  account  to  the  legatee  for  the  balance,  if  any,  of  such 
proceeds,  in  lieu  of  the  property.  An  executor  or  administrator  shall  collect  taxes 
due  upon  land  which  is  subject  to  tax  under  the  provisions  hereof  from  the  heirs 
or  devisees  entitled  thereto,  and  he  may  be  authorized  to  sell  said  land  according 
to  the  provisions  of  section  8,  if  they  refuse  or  neglect  to  pay  said  tax.  When  a 
conveyance  made  by  a  decedent  during  his  lifetime  is  subject  to  said  tax,  and 
the  property  thus  conveyed,  being  personal  property,  is  without  the  State  or  is 
removed  from  the  State  before  the  tax  is  paid,  such  tax  shall  become  a  lien  upon 
all  the  property  of  the  decedent,  and  shall  be  chargeable  as  an  expense  of 
administration ;  and  the  executor  or  administrator  shall  collect  taxes  due  on 
account  of  such  conveyance  and  may  be  authorized  to  sell  any  property  subject 
to  the  lien  of  such  tax,  for  the  payment  thereof,  as  in  other  cases. 

If  a  legacy  is  payable  out  of  real  estate. 

|  6.  If  a  legacy  subject  to  said  tax  is  charged  upon  or  payable  out  of  real 
estate,  the  heir  or  devisee  before  paying  it  shall  deduct  said  tax  therefrom  and 
pay  it  to  the  executor,  administrator  or  trustee,  and  the  tax  shall  remain  a  charge 
upon  said  real  estate  until  it  is  paid.  Payment  thereof  may  be  enforced  by  the 
executor,  administrator  or  trustee  in  the  same  manner  as  the  payment  of  the 
legacy  itself  could  be  enforced. 

Executor's  duties  if  property  less  than  an  estate  in  fee  is  devised  or  bequeathed. 

§  7.  When  any  interest  in  property  less  than  an  estate  in  fee  is  devised  or 
bequeathed,  to  one  or  more  beneficiaries  with  remainder  to  others,  and  the  interest 
of  one  or  more  of  the  beneficiaries  is  subject  to  said  tax,  the  executor  shall 
deduct  the  tax  upon  such  taxable  interests  from  the  whole  property  thus  devised 
or  bequeathed,  and  whenever  property  other  than  money  is  so  devised  or 
bequeathed,  he  may,  unless  the  taxes  upon  all  the  taxable  interests  are  paid  when 
due  by  the  beneficiaries,  be  authorized  to  sell  such  property  or  such  portion 
thereof  as  may  be  necessary,  as  provided  in  sections  5  and  8,  and  having  deducted 
the  unpaid  taxes  on  such  taxable  interests  from  the  proceeds  of  such  sale,  he  shall 
account  for  the  balance  in  lieu  of  the  property  sold  as  in  other  cases. 

Court  may  authorize  sale  of  real  estate. 

§  8.  The  Probate  Court  may  authorize  executors,  administrators  and  trustees 
to  sell  the  real  estate  of  a  decedent  for  the  payment  of  said  tax  in  the  aame 
manner  as  it  may  authorize  them  to  sell  real  estate  for  the  payment  of  debts. 


SOUTH  CAROLINA  W91 

Duties  of  executors  and  administrators — statements  to  be  prepared. 

§  9.  Every  administrator  shall  prepare  a  statement  in  duplicate,  showing,  as 
far  as  can  be  ascertained,  the  names  of  all  the  heirs  at  law,  and  every  executor 
shall  prepare  a  like  statement,  showing  the  names  of  all  legatees  and  devisees 
named  in  the  will,  or  entitled  to  take  thereunder,  and  stating  whether  or  not 
the  same  were  living  at  the  time  of  the  decedent's  death,  which  said  statements 
shall  also  show  the  relationship  to  the  decedent  and  ages  of  all  heirs  at  law  or 
legatees  and  devisees,  and  the  age  at  the  time  of  the  death  of  the  decedent  of 
all  legatees  and  devisees  to  whom  property  is  bequeathed  or  devised  for  life,  or 
for  a  term  of  years,  or  subject  to  a  contingency,  or  the  exercise  of  a  discretion, 
and  shall  file  the  same  with  the  Probate  Court  at  the  time  of  his  appointment. 
Letters  testamentary  or  letters  of  administration  shall  not  be  issued  by  the 
Probate  Court  to  any  executor  or  administrator  until  he  has  filed  such  statement 
in  duplicate.  An  inventory  and  appraisal  under  oath  of  every  estate,  in  the 
form  prescribed  by  the  statute,  shall  be  filed  in  the  Probate  Court  by  the 
executor,  administrator,  or  trustee  within  three  months  after  his  appointment.  If 
he  neglects  or  refuses  to  comply  with  any  of  the  requirements  of  this  section,  he 
shall  be  liable  to  a  penalty  of  not  more  than  one  thousand  dollars,  which  shall  be 
recovered  by  the  South  Carolina  Tax  Commission  for  the  use  of  the  State,  and 
an  action  for  the  recovery  thereof  may  be  brought  in  any  court  of  competent 
jurisdiction  where  the  estate  is  being  administered.  The  Probate  Court,  after  a 
hearing,  and  such  notice  as  the  said  court  may  require,  may  remove  said  executor 
or  administrator,  and  appoint  another  person  executor  or  administrator,  as  the 
case  may  be,  and  the  probate  judge  shall  notify  the  South  Carolina  Tax  Com- 
mission within  thirty  days  after  the  expiration  of  said  three  months  of  the 
failure  of  any  executor,  administrator  or  trustee  to  file  such  inventory  and 
appraisal  in  his  office. 

Duties  of  probate  judge — papers  to  be  sent  to  the  Tax  Commission — fees. 

§  10.  The  probate  judge  shall,  within  thirty  days  after  it  is  filed,  send  to  the 
South  Carolina  Tax  Commission,  by  mail,  one  copy  of  every  statement  filed  with 
him  by  executors  and  administrators,  as  provided  in  section  9,  a  copy  of  every  will 
admitted  to  probate,  and  a  copy  of  the  inventory  and  appraisal  of  every  estate, 
and  he  shall  in  like  manner  send  to  the  South  Carolina  Tax  Commission  a  copy 
of  every  account  of  an  executor  or  administrator  within  seven  days  after  it  is 
filed,  but  the  South  Carolina  Tax  Commission  shall  have  power  to  pass  general  or 
special  rules  or  orders  as  may  dispense  with  the  requirements  that  the  probate 
judge  send  to  it  copies  of  any  or  all  papers  in  case  it  is  manifest  that  no  tax 
will  be  payable  under  the  terms  of  this  Act.  The  probate  judge  shall  also  furnish 
copies  of  papers  and  such  information  as  to  the  records  and  files  in  his  office,  in 
such  form  as  the  South  Carolina  Tax  Commission  may  require.  A  refusal  or 
neglect  by  the  probate  judge  to  so  send  such  copies,  or  to  furnish  such  informa- 
tion, shall  be  a  breach  of  his  official  bond.  The  fees  of  the  probate  judge  for 
copies  furnished  under  the  provisions  of  this  section  shall  be  ten  cents  per 
hundred  words,  and  shall  be  charged  against  the  estate  as  other  fees  allowed  the 
probate  judge.  And  the  probate  judge,  or  other  judge  exercising  probate  juris- 
diction, shall,  also,  be  paid,  in  addition  to  his  other  fees  and  salary  received  by 
him,  fees  according  to  the  following  schedule  for  each  estate  settled: 

On  the  first  $100.00  of  tax  collected 5% 

Above  $100.00  and  up  to  $1,000.00 2% 

Above  $1,000.00  and  up  to  $10,000.00 1%% 

Above  $10,000.00  and  up  to  $50,000.00 1% 

Above  $50,000.00  and  up  to  $100,000.00 84  of  1% 

Above  $100,000.00  and  up  to  $300,000.00 %  of  1% 

Above  $300,000.00 %  of  1% 

Provided,  That  when  the  total  fees  received  by  the  probate  judge  under  this 
schedule  shall  in  any  one  year  exceed  one  thousand  dollars,  the  State  Treasurer 
shall  retain  three-fourths  of  the  excess  above  one  thousand  dollars,  and  shall  turn 
such  excess  into  the  general  funds  of  the  treasury.  That  all  fees  allowed  under 


1092  THE  STATE  STATUTES 

this  schedule  shall  be  paid  out  of  the  taxes  collected  by  the  State  Treasurer 
immediately  upon  the  receipt  thereof,  and  the  receipt  of  the  officer  entitled 
thereto  shall  be  a  sufficient  voucher  of  the  State  Treasurer  for  paying  the  same. 

Duty  of  executor,  administrator,  or  trustee  to  report  real  estate  transfers. 

§  11.  If  real  estate  of  a  decedent  so  passes  to  another  person  as  to  become 
subject  to  said  tax,  his  executor,  administrator  or  trustee  shall  inform  the  South 
Carolina  Tax  Commission  thereof  within  six  months  after  his  appointment,  or  if 
the  fact  is  not  known  to  him  within  that  time,  then  within  one  month  after  the 
fact  becomes  known  to  him. 

Tax  Commission  to  assess  the  tax — certain  small  bequests  may  be  exempted. 

§  12.  The  South  Carolina  Tax  Commission  shall  determine  the  amount  of  all 
taxes  due  and  payable  under  the  provisions  of  this  Act,  and  shall  certify  the 
amount  so  due  and  payable  to  the  executor  or  administrator,  if  any,  otherwise 
to  the  person  or  persons  by  whom  the  tax  is  payable;  but  in  the  determination 
of  the  amount  of  any  tax,  the  said  South  Carolina  Tax  Commission  shall  not  be 
required  to  consider  any  payments  on  account  of  debts  or  expenses  of  admin- 
istration which  have  not  been  allowed  by  the  court  having  jurisdiction  of  the  said 
estate. 

The  amount  due  upon  the  claim  of  any  creditor  against  the  estate  of  a  deceased 
person  arising  under  a  contract  made  after  the  passage  of  this  Act,  if  payable 
by  the  terms  of  such  contract  at  or  after  the  death  of  the  deceased,  shall  be 
subject  to  the  same  tax  imposed  by  this  Act  upon  a  legacy  of  like  amount.  The 
value  of  legacies  or  distributive  shares  in  the  estates  of  deceased  persons  for  the 
purpose  of  the  legacy  or  succession  tax  shall  not  be  diminished  by  reason  of  any 
claim  against  the  estate  based  upon  such  contract  in  favor  of  the  person  entitled 
to  such  legacies  or  distributive  shares,  except  in  so  far  as  it  may  be  shown 
affirmatively  by  competent  evidence  that  such  claim  was  legally  due  and  payable 
in  the  lifetime  of  the  decedent.  Payment  of  the  amount  so  certified  shall  be  a 
discharge  of  the  tax.  Whenever  a  specific  bequest  of  household  furniture,  wear- 
ing apparel,  personal  ornaments,  or  similar  articles  of  small  value  is  subject  to  a 
tax  under  the  provisions  of  this  Act,  the  South  Carolina  Tax  Commission,  in  its 
discretion,  may  abate  such  tax  if,  in  its  opinion,  the  tax  is  not  of  sufficient 
amount  to  justify  the  labor  and  expense  of  its  collection. 

If  no  inventory  filed  or  Tax  Commission  is  not  satisfied  with  the  inventory — 

procedure  for  appraisal. 

§  13.  If  an  executor  or  administrator  shall  fail  to  file  an  inventory  and 
appraisal  in  the  probate  court,  as  provided  in  section  9  of  this  Act,  or  if  the 
South  Carolina  Tax  Commission  is  not  satisfied  with  the  inventory  and  appraisal 
which  is  filed,  the  South  Carolina  Tax  Commission  may  employ  a  suitable  person 
to  appraise  the  property,  and  the  executor  or  administrator  shall  show  the 
property  of  decedent  to  such  appraiser  upon  demand,  and  shall  make  and  sub- 
scribe his  oath  that  the  property  thus  shown  includes  all  the  property  of  the 
decedent  that  has  come  to  his  knowledge  or  possession.  Such  appraiser  shall 
prepare  an  inventory  of  said  property,  and  shall  appraise  it  at  its  actual  market 
value  at  the  time  of  the  decedent's  death,  and  shall  return  such  inventory  and 
appraisal  to  the  South  Carolina  Tax  Commission.  The  expenses  of  such  appraisal 
shall  be  a  charge  upon  the  estate  of  the  decedent  as  an  expense  of  administration 
in  all  cases  where  an  inventory  and  appraisal  have  not  been  filed,  as  provided  in 
section  9,  otherwise  the  expense  shall  be  paid  by  the  South  Carolina  Tax  Com- 
mission. An  executor  or  administrator  who  shall  neglect  or  refuse  to  show  the 
property  of  the  decedent  to  such  appraiser  upon  demand,  and  to  make  and  sub- 
scribe such  oath,  shall  be  liable  to  the  same  penalty  as  for  a  violation  of  the 
provision  of  said  section  9.  Said  tax  shall  be  assessed  upon  the  actual  market 
value  of  the  property  at  the  time  of  the  decedent's  death.  Such  value  shall  be 
determined  by  the  South  Carolina  Tax  Commission,  and  notified  by  it  to  the 
person  or  persons  by  whom  the  tax  is  payable,  and  such  determination  shall  be 
final  unless  the  value  so  determined  shall  be  reduced  by  proceedings  as  herein 
provided.  Upon  the  application  of  any  party  interested  in  the  succession,  or  of 
the  executor,  administrator  or  trustee,  made  at  any  time  within  three  months  after 


SOUTH  CAROLINA  1093 

notice  of  such  determination,  the  probate  judge  shall  appoint  three  disinterested 
appraisers,  who,  first  being  sworn,  shall  appraise  such  property  at  its  actual 
market  value,  as  of  the  date  of  the  death  of  the  decedent,  and  shall  make  return 
thereof  to  said  court.  Such  return,  when  accepted  by  said  court,  shall  be  final: 
Provided,  That  any  party  aggrieved  by  such  appraisal  shall  have  an  appeal  direct 
to  the  Supreme  Court  upon  matters  of  law.  One-half  of  the  fees  of  said 
appraisers,  as  determined  by  the  judge  of  the  said  court,  shall  be  paid  by  the 
South  Carolina  Tax  Commission,  and  one-half  of  said  fees  shall  be  paid  by  the 
other  party  or  parties  to  the  said  proceedings. 

Appeal  from  the  Tax  Commission's  assessment. 

§  14.  An  executor,  administrator,  trustee,  devisee,  legatee,  distributee,  or 
grantee,  who  is  aggrieved  by  the  assessment  of  any  tax  by  the  South  Carolina 
Tax  Commission,  as  provided  in  section  12,  may  at  any  time  within  thirty  days 
after  notice  of  such  assessment  appeal  therefrom  to  the  Supreme  Court,  which 
court  shall  hear  and  determine  all  questions  relative  to  said  tax,  and  the  South 
Carolina  Tax  Commission  shall  be  the  respondent,  and  shall  represent  the  State 
in  any  such  proceedings:  Provided,  That  within  thirty  days  written  notice  of 
intention  to  appeal  shall  be  served  upon  the  South  Carolina  Tax  Commission,  and 
thereafter  the  case  for  appeal  shall,  so  far  as  may  be  practicable,  be  perfected 
and  filed  in  the  Supreme  Court  in  the  manner  now  provided  by  law  for  appeals 
from  the  Circuit  Court  to  the  Supreme  Court:  Provided,  further,  That  in  case  the 
appellant  and  respondent  are  unable  to  agree  what  the  case  for  appeal  shall  con- 
tain, any  justice  of  the  Supreme  Court  shall  have  jurisdiction  to  pass  any  order 
or  orders  to  settle  the  same. 

If  no  will  and  no  petition  for  administration. 

§  15.  If  upon  the  decease  of  a  person  leaving  an  estate  liable  to  a  tax  under 
the  provisions  of  this  Act,  a  will  disposing  of  such  estate  is  not  offered  for  pro- 
bate, or  an  application  for  administration  made  within  four  months  after  such 
decease,  the  proper  probate  court,  upon  application  by  the  South  Carolina  Tax 
Commission,  shall  appoint  an  administrator. 

Payment  of  tax  necessary  before  discharge  of  administrator  or  executor — what 
proof  of  payment  required. 

§  16.  No  final  account  of  an  executor,  administrator,  or  trustee  shall  be  allowed 
by  the  probate  court  until  the  certificate  of  the  State  Treasurer  has  been  filed  in 
said  court,  that  all  taxes  imposed  by  the  provisions  of  this  Act  upon  any  property 
or  interest  therein  belonging  to  the  estate  to  be  included  in  said  account,  and 
already  payable,  have  been  paid,  and  that  all  taxes  which  may  become  due  on 
said  property  or  interest  therein  to  be  included  in  said  account  have  been  paid  or 
settled  as  hereinbefore  provided.  The  certificate  of  the  State  Treasurer  as  to 
the  amount  of  tax  and  his  receipt  for  the  amount  therein  certified  shall  be  con- 
clusive as  to  the  payment  of  the  tax  to  the  extent  of  such  certification:  Pro- 
vided, That  the  said  certificate  of  the  State  Treasurer  shall  not  be  required  in  any 
case  where  the  probate  judge  shall  ascertain  that  there  is  manifestly  no  tax  due 
under  the  provisions  of  this  Act. 

After  one  year  Tax  Commission  may  require  production  of  papers  in  Columbia. 
§  17.  At  any  time  after  the  expiration  of  one  year  from  the  date  of  the 
appointment  of  the  executor  or  administrator  of  any  estate  upon  which  the  tax 
has  not  been  determined  as  provided  in  section  12,  or  upon  which  no  tax  has 
been  paid,  the  South  Carolina  Tax  Commission  may  require  such  executor  or 
administrator,  or  any  person  or  corporation  interested  in  the  succession,  to  appear 
at  the  office  of  the  South  Carolina  Tax  Commission,  at  such  time  as  the  South 
Carolina  Tax  Commission  may  designate,  and  then  and  there  to  produce,  for  the 
use  of  the  South  Carolina  Tax  Commission  in  determining  whether  or  not  the 
estate  is  subject  to  said  tax  and  the  amount  of  such  tax,  if  any,  all  books,  papers 
or  securities  which  may  be  within  the  possession  or  within  the  control  of  such 
executor,  administrator  or  beneficiary  relating  to  such  estate  or  tax,  and  to 
furnish  such  other  information  relating  to  the  same  as  he  may  be  able  and  the 
South  Carolina  Tax  Commission  may  require.  Whenever  the  South  Carolina  Tax 


1094  THE  STATE  STATUTES 

Commission  shall  desire  the  attendance  of  an  executor,  administrator  or  bene- 
ficiary as  herein  provided,  it  shall  issue  a  summons,  stating  the  time  when  such 
attendance  is  required,  and  shall  transmit  the  same  by  registered  mail  or  by 
process  now  provided  by  law  to  such  person  or  corporation  fourteen  days  at 
least  before  the  date  when  such  person  or  corporation  is  required  to  appear.  If 
a  person  or  corporation  receiving  such  notice  neglects  to  attend  or  to  give 
attendance  so  long  as  may  be  necessary  for  the  purpose  for  which  the  summons 
was  issued,  or  refuses  to  produce  such  books,  papers  or  securities,  or  to  furnish 
such  information,  such  person  or  corporation  shall  be  liable  to  a  penalty  of 
$250.00  for  each  offense,  which  shall  be  recovered  by  the  South  Carolina  Tax 
Commission  for  the  use  of  the  State.  The  South  Carolina  Tax  Commission  may 
commence  an  action  for  the  recovery  of  any  of  said  taxes  at  any  time  after  the 
same  became  payable;  and  also  whenever  the  judge  of  probate  certifies  to  it  that 
the  final  account  of  an  executor,  administrator  or  trustee  has  been  filed  in  such 
court,  and  that  the  settlement  of  the  estate  is  delayed  because  of  the  non-pay- 
ment of  said  tax.  The  probate  court  shall  so  certify  upon  the  application  of  any 
heir,  legatee,  or  other  person  interested,  and  may  extend  the  time  of  payment  of 
said  tax  whenever  the  circumstances  of  the  case  require. 

Executor  or  administrator  appointed  for  a  non-resident. 

§  18.  When  real  or  personal  estate  within  the  State,  or  any  interest  therein, 
belonging  to  a  person  who  is  not  an  inhabitant  of  the  State,  shall  pass  by  will  or 
otherwise  so  that  it  may  be  subject  to  tax  under  the  provisions  of  section  1,  and 
an  executor  or  administrator  of  the  estate  of  said  decedent  is  appointed  by  a 
probate  court  of  this  State  upon  ancillary  proceedings,  or  otherwise,  such 
executor  or  administrator  shall,  for  the  purposes  of  this  Act,  have  the  same 
powers  and  be  subject  to  the  same  duties  and  liabilities  with  reference  to  such 
estate  as  though  the  decedent  had  been  a  resident  of  this  State. 

Limitations  upon  the  transfers  of  stocks,  bonds,  etc.,  held  by  safe  deposit  com- 
panies, corporations,  etc. 

§  19.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer 
any  stock  or  obligations  in  this  State  standing  in  the  name  of  the  decedent,  or 
in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  State 
Treasurer  on  the  transfer  thereof.  No  safe  deposit  company,  trust  company, 
corporation,  bank,  or  other  institution,  person  or  persons  having  in  possession  or 
under  control,  securities,  deposits  or  other  assets  belonging  to  or  standing  in  the 
name  of  a  decedent  who  was  a  resident  or  non-resident,  or  belonging  to  or  stand- 
ing in  the  joint  names  of  such  decedent  and  one  or  more  persons,  including  the 
shares  of  the  capital  stock  of,  or  other  interest  in,  the  safe  deposit  company, 
trust  company,  corporation,  bank,  or  other  institution  making  the  delivery  or 
transfer  herein  provided,  shall  deliver  or  transfer  the  same  to  the  executors, 
administrators  or  legal  representatives  of  said  decedent,  or  to  the  survivor  or 
survivors  when  held  in  the  joint  names  of  a  decedent  and  one  or  more  persons,  or 
upon  their  order  or  request,  unless  notice  of  the  time  and  place  of  such  intended 
delivery  or  transfer  be  served  upon  the  Soutli  Carolina  Tax  Commission  at  least 
ten  days  prior  to  said  delivery  or  transfer;  nor  shall  any  safe  deposit  company, 
trust  company,  corporation,  bank  or  other  institution,  person  or  persons,  deliver 
or  transfer  any  securities  or  deposits  or  other  assets  belonging  to  or  standing  in 
the  name  of  a  decedent,  or  belonging  to  or  standing  in  the  joint  names  of  a 
decedent  and  one  or  more  persons,  including  the  shares  of  the  capital  stock,  or 
other  interests  in,  the  safe  deposit  company,  trust  company,  corporation,  bank  or 
other  institution  making  the  delivery  or  transfer,  without  retaining  a  sufficient 
portion  or  amount  thereof  to  pay  any  tax  or  interest  which  may  thereafter  be 
assessed  on  account  of  the  delivery  or  transfer  of  such  securities,  deposits  or 
other  assets,  including  the  shares  of  the  capital  stock  of,  or  other  interests  in,  the 
safe  deposit  company,  trust  company,  corporation,  bank  or  other  institution 
making  the  delivery  or  transfer  under  the  provisions  of  this  Act,  unless  the  South 
Carolina  Tax  Commission  consent  thereto  in  writing.  And  it  shall  be  lawful  for 
the  South  Carolina  Tax  Commission  personally  or  by  representatives,  to  examine 
said  securities,  deposits,  or  assets  at  the  time  of  such  delivery  or  transfer. 
Failure  to  serve  such  notice,  or  failure  to  allow  such  examination,  or  failure  to 
retain  a  sufficient  portion  or  amount  to  pay  such  tax  and  interest,  as  herein  pro- 


SOUTH  CAROLINA  1Q95 

vided,  shall  render  said  safe  deposit  company,  trust  company,  corporation,  bank 
or  other  institution,  person  or  persons,  liable  to  the  payment  of  the  amount  of 
the  tax  and  interest  due  or  thereafter  to  become  due  upon  said  securities,  deposits, 
or  other  assets,  including  the  shares  of  the  capital  stock  of  or  other  interest  in, 
the  safe  deposit  company,  trust  company,  corporation,  bank,  or  other  institution 
making  the  delivery  or  transfer,  and  in  addition  thereto  a  penalty  of  one  thousand 
dollars;  and  the  payment  of  such  tax  and  interest  thereon,  or  of  the  penalty 
above  prescribed,  or  both,  may  be  enforced  in  an  action  brought  by  the  South 
Carolina  Tax  Commission  in  any  court  of  competent  jurisdiction. 

In  the  absence  of  administration  in  this  State  upon  the  estate  of  a  non-resident. 
§  20.  In  the  absence  of  administration  in  this  State  and  the  estate  of  a  non- 
resident, the  South  Carolina  Tax  Commission  may,  at  the  request  of  an  executor 
or  administrator  duly  appointed  and  qualified  in  the  State  of  the  decedent's  domi- 
cile, or  at  the  request  of  a  devisee,  legatee,  distributee,  or  of  a  grantee  under  a 
conveyance  made  during  the  grantor's  lifetime,  and  upon  satisfactory  evidence 
furnished  it  by  such  executor,  administrator,  devisee,  legatee,  distributee  or 
grantee  or  otherwise,  determine  whether  or  not  any  estate  of  said  decedent  within 
this  State  is  subject  to  tax  under  the  provisions  of  this  Act,  and  if  so,  may 
determine  the  amount  of  such  tax  and  adjust  the  same  with  such  executor, 
administrator,  devisee,  legatee,  distributee,  grantee  or  other  legal  representative, 
and  for  that  purpose  may  appoint  an  appraiser  to  appraise  said  property  as  pro- 
vided in  section  13,  and  the  expense  of  such  appraisal  shall  be  a  charge  upon  the 
said  estate  in  addition  to  the  tax.  The  South  Carolina  Tax  Commission's  cer- 
tificate as  to  the  amount  of  such  tax  and  the  State  Treasurer's  receipt  for  the 
amount  therein  certified  may  be  filed  in  the  probate  court  having  jurisdiction, 
and  when  so  filed  shall  be  conclusive  evidence  of  the  payment  of  the  tax  to  the 
extent  of  the  certification,  as  provided  in  section  16.  Whenever  in  such  a  case 
the  tax  is  not  adjusted  within  four  months  after  the  death  of  the  decedent,  the 
proper  probate  court,  upon  application  of  the  South  Carolina  Tax  Commission, 
shall  appoint  an  administrator  in  this  State  as  provided  in  section  15. 

Tax  Commission  may  appear  in  court — notice  of  proceedings  in  court. 

§  21.  The  South  Carolina  Tax  Commission  shall  be  entitled  to  appear  in  any 
proceeding  in  any  court  in  which  the  decree  may  in  any  way  affect  the  tax;  and 
no  decree  in  any  such  proceeding,  or  appeal  therefrom  shall  be  binding  upon  the 
State  unless  personal  notice  of  such  proceeding  shall  have  been  given  to  the 
South  Carolina  Tax  Commission. 

Tax  Commission  to  provide  books  and  blanks. 

|  22.  The  South  Carolina  Tax  Commission  shall  provide  the  judges  of  probate 
of  the  State  with  such  books  and  blanks  as  are  requisite  for  the  execution  of 
this  Act. 

Tax  Commission  to  certify  amount  of  tax  to  State  Treasurer. 

§  23.  Whenever  the  South  Carolina  Tax  Commission  shall  determine  the  amount 
of  any  tax  due  and  payable  under  the  provisions  of  this  Act,  it  shall  certify  the 
same  to  the  State  Treasurer,  and  such  certification  shall  be  full  authority  for 
the  State  Treasurer  collecting  and  receiving  the  amount  of  such  tax,  and  upon 
the  receipt  of  the  amount  of  such  tax,  the  State  Treasurer  shall  issue  his  receipt 
to  the  executor,  administrator,  or  other  interested  person  paying  the  same. 

Tax  Commission  to  institute  proceedings  to  collect  taxes  unpaid. 

§  24.  Whenever  it  appears  that  any  tax  is  due  and  unpaid  under  the  pro- 
visions of  this  Act,  and  the  persons,  institutions,  or  corporations  liable  for  said 
tax  have  refused  or  neglected  to  pay  the  same,  it  shall  be  the  duty  of  the  South 
Carolina  Tax  Commission  to  cause  to  be  instituted  in  the  name  of  the  State  of 
South  Carolina,  in  any  court  of  competent  jurisdiction,  such  action  or  actions, 
proceeding  or  proceedings,  as  may  be  necessary  to  enforce  the  lien  of  said  tax 
and  the  collection  thereof;  and  if  there  be  any  grounds  for  same,  and  it  is  deemed 
necessary  by  the  South  Carolina  Tax  Commission,  to  secure  an  injunction  against 
the  transfer  or  delivery  of  property  subject  to  the  lien  for  the  payment  of  the 


1096  THE  STATE  STATUTES 

inheritance  tax.  And  the  remedy  herein  provided  for  the  collection  of  said  tax 
shall  be  deemed  and  construed  to  be  in  addition  to  any  other  remedies  for  the 
collection  of  taxes  that  may  now  or  hereafter  exist.  And  whenever  the  South 
Carolina  Tax  Commission  in  any  action  instituted  by  it  recovers  taxes  under  the 
provisions  of  this  Act,  the  amount  of  the  judgment  so  recovered  shall  be  paid  to 
the  South  Carolina  Tax  Commission,  and  the  said  South  Carolina  Tax  Commission 
shall  turn  over  to  the  State  Treasurer  all  of  said  taxes  after  paying  the  costs, 
disbursements  and  expenses  of  such  suit. 

Effective  date. 

§  25.  This   Act   shall   go   into   effect    immediately   upon   its    approval    by   the 
Governor. 

Approved  February  23,  1922. 


SOUTH  DAKOTA 


1097 


. 

<fl 
- 


H 
S    Q 

S3       fc 

S       « 
CO 

OQ      H 

3  i 

.a  fe 

J      O 

e   3 

{3 

« 


1 

i 

S 

f*  o§ 
Oa     » 

Four  Timi 
Primary 
Rates 

f 

f 

M 

1-1 

* 

c 

* 

S 

a 

§ 

1 

B    ba 

o 
£ 

Sri 

|]pN 

* 

C«J 

O 

* 

a 

f 

5 

r 

1         * 

B 

c 

b 

o 

£ 

"o 

q 

SB 

_o 

1 

IK' 

ts 

53    S 

"      SP 

1 

•a    -  o    - 

PC-" 

^ 

^ 

# 

^ 

f 

§55.^11. 

I'CfS 

M 

*• 

e 

00 

w 

a 

1 

"^  Sjf 

O  ii 

--"a* 

go       .S3  UQ 

1"? 

eg  a- 

11 

f 

f 

CO 

f 

f 

H 

»i 

1    s 

ill 

!i- 

11 

a 

s 

0 

8 

•< 

o" 

^I18 

s*l| 

•§2-a» 

I 

I 

I1!? 

ls| 

S 

1^ 

K 

V  _H  *e 

^5 

s 

"S-d 

11 
"1 

p 

1d 
i'l 

L,    O    <U 

i|l 

*S  ^  o 
"50*0 

i 

O   55 

lii 

I-"" 

S   _*• 
M*?  8 

* 

"si* 

•d|J 

^  §  ° 

"S 

a 
o 

1 
1 

5 

i 

£ 

73 
V 

"S 

.1 

"8 

1 

1 
s 

a 

1 

SI 

a* 

e^ 

S'rt 

3 

ai 

to  u 
3  o 

pa 

•2  <u 

?j 
_g|x 
g'S  o 

M 

fell 

.2  0  -w 

•is-2 

"OfH 

S  o  ».*: 
..  S  e 

-  •*->  a; 

sl-si 

!«*« 

Persons  in  other  d 
lateral  consanguir 
in  blood  and  bod 
corporate. 

•< 

|H 

«) 

CO 

«* 

10 

1098  THE  STATE  STATUTES 

THE  STATUTE. 
REVISED  CODE  OF  SOUTH  DAKOTA,  1919,  SECTIONS  6827  TO  6871. 

§  6827.  Taxable  transfers.  A  tax  shall  be  imposed  upon  any  transfer  of 
property,  real,  personal  or  mixed,  or  any  interest  therein  or  income  therefrom,  in 
trust  or  otherwise,  to  any  person,  association  or  corporation  except  a  county, 
township  or  municipal  corporation,  within  the  State,  for  strictly  county,  township 
or  municipal  purposes,  in  the  following  cases: 

1.  When  the  transfer  is  by  will  or  by  intestate  laws  of  this  State  from  any 
person  dying  possessed  of  the  property  while  a  resident  of  the  State. 

2.  When  a  transfer  is  by  will  or  intestate  law,  of  property  within  the  State  or 
within  its  jurisdiction  and  the  decedent  was  a  nonresident  of  the  State  at  the 
time  of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  nonresident 
when  such  nonresident's  property  is  within  this  State,  or  within  its  jurisdiction, 
by  deed,  grant,  bargain,  sale  or  gift,  made  in  contemplation  of  the  death  of  the 
grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession  or  enjoyment  at 
or  after  such  death. 

Such  tax  shall  be  imposed  when  any  such  person  or  corporation  becomes  ben£- 
ficially  entitled  in  possession  or  expectancy  to  any  property  or  the  income  thereof, 
by  any  such  ffansfer,  whether  made  before  or  after  the  taking  effect  of  this  code. 
Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment  derived 
from  any  disposition  of  property  made  either  before  or  after  the  taking  effect 
of  this  code,  such  appointment  when  made  shall  be  deemed  a  transfer  taxable 
under  the  provisions  of  this  chapter  in  the  same  manner  as  though  the  property 
to  which  such  appointment  relates  belonged  absolutely  to  the  donee  of  such  power 
and  had  been  bequeathed  or  devised  to  such  donee  by  will;  and  whenever  any 
person  or  corporation  possessing  such  power  of  appointment  so  derived  shall  omit 
or  fail  to  exercise  the  same  within  the  time  provided  therefor,  in  whole  or  in 
part,  a  transfer  taxable  under  the  provisions  of  this  chapter  shall  be  deemed  to 
take  place  to  the  extent  of  such  omission  or  failure  in  the  same  manner  as  though 
the  person  or  corporation  thereby  becoming  entitled  to  the  possession  or  enjoy- 
ment of  the  property  to  which  such  power  related  had  succeeded  thereto  by  a 
will  of  the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect  at  the 
time  of  such  omission  or  failure. 

§  6828.  Lien  created  and  discharged.  Such  tax  shall  be  and  remain  a  lien 
upon  the  property  passed  or  transferred  until  paid,  except  where  the  transfer  is 
by  deed  or  grant  in  the  hands  of  a  bona  fide  purchaser  or  incumbrancer  without 
notice.  In  such  case  a  certified  copy  of  the  application  for  probate  of  the  will 
or  estate  of  the  decedent,  or  a  certified  copy  of  the  application  for  a  determination 
of  the  inheritance  taxes,  may  be  recorded  in  the  office  of  the  register  of  deeds 
of  the  county  where  any  real  property  described  therein  is  situated,  which  record 
shall  thereafter  be  deemed  to  be  notice  of  such  taxes  to  subsequent  purchasers 
and  incumbrancers  of  such  real  property,  which  record  may  be  discharged  by 
recording  the  certificate  of  the  county  treasurer  to  that  effect,  or  by  recording  a 
certified  copy  of  the  order  of  the  County  Court  to  that  effect.  The  person  to 
whom  the  property  passes  or  is  transferred  and  all  administrators,  executors  and 
the  trustees  of  every  estate  shall  be  liable  for  any  and  all  such  taxes  until  the 
same  shall  have  been  paid  as  hereinafter  directed. 

§  6829.  Tax  computed  upon  full  value  in  excess  of  exemptions.  The  tax  so 
imposed  shall  be  computed  upon  the  true  and  full  market  value  in  money  of  such 
property  less  any  indebtedness,  except  expenses  of  administration,  chargeable 
against  such  property,  and  at  the  rate  hereinafter  prescribed  and  only  upon  the 
amount  in  excess  of  the  exemptions  hereinafter  granted;  provided,  that  in  deter- 
mining the  true  and  full  market  value  in  money  of  such  property  no  deductions 
shall  be  made  by  reason  of  any  part  of  the  property  being  claimed,  used  or 
occupied  as  the  homestead  as  created  and  denned  by  any  law  of  this  State. 
Provided,  further,  that  in  determining  the  true  and  full  market  value  in  money 
of  such  property  no  deductions  shall  be  made  for  any  inheritance  tax  or  estate  tax 
paid  to  the  government  of  the  United  States. 

§  6830.  Primary  rates  on  fifteen  thousand  dollars  or  less.  When  the  property 
or  any  beneficial  interest  therein  passes  by  any  such  transfer,  where  the  amount 


SOUTH  DAKOTA  1099 

of  the  property  shall  exceed  in  value  the  exemptions  hereinafter  specified,  and 
shall  not  exceed  in  value  fifteen  thousand  dollars,  the  tax  hereby  imposed 
shall  be: 

1.  Where  the  person  entitled  to  any  beneficial  interest  in  such  property  shall 
be  the  wife  or  lineal  issue,  at  the  rate  of  1%  of  the  clear  value  of  such  interest 
in  such  property. 

2.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such  prop- 
erty shall  be  the  husband,  lineal  ancestor  of  the  decedent  or  any  child  adopted 
as  such  in  conformity  with  the  laws  of  this  State  or  any  child  to  whom  such 
decedent  for  not  less  than  ten  years  prior  to  such  transfer  stood  in  mutually 
acknowledged  relation  of  a  parent;   provided,   however,   such  relationship  began 
at  or  before  the  child's  fifteenth  birthday  and  was  continuous  for  said  ten  years 
thereafter,  or  any  lineal  issue  of  such  adopted  or  mutually  acknowledged  child, 
at  the  rate  of  2%  of  the  clear  value  of  such  interest  in  such  property. 

3.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such  prop- 
erty shall  be  a  brother  or  sister  or  a  descendant  of  a  brother  or  sister  of  the 
decedent,  a  wife  or  a  widow  of  a  son  or  the  husband   of   a   daughter  of  the 
decedent,  at  the  rate  of  3%  of  the  clear  value  of  such  interest  in  such  property. 

4.  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such  prop- 
erty shall  be  the  brother  or  sister  of  the  father  or  mother  or  a  descendant  of  a 
brother  or  sister  of  the  father  or  mother  of  the  decedent,  at  the  rate  of  4%  of 
the  clear  value  of  such  interest  in  such  property. 

5.  Where   any   person   or   persons   entitled   to   any   beneficial   interest   in    such 
property  shall  be  in  any  other  degree  of  collateral  consanguinity  than  is  herein- 
before stated,  or  shall  be  a  stranger  in  blood  to  the  decedent,  or  shall  be  a  body 
politic  or  corporate,  at  the  rate  of  5%  of  the  clear  value  of  such  interest  in  such 
property. 

§  6831.  Primary  rates  on  amounts  above  fifteen  thousand  dollars.  The  rates 
in  the  preceding  section  are  for  convenience  termed  primary  rates.  When  the 
amount  of  the  clear  value  of  such  property  or  interest  exceeds  fifteen  thousand 
dollars,  the  rate  of  tax  upon  the  excess  shall  be  as  follows: 

1.  Upon  all  excess  of  fifteen  thousand  dollars  and  up  to  fifty  thousand  dollars, 
two  times  the  primary  rate. 

2.  Upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred  thousand 
dollars,  two  times  the  primary  rate. 

3.  Upon  all  in  excess  of  one  hundred  thousand  dollars,  four  times  the  primary 
rate. 

§  6832.  Exemptions  allowed.  The  following  exemptions  from  the  tax  are 
hereby  allowed: 

1.  All  property  transferred  to  public  corporations  within  the  State  for  strictly 
county,  township  or  municipal  purposes  shall  be  exempt. 

2.  Property  of  the  clear  value  of  ten  thousand  dollars  transferred  to  the  widow 
of  the  decedent   or  husband  of  the  decedent,  each   of  the   lineal  issue   of  the 
decedent,  or  any  child  adopted  as  such  in  conformity  with  the  laws  of  this  State, 
or  any  child  to  whom  the  decedent  for  not  less  than  ten  years  prior  to  such 
transfer  stood  in  mutually  acknowledged  relation  of  a  parent,  provided,  however, 
such  relationship  began  at  or  before  the  child's  fifteenth  birthday  and  was  con- 
tinuous for  said  ten  years  thereafter,  or  any  lineal  issue  of   such   adopted   or 
mutually  acknowledged  child,  shall  be  exempt. 

4.  Property  of  the  clear  value  of  five  hundred  dollars  transferred  to  each  of 
the  persons  described  in  the  third  subdivision  of  the  second  preceding  section 
shall  be  exempt. 

5.  Property  of  the  clear  value  of  two  hundred  dollars  transferred  to  each  of 
the  persons  described  in  the  fourth  subdivision  of  the  second  preceding  section 
shall  be  exempt. 

6.  Property  of  the  clear  value  of  one  hundred  dollars  transferred  to  each  of 
the  persons  and  corporations  described  in  the  fifth  subdivision  of  the  second  pre- 
ceding section  shall  be  exempt;   provided,  however,  that  property  of  the  clear 
value   of   two   thousand   five   hundred   dollars   transferred   to   a   public   hospital, 
academy,  college,  university,  seminary  of  learning,   church  or  purely  charitable 
institution  within  this  State,  shall  be  exempt.     Provided,  that  if  any  of  the  per- 
sons above  named  to  whom  are  granted  such  exemptions  shall  receive  from  the 
decedent  by  the  same  transfer  property  outside  the  jurisdiction  of  this  State,  the 
value  of  such  outside  property  at  the  date  of  decedent's  death  shall  be  deducted 


1100  THE  STATE  STATUTES 

from  the  amount  of  exemptions  hereinbefore  contemplated,  and  the  remainder 
shall  be  the  amount  of  exemptions  allowed,  and  if  the  value  equals  or  exceeds  the 
exemptions  then  no  exemptions  shall  be  allowed.  No  other  exemptions  shall  be 
allowed  to  the  persons  above  named  by  reason  of  any  other  statute  of  this  State. 

§  6833.  Prescribes  the  jurisdiction  of  the  County  Court  and  regulates  procedure. 

§  6834.  Makes  the  tax  payable  as  soon  as  determined,  except  on  contingent 
interests,  when  it  does  not  accrue  until  beneficiary  gets  the  property. 

§  6835.  Prescribes  the  powers  and  duties  of  the  tax  commission. 

§  6836.  Report  of  personal  representatives — inventory — service.  Within  thirty 
days  after  the  appointment  and  qualification  of  an  executor  or  administrator  he 
shall  make  and  return  under  oath  to  the  clerk  of  the  court  issuing  to  him  his 
letters,  a  full  and  detailed  report  upon  forms  of  blanks  prescribed  by  the  tax 
commission  as  follows: 

1.  Name  and  last  residence  of  decedent. 

2.  Date  of  death. 

3.  Whether  or  not  he  left  a  will. 

4.  Name  and  postoffice  address  of  executor,  administrator,  or  trustee. 

5.  Name  and  postoffice  address  of  surviving  husband  or  wife,  if  any,  and  the 
age  of  such  surviving  husband  or  wife,  at  the  date  of  decedent's  death. 

6.  If  testate,  name  and  postoffice  address  of  each  beneficiary  in  the  will. 

7.  Relationship  of  each  beneficiary  to  the  testator. 

8.  If  intestate,  name  and  postoffice  of  each  heir  at  law. 

9.  Relationship  of  each  heir  at  law  to  the  decedent. 

10.  Inventory  of  all  property  of  the  decedent,  located  within  or   without  the 
State,  including  any  property  transferred  in  contemplation  of  death  or  which  he 
may  have  reason  to  believe  was  so  transferred,  together  with  the  value  of  each 
item  of  property,  except  property  outside  the  State  and  as  to  that  property  the 
gross  value  of  the  whole  of  such  property. 

11.  Whether  or  not  the  property  passed  in  possession  and  enjoyment  in  fee, 
for  life  or  for  a  term  of  years,  with  a  copy  of  any  will,  deed  or  instrument  of 
transfer  and  such  other  information  as  the  tax  commission  may  require. 

With  such  report  he  shall  file  proof  of  service  of  a  copy  thereof  on  the  county 
treasurer  of  the  county  in  which  his  letters  were  issued.  A  copy  shall  also 
forthwith  be  mailed  by  such  executor  or  administrator,  or  the  attorney  repre- 
senting him,  to  the  tax  commission  and  the  receipt  of  the  tax  commission  therefor 
shall  be  filed  with  the  clerk.  Upon  failure  of  the  executor  or  administrator  to 
return  such  report  and  proof  of  service  and  receipt  of  the  tax  commission,  the 
clerk  shall  forthwith  report  his  delinquency  to  the  court  for  such  orders  as  may 
be  necessary  to  enforce  the  observance  of  this  section;  the  receipt  of  the  tax 
commission  for  the  copy  of  the  report  may  not  be  filed  until  such  report  is 
made  complete  as  required  by  this  section.  No  decision  of  the  court  deter- 
mining whether  there  be  a  tax  or  no  tax  shall  be  made  by  the  court  until  the 
formal  receipt  of  the  tax  commission  is  filed  with  the  clerk. 

Whenever  by  reason  of  the  complicated  nature  of  the  estate,  or  by  reason  of 
the  confused  condition  of  the  decedent's  affairs  it  is  impracticable  for  the 
executor  or  administrator  to  file  with  the  clerk  of  courts  a  full,  complete  and 
itemized  inventory  of  the  property  in  the  estate  within  the  time  required,  the 
court  may  on  application  extend  the  time  for  filing  the  same  and  the  clerk 
shall  notify  the  tax  commission  of  such  extended  time.  Upon  request  of  the 
tax  commission  the  executor  or  administrator  shall  furnish  the  commission  with 
such  further  information  as  it  may  require. 

§  6837.  Provides  for  proceedings  to  collect  the  tax  in  case  no  report  is  filed 
as  prescribed  in  the  last  section. 

§  6838.  Provides  for  appraisal  by  the  County  Court. 

§  6839.  Regulates  procedure  upon  the  appraisal. 

§  6840.  Provides  for  procedure  on  appeal. 

§§  6841  to  6845.  Provide  for  the  taxation  of  life  estates,  remainders  and 
contingent  interests  similarly  to  the  New  York  statute. 

§  6846.  Increase  of  estate  subject  to  tax.  Whenever  any  property  has 
been  transferred  since  the  twelfth  day  of  March,  1915,  or  shall  hereafter  be 
transferred  subject  to  any  charge,  estate  or  interest  determinable  by  the  death 
of  any  person,  or  at  any  period  ascertainable  only  by  reference  to  death,  the 
increase  accruing  to  any  person  or  corporation  upon  the  extinction  or  deter- 


SOUTH  DAKOTA 

urination  of  such  charge,  estate  or  interest  shall  be  deemed  a  transfer  of  prop- 
erty taxable  under  the  provisions  of  this  chapter,  in  the  same  manner  as 
though  the  person  or  corporation  beneficially  entitled  thereto  had  then  acquired 
such  increase  from  the  person  from  whom  the  title  to  their  respective  estates  or 
interests  is  derived. 

§  6847.  When  actual  value  cannot  be  determined.  The  tax  upon  any 
devise,  bequest,  gift  or  transfer  limited,  conditioned,  dependent  or  determin- 
able  upon  the  happening  of  any  contingency  or  further  event,  by  reason  of 
which  the  full,  true  and  actual  value  thereof  cannot  be  ascertained,  as  provided 
for  by  fhe  provisions  of  this  chapter,  at  or  before  the  time  when  the  taxes 
become  due  and  payable  as  herein  provided,  shall  accrue  and  become  payable 
when  the  person  or  corporation  beneficially  entitled  thereto  shall  come  into  the 
actual  possession  or  enjoyment  thereof. 

§  6848.  Expectancies  appraised.  Estates  in  expectancy  which  are  contin- 
gent or  defeasible  and  in  which  the  proceedings  for  the  determination  of  the 
amount  of  the  tax  have  not  been  taken,  or  where  the  taxation  thereof  has  been 
held  in  abeyance,  shall  be  fixed  at  their  full,  undiminished  value  when  the 
persons  entitled  thereto  shall  come  into  the  beneficial  enjoyment  or  possession 
thereof,  without  diminution  for  or  on  account  of  any  valuation  made  of  the 
particular  estates  for  the  purposes  of  taxation,  upon  which  such  estates  in 
expectancy  may  have  been  limited. 

§  6849.  Imposes  costs  and  provides  for  their  payment  out  of  the  estate. 
Stenographers'  fees,  when  minutes  are  demanded,  may  be  made  part  of  such 
costs. 

§  6850.  Provides  for  reappraisal  on  the  ground  of  fraud  or  mistake. 

§  6851.  By  whom  payable,  deduction,  collection,  sale.  Such  inheritance  tax 
may  be  enforced  in  the  County  Court  in  the  same  manner  provided  for  the 
enforcement  of  a  claim  against  the  estate  of  a  decedent,  except  that  no  claim 
need  be  presented  by  the  State  therefor,  and  the  tax  shall  be  collected  from 
the  portion  of  the  estate  to  which  any  person  is  entitled  as  an  inheritance, 
devise,  bequest,  legacy,  grant  or  gift.  Any  administrator,  executor  or  trustee 
having  in  charge  or  in  trust  any  property  for  distribution  embraced  in  or 
belonging  to  any  inheritance,  devise,  bequest,  legacy  or  gift,  subject  to  the 
tax  thereon  as  imposed  by  this  chapter,  shall  deduct  the  tax  therefrom,  and 
within  thirty  days  thereafter  shall  pay  the  same  over  to  the  county  treasurer 
as  herein  provided.  He  shall  not  deliver  or  be  compelled  to  deliver  any  prop- 
erty embraced  in  any  inheritance,  devise,  bequest,  legacy  or  gift,  subject  to 
taxation  under  this  chapter,  to  any  person  until  he  shall  have  collected  the  tax 
thereon.  The  property  of  the  estate,  or  any  part  thereof  chargeable  with  the 
payment  of  any  such  tax,  may  be  sold  in  satisfaction  thereof  as  provided  for 
the  sale  of  the  assets  of  an  estate  to  pay  the  debts  of  the  decedent. 

§  6852.  Collection  by  action.  In  addition  to  any  other  remedy  for  the  collection 
of  inheritance  taxes,  the  State  may  enforce  its  claim  therefor  and  the  lien 
thereof  by  an  action  at  law  or  a  suit  in  equity,  in  any  court  of  competent 
jurisdiction  within  the  proper  county,  against  any  person  liable  to  pay  the 
same  and  against  any  property  subject  to  the  lien  thereof. 

§  6853.  Provides  for  receipts  and  distribution  of  tax  proceeds. 

§  6854.  Interest  rates  after  one  year.  If  such  tax  shall  not  be  paid  within 
one  year  from  the  date  of  the  death  of  the  decedent,  interest  shall  be  collected 
thereon  at  the  rate  of  7%  from  the  date  of  the  death  of  the  decedent,  unless, 
by  reason  of  claims  against  the  estate,  necessary  litigation  or  other  unavoid- 
able cause  of  delay,  such  tax  cannot  be  determined,  as  herein  provided;  in  such 
case  interest  at  the  rate  of  6%  per  annum  shall  be  charged  upon  such  tax  from 
the  date  of  the  death  of  the  decedent  until  the  cause  of  delay  is  removed,  after 
which  7%  shall  be  charged.  If  the  tax  shall  be  paid  in  full  prior  to  the 
expiration  of  one  year  from  the  date  of  the  death  of  the  decedent  no  interest 
shall  be  charged. 

§  6855.  Provides  for  refunds  in  case  of  error. 

§  6856.  Transfer  of  capital  stock.  No  corporation  organized  under  the  laws 
of  this  State  shall  transfer  on  its  books  any  shares  of  its  capital  stock  standing 
in  the  name  of  a  nonresident  decedent  or  in  trust  for  a  nonresident  decedent, 


1102  THE  STATE  STATUTES 

without  the  consent  of  the  tax  commission  first  procured  as  herein  provided  for. 
Any  corporation  violating  any  of  the  provisions  of  this  section  shall  be  liable 
to  the  State  for  the  amount  of  tax  due  to  the  State  on  a  transfer  of  any  such 
shares  of  stock,  and  in  addition  thereto  a  penalty  equal  to  10%  of  the  amount 
of  such  tax ;  to  be  recovered  in  a  civil  action  in  the  name  of  and  for  the  benefit 
of  the  State. 

§  6857.  Transfer  of  nonresident's  property,  tax  determined,  receipt,  certificate. 
No  foreign  administrator  or  executor  shall  assign  or  transfer  any  stock 
or  obligation  in  this  State  or  within  its  jurisdiction,  standing  in  the  name 
of  a  nonresident  decedent  or  in  trust  for  a  nonresidet  decedent,  without  the 
consent  of  the  tax  commission  first  procured  as  herein  provided  for,  and  no  such 
assignment  or  transfer  shall  be  valid  until  this  provision  is  complied  with.  In 
order  to  determine  whether  an  inheritance  tax  is  due  to  the  State  under  the 
provisions  of  this  and  the  preceding  section,  the  personal  representative  of 
such  estate  shall  make  application  to  the  tax  commission  for  the  purpose  of 
having  the  tax  determined,  whereupon  it  shall  be  the  duty  of  the  tax  commission 
to  immediately  furnish  such  personal  representative  with  all  necessary  blanks 
for  such  purpose.  Such  blanks  shall  be  properly  filled  out  and  duly  verified 
and  transmitted  to  the  tax  commission,  and  upon  receipt  thereof  the  tax  com- 
mission shall  immediately  proceed  to  determine  the  inheritance  tax  and  advise 
the  representative  thereof  of  the  amount  of  such  tax.  The  tax  so  determined 
shall  be  paid  directly  to  the  State  Treasurer  and  he  shall  issue  and  transmit  to 
such  personal  representative  his  receipt  therefor,  and  if  no  tax  shall  be  found 
due  the  tax  commission  shall  issue  its  certificate  to  that  effect,  and  promptly 
transmit  the  same  to  the  representative  of  such  estate  by  ordinary  or  usual 
course  of  United  States  mail. 

§  6858.  Nonresident  estate,  report,  tax.  payment,  certificate.  Every  foriegn 
administrator  or  executor  of  the  estate  of  a  nonresident  decedent  having 
property  within  this  State,  or  within  its  jurisdiction,  in  which  no  ancillary 
probate  proceedings  are  instituted  in  the  County  Courts  of  this  State  for  the 
purpose  of  probating  such  estate,  shall  within  ninety  days  after  the  issuing  of 
letters  testamentary  or  letters  of  administration,  as  the  case  may  be  in  the 
foreign  State,  make  application  to  the  tax  commission  of  this  State  for  the 
determination  of  whether  there  is  an  inheritance  tax  due  to  this  State  on 
account  of  the  transfer  of  the  nonresident  decedent's  property,  and  such 
applicant  shall  furnish  to  the  tax  commission  therewith  an  affidavit  setting 
forth  a  description  of  the  property  owned  by  such  decedent  at  the  •  time  of  his 
death,  and  being  within  this  State  or  within  its  jurisdiction,  and  the  value 
thereof  as  of  the  date  of  the  nonresident  decedent's  death.  If  such  property 
consists  in  whole  or  in  part  of  mortgages  secured  upon  real  or  personal  property 
situated  within  this  State,  such  list  shall  enumerate  each  mortgage  separately, 
stating  the  name  and  postoffice  address  of  the  mortgagor,  the  county  in  which 
the  mortgaged  property  is  situated,  the  date  of  the  execution  of  the  mortgage, 
the  amount  for  which  such  mortgage  is  given,  the  rate  of  interest  and  the 
amount  due  on  such  mortgage  at  the  date  of  death  of  the  decedent,  and  in 
addition,  if  such  mortgage  is  on  real  property,  the  legal  description  of  the 
same  shall  be  given,  the  county  in  which  the  mortgage  is  recorded,  the  date 
when  recorded  and  the  book  and  page  where  recorded  within  such  county.  If 
such  property  consists  in  whole  or  in  part  of  a  debt  or  debts  evidenced  in  any 
other  manner  than  by  mortgages  secured  on  real  or  personal  property,  such  list 
shall  contain  the  name  of  the  debtor,  the  amount  of  the  debt  as  of  the  date 
of  the  death  of  the  decedent,  and  the  nature  of  the  debt;  also  when  required 
by  the  tax  commission  a  description  and  statement  of  the  aggregate  true  value 
of  all  the  property  owned  by  the  nonresident  decedent  at  the  time  of  his  death 
having  its  situs  outside  of  this  State;  a  copy  of  the  last  will  of  the  decedent, 
in  case  he  died  testate,  the  name,  relationship  and  postofiice  address  of  each 
beneficiary  of  the  testator;  if  intestate,  the  name,  postoffice  address  and  rela- 
tionship of  each  heir  at  law,  and  such  other  information  as  the  tax  commission 
may  require  to  enable  it  to  determine  the  inheritance  tax.  Such  application 
and  statements  shall  be  subscribed  and  sworn  to  by  the  personal  representative 
of  such  nonresident  decedent,  or  some  other  person  having  knowledge  of  the 
facts  therein  set  forth.  The  statements  in  such  affidavits  as  to  value  or  other- 
wise shall  not  be  binding  upon  the  tax  commission  in  case  it  believes  the  same 


SOUTH  DAKOTA  HQ3 

to  be  incorrect  in  any  respect.  From  the  information  so  furnished  and  such 
other  information  as  it  may  acquire  with  reference  thereto,  the  tax  commission 
shall  with  reasonable  expedition,  determine  the  amount  of  tax,  if  any,  due  to 
the  State  under  the  provisions  of  the  inheritance  tax  law  and  notify  the  person 
making  application  of  the  amount  thereof  claimed  to  be  due.  On  payment  of 
the  tax  so  determined  to  be  due  to  the  State  Treasurer  he  shall  issue  to  the 
administrator  or  executor  paying  the  amount  his  receipt  therefor,  and  imme- 
diately furnish  a  duplicate  thereof  to  the  tax  commission.  In  case  no  tax  is 
due  the  tax  commission  shall  issue  its  certificate  to  that  effect  and  send  the 
same  to  the  executor  or  administrator  by  the  usual  and  ordinary  course  of 
United  States  mail. 

§  6859.  Prescribes  duties  for  register  of  deeds. 

§  6860.  Provides  for  proceedings  on  appeal  and  judgments. 

§  6861.  Provides  for  trial,  change  of  venue,  depositions,  etc. 

§  6862.  Deposit  companies,  notice  to  county  treasurer,  inventory,  liability. 
No  safety  deposit  company,  bank  or  other  institution,  or  person  holding 
assets  or  securities  of  a  decedent,  shall  deliver  or  transfer  the  same  to  the 
executor,  administrator  or  legal  representative  of  such  decedent,  or  upon  his 
order  or  request  or  to  any  other  person,  unless  notice  of  the  time  and  place 
of  such  transfer  shall  be  given  to  the  county  treasurer  at  least  ten  days  prior 
thereto,  to  examine  such  securities  or  assets  prior  to  the  time  of  such  delivery 
or  transfer,  and  such  examination  by  the  county  treasurer  shall  be  at  the 
office  of  such  county  treasurer,  in  the  presence  of  the  executor  named  in  the 
will  or  any  legal  representative  of  or  any  person  interested  in  the  estate  of 
decedent.  The  county  treasurer  shall  make  a  complete  and  itemized  list 
thereof  and  immediately  forward  the  same  to  the  tax  commission.  If  upon 
such  examination  the  county  treasurer  shall  for  any  cause  deem  it  advisable 
that  such  securities  or  assets  should  not  be  immediately  transferred  or  deliv- 
ered he  may  forthwith  notify  in  writing  such  bank,  company,  institution  or 
person  to  defer  delivery  or  transfer  thereof  for  a  period  not  exceeding  ten  days 
from  the  date  of  such  notice,  and  thereupon  it  shall  be  the  duty  of  such  com- 
pany, bank,  institution  or  person  to  withhold  the  delivery  or  transfer  to  the 
time  stated  in  such  notice  or  until  the  revocation  thereof.  Failure  to  serve 
the  notice  first  above  mentioned  or  defer  the  delivery  or  transfer  of  such 
securities  or  assets  for  the  time  stated  in  the  second  notice  above  mentioned 
shall  render  such  company,  bank,  institution  or  person  liable  to  the  payment 
of  the  inheritance  tax  due  upon  such  securities  or  assets  pursuant  to  the 
provisions  of  this  chapter. 

§  6863.  Stipulation  as  to  value  govern,  if  approved.  The  tax  commission  shall 
have  power  to  stipulate  as  to  the  value  of  any  property  where  the  estate  is  being 
probated,  and  any  such  stipulation  when  approved  by  the  court  shall  be  of  the 
same  force  and  effect  as  a  decree  to  the  same  effect  made  by  the  court. 

§  6864.  Agreement  as  to  tax  with  tax  commission  valid.  The  tax  commission, 
in  case  of  the  estate  of  a  nonresident  decedent  whose  estate  has  not  been 
probated  in  this  State,  shall  have  power  to  agree  upon  the  amount  of  the 
tax  due  upon  any  transfer,  and  the  person  paying  such  tax  may  present  such 
agreement  to  the  State  Treasurer  and,  upon  payment  of  the  amount  fixed  in 
such  agreement,  shall  be  discharged  from  further  liability  under  the  provisions 
of  this  chapter.  In  such  case  the  State  shall  retain  the  whole  of  such  tax. 

§  6865.  Agreement  to  compound  tax  valid  if  approved  by  county  court.  The 
tax  commission  is  authorized,  in  case  of  the  estate  of  a  nonresident  dece- 
dent whose  estate  has  not  been  probated  in  this  State,  and  with  the  consent 
and  approval  of  the  County  Court  in  the  case  of  an  estate  probated  in  this 
State,  expressed  in  writing,  to  enter  into  an  agreement  with  the  trustees  of  any 
estate  in  which  remainders  or  expectant  estates  are  of  such  a  nature  or  the 
circumstances  such  that  the  taxes  are  not  presently  payable  or  where  the 
interests  of  the  legatees  or  devisees  are  or  were  not  ascertainable,  under  the 
provisions  of  this  chapter,  at  the  time  fixed  for  the  determination  thereof,  as 
hereinbefore  provided,  and  to  compound  the  tax  upon  any  transfers  upon  such 
terms  as  are  deemed  equitable  and  expedient;  to  grant  a  discharge  to  such 
trustees  on  account  thereof  upon  the  payment  of  the  taxes  provided  for  in 


1104  THE  STATE  STATUTES 

such  composition  agreement;  provided,  further,  however,  that  no  such  agree- 
ment shall  be  conclusive  in  favor  of  any  trustee  as  against  the  interests  of  any 
cestui  que  trust  who  may  possess  either  present  rights  of  enjoyment  or  fixed, 
absolute  and  indefeasible  rights  of  future  enjoyment  or  of  such  as  would 
possess  such  rights  in  the  event  of  the  immediate  termination  of  any  particular 
estate,  unless  he  consents  thereto  either  personally  or  by  duly  authorized  attorney, 
when  competent,  or  by  guardian  when  incompetent. 

§  6866.  Composition  agreements  executed  in  triplicate.  Composition  agree- 
ments under  the  provisions  of  this  chapter  shall  be  executed  either  in  duplicate 
or  triplicate  as  the  case  may  require,  one  of  which  shall  be  filed  in  the  probate 
court  in  the  county  in  which  the  tax  is  to  be  paid,  if  the  estate  is  being 
probated  in  this  State,  one  with  the  tax  commission,  and  one  shall  be  delivered 
to  the  person  paying  the  tax  thereunder. 

§  6867.  Tax  paid  or  bond  for  payment  required  before  transfer.  The  tax 
commission  shall  not  consent  to  the  assignment  or  delivery  of  any  property 
embraced  in  any  legacy,  devise  or  transfer  from  a  nonresident  decedent  to  a 
nonresident  trustee,  where  the  property  embraced  in  such  legacy,  devise  or 
transfer  is  so  situated  and  disposed  of  as  to  be  presently  ascertained,  until  the 
tax  thereon  shall  have  been  paid  as  hereinbefore  provided;  nor  shall  the  tax 
commission  consent  to  the  assignment  or  delivery  of  any  property  embraced  in 
any  such  legacy,  devise  or  transfer,  where  the  property  embraced  therein  is  so 
situated  and  disposed  of  as  to  authorize  it  to  enter  into  a  composition  agree- 
ment with  reference  thereto,  until  the  tax  thereon  shall  have  been  compromised 
and  the  tax  paid  as  hereinbefore  provided,  or  the  trustee,  or  other  person  to 
whom  the  possession  of  such  property  is  delivered,  shall  have  executed  and 
delivered  to  the  tax  commission  a  bond  to  the  State,  in  an  amount  equal  to  the 
amount  of  tax  which  in  any  contingency  may  become  due  and  owing  to  the 
State  on  account  of  the  transfer  of  such  property;  such  bond  to  be  approved 
by  the  tax  commission  and  conditioned  for  the  payment  to  the  State  of  any 
tax  which  may  accrue  to  the  State  under  this  chapter,  on  the  subsequent  trans- 
fer or  delivery  of  the  property  to  any  person  beneficially  entitled  thereto. 

§  6868.  Distribution  contingent  on  payment  or  bond.  No  property  having  its 
situs  in  this  State  embraced  in  any  legacy  or  devise  bequeathed  or  devised 
to  a  nonresident  trustee,  and  situated  or  disposed  of  as  described  in  the  pre- 
ceding section,  shall  be  decreed  or  distributed  by  any  court  of  this  State  to 
such  nonresident  trustee  until  he  shall  have  compromised  and  paid  the  tax  as 
provided  for  in  that  section,  or  in  lieu  thereof  given  a  bond  to  the  State  as 
provided  for  therein. 

§  6869.  Gives  definitions  of  terms  used  in  the  act. 

§  6870.  When  conveyance  presumed  to  be  in  contemplation  of  death.  In  any 
action  or  proceeding  by  or  on  behalf  of  the  State,  or  under  the  authority 
thereof,  to  enforce  an  inheritance  tax  against  property  claimed  to  have  been 
transferred  in  contemplation  of  death,  in  all  cases  where  the  instrument  of 
conveyance  shall  have  been  delivered,  or  delivered  out  of  escrow,  or  recorded, 
upon  or  after  the  death  of  the  decedent  it  shall  be  presumed  that  such  transfer 
was  made  in  contemplation  of  death  within  the  meaning  of  this  chapter,  and 
the  burden  of  proof  to  show  otherwise  shall  be  upon  the  person  claiming  under 
such  transfer. 

§  6871.  Proceedings  applicable  to  past  and  future  transfers.  The  proceedings 
herein  provided  for  the  appraisement  of  estates  for  inheritance  tax  purposes, 
and  the  determination  of  such  tax  and  the  collection  thereof,  shall  apply  to 
and  govern  all  proceedings  for  the  determination  and  collection  of  inherit- 
ance taxes  commenced  after  the  taking  effect  of  this  code,  whether  the  same 
accrued  prior  or  subsequent  thereto;  the  intention  of  this  statute  being  to 
furnish  a  remedy  for  the  determination  and  collection  of  taxes  already  accrued 
as  well  as  to  provide  for  such  taxes,  and  the  determination  and  collection 
thereof  in  the  future. 


TENNESSEE 


1105 


TENNESSEE. 
ACT  OF  1919,  EFFECTIVE  FEB.  21,  1919. 

Repeals  chap.  174,  L.  1893,  as  amended  by  chap.  479,  L.  1907;  chap.  101, 
L.  1915,  as  amended  by  chap.  70,  L.  1917. 

Does  not  tax  shares  of  stock  in  domestic  corporations  where  such  shares  are 
taxed  by  State  of  domicile  of  nonresident  decedent. 

TABLE  OF  RATES  AND  EXEMPTIONS 


Above 

Class  or  Relationship 

Ex- 
emption 

exemp- 
tion to 
$25,000 

Next 
$25,000 

Next 
$50,000 

Next 
$400,000 

All  over 
$500,000 

Husband,  wife,  direct  de- 
scendants or  ascendants' 
adopted  child. 

$10,000 

1% 

1%% 

2% 

3% 

5% 

Above 
exemp- 
tion to 
$50,000 

Next 
$50,000 

Next 
$50,000 

Next 
$50,000 

Next 
$50,000 

On  all 
over 

$250,$00 

All  others,  except  munici- 
pal, charitable,  educational 
or  religious  purposes, 
which  are  wholly  exempt. 

$1,000 

5% 

6% 

1% 

8% 

9% 

10<fr 

THE  STATUTE. 

[NOTE:     By  amendment  of  1921  the  tax  on  life  insurance  policies  is  repealed.] 

Section  1.  Be  it  enacted  by  the  General  Assembly  of  the  State  of  Tennessee, 
That  a  tax  shall  be  and  is  hereby  imposed  and  established  for  the  general  uses 
and  purposes  of  the  State,  upon  every  transfer  of  property,  real,  personal  or 
mixed,  or  any  interest  therein  or  income  therefrom,  in  trust  or  otherwise,  to 
persons  or  corporation,  subject  to  the  exceptions  and  limitations  hereinafter 
prescribed,  in  the  following  cases,  to  wit: 

(1)  When  the  transfer  is  by  will  or  by  the  intestate  or  other  laws  of  this 
State,   from   any  person   dying  possessed   of   property  while   a  resident   of   the 
State. 

(2)  When  the  transfer  is  by  will  or  by  intestate,  or  other  laws  of  property 
within  the  State,  or  within  its  jurisdiction,  and  the  decedent  was  a  nonresident 
of  the  State  at  the  time  of  his  death,   except  the  following  property,  to  wit: 
(a)   Money  on  hand  or  on  deposit;    (b)    shares  of  stock,  bonds  or  notes  held 
as  collateral  to  secure  any  bona  fide  indebtedness  owed  by  such  nonresident  to 
any  person,  firm  or  corporation  in  this  State;   (c)  shares  of  stock,  bonds,  notes, 
or  other  evidences  of  debt,  where  the  imposition  of  an  inheritance  tax  thereon 
in  this  State  would  result  in  the  payment  of  a  second,   or  double  inheritance 
tax  upon  such  property  by  reason  of  the  fact  that  it  is  subject  to  the  payment 
of  such  a  tax  in  the  State  where  the  nonresident  decedent  lived   at  the  time 
of  his  death. 

(3)  When  the  proceeds  of   any  life   insurance  policy   or   contract,   upon  the 
death  of  an  insured  who  was  a  citizen  of  this  State  at  the  time  of  his  death, 
by   the   terms   thereof,   or   by   any   statute,   pass    to    the    wife,    husband,    heirs, 
administrator,  executor,  or  trustee  of  the  insured,  or  to  any  specific  beneficiary 
or   beneficiaries,   in    the   nature    of   a    distribution,    gift,    bequest    or    devise,    or 
without  a  fair  consideration  in  money  or  money's  worth. 

(4)  When  the  transfer  of  property  is  by  deed,  grant,  bargain,  sale,  gift,  or 
by  life  insurance  policy,  or  contract,  and  is  made  by  a  resident  of  this  State; 
or  when  the  same  is  made  by  a  nonresident   of   this   State   and  the   property 

70 


1106  THE  STATE  STATUTES 

transferred  is  situated  within  this  State,  or  is  within  the  State's  jurisdiction; 
and  in  either  case  when  the  transfer  is  made  in  the  nature  of  a  final  disposition 
or  distribution  of  such  property  in  contemplation  of  death  of  the  transferrer 
to  take  effect  in  possession  or  enjoyment  at  or  after  the  date  of  such  death, 
and  every  such  transfer  made  within  two  (2)  years  next  preceding  the  date  of 
such  death  without  consideration  equal  in  money  or  money's  worth  to  the  full 
value  of  the  property  transferred,  shall  be  construed  to  have  been  made  in 
contemplation  of  death  within  the  meaning  of  this  act;  and  the  words  "con- 
templation of  death"  shall  be  taken  to  include  that  expectancy  of  death  which 
actuates  the  mind  of  a  person  on  the  execution  of  his  last  will  and  testament, 
it  being  the  intention  to  include  within  the  provisions  of  this  act  all  transfers 
made  in  lieu  of  or  for  the  purpose  of  avoiding  transfers  by  last  will  and 
testament,  or  by  the  intestate  laws. 

(5)  Whenever,   except   in   cases   of  partnerships   formed   to   operate   any   kind 
of  a  business  undertaking  property,  real  or  personal,  is  held  in  the  joint  names 
of    two    or    more    persons,    or    is    deposited    in    banks    or    other    institutions    or 
depositories   in   the   joint   names    of    two    or   more   persons    and    payable   to   the 
survivor,  or  survivors,  of  such  person  upon  the  death  of  one  or  more  of  them, 
and  upon  such  death  the  survivor  or  survivors  is,  or  are,   entitled  to  the  imme- 
diate ownership  or  possession  and  enjoyment   of  such  property,  the   vesting  of 
title  or   ownership   or   possession  and   enjoyment   of   such   property  in   such  sur- 
vivor or  survivors  at  such  death  or  deaths  shall  be  deemed  a  transfer  taxable 
under   the   provisions   of   this   act.     The   amount   on   which   such   taxes   shall   be 
collected  is  the  full  value  of  the  property  so  transferred,  less  such  part  thereof 
as  may  be  proved  by  the  survivor  or  survivors  to  have   originally  belonged  to 
him  or  them,  and  never  to  have  belonged  to  the  decedent ;   provided,  that  real 
estate   held   by   the   entireties   by   husband    and   wife    shall   not    be    subject    to 
taxation  under  the  provisions  of  this  act  if  such  real  estate  vests  in  the  sur- 
vivor on  the  death  of  either. 

(6)  Whenever  any  person,  trustee,  or  corporation  has   the  power   of  making 
disposition   of   property  under   an   appointment   by  will,   deed,   or   other   instru- 
ment heretofore  executed;   or  is  vested  with  such  power  by  such  will,  deed  or 
other    instrument    hereafter    executed,    a    transfer    of    such    property    shall    be 
deemed  to  take  place  for  the  purposes  of  taxation  under  the  provisions  of  this 
act  at  the  time  such  power  of  appointment,  under  the  provisions   of  the  will, 
deed  or  other  instrument  is  to  be  exercised,  whether  the  power  is  then  exercised 
or  not. 

(7)  Whenever  a  decedent  appoints  or  names  one  or  more  executors  or  trus- 
tees, and  makes  a  bequest  or  devise  of  property  to  them  in  lieu  of  commissions 
or  allowances,  which  would  otherwise  be  liable  to   said  tax,   or  appoints   them 
his   residuary   legatees,   and   said   bequest,    devise,    or   residuary   legacy   exceeds 
what  would  be  a  reasonable  compensation  for  their  services,   such  excess  shall 
be  liable  to  said  tax. 

(8)  Where  any  property  shall,  after  the  passage  of  this  act,  be  transferred 
subject  to   any  charge,   estate,   or   interest,   determinable  by  the   death   of    any 
person,  or  at  any  period  ascertainable  only  by  reference  to  death,  the  increase 
accruing  to  any  person  or  corporation  upon  the  extinction  or  determination  of 
such  change,  estate,  or  interest,  shall  be  deemed  a  transfer  of  property  taxable 
under  the  provisions  of  this  act  in  the  same  manner  as  though  the  person  or 
corporation  beneficially   entitled  thereto   had  then   acquired   such  increase   from 
the  person  from  whom  the  title  to  their  respective  estates  or  interests  is  derived. 

§  2.  Be  it  further  enacted,  That  there  is  excepted  from  the  tax  imposed  in 
the  foregoing  section  and  from  the  operation  of  this  act  the  following  and 
no  other: 

(1)  Property   of   an   intestate,   testator,    or    grantor,   where    the   whole    estate 
has  a  clear  market  value  of  less  than  $1,000.00. 

(2)  Property   having    a    clear   market   value    of   less    than    $10,000.00,    trans- 
ferred to  the  wife  and  to  the  direct  descendants  and  ascendants,  or  either  of 
them,  of  the  person  from  whom  the  transfer  is  made;  provided,  however,  that 
in  determining  whether  any  property  falls  within  either  of  the  foregoing  excep- 
tions, the  estate  the  transfer  of  which  may  be  the  subject  of  taxation  under  this 
act,  shall  be  treated  as  a  whole  or   as  one  transfer   or   sum,   without   reference 
to  the  number  of  transfers  or  parts  of  shares  into  which  such  estate  may  be 
subdivided. 


TENNESSEE 

(3)  All  property  transferred  to  municipal  corporations,  for  strictly  municipal 
purposes. 

(4)  All  property  devised   or  transferred  to  any  church   for   purely  religious 
purposes,    to    any    school    or    college    for    purely    educational    purposes,    to    any 
hospital  or   bona  fide  charitable  institution. 

§  3.  Prescribes  the  rates  and  exemptions  of  the  foregoing  table. 

§  4.  Provides  that  the  tax  shall  be  levied  on  the  clear  market  value  after 
deducting  debts  and  expenses  of  administration,  and  that  life  estates  shall  be 
computed  by  the  Carlisle  tables. 

§  5.  Authorizes  the  County  Court  clerks  or  any  interested  party,  including 
the  Comptroller  of  the  Treasury,  to  institute  proceedings,  and  regulates 
procedure. 

§  6.  Authorizes  the  State  authorities  to  co-operate  with  the  Federal  authori- 
ties in  the  collection  of  the  Federal  tax. 

§  7.  Makes  the  tax  a  lien  for  five  years  and  the  executor,  administrator, 
trustee  or  beneficiary  personally  liable. 

§  8.  Allows  5%  discount  if  tax  is  paid  within  six  months  after  death.  If 
not  paid  within  twelve  months  interest  is  charged  from  date  of  accrual  of  tax. 

§  9.  Prescribes  the  duties  of  the  court  clerk  in  turning  over  tax  money  to 
the  treasury. 

§  10.  Provides  for  books  to  be  kept  by  the  court  clerk. 

§  11.  Gives  power  of  sale  to  executors  and  administrators  and  forbids  them 
from  turning  over  any  property  until  the  tax  is  paid.  Requires  them  to  deduct 
the  amount  of  the  tax  from  money  legacies. 

§  12.  Requires  executors  and  administrators  to  notify  court  clerk  in  writing 
ten  days  before  taking  possession  of  property  in  the  hands  of  safe  deposit 
companies,  banks  or  similar  institutions.  Requires  them  within  thirty  days  of 
appointment  to  file  complete  inventory  with  the  State  Comptroller,  but  such 
information  shall  only  be  available  for  the  collection  of  the  tax. 

§  13.  Be  it  further  enacted,  That  every  life  insurance  company  or  association 
doing  business  in  this  State,  shall,  within  ten  days  after  the  approval  of  proof 
of  death  of  a  person  insured  under  a  policy  or  policies,  in  such  companies  or 
associations,  give  notice  in  writing  to  the  County  Court  clerk  of  the  county 
where  the  estate  is  being  administered,  stating:  (a)  The  date  and  amount  of 
each  policy;  (b)  the  name  and  address  of  each  beneficiary  therein;  (c)  the 
time  and  manner  of  payment. 

Any  insurance  company  doing  business  in  the  State  of  Tennessee  failing  or 
refusing  to  comply  with  the  provisions  of  this  act,  shall  thereby  forfeit  their 
charter  within  this  State  and  their  right  to  do  business  within  the  State  of 
Tennessee. 

Upon  certification  from  the  Insurance  Commissioner  that  any  insurance  com- 
pany has  failed  or  refused  to  comply  with  the  provisions  of  this  act,  the  Secre- 
tary of  State  shall  forthwith  cancel  the  charter  of  such  company  and  shall 
immediately  notify  such  insurance  company  that  it  is  barred  from  doing  further 
business  in  the  State  of  Tennessee.* 

§  14.  Be  it  further  enacted,  That  the  Comptroller  of  the  Treasury  shall  be 
vested  with  absolute  and  exclusive  jurisdiction  over  the  collection  of  all  taxes 
provided  for  in  this  act  after  the  expiration  of  one  year  from  the  date  of  the 
death  of  the  person  from  whom  the  tax  is  derived,  but  that  the  tax  itself  shall 
be  paid  to  the  County  Court  clerk,  except  as  hereinafter  provided. 

Said  Comptroller  of  the  Treasury  is  vested  with  full  and  complete  authority 
to  sue  in  the  name  of  the  State,  or  to  intervene  in  any  case  pending,  wherein 
the  estates  of  decedents  are  being  administered,  for  the  collection  of  such  taxes 
after  the  expiration  of  twelve  months,  whether  the  payment  of  said  tax  be 
delinquent  or  whether  its  collection  has  been  postponed  by  reason  of  litigation, 
or  other  cause  of  delay,  or  whether  for  any  reason  no  appraisal  has  theretofore 
been  made;  provided,  independent  suits  for  the  collection  of  the  tax  shall  be 
brought  by  the  Comptroller  in  the  Chancery  or  Circuit  Courts  of  the  State, 
in  the  county  in  which  the  tax  accrues,  and  that  the  Comptroller  may  employ 
some  competent  attorney  to  represent  the  State,  or  direct  the  revenue  agent  to 
do  so,  and  if  the  court  adjudges  any  tax  to  be  due,  it  shall  also  fix  a  reason- 
able fee  for  the  attorney  or  revenue  agent  representing  the  Comptroller,  which 


'Repealed,  1921. 


1108  THE  STATE  STATUTES 

shall  be  taxed  up  as  a  part  of  the  costs  of  the  cause,  to  be  collected  from  the 
taxpayer  or  out  of  the  property  held  liable  for  the  tax. 

All  suits  or  intervening  proceedings  brought  by  the  Comptroller  as  above 
provided,  may  be,  at  the  option  of  the  Comptroller,  based  upon  the  appraise- 
ment, if  such  has  been  made  in  accordance  with  the  previous  provisions  of  this 
act,  or  he  may  apply  to  the  court  in  which  the  suit  is  brought,  to  fix  and 
determine  the  amount  of  the  tax,  where  no  appraisement  has  been  made,  or 
without  reference  to  any  appraisement  that  may  have  been  made,  the  taxpayer 
forfeiting  any  benefits  of  the  appraisement  for  his  failure  to  make  payment 
before  the  tax  becomes  delinquent. 

Whenever  an  estate  charged  or  sought  to  be  charged  with  an  inheritance  tax 
in  this  act  provided  for  is  of  such  a  nature  or  is  so  disposed  that  the  liability 
of  the  estate  is  doubtful,  or  the  value  thereof  cannot  with  reasonable  certainty 
be  ascertained  under  the  provisions  of  the  law,  the  Comptroller  of  the  State 
may  compromise  with  the  beneficiaries  or  representatives  of  such  estate  and 
compound  the  tax  thereon,  such  settlement  and  compromise  to  be  filed  in  the 
office  of  the  County  Court  clerk  of  the  particular  county  to  whom  the  tax,  as 
thus  compounded,  shall  be  paid. 

§  15.  Requires  the  furnishing  of  blanks,  and  the  other  sections  deal  with 
the  repeal  of  former  statutes. 


TEXAS 


1109 


TEXAS. 

Taxes  only  collaterals  and  strangers. 

Taxes   all   property   of   nonresidents   within    the    State    when    passing   to    col- 
laterals and  strangers,  including  stock  in  domestic  corporations. 

TABLE  OF  RATES  AND  EXEMPTIONS 


CLASS  OB  RELATIONSHIP 

Amount 
exempt 

Rates 

of  tax 

Father,  mother,  husband, 
wife,  direct  lineal  descend- 
ants. 

All 

No  tax. 

•Public  corporations,  chari- 
table, educational  or  re- 
ligious purposes  within  the 
State. 

All 

No  tax. 

Above 
exemp- 
tion 
up  to 
$10,000 

$10,000 
to 
$25,000 

$25,000 
to 
$50,000 

$50.000 
to 
$100,000 

$100,000 
to 
$500,000 

In 

excess 
of 
$500,000 

Lineal  ascendant,  brother, 
sister  or  their  lineal  descend- 
ants. 

$2,000 

2% 

2i% 

3% 

31% 

4% 

5% 

Uncle,  aunt  or  their  lineal  de- 
scendants. 

$1,000 

3% 

4% 

5% 

6% 

7% 

8% 

All  others  

$500 

4% 

5J% 

7% 

8i% 

10% 

12% 

LAWS  OF  1907,  CHAPTER  21,  AS  AMENDED  BY  CHAPTER  166,  LAWS  OF 

1917. 

Section  1.  All  property  within  the  jurisdiction  of  this  State,  real  or  per- 
sonal, corporeal  or  incorporeal,  and  any  interest  therein,  whether  belonging 
to  inhabitants  of  this  State  or  not,  which  shall  pass,  absolutely  or  in  trust,  by 
will,  or  by  the  laws  of  descent  of  this  or  any  other  State,  or  by  deed,  grant, 
sale  or  gift,  made  or  intended  to  take  effect  in  possession  or  enjoyment  after 
the  death  of  the  grantor  or  donor,  shall  upon  passing  to  or  for  the  use  of  any 
person  except  the  father,  mother,  husband,  wife  or  direct  lineal  descendants 
of  the  testator,  intestate,  grantor  or  donor,  or  any  public  corporation  or 
charitable,  educational  or  religious  organization  within  this  State  when  such 
bequest,  gift  or  devise  is  to  be  used  for  charitable,  educational  or  religious 
purposes  within  this  State,  be  subject  to  a  tax  for  the  benefit  of  the  State,  as 
follows : 

The  section  then  prescribes  the  rates  and  exemptions  as  shown  in  the  fore- 
going table. 

§  2.  Provides  for  the  valuation  of  life  estates  and  remainders  upon  actu- 
aries' combined  experience  tables  on  the  basis  of  4%. 

§  3.  Taxes  bequests  to  executors  in  lieu  of  commissions  in  excess  of  a  reason- 
able compensation. 

§  4.  Bequires  the  executor  or  administrator  to  file  an  inventory  within  three 
months  of  his  appointment  under  penalty  of  $1,000. 

§  5.  If  no  probate  proceedings  have  been  brought  on  a  taxable  estate  vsithin 
three  months  after  death  the  County  Court  must  appoint  an  administrator. 

§  6.  Provides  for  the  appointment  of  appraisers  or  that  the  county  judge 
may  make  the  appraisal  himself. 

§  7.  Requires  the  county  judge  to  assess  the  tax  upon  the  appraisal,  makes 
the  tax  a  lien  with  interest  from  the  date  of  death  unless  paid  within  six 
months,  when  no  interest  is  charged. 

§  8.  Requires  the  executor  or  administrator  to  deduct  the  tax  if  bequest  or 


1110  THE  STATE  STATUTES 

share  is  in  money;  if  in  property  to  collect  it  from  the  beneficiary;  gives  him 
power  of  sale,  and  forbids  delivery  to  beneficiary  until  tax  is  paid. 

§  9.  Where  a  legacy  is  charged  on  real  estate  the  heir  is  required  to  deduct 
the  tax,  which  remains  a  lien  and  may  be  enforced  in  the  same  manner  as  the 
legacy. 

§  10.  Provides  for  tax  receipts. 

§  11.  Provides  for  actions  to  recover  delinquent  taxes. 

§  12.  Eequires  payment  of  taxes  by  county  collectors  to  the  State  Treasurer. 

§  13.  Provides  for  deposit  of  the  tax  moneys  in  the  general  revenue  fund. 

§  14.  Provides  for  a  proportionate  refund  where  debts  have  been  proved 
against  the  estate  after  distribution. 

§  15.  Requires  that  final  accounting  shall  show  payment  of  the  tax. 

§  16.  Provides  that  administration  may  be  dispensed  with  where  an  inven- 
tory is  filed  and  tax  proceedings  had. 

Chapter  166,  Laws  of  1917,  reads  as  follows: 

The  Comptroller  of  Public  Accounts  of  the  State  of  Texas  is  hereby  authorized 
and  empowered,  and  it  is  made  his  duty  to  appoint  and  contract  with  some 
suitable  person  or  persons  whose  duty  it  shall  be  to  look  specially  after,  sue  for 
and  collect  the  taxes  provided  by  this  chapter;  such  person  in  no  event  to 
receive  under  such  contract  more  than  ten  (10)  per  cent  of  the  amount  of  such 
taxes  collected  hereunder,  as  compensation.  It  shall  be  the  duty  of  such  person, 
so  contracted  with,  to  make  written  report  to  the  county  judge  of  each  county 
in  which  he  may  be  appointed  and  employed  to  assist  in  the  enforcement  of 
this  law,  of  each  estate  upon  which  such  tax  may  be  due,  or  may  become  due, 
as  soon  as  possible  after  the  death  of  any  person  owning  such  estate.  Such 
report  shall  state  probable  value  of  such  estate,  its  character  and  location,  if 
known,  and  the  names  of  the  persons  known  to  be  interested  therein. 

The  amount  of  compensation  due  such  person  shall  be  paid  by  the  collector 
of  taxes  out  of  the  taxes  collected  on  property  belonging  to  such  estate,  and 
such  payment  shall  be  deducted  from  said  taxes  by  said  collector  and  reported 
to  the  Comptroller. 

It  shall  be  the  further  duty  of  such  person  to  aid  in  every  possible  way  in 
the  collection  of  such  taxes. 

It  shall  be  the  duty  of  the  county  judge  of  said  county  upon  his  own  motion 
or  petition  of  such  appointee  of  said  Comptroller,  to  appoint  an  administrator 
of  every  estate  subject  to  taxation  under  the  provisions  of  this  chapter  where 
no  application  for  letters  testamentary  or  of  administration  thereon  is  made 
within  three  (3)  months  after  the  death  of  the  person  owning  such  estate  tax- 
able hereunder.  The  person  appointed  by  the  said  Comptroller  may  represent 
the  State  in  any  proceeding  necessary  under  the  provisions  of  this  chapter  to 
enforce  the  collection  of  such  taxes  but  without  other  compensation  than  as 
provided  in  his  original  employment. 


UTAH 


1111 


UTAH. 

Taxes  all  property  of  nonresidents  within  the  State. 

TABLE  OF  RATES  AND  EXCEPTIONS 


CLASS  OR 

RELATIONSHIP 

Amount  exempt 

On  entire 
net  estate 
above 
$10,000  up 
to  $25,000 

On  entire 
net  estate 
in  excess 
of  $25,000 

The  court  apportions  the  tax  among  all  benefi- 
ciaries without  exception. 

On  entire  estate; 
one  exemption 

3% 

5% 

of  $10,000. 

TITLE    36,    COMPILED    LAWS    OF    UTAH,    OF    1907,    AS    AMENDED    BY 
CHAPTERS  28  AND  29,  LAWS  OF  1915,  AND  LAWS  OF  1917. 

[NOTE:     1917  and  1919  amendments  did  not  change  rates  or  exemptions]. 

§  1220-x.  Property  Subject  to  Tax.  Computation.  Lien.  Deductions. — All 
property  within  the  jurisdiction  of  this  State,  and  any  interest  therein,  whether 
belonging  to  the  inhabitants  of  this  State  or  not,  and  whether  tangible  or  in- 
tangible, which  shall  pass  by  will  or  by  statutes  of  inheritance  of  this  or  any 
other  State,  or  by  deed,  grant,  bargain,  sale,  or  gift,  made  in  contemplation 
of  the  death  of  the  grantor,  vendor  or  donor,  or  intended  to  take  effect  in 
possession  or  enjoyment  at  or  after  the  death  of  the  grantor,  vendor,  or  donor, 
to  any  person  in  trust  or  otherwise,  shall  be  subject  to  the  following  tax,  after 
the  payment  of  all  debts,  for  the  use  of  the  State:  Three  per  cent  of  its 
market  value  in  excess  of  $10,000.00,  and  not  exceeding  $25,000.00,  and  5%  of  its 
market  value  in  excess  of  $25,000.00 ;  and  all  administrators,  executors,  and 
trustees,  and  any  such  grantee  under  conveyance,  and  such  donee  under  a  gift 
made  during  the  grantor's  or  donor's  life,  shall  be  respectively  liable  for  all 
such  taxes  to  be  paid  by  them  respectively,  except  as  herein  otherwise  provided, 
with  lawful  interest  as  hereinafter  set  forth,  until  the  same  shall  have  been  paid. 
The  tax  aforesaid  shall  be  and  remain  a  lien  on  such  estate  from  the  death  of 
the  decedent  until  paid.  In  determining  the  amount  of  tax  to  be  paid  under  the 
provisions  of  this  section,  the  debts  of  the  estate  shall  first  be  deducted,  and 
the  remainder'  shall  be  the  net  estate.  Upon  all  that  portion  of  the  net  estate  in 
excess  of  $25,000.00  the  tax  of  5%  shall  be  computed.  Upon  all  that  portion  of 
the  net  estate  in  excess  of  $10,000.00  and  not  exceeding  $25,000.00  the  tax  of 
3%  shall  be  computed;  and  the  court  shall  determine  the  amount  of  tax  to  be 
paid  by  the  several  devisees,  legatees,  grantees,  or  donee  of  the  decedent. 

§  1220-xl.  The  term  ' '  debts, ' '  as  used  in  this  chapter, .  shall  include,  in  addi- 
tion to  debts  owing  by  decedent  at  the  time  of  his  death,  the  local  or  State 
taxes  due  from  the  estate  prior  to  his  death,  a  reasonable  sum  for  funeral 
expenses,  the  court  costs,  the  statutory  fees  of  executors,  administrators,  or 
trustees,  and  no  other  sum;  but  said  debts  shall  not  be  deducted  unless  the 
same  are  approved  and  allowed,  within  fifteen  months  from  the  death  of 
decedent,  as  established  claims  against  the  said  estate,  unless  otherwise  ordered 
by  the  judge  of  the  proper  county,  or,  in  case  of  foreign  estates  where  the 
property  within  this  State  consists  of  personal  property  only,  allowed  by  the 
Attorney-General. 

§§  2  to  7.  Provide  for  the  appointment  of  appraisers,  their  compensation 
and  duties,  with  the  usual  regulations  as  to  notice,  hearings,  appeal  and 
reappraisal. 

§  8.  Eequires  appraisement  within  three  months  and  payment  of  the  tax 
within  fifteen  months  after  death,  or  the  property  will  be  decreed  to  be  sold. 

§  9.  Provides  for  the  valuation  of  life  interests  in  real  property  and  their 
present  taxation  on  the  expiration  of  such  life  estate,  the  remainder  is  valued 
less  any  betterments  by  the  remainderman,  and  the  tax  then  becomes  due  and 


1112  THE  STATE  STATUTES 

payable  within  sixty  days.  In  case  of  personalty  the  court  apportions  the  tax 
on  the  value  of  the  life  estate  and  the  remainder,  and  it  is  then  presently 
payable. 

§  10.  Taxes  bequests  to  executors  in  lieu  of  commissions  when  in  excess  of 
reasonable  compensation. 

§  11.  Requires  the  heir  to  deduct  the  tax  when  a  legacy  is  charged  on  real 
estate,  makes  it  a  lien,  and  provides  for  enforcement  in  the  same  manner  as 
the  legacy. 

§  12.  Requires  the  executor  or  administrator  to  deduct  the  tax  or  collect  it 
from  the  beneficiary,  and  property  may  not  be  delivered  until  the  tax  is  paid. 

§  13.  Makes  taxes  payable  within  fifteen  months;  after  that  8  per  cent  is 
charged.  The  time  may  be  extended  and  interest  abated  in  a  proper  case  by 
the  court,  or  in  case  of  nonresidents  by  the  attorney-general. 

§  14.  Provides  for  proceedings  to  sell  real  estate  to  pay  the  tax  in  the  same 
way  as  to  pay  debts. 

§  15.  Provides  that  final  accounting  must  show  payment  of  tax  before  settle- 
ment allowed. 

§  16.  Gives  district  court  issuing  letters  jurisdiction  in  tax  proceedings. 

§  17.  Empowers  the  state  treasurer  to  demand  information  from  executors 
and  administrators. 

§  18.  Provides  for  the  keeping  of  an  inheritance  tax  book  by  the  clerk  of 
the  district  court. 

§  19.  Provides  for  inventory  by  executors  and  administrators,  and  the  keep- 
ing of  a  real  estate  lien  book. 

§  20.  Authorizes  the  court  to  extend  the  time  of  appraisement,  but  not  for 
more  than  three  months. 

§§  21  to  25.  Prescribe  the  duties  of  the  court  clerk  and  provide  for  collection 
of  delinquent  taxes  by  the  attorney-general. 

§  26.  No  safe  deposit  company,  bank,  or  other  institution,  person,  or  per- 
sons holding  securities  or  assets  of  the  decedent  shall  deliver  or  transfer  the 
same  to  the  executor  or  administrator  or  legal  representative  of  said  decedent 
unless  notice  of  the  time  and  place  of  such  intended  transfer  be  served  upon 
the  state  treasurer  at  least  five  days  prior  to  the  transfer  thereof,  or  unless 
the  tax  for  which  such  securities  or  assets  are  liable  under  this  title  shall  be 
first  paid.  It  shall  be  lawful  for,  and  the  duty  of,  the  state  treasurer  person- 
ally, or  by  any  person  by  him  duly  authorized,  to  examine  such  securities  or 
assets  at  the  time  of  such  delivery  or  transfer.  Failure  to  serve  such  notice 
upon  the  state  treasurer,  or  to  allow  such  examination  on  the  delivery  of  such 
securities  or  assets  to  such  executor,  administrator,  or  legal  representative 
before  said  tax  is  paid  shall  render  such  safe  deposit  company,  trust  company, 
bank,  or  other  institution,  person,  or  persons  liable  for  the  payment  of  the 
taxes  due  upon  such  securities  or  assets  as  provided  in  this  title. 

§  27.  Where  any  property  belonging  to  a  foreign  estate  is  subject  to  the 
payment  of  an  inheritance  tax  in  this  state,  such  tax  shall  be  assessed  upon 
the  market  value  of  such  property  remaining  after  the  payment  of  such  debts 
and  expenses  as  are  chargeable  to  the  property  under  the  laws  of  this  state, 
and  in  the  event  that  the  executor,  administrator  or  trustee  of  such  foreign 
estate  files  with  the  clerk  of  the  court  having  ancillary  jurisdiction,  state- 
ments in  writing  exhibiting  the  true  market  value  of  the  entire  estate  of  the 
decedent  owner,  and  the  indebtedness  for  which  the  said  estate  has  been  adjudged 
liable,  which  statements  shall  be  in  affidavit  form  and  sworn  to  by  such  executor, 
administrator  or  trustee,  the  beneficiaries  of  said  estate  shall  then  be  entitled 
to  have  deducted  such  proportion  of  the  said  indebtedness  of  the  decedent  from 
the  value  of  the  property  within  this  state,  as  the  value  of  the  property  within 
this  state  bears  to  the  value  of  the  entire  estate;  provided,  that  in  all  such  cases 
where  the  property  within  this  state  consists  of  personal  property  only,  the 
statements  hereinbefore  provided  for  shall  be  filed  with  the  attorney-general. 

§  28.  Whenever  any  property,  real  or  personal,  within  this  state,  belongs  to 
a  foreign  estate,  said  foreign  estate  passes  in  part  exempt  from  the  inheritance 
tax,  and  in  part  subject  to  such  inheritance  tax,  and  it  is  within  the  authority 
or  discretion  of  the  foreign  executor,  administrator,  or  trustee  administering 
the  estate  to  dispose  of  the  property  not  specifically  devised  to  direct  heirs  or 
devisees  in  the  payment  of  the  debts  owing  by  the  decedent  at  the  time  of  his 
death  or  in  the  satisfaction  of  legacies,  devises,  or  trusts  given  to  direct 


UTAH  1H3 

and  collateral  legatees  or  devisees,  or  in  payment  of  the  distributive  shares  of 
any  direct  and  collateral  heirs,  then  the  property  within  the  jurisdiction  of 
the  state,  belonging  to  such  foreign  estate,  shall  be  subject  to  the  inheritance 
tax  imposed  by  this  title,  and  the  tax  due  thereon  shall  be  assessed  as  provided 
in  the  next  preceding  section  of  this  title,  and  with  the  same  proviso  respect- 
ing the  deduction  of  the  proportionate  share  of  the  indebtedness,  as  therein 
provided. 

§  29.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer 
any  corporate  stock  or  obligations  in  this  state  standing  in  the  name  of  a 
decedent,  or  in  trust  for  a  decedent,  liable  to  such  tax,  the  tax  shall  be  paid  to 
the  state  treasurer  on  or  before  the  transfer  thereof;  otherwise  the  corporation 
permitting  its  stock  to  be  so  transferred  shall  be  liable  to  pay  such  tax,  and  it 
is  the  duty  of  the  state  treasurer  to  enforce  the  payment  thereof. 

§  30.  Whenever  an  estate  charged,  or  sought  to  be  charged,  with  the  inherit- 
ance tax,  is  of  such  a  nature  or  is  so  disposed  that  the  liability  of  the  estate  is 
doubtful,  or  the  value  thereof  cannot  with  reasonable  certainty  be  ascertained 
under  the  provisions  of  law,  the  state  treasurer  may,  with  the  approval  of  the 
attorney-general,  which  approval  shall  set  forth  the  reasons  therefor,  com- 
promise with  the  beneficiaries  or  representatives  of  such  estates,  and  compound 
the  tax  thereon;  but  said  settlement  must  be  approved  by  the  district  court 
or  judge  of  the  proper  court,  and  after  such  approval,  the  payment  of  the 
amount  of  the  taxes  so  agreed  upon  shall  discharge  the  lien  against  the  prop- 
erty of  the  estate. 

§  31.  This  title  shall  apply  to  all  pending  estates  which  are  not  closed,  and 
the  property  subjected  by  this  title  to  the  said  tax  is  liable  to  the  provisions 
incorporated  in  this  title. 

[NOTE:  Constitutionality  of  rate  of  3  per  cent  on  estates  of  $10,000  to 
$25,000  and  5  per  cent,  on  balance  sustained.  Ee  Howe's  Estate,  166  Pac.  990.] 


1114 


THE  STATE  STATUTES 


VERMONT. 

Taxes  only  real  estate  of  nonresidents. 

Until  June  1,  1917,  Vermont  only  taxed  collaterals  and  strangers. 

TABLE  OF  RATES  UNDER  STATUTE  OF  1917 
Became  a  law  June  1,  1917. 


CLASS  OR  RELATIONSHIP 

Exemp- 
tion 

Rates 

$10,000 
to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$250,000 

In  excess 
of 
$250,000 

Husband,  wife,  child,  father,  mother, 
or  grandchild  of  a  descendant,  son- 
in-law,  daughter-in-law,  adopted 
or  mutually  acknowledged  child, 
step-child,  other  lineal  descendant. 

$10,000 

1  of 
1,0 

2% 

4% 

5% 

All  others,  excepting  charities  named 
in  second  table. 

None 

5%  on  all. 

TABLE  OF  RATES  AND  EXEMPTIONS  PRIOR  TO  APRIL  12,  1917 


CLASS  OK  RELATIONSHIP 

Exemption 

Rate  of  tax 

Father,  mother,  husband,  wife,  lineal  descendant,  the  wife  or  widow 
of  a  son,  the  husband  of  a  daughter,  a  step-child,  a  child  adopted  as 
such  during  his  minority  in  conformity  with  the  laws  of  this  state, 
a  child  of  a  step-child  or  of  such  adopted  child,  bishop  in  his  ecclesi- 
astical capacity  for  religious  uses  within  this  state,  or  a  city  or  town 
for  cemetery  purposes;  and  every  charitable,  educational  or  religious 
society  or  institution,  other  than  one  created  and  existing  under 
and  by  virtue  of  the  laws  of  this  state  and  having  its  principal  office 
herein. 

All 

No  tax. 

All  others  

None 

5%  on  all. 

NO.  52,  LAWS  1917. 

An   Act   in   Addition    to   Chapter    38   of   the   Public    Statutes,    Relating    to    the 

Taxation  of  Inheritance  and  Taxable  Transfers. 
It  is  hereby  enacted  by  the  General  Assembly  of  the  State  of  Vermont: 

Section  1.  The  husband,  wife,  child,  father,  mother  or  grandchild  of  a  dece- 
dent, the  wife  or  widow  of  a  son  or  the  husband  of  a  daughter  thereof,  a 
child  adopted  during  its  minority  by  a  decedent  during  his  life  under  the  laws 
of  this  State,  a  step-child  of  a  decedent,  a  child  of  such  adopted  child  or  of 
such  step-child,  or  other  lineal  descendants  of  a  decedent  who  receives  from 
such  decedent,  in  trust  or  otherwise,  a  legacy  or  distributive  share  consisting 
of  or  arising  from  property  or  an  interest  therein  owned  by  such  decedent  at 
his  decease  and  passing  by  will,  the  laws  of  descent  or  a  decree  of  a  court  in 
this  State,  shall,  except  as  otherwise  provided,  pay  to  the  State  a  tax  at  the 
following  rates: 

On  the  excess  of  its  value  over  ten  thousand  dollars  and  not  exceeding 
twenty- five  thousand  dollars,  at  1% ; 

On  the  excess  of  its  value  over  twenty-five  thousand  dollars  and  not  exceeding 
fifty  thousand  dollars,  2% ; 

On  the  excess  of  its  value  over  fifty  thousand  dollars,  and  not  exceeding  two 
hundred  fifty  thousand  dollars,  at  4% ; 


VERMONT  1H5 

On  the  excess  of  its  value  over  two  hundred  fifty  thousand  dollars,  at  5%. 

§  2.  The  provisions  of  this  act  imposing  a  tax  upon  legatees  or  distributive 
shares  passing  to  persons  enumerated  in  the  preceding  section  shall  not  apply 
to  legacies  or  shares  passing  from  the  estates  of  persons  who  deceased  prior 
to  the  date  whereon  this  act  takes  effect. 

§  3.  The  two  preceding  sections  shall  be  construed  to  be  in  addition  to  and 
forming  a  part  of  chapter  38  of  the  Public  Statutes  (chapter  48  of  the  General 
Laws,  as  proposed).  Unless  inconsistent  with  or  repugnant  to  the  context  of 
this  act,  all  provisions  of  said  chapter  38  (chapter  48,  G.  L.),  and  of  all  acts  or 
parts  of  acts  in  amendment  thereof  or  in  addition  thereto  shall  be  construed 
to  apply  to  the  taxes  assessed  in  the  first  section  of  this  act  with  the  same 
force  and  effect  as  if  such  last  named  section  were  a  part  of  said  chapter. 

Approved  April  12,  1917. 

Prior  to  an  act  of  1917  the  Vermont  Inheritance  Statute  is  summarized  as 
follows : 

PUBLIC  STATUTES  OF  1906,  AS  AMENDED  BY  LAWS  OF  1912, 
CHAPTER  60. 

§  822.  After  making  the  above  exemptions  prescribes  as  to  all  others:  that 
shall  receive  in  trust  or  otherwise  a  legacy  or  distributive  share  consisting  of 
or  arising  from  real  estate  within  this  State  or  any  interest  therein  owned  by 
such  decedent  at  the  date  of  his  death,  and  passing  by  will,  the  laws  of  descent, 
or  a  decree  of  court  in  this  State,  or  that  shall  receive  in  trust  or  otherwise 
a  legacy  or  distributive  share  consisting  of  or  arising  from  personal  estate  or 
any  interest  therein  so  passing  from  such  decedent  who  at  the  date  of  his 
death  was  an  inhabitant  of  this  State  and  then  owned  such  personal  property 
shall,  except  as  otherwise  provided  in  this  chapter,  pay  to  the  State  a  tax  of 
5%  of  the  value  in  money  of  such  legacy  or  distributive  share. 

§  823.  Every  person,  unless  one  of  a  class  exempted  in  the  preceding  sec- 
tion, who  acquires  title  to  real  estate  within  this  State  or  any  interest  therein 
by  deed,  grant,  or  gift,  except  in  case  of  a  bona  fide  purchase  for  a  full  con- 
sideration in  money  or  money's  worth,  made  or  intended  to  take  effect  in 
possession  or  enjoyment  upon  or  after  the  death  of  the  grantor  or  donor ; 
and  every  such  person  who  thus  acquires  title  to  personal  estate  or  any  interest 
therein  from  a  deceased  person  who  at  the  date  of  his  death  was  an  inhabitant 
of  this  State  and  then  owned  such  property,  shall  pay  to  the  State  the  same 
tax  that  he  would  have  been  required  to  pay  had  such  estate  or  interest  passed 
to  him  from  such  deceased  person  by  will,  the  laws  of  descent,  or  decree  of  a 
court  in  this  State.  Such  tax  shall  be  a  first  lien  on  the  real  or  personal  estate 
thus  conveyed,  until  such  tax  is  paid  in  full. 

§§  824-825.  Are  repealed  by  chapter  60,  L.  1912. 

§  826.  Exempts  bequests  to  maintain  burial  costs. 

§  827.  Requires  the  executor  or  administrator  to  deduct  the  tax  or  collect  it 
from  the  heir  or  legatee. 

§  828.  Gives  power  of  sale  to  pay  the  tax  in  the  same  manner  as  to  pay  debts. 

§  829.  Makes  the  tax  a  lien  on  property  and  forbids  its  delivery  to  bene- 
ficiary until  the  tax  is  paid. 

§  830.  Makes  the  executor  or  administrator  personally  liable  and  requires  him 
to  collect  the  tax  from  heir  to  real  estate. 

§  831.  Requires  the  heir  to  deduct  the  tax  when  a  legacy  is  charged  on  real 
estate,  makes  it  a  lien  and  provides  for  its  enforcement. 

§  832.  Requires  that  final  accounting  shall  show  that  all  taxes  have  been 
paid. 

§  833.  Gives  the  probate  court  granting  letters  jurisdiction  in  transfer  tax 
proceedings. 

§§  834-837.  Provide  for  appeals  proceedings  in  the  Supreme  Court  hearings 
and  costs. 

§§  838-841.  Provide  that  the  probate  court  may  value  the  estate  and  for 
proceedings  on  such  valuation. 

§§  842-847.  Provide  for  valuation  by  appraisers  and  proceedings  thereon. 

§§  848-852.  Provide  for  valuation  by  agreement  between  foreign  personal 
representatives  and  the  commissioner  of  State  taxes.  These  sections  now  apply 
only  to  real  estate  within  the  State. 


1116  THE  STATE  STATUTES 

§§  853-857.  Provide  for  the  valuation  of  life  estates  and  remainders  upon 
American  experience  tables  with  the  rate  of  interest  at  3%%. 

§  858.  Taxes  bequests  to  executors  in  lieu  of  commissions  in  excess  of  reason- 
able compensation. 

§  859.  Provides  for  receipts. 

§  860.  Provides  for  refunding  taxes  erroneously  paid. 

§§  861-869.  Provide  for  the  payment  of  taxes  which  are  due  two  years  after 
death  unless  a  legacy  shall  have  been  paid  before  them,  in  which  case  the  tax 
must  be  paid  on  delivery.  The  probate  court  may  extend  the  time  on  good 
cause  shown.  Taxes  on  grants  and  gifts  in  contemplation  of  death  are  due 
three  months  after  death  of  donor  or  when  beneficiary  takes  possession  if  he 
does  so  before  the  three  months,  and  such  beneficiaries  must  file  an  inventory  of 
the  property  under  penalty  of  not  more  than  10%  nor  less  than  5%  of  its 
value  to  be  recovered  in  a  civil  action.  Taxes  not  paid  when  due  bear  interest 
from  that  date. 

&§  870-871.  Provide  for  reports  to  the  commissioner  of  State  taxes  by  the 
register  of  probate  as  to  estates  liable  to  the  tax. 

§  872.  Authorizes  the  commissioner  of  State  taxes  to  apply  for  administra- 
tion if  no  proceedings  have  been  brought  within  four  months  after  death. 

§  873.  Requires  the  register  of  probate  to  notify  the  commissioner  of  such 
cases. 

The  remaining  sections,  874  to  901,  refer  to  the  collection  of  taxes  on  non- 
residents and  are  now  obsolete,  as  the  amendment  of  1912  imposes  such  taxes 
only  on  real  estate  within  the  State. 

AMENDMENT  OF  1919. 

By  chapters  48  and  49,  Laws  of  1919,  the  probate  may  appoint  an  appraiser 
to  represent  the  State  upon  the  application  of  the  commissioner  of  taxes.  The 
exemption  for  cemetery  purposes  is  confined  to  cemeteries  within  the  State. 
Otherwise  the  law  stands  unchanged  since  the  amendments  of  1917. 


VIRGINIA 


1117 


VIRGINIA. 

Virginia  has  imposed  a  collateral  inheritance  tax  since  1844.  From  1903 
to  1916  the  rate  was  5%.  The  act  of  1916  imposed  the  rates  given  in  the 
table  below.  A  new  act  was  passed  in  1918,  which  applies  to  all  estates  where 
death  occurred  after  June  21,  1918. 

TABLE  OF  BATES  AND  EXEMPTIONS  AS  TO  ALL  PERSONS  DYING 
AFTER  MARCH  22,  1916,  AND  BEFORE  June  21,  1918 


Graded  rates 

CLASS  OR  RELATIONSHIP 

Amount 
of 

In 

exemp- 

excess 
of 

$50,000 

$250,000 

In 

to 

to 

excess  of 

exemp- 
tion to 

$250,000 

$1,000,000 

$1,000,000 

$50,000 

Grandparents,  parents,  husband,  wife, 
brother,  sister  or  lineal  descendant. 

$15,000 

1% 

2% 

3% 

4% 

All  others  except  state,  county,  munic- 
ipal, benevolent,  charitable,  educa- 

None 

5% 

10% 

15% 

20% 

tional  or  religious  purposes  which 

are  exempted. 

TABLE  OF  RATES  AND  EXEMPTIONS  AS  TO  ESTATES  OF  ALL  PERSONS   DYING   AFTER 

JUNE  21,  1918 


Above 

Class  or  Relationship 

Ex- 

exemp- 
tion to 

$50,000 
to 

$100,000 
to 

$500,000 
to 

In  excess 
of 

emption 

$50,«00 

$100,000 

$500,000 

$1,000,000 

$1,000,000 

Class    A.     Husband,    wife,    lineal 

$10,000 

1% 

2% 

3% 

4% 

5% 

ancestor,  lineal  descendant. 

Class  B.    Brother,  sister,  nephew, 

4,000 

2% 

4% 

6% 

8% 

10% 

niece. 

Class   C.     All   others,    except   be- 

1,000 

5% 

7% 

9% 

12% 

15% 

quests  for  State,  county,  munici- 

pal,   charitable,    educational    or 

religious  purposes,  or  institutions 

exempt     from     State     taxation, 

which  are  exempt  from  inherit- 

ance tax. 

[NOTE:  By  amendment  of  1922,  effective  March  27,  1922,  a  tax  of  2  per  cent 
is  imposed  upon  the  transfer  of  all  property  of  nonresident  decedents  within 
the  State.  See  page  1123.] 

VIRGINIA  CODE  OF  1903,  AS  AMENDED  BY  LAWS  OF  1910,  CHAPTER  148. 
AND  LAWS  OF  1916,  CHAPTER  484  (APPROVED  MARCH  22,  1916). 

§  44  (a).  Where  any  estate  in  this  Commonwealth  of  any  decedent  shall  pass 
under  a  will  or  the  laws  regulating  descents  and  distributions  to  any  person  or 
for  the  use  of  any  person  the  estate  so  passing  shall  be  subject  to  a  tax. 

The  subdivision  then  prescribes  the  rates  and  exemptions  as  shown  in  the 
foregoing  table. 

(b)  The  personal  representative  of  such  decedent  shall  pay  the  whole  of 
such  tax,  except  on  real  estate,  to  sell  which  or  to  receive  the  rents  and  profits 
of  which  he  is  not  authorized  by  the  will,  and  the  sureties  on  his  official  bond 
shall  be  bound  for  the  payment  thereof. 


1118  THE  STATE  STATUTES 

(c)  Where  there  is  DO   personal  estate,  or  the   personal  representative  is   not 
authorized  to  sell  or  receive  the  rents  and  profits  of  the  real  estate,   the  tax 
shall   be   paid   by  the   devisee   or   devisees,    or   those    to   whom   the    estate   may 
descend  by  operation  of  law;  and  the  tax  shall  be  a  lien  on  such  real  estate, 
and  the  treasurer  may  rent  or  levy  upon  and  sell  so  much  of  said  real  estate 
as  shall  be  sufficient  to  pay  the  tax  and  expenses  of  sale,  etc. 

(d)  Such  payment  shall  be  made  to  the  treasurer  of  the  county  or  city  in 
which  certificate  was  granted  such  personal  representative  for  obtaining  probate 
of  the  will  or  letters  of  administration. 

(e)  The  corporation  or  hustings  court  of  a  city,  the  circuit  court  of  a  county, 
or  city,  the  chancery  court  of  the  city  of  Richmond,  the  law  and  chancery  court 
of  the  city  of  Norfolk,   or  the   clerk  of  the  circuit  court  of  a  county   or   city, 
before   whom   a   will  is   probated   or   administration   is   granted   shall    determine 
the  collateral  inheritance  tax,  if  any,  to  be  paid  on  the  estate  passing  by  will 
or  administration,  and  shall  enter  of  record  in  the  order  book  of  the   court  or 
clerk,  as  the  case  may  be,  by  whom  such  tax  shall  be  paid  and  the  amount  to  be 
paid.     The  clerk  of  the  court  shall  certify  a  copy  of  such  order  to  the  treasurer 
of  his  county  or  city  and  to  the  auditor  of  public  accounts,  for  which  services 
the  clerk  shall  be  paid   a  fee  of  two   dollars   and  fifty  cents  by  the   personal 
representative  of  the  estate.     The  auditor  of  public  accounts   shall  charge  the 
treasurer  with  the  tax,  and  the  treasurer  shall  pay  the  same  into  the  treasury 
as   soon   as   collected,    less   a   commission   of   five   per   centum.      Every   personal 
representative  or   other  party  or  officer   failing   in   any  respect   to   comply   with 
this  section  shall  forfeit  one  hundred  dollars. 

(f)  Any  personal   representative,  devisee   or  person   to  whom   the   estate   may 
descend   by   operation    of   law,    failing   to   pay    such   tax   before    the    estate    on 
which  it   is   chargeable   is   paid   or   delivered   over    (whether    he    be    applied   to 
for  the  tax  or  not)   shall  be  liable  to  damages  thereon  at  the  rate  of  ten  per 
centum   per   annum   for   the   time   such   estate   is   paid   or    delivered   over   until 
the  tax   is   paid,   which   damages   may  be   recovered,   with   the    tax,    on   motion 
of  the  Commonwealth,  and  in  the  name  of  the  Commonwealth  against  him   in 
the  circuit  court  for  the  count}7  or  in  the  corporation  court  of  the  city  wherein 
such  tax  was  assessed,  except  that  in  the  city  of  Richmond,  the  motion  shall  be 
in  the  chancery  court.     Such  estate  shall  be  deemed  paid  or  delivered  at  the 
end  of  a  year  from  the  decedent's  death,  unless  and  except  so  far  as  it  may 
appear   that    the   legatee    or    distributee    has   neither    received    such    estate,    nor 
is  entitled  then  to  demand  it.     All  taxes  upon   said  inheritance  paid  into   the 
State  treasury  shall  be  placed  to  the  credit  of  the  public  school  fund  of   the 
Commonwealth    and    shall   be    apportioned    according   to    school    population    and 
be  used  for  the  primary  and  grammar  grades. 

ACT  OF  1918,  CHAPTER  238,  PP.  416  432. 
Note  Issued  by  Tax  Commission. 

Notes:  (a)  Bonds,  notes,  evidences  of  debt,  money,  shares  of  stock,  the 
estate  of  a  nonresident  of  Virginia,  inherited  by  or  bequeathed  to  a  resident 
of  Virginia,  are  not  subject  to  inheritance  tax  in  Virginia  because  such  prop- 
erty is  not  within  the  jurisdiction  of  Virginia. 

(b)  Real  estate  situate  outside  of  the  State  of  Virginia  devised  to  or  inher- 
ited by  a  resident  of  Virginia  is  not  subject  to  inheritance  tax  in  Virginia 
because  such  real  estate  is  not  within  the  jurisdiction  of  Virginia. 

(e)  A  gift,  devise  or  bequest  made  exclusively  to  this  State,  or  exclusively  to  a 
county,  town  or  city  in  this  State,  or  exclusively  for  charitable,  educational  or 
religious  purposes  in  this  State;  or  for  the  exclusive  benefit  of  any  institution, 
association  or  corporation  in  this  State,  whose  property  is  exempt  from  taxation 
by  the  laws  of  this  State,  is  not  liable  to  any  inheritance  tax.  (Sub-section  1.) 

A  gift,  devise  or  bequest  to  any  other  State,  or  a  county,  town  or  city  in 
any  other  State,  or  for  charitable,  educational  or  religious  purposes  in  any 
other  State,  is  liable  to  inheritance  tax  in  Virginia. 

(d)  Bonds  of  the  United  States  and  bonds  of  the  State  of  Virginia,  although 
exempt   in   Virginia   from   taxation    as   property,    are    liable    to    inheritance    tax 
when  they  are  part  of  an  estate  subject  to  inheritance  tax  in  Virginia. 

(e)  In  determining  the  tax  it  is  proper  to  make  deduction  for  debts  due  by 
the  estate  and  the  cost  of  administrat:on  of  the  estate. 


VIRGINIA  1119 

THE  STATUTE. 

§  44.  (As  amended  by  act  approved  March  15,  1918,  chap.  238,  pages  416-422, 
Acts  of  Assembly  1918.)  1.  All  property  within  the  jurisdiction  of  the  Common- 
wealth, real,  personal  and  mixed,  and  any  interest  therein,  whether  belonging  to 
inhabitants  of  the  Commonwealth  or  not,  which  shall  pass  by  will,  or  grant  or 
gift  (except  in  case  of  a  bona  fide  purchase  for  full  consideration  in  money  or 
money's  worth)  made  or  intended  to  take  effect  in  possession  or  enjoyment  after 
the  death  of  the  grantor,  whether  absolutely  or  in  trust,  except  to  or  for  the  use 
of  (Class  A)  the  husband,  wife,  lineal  ancestor,  or  lineal  descendant  of  a  de- 
cedent, or  to  or  for  the  use  of  (Class  B)  the  brother,  sister,  nephew,  or  niece  of 
a  decedent,  shall  be  subject  to  a  tax  of  five  per  centum  of  the  fair  market  value 
or  so  much  thereof  as  is  in  excess  of  one  thousand  dollars  and  not  in  excess  of 
fifty  thousand  dollars,  to  a  tax  of  seven  per  centum  upon  all  in  excess  of  fifty 
thousand  dollars  and  up  to  one  hundred  thousand  dollars,  to  a  tax  of  nine  per 
centum  upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  five  hundred 
thousand  dollars,  to  a  tax  of  twelve  per  centum  on  all  in  excess  of  five  hundred 
thousand  dollars  and  up  to  one  million  dollars,  and  a  tax  of  fifteen  per  centum 
upon  all  in  excess  of  one  million  dollars;  and  such  property  which  shall  so  pass 
to  or  for  the  use  of  a  member  of  Class  A  shall  be  subject  to  a  tax  of  one  per 
centum  of  the  fair  market  value  of  so  much  thereof  as  is  in  excess  of  ten 
thousand  dollars  and  not  in  excess  of  fifty  thousand  dollars,  to  a  tax  of  two  per 
centum  upon  all  in  excess  of  fifty  thousand  dollars  and  up  to  one  hundred 
thousand  dollars,  to  a  tax  of  three  per  centum  upon  all  in  excess  of  one  hundred 
thousand  dollars  and  up  to  five  hundred  thousand  dollars,  to  a  tax  of  four  per 
centum  upon  all  in  excess  of  five  hundred  thousand  dollars  and  up  to  one  million 
dollars,  and  to  a  tax  of  five  per  centum  upon  all  in  excess  of  one  million  dollars; 
and  such  property  which  shall  so  pass  to  or  for  the  use  of  a  member  of  Class  B 
shall  be  subject  to  a  tax  of  two  per  centum  of  the  fair  market  value  of  so  much 
thereof  as  is  in  excess  of  four  thousand  dollars  and  not  in  excess  of  fifty 
thousand  dollars,  to  a  tax  of  four  per  centum  upon  all  in  excess  of  fifty 
thousand  dollars  and  up  to  one  hundred  thousand  dollars,  to  a  tax  of  six  per 
centum  upon  all  in  excess  of  one  hundred  thousand  dollars  and  up  to  five 
hundred  thousand  dollars,  to  a  tax  of  eight  per  centum  upon  all  in  excess  of 
five  hundred  thousand  dollars  and  up  to  one  million  dollars,  to  a  tax  of  ten  per 
centum  upon  all  in  excess  of  one  million  dollars;  but  no  such  gift,  bequest, 
devise  or  distributive  share  of  an  estate  which  shall  so  pass  to  or  for  the  use 
of  the  husband,  wife,  lineal  ancestor  or  lineal  descendant  of  a  decedent,  unless 
its  fair  market  value  exceed  the  sum  of  ten  thousand  dollars,  and  no  such  gift, 
bequest,  devise  or  distributive  share  of  an  estate  which  shall  so  pass  to  or  for 
the  use  of  the  brother,  sister,  nephew  or  niece  of  a  decedent,  unless  its  fair 
market  value  exceed  the  sum  of  four  thousand  dollars,  and  no  other  such  gift, 
bequest,  devise  or  distributive  share  of  an  estate  unless  its  fair  market  value 
exceed  the  sum  of  one  thousand  dollars,  nor  any  such  gift,  devise  or  bequest 
made  exclusively  for  State,  county,  municipal,  charitable,  educational  or  religious 
purposes  in  this  State,  nor  any  such  gift,  devise  or  bequest  made  for  the  ex- 
clusive benefit  of  any  institution,  association  or  corporation  in  this  State  whose 
property  is  exempt  from  taxation  by  the  laws  of  this  State,  shall  be  subject  to  the 
provisions  of  this  act. 

2.  The  personal  representative  of  such  decedent  shall  withhold  and  pay  the 
whole  of  said  tax,  except  the  tax  on  the  transfer  of  such  real  estate  belonging 
to  the  estate  of  the  decedent  as  he  is  not  authorized  to  sell  or  receive  the  rents 
and  profits  from,  and  sureties  on  his  official  bond  shall  be  bound  for  the  payment 
thereof. 

3.  Where  the  personal  representative  is  not  authorized  to  sell  or  receive  the 
rents  and  profits  from  any  real  estate  belonging  to  the  estate  of  his  decedent 
and  passing  at  his  death,  the  taxes  upon  the  transfer  of  such  real  estate  shall 
be   paid   by  the   devisee,    devisees,    or    heirs-at-law    of    such    decedent,    or    other 
person  or  persons  to  whom  such  real  estate  shall  pass,  whether  by  the  terms 
of  the  decedent's  will  or  of  any  deed  or  grant  made  by  him  in  his  life  time 
and   taking    effect    at   his    death,    or    by    operation    of    the    statutes    regulating 
descents  and  distributions. 

4.  The  tax  on  the  transfer  of  any  property,  of  whatever  nature,  as  to  which 
the  decedent  shall  die  intestate,  or  which  is  not  under  the  control  of  a  personal 
representative,   shall  be  paid  by  the   distributee,   distributees,   heir   or   heirs-at- 


1120  THE  STATE  STATUTES 

law  of  such  decedent,  or  by  the  other  person  or  persons  to  whom  such  property 
shall  pass  under  the  laws  regulating  descents  and  distributions,  or  by  operation 
of  any  deed  or  gift  made  by  the  decedent  in  his  life  time  and  taking  effect 
upon  his  death. 

5.  The   corporation   or    hustings    court    of   a    city,    or   the    circuit    court    of    a 
county   or    city,    the    chancery    court    of    the    city"  of    Richmond,    the    law    and 
chancery  court  of  the  city  of  Norfolk,  or  the  clerk  of  the  circuit  court  of  a 
county  or  city  or  the  clerk  of  the   corporation  or  hustings  court  of  the   city, 
before  whom   the  will   is  probated   or   administration   granted,    shall    determine 
the  amount  of  the  tax  provided  for  by  this  act  to  be  computed  upon  the  transfer 
of  such  property  as  passes  by  such  will,   or  as  comes  into  the  hands  of  such 
administrator   for   the   purpose   of    ascertaining   the   taxes    due   under    this    act, 
the  court  of  every  city  and  county  having  jurisdiction  to  admit  wills  to  probate 
and  to  grant  letters  of  administration  shall  designate  one  of  its  commissioners 
whose  duty  it  shall  be,   except  where  the   estate  is  administered  in  a   suit,   to 
investigate  and  report  to  the  court  or  clerk,  as  the  case  may  be,  the  value  of 
the   estate   of   every  decedent   chargeable   with   a   tax  under   this   act,   and   the 
probate  of  whose  will  or  letters  of  administration  on  whose  estate  is   had   in 
said  court  or  clerk's  office,  and  report  the  amount  and  kinds  thereof  and  the 
persons   who    are    entitled    to    the    same;    and   the    said    commissioner    shall    be 
allowed  for  his  services  for  making  said  appraisement  and  report  one-half   of 
one  per  cent  of  said  estate  so  taxable,  payable  out  of  said  estate  as  part  of 
the  cost  of  administration;  provided,  however,  that  said  compensation  shall  in 
no  case  be  less  than  five  nor  more  than  fifty  dollars,   except  that   for  special 
services  rendered  the  court  may  allow  greater  compensation.     Upon  the  report 
of   said   commissioner  the   said   court   or  the   clerk   of   any   court   clothed   with 
probate    powers    and   in    the    exercise    thereof,    shall    determine    the    inheritance 
taxes,  if  any,  to  be  paid  on  the  estate  passing  by  will  or  administration,  and 
shall  enter  of  record  in  the  order  book  of  the  court  or  clerk,  as  the  case  may 
be,  the  amount  of  the  tax  to  be  paid  and  by  whom.     And  no   estate  of  any 
decedent,   subject  to   tax  under   this   act   shall   be   distributed   unless   and  until 
the  tax  has  been  assessed  thereon  as  provided  by  this  act.     The  clerk  of  the 
court  shall  certify  a  copy  of  said  order  to  the  treasurer  of  his  county  or  city 
and  a  copy  to  the  auditor  of  public  accounts,  for  which  service  such  clerk  shall 
be   paid   a  fee   of   two    dollars   and   fifty  cents   by   the   personal   representative 
of  such  decedent.     The  Auditor  of  Public  Accounts  shall  charge  the  treasurer 
with  the  tax  and  the  treasurer  shall  pay  the  same  into  the  treasury  as  collected, 
less  a  commission  of  five  per  centum.     And  no  estate  of  any  decedent  subject  to 
investigation  under  this  act  shall  be  distributed  unless  and  until  such  investigation 
shall  have  been  made  and  the  tax,  if  any  be  proper,  has  been  assessed  thereon  as 
provided  by  this  act  (as  amended  Sept.  3,  1919). 

6.  The  amount  of  the  tax  on  a  transfer  of  any  property,  of  whatever  natuie 
as  to  which  the  decedent  shall  die  intestate,  or  which  is  not  under  the  control 
of  a  personal  representative,  shall  be  determined  in  the  same  manner  provided 
in  paragraph  five  of  this  act  by  the  corporation  or  hustings  court  of  a  city, 
or  the  circuit   court   of   a   county  or   city,   the    chancery   court   of   the   city   of 
Eichmond,  the  law  and  chancery  court  of  the  city  of  Norfolk,  or  the  cleik  of 
the  circuit  court  of  the  county  or  city,   or  other  court  in  which  certificate  was 
granted  the  personal  representative  for  obtaining  probate  of  the  will  or  letters  of 
administration;    and   if   there   has   been   no    qualification    on   the    estate   of    the 
decedent,  the  amount  of  said  tax  shall  be  determined  in  the  same  manner  pro- 
vided in  paragraph  five  of  this  act  by  the  corporation  or  hustings  court  of  a 
city,  or  the  circuit  court  of  a  county  or  city,  the  chancery  court  of  the  city  of 
Eichmond,  the  law  and  chancery  court  of  the  city  of  Norfolk,  or  the  clerk  of 
the  circuit  court  of  the  county  or   city,   or  other  court,   in  which  qualification 
might  have  been  had.     Entry  shall  be  made  in  the  order  book  of  the  court  or 
clerk,  as  the  case  may  be,  showing  the  nature  and  value  of  the  property  so  passing, 
the  amount  of  the  tax  determined  and  by  whom  the  same  shall  be  paid.     The 
clerk  of  the  court  shall  certify  a  copy  of   such  order  to  the  treasurer   of  his 
county  or  city  and  a  copy  to  the  Auditor  of  Public  Accounts,  for  which  service 
the  clerk  shall  be  paid  a  fee  of  two  dollars  and  fifty  cents  by  the  person  or 
persons  to  whom  such  property  passes.     The  Auditor  of  Public  Accounts  shall 
charge  the  treasury  with  the  tax  and  the  treasurer  shall  pay  the  same  into  the 
treasury  as  collected,  less  a  commission  of  five  per  centum. 


VIRGINIA 

7.  Said  taxes  shall  be  assessed .  upon  the  actual  value  of  the  property  at  the 
time   of   the   death    of   the   decedent.      In    every    case    where    there    shall    be    a 
devise,  descent,  bequest  or  grant  to  take  effect  in  possession  or  enjoyment  after 
the   expiration  of   one   or  more  life  estates,   the  tax   shall  be   assessed   on  the 
actual  value  of  the  property  or  the  interest   of  the  beneficiary  therein  at  the 
time  when  he  becomes  entitled  to  the  same  in  possession  or  enjoyment.     The 
value  of  an  annuity  or  a  life  interest  in  such  property,  or  any  interest  therein 
less  than  an  absolute  interest,   shall  be  determined  by  the  annuity  tables  pro- 
vided for  by  section  twenty-two  hundred  and  eighty-one   of  the  Code  of  Vir- 
ginia.    In  every  case  in  which  it  is  impossible  to   compute   the  present  value 
of    any   interest   in   property   so    passing   the    court    or    clerk   then    engaged   in 
determining  the  amount  of  the  said  tax  shall,  subject  to  the  approval  of  the 
Auditor  of  Public  Accounts,  affect  such  settlement  of  the  tax  as  such  court  or 
clerk  shall  deem  to  be  for  the  best  interest  of  the  Commonwealth,  and  payment 
of  the  same  so  agreed  upon  shall  be  a  full  satisfaction  of  such  taxes. 

8.  The  clerk  by  whom  the  tax  is  to  be  determined,  or  the  clerk  of  the  court 
by  which  the  tax  is  to  be  determined,  shall  serve  a  written  notice  on  the  attorney 
for  the  Commonwealth  of  the  city  or  county  in  which  such  determination  shall 
be  had,  and  on  each  personal  representative,  devisee,  heir-at-law,  or  other  person  to 
be  charged  with  taxes  by  the  said  clerk  or  court,  at  least  ten  days  before  the 
entry  of  the  order  charging  the  taxes,  and  said  notice  shall  set  forth  the  time 
and  place  at  which  such  determination  shall  be  had ;  but  the  mailing  of  said  notice 
to  the  last  known  address  of  the  party  to  be  notified,  or  to  the  attorney  at  law 
representing  such  party,  shall  be  sufficient  service  under  this  section. 

9.  Taxes    imposed    by    the    provisions    of    this    act    shall    be    payable    to    the 
treasurer  of  the  county  or  city  in  which  the  amount  of  such  tax  was  determined 
and   at  the   expiration   of   one   year   after   the   death   of   the   decedent.     In   all 
cases  in  which  there  shall  be  a  grant,  devise,  descent  or  bequest  to  take  effect 
in  possession  or  come  into  actual  enjoyment  after  the  expiration  of  one  or  more 
life   estates   or   a   term   of   years,    the   taxes   thereon   shall   be   payable    by   the 
executors,    administrators    or   trustees   in   office   when    such    right   of    possession 
occurs,  or,  if  there  is  no  such  executor,  administrator  or  trustee,  by  the  person 
or  persons  so  entitled  thereto,  and  at  the  expiration  of  one  year  after  the  date 
when  the  right  of  possession  accrues  to  the  person  or  persons  so  entitled.     If 
the  taxes  are  not  paid  when  due  a  penalty  thereon  of  twenty  per  centum  and 
interest  at  the  rate  of  six  per  centum  per  annum  on  the  total  amount  of  taxes 
and  penalty  from  the  date  when  the  same  was  due  until  paid,  shall  be  added  to 
the  amount  of  said  taxes  and  collected  as  a  part  of  same. 

10.  Property  of  which  a  decedent  dies  seized  or  possessed   subject   to   taxes 
as  aforesaid,   in  whatever   form   of   investment  it  may   happen  to   be,    and   all 
property  acquired  in  substitution  therefor,  shall  be  charged  with  a  lien  for  all 
taxes   and   interest  thereon  which   are   or   may   become   due   on   such   property; 
but  said  lien  shall  not  affect  any  personal  property  after  the  same  has  been 
sold  or  disposed  of  to  a  bona  fide  purchaser  for  value  by  the  executors,  admin- 
istrators or  trustees.     The   lien  charged  by  this   act   upon   any   real   estate   or 
separate  parcel  thereof  may  be  discharged  by  the  payment  of   the   taxes   due 
and  to  become  due  upon  said  real  estate  or  separate  parcel,  or  by  an  order  or 
decree   of   the   court    discharging    said   lien   and    securing   the    payment    to    the 
Commonwealth  of  the  taxes  due  or  to  become   due  by  bond  or  deposit.     The 
treasurer  may  levy  upon  and  sell  so  much  of  said  property,  both  real  and  per- 
sonal, as  shall  be  sufficient  to  pay  the  taxes  and  expenses  of  sale,  or  he  may 
rent  or  lease  any  portion  of  the  real  estate  charged  with  the  taxes  for  cash 
sufficient  to  pay  the  amount  of  taxes  due. 

11.  If  the  amount  of  the  taxes  charged  is  determined  by  a  court,  the  person 
or   persons   so   charged  with  the   taxes   shall  have   the   right   of   appeal  to   the 
Supreme  Court  of  Appeals  as  in  other  cases. 

12.  Any  person  charged  with  taxes  under  this  section,  aggrieved  by  an  order  of 
any  clerk  of  a  court  determining  the  amount  of  said  taxes,  may,   within  one 
year  after  the  date  on  which  such  order  was  entered,  apply  for  relief  to  the 
court  of  which  such  clerk  is  an  officer.     An  application  in  writing,  setting  forth 
the  manner  in  which  the  applicant  considers  himself  aggrieved,   shall  be   filed 
with  the  clerk  by  whom   such  order  was   made,   at   least  ten  days   before   the 
hearing  of  the  cause,  and  notice  of  the  time  at  which  such  application  will  be 
presented  to   the  court   shall  be   served  upon   the   clerk  of   the   court   and  the 

71 


1122  THE  STATE  STATUTES 

attorney  for  the  Commonwealth,  and  a  copy  of  both  the  application  and  the 
notice  mailed  to  the  Auditor  of  Public  Accounts.  Said  notice  shall  be  served  on 
the  clerk  and  the  attorney  for  the  Commonwealth,  and  a  copy  thereof  mailed 
to  the  Auditor  of  Public  Accounts  at  least  fifteen  days  prior  to  the  date  on  which 
the  application  is  presented  to  the  court.  The  attorney  for  the  Commonwealth 
shall  defend  the  application  and  no  order  made  in  favor  of  the  applicant  shall 
have  any  validity  unless  it  is  stated  therein  that  such  attorney  did  so  defend;  that 
the  clerk  charging  the  taxes,  or  his  successor,  was  examined  as  a  witness  touching 
the  application;  and  the  facts  proved  upon  such  hearing  be  certified. 

13.  If   the   court    be    satisfied   that    the   applicant    is    erroneously    charged    in 
the  clerk's  order  and  that  the  erroneous  charge  was  not  caused  by  the  failure 
or  refusal  of  the  applicant  to  furnish  an  inventory  of  the  property  subject  to 
the  tax  to  the  clerk  of  the  court,  the  court  may  order  that  the  order  of  the 
clerk  be   corrected.     If  the  order   of  the   clerk   charges   more   than   the   proper 
amount,  the  court  may  order  that  the  applicant  be  exonerated  from  the  pay- 
ment of  so  much  as  is  erroneously  charged,  if  not  already  paid,  and  if  paid, 
that  it  be  refunded  to  him.     If  the   order  of  the  clerk  charges  less  than  the 
proper  amount,  the  clerk  shall  order  that  the  applicant  pay  the  proper  taxes. 
A  copy  of  any  order  made  under  this  section  correcting  an  erroneous  order  of  a 
clerk  shall  be  certified  by  the  court  to  the  Auditor  of  Public  Accounts  and  the 
Treasurer  of  the  State. 

14.  If,    from   the   statement   of   the  facts   or   other   evidence,   the   Auditor   of 
Public  Accounts  shall  be  of  opinion  that  the  order  of  the  court,  of  the  orders 
of  the  clerk,  determining  the  taxes  is  erroneous,  he  may,  within  one  year  from 
the  time  such  order  is  made,  file  a  petition  for  a  rehearing  or  review  of  such 
order;  said  petition  may  be  filed  in  the  court  by  which  the  order  was  made  or 
of  which  the  clerk  is  an  officer,  or  with  the  judge  thereof  in  vacation,  and  shall 
be   in   the  name   of   the   Commonwealth,    and    on   the    filing   of   the   same    shall 
operate   as   a   supersedeas    and   the    matter   shall   thereupon   be   reheard    or    the 
order  reviewed  in  said  court,  and  witnesses  examined  in  the  same  manner  as  if 
no  previous  determination  had  been  had.     The  petition  shall  be  presented  and 
the  hearing  conducted  by  the  attorney  for  the  Commonwealth  of  the  county  or 
corporation. 

At  the  rehearing  the  court  shall  make  such  order  therein  as  may  be  proper, 
and  should  the  order  of  the  court  be  against  the  Commonwealth,  the  Auditor 
of  Public  Accounts  may  take  an  appeal  to  the  Supreme  Court  of  Appeals,  and 
a  supersedeas  may  be  granted  in  such  case  in  the  same  manner  as  now  pro- 
vided by  law  in  cases  other  than  cases  of  appeal  of  right.  No  costs  shall  be 
adjudged  against  the  Commonwealth  on  the  appeal,  but  costs  only  may,  in  the 
discretion  of  the  court,  be  awarded  against  the  clerk  of  the  court  who  charged 
the  tax,  if  the  same  be  erroneous. 

15.  Of  all  taxes  upon  said  inheritances  paid  into  the  State  treasury  one-half 
shall  be  placed  to  the  credit  of  the  public  school  fund  of  the  Commonwealth, 
and   shall   be   apportioned   according   to   school   population,    and   the   other   half 
shall  be  remitted  to  the  counties  and  cities  in  which  such  taxes  are  respectively 
collected,  and  all  of  such  taxes  shall  be  used  for  the  primary  and  grammar  grades 
of  the  public  free  schools  of  the  State  and  in  such  counties  and  cities. 

16.  All    acts    and    parts    of    acts    inconsistent    with    this    act    and    specifically 
section  forty-four  of  an   act  entitled  an  act  to  raise  revenue   for  the  support 
of  the  government  and  the  public  free  schools  and  to  pay  the  interest  on  the 
public  debt,  and  to  provide  a  special  tax  for  pensions  as  authorized  by  section 
one  hundred  and  eighty-nine  of  the  Constitution,  approved  April  the  sixteenth, 
nineteen  hundred  and  three,  are  hereby  repealed. 

AMENDMENT  OF  1920. 
Code  Sections  2332,  2333,  2334,  2335   and  2336,  as  Amended  by  Chapter   115, 

Acts  of  Assembly,  1920. 

Sec.  2332.  Omitted  taxes,  levies,  etc.,  how  assessed.  If  the  commissioner  of  the 
revenue,  examiner  of  records  or  other  assessing  officer,  commission  or  board 
designated  by  law  to  assess  persons,  property  (real,  personal  and  mixed),  taxes, 
levies,  et  cetera,  ascertain  that  any  person,  or  any  real  or  personal  property,  or 
income,  or  salary,  or  license  tax,  or  inheritance  tax  has  not  been  assessed,  for  any 
year  of  the  three  years  next  preceding  that  in  which  such  ascertainment  is  made, 


VIRGINIA  H23 

by  the  State,  county,  district,  city  or  town,  or  that  the  same  has  been  assessed 
at  less  than  the  law  required  for  any  one  or  more  of  such  years,  or  that  the  taxes, 
levies,  et  cetera,  thereon,  for  any  cause,  have  not  been  realized,  it  shall  be  the 
duty  of  the  commissioner  of  the  revenue,  examiner  of  records,  or  other  assessing 
officer,  to  list  the  same  and  assess  persons,  property  (real,  personal  and  mixed), 
with  taxes  and  levies  at  the  rate  prescribed  for  that  year,  adding  thereto  a 
penalty  of  five  per  centum  and  interest  at  the  rate  of  six  per  centum  per  annum, 
which  shall  be  computed  upon  the  taxes,  levies  and  penalty  from  the  first  day  of 
December  of  the  year  in  which  such  taxes  should  have  been  paid,  and  any 
treasurer  collecting  such  taxes,  levies,  penalties  and  interest  shall  add  thereto 
interest  at  the  rate  of  six  per  centum,  which  shall  be  computed  upon  the  total 
amount  due  from  the  day  on  which  the  assessment  is  certified  to  him  for  collec- 
tion unless  the  same  is  paid  within  thirty  days  following  such  certification. 

Sec.  2333.  Forms  for  assessment  of,  to  be  prescribed  by  the  Auditor  of  Public 
Accounts.  It  shall  be  the  duty  of  the  Auditor  of  Public  Accounts  to  prescribe 
and  furnish  to  commissioners  of  the  revenue,  forms  upon  which  to  assess  omitted 
taxes  on  persons,  tangible  and  intangible  personal  property,  money,  income  and 
real  estate,  which  form  shall  be  used  by  the  commissioners  of  the  revenue  in 
making  the  assessments  required  by  law,  and  the  assessment  of  omitted  taxes 
shall  not  be  made  upon  the  land,  personal  property  and  income  books  for  the 
current  year's  assessment,  but  shall  be  made  upon  the  forms  prescribed  by  the 
Auditor  of  Public  Accounts,  which  he  is,  by  this  section,  required  to  prepare 
and  furnish. 

Sec.  2334.  Assessment  and  collection;  methods  of  ascertaining  and  reporting. 
Within  the  period  prescribed  in  section  twenty-three  hundred  and  thirty-two,  the 
examiner  of  records  and  the  county  and  city  treasurers  are  hereby  authorized, 
unless  the  assessment  on  intangible  personal  property,  money,  inheritance  and  in- 
come for  omitted  taxes  have  already  been  made,  to  use  the  same  methods  of 
ascertaining  and  reporting  property  for  assessment  and  for  the  assessment  and 
collection  of  all  omitted  taxes  on  intangible  personal  property,  money,  incomes 
and  inheritances  as  are  authorized  to  be  used  for  the  assessment  and  collection 
of  current  taxes  and  shall  receive  the  commissions  allowed  by  law. 

Sec.  2335.  Appropriation  of  taxes  collected  under  sections  twenty-three  hundred 
and  thirty-two  and  twenty-three  hundred  and  thirty-four.  All  State  taxes 
hereafter  assessed  and  collected  under  sections  twenty-three  hundred  and  thirty- 
two  and  twenty-three  hundred  and  thirty-four  are  appropriated  to  the  public  free 
schools  of  the  primary  and  grammar  grades,  except  the  State  taxes  hereafter 
assessed  and  collected  for  pensions. 

Sec.  2336.  Assessments  of  and  suits  or  actions  for  the  collection  of,  not 
invalidated.  Nothing  contained  in  the  four  preceding  sections  shall  operate  to 
invalidate  or  defeat  any  assessment  of  property  or  income  or  inheritance  or  any 
suit  or  action  for  the  collection  of  any  taxes,  made  or  commenced  prior  to  the 
date  on  which  such  sections,  as  amended,  shall  become  effective ;  provided  also 
that  nothing  therein  contained  shall  apply  to  the  assessment  of  any  taxes  or 
levies  by  action,  suit  or  otherwise,  based  upon  valuations  to  establish  which  any 
petition  shall  have  been  filed  with  the  State  Corporation  Commission  prior  to  the 
date  on  which  such  sections,  as  amended,  shall  become  effective. 

AMENDMENT  OF  1922,  TAXING  PERSONAL  PROPERTY  OF  NONRESIDENT 
DECEDENTS,  EFFECTIVE  JUNE  18,  1922. 

Sec.  44%.  Tax  upon  the  transfer  at  death  of  the  personal  property  on  non- 
residents. (1)  All  personal  property  within  the  jurisdiction  of  the  State  and 
any  interest  therein,  belonging  to  persons  whose  domicile  is  without  the 
State  shall,  upon  the  death  of  the  owner,  be  subject  to  a  tax  of  two  per  centum 
of  its  actual  value  for  the  support  of  the  State  government,  upon  its  transfer, 
payment  or  delivery  to  the  executor,  administrator  or  trustee  of  the  estate  of  said 
deceased. 

(2)  No  stock  or  obligation  of  any  national  bank  located  in  this  State  or  of 
any  corporation  organized  under  the  laws  of  this  State,  deposited  in  any  bank, 
trust  company,  or  other  similar  institution  located  in  this  State  or  organized  under 
its  laws,  obligation  of  any  citizen  of  this  State,  or  securities  or  personal  property 
of  any  description  within  the  jurisdiction  of  the  State,  or  any  interest  therein, 
belonging  to  the  estate  of  a  non-resident  shall  be  transferred,  paid  or  delivered 
to  any  person  except  an  executor,  administrator  or  trustee  of  the  estate  of  said 


1124  THE  STATE  STATUTES 

deceased  duly  appointed  either  in  this  State  or  in  the  State  of  the  decedent's 
domicile  by  a  court  having  jurisdiction  for  that  purpose. 

(3)  Such  property  shall   not   be  transferred,   paid   or   delivered   to   a   foreign 
executor,  administrator  or  trustee  until  the  tax  has  been  paid.     Any  person  or 
corporation  which  shall  transfer,  pay,  or  deliver  or  having  control  thereof  shall 
permit  the  transfer,  payment,  or  delivery  of  any  such  property  to   any  person 
other   than   a   resident   executor,   administrator,   or   trustee   before   such   tax   has 
been  paid  shall  be  liable  for  the  tax  and  an  additional  penalty  of  not  more  than 
one  thousand  dollars  in  an  action  brought  by  the  Auditor  of  Public  Accounts. 
Any  such  bank  or  corporation  which  shall  record  such  a  transfer  of  any  share  of 
its  stock  or  if  its  obligations  or  issue  a  new  certificate  of  stock  or  other  instru- 
ment to  evidence  such  a  transfer  before  all  taxes  imposed  upon  the  transfer  by  this 
act  have  been  paid  shall  be  subject  to  the  same  liability  and  penalty. 

(4)  Executors,  administrators,  and  trustees  shall  be  liable  for  such  transfer 
tax  upon  all  such  property  which  shall  come  to  their  hands,  with  interest   as 
hereinafter  provided. 

(5)  Every  person  having  in  his  possession  or   control   any  personal  property 
belonging  to  a  non-resident,  shall,  unless  the  property  is  delivered  to  a  resident 
administrator  within  thirty  (30)   days  after  the  death  of  the  owner,  notify  the 
Auditor    of    Public    Accounts    and   prepare    and    transmit    to    him    an    itemized 
schedule  of  the  property.     If  the  tax  is  not  paid  or  a  resident  administrator 
appointed  within  four  months  after  the  owner's  death  the  circuit  court  of  the 
city  of  Eichmond  shall,  upon  petition  of  the  Auditor  of  Public  Accounts,  appoint 
a  resident  administrator  or  a  special  administrator  as  the  circumstances  of  the 
case  may  require  to  whom  the  property  shall  be  transferred,  whose  duty  it  shall 
be  to  collect  and  pay  the  tax  and  to  account  for  the  balance  of  the  property 
according  to  law  under  the  order  of  the  court. 

(6)  All  taxes  imposed  by  this  act  shall  be  due  and  payable  at  the  time  of  the 
transfer  of  the  property,  and  if  not  then  paid  interest  at  the  rate  of  ten  per 
centum  per  annum  shall  be  charged  and  collected  from  the  time  of  the  transfer 
and  said  taxes  and  interest  shall  be  and  remain  a  lien  on  the  property  transferred 
until  the  same  are  paid.     Provided,  however,  that  if  the  transfer  is  not  made 
within  four  months  after  the  owner's  death  interest  as  aforesaid  shall  be  charged 
and  collected  after  the  expiration  of  said  four  months. 

(7)  Personal    property    within    the    jurisdiction    of    this    State    belonging    to 
non-residents  which  shall  pass  by  deed,  grant,  bargain,  sale,   or   gift,  made  in 
contemplation  of   death,  or  made   or  intended   to   take   effect   in   possession   or 
enjoyment  at  or  after  the  death  of  the  grantor  or  donor  shall  be  subject  to  the 
same  tax  imposed  upon  the  transfers  hereinbefore  described  in  this  act.     The 
taxes   upon  such   transfers   shall   become    due   at   once   upon   the   death   of   the 
grantor  or  donor,  and  if  not  paid  within  four  months  shall  be  subject  to  interest 
as  aforesaid  after  the  expiration  of  said  period,  until  paid.     Said  taxes   and 
interest  shall  be  a  charge  against  the  persons  receiving  such  transfer,   and  the 
property  transferred  and  any  other  property  of  the  grantor  or  donor  within  the 
jurisdiction  of  the  State  shall  be  subject  to  a  lien  to  secure  its  payment.     All 
persons  or  corporations  within  the  jurisdiction  of  the  State  in  whose  possession 
or  control  any  such  property  so  transferred  or  to  be  transferred  remains  at  the 
time  of  the  death  of  the  grantor  or  donor  shall  be  subject  to  all  the  duties,  lia- 
bilities, and  penalties  imposed  by  this  act  upon  persons  having  the  possession  or 
control  of  personal  estate  of  such  a  decedent. 

(8)  A  resident  executor,  administrator,  or  trustee  holding  personal  property  of 
a  deceased  non-resident  subject  to  said  tax  shall  deduct  the  tax  therefrom  or 
collect  it  from  the  executor,  administrator,  or  trustee  in  the  State  of  the  de- 
cedent's domicile,  and  shall  not  deliver  such  property  to  him  or  any  other  person 
until  he  has  collected  the  tax.     When  the  transfer  of  such  personal  property, 
other  than  money,  is  subject  to  a  tax  under  the  provisions  of  this  act  and  the 
executor,  administrator,  or  trustee  in  the  State  of  domicile  neglects  or  refuses 
to  pay  the  tax  upon  demand,  or  if  for  any  reason  the  tax  is  not  paid  within  four 
months  after  the  decedent's  death,  the  resident  administrator,  executor,  or  trustee 
may,  upon  such  notice  as  the  circuit  court  of  the  city  of  Eichmond  may  direct, 
be  authorized  to  sell  such  property,  or  if  the  same  can  be  divided  such  portion 
thereof  as  may  be  necessary,  and  shall  deduct  the  tax  from  the  proceeds  of  such 
.sale  and  shall  account  for  the  balance,  if  any,  in  lieu  of  the  property.     When  a 
conveyance  made  by  a  non-resident  decedent  in  his  lifetime  is  subject  to  said 


VIRGINIA 

tax,  the  resident  executor  or  administrator  shall  collect  the  taxes  due  on  account 
of  such  conveyance  and  may  be  authorized  to  sell  any  property  subject  to  the 
lien  of  such  tax,  as  in  other  cases. 

(9)  The  Auditor  of  Public  Accounts  shall  determine  the  amount  of  all  taxes 
due  and  payable  under  the  provisions  of  this  act  and  shall  certify  the  amount 
due  and  payable  to  the  resident  executor,  administrator  or  trustee,  if  any,  other- 
wise to  the  person  or  persons  by  whom  the  tax  is  payable.     Said  tax  shall  be 
assessed  upon  the  actual  value  of  the  property  transferred  at  the  time  of  the 
decedent 's  death.    Such  tax  shall  be  determined  by  the  Auditor  of  Public  Accounts 
who  shall  certify  the  same  to  the  person  or  persons  by  whom  the  tax  is  payable 
and  such  determination  shall  be  final  unless  the  tax  shall  be  reduced  or  increased 
upon  application  by  the  person  assessed  therewith,  within  one  year  from  the  date 
of  such  assessment,  to  the  circuit  court  of  the  city  of  Richmond.     Upon  such 
application  the  procedure  shall  be  as  near  as  may  be  the  same  procedure  prescribed 
by  section  forty-four  of  this  act  for  the  correction  of  erroneous  assessments  of 
inheritance  taxes,  with  the  same  right  of  appeal  to  the  Supreme  Court  of  Appeals 
of  Virginia,  either  to  the  applicant  or  the  Auditor  of  Public  Accounts  as  pro- 
vided by  law  for  appeals  in  other  cases,  except  cases  in  which  there  is  appeal  as  a 
matter  of  right. 

(10)  The  Auditor  of  Public  Accounts,  whenever  he  has  knowledge  or  reason  to 
believe  that  any  person  or  corporation  has  in  his  possession  or  control  any  personal 
property  belonging  to  the  estate  of  a  deceased  non-resident  upon  which  the  tax 
has  not  been  paid  and  a  schedule  of  which  has  not  been  furnished  him,  as  herein 
provided,  or  that  any  such  person  or  corporation  has  received  a  transfer  of  such 
property  or  made  such  a  transfer   (except  to  a  resident  executor,  administrator, 
or  trustee)  upon  which  the  tax  has  not  been  paid,  as  herein  provided,  or  that 
such  person  or  corporation  has  knowledge  of  a  transfer   of   any   such  personal 
property  of  such  non-resident  decedent  in  his  lifetime  by  deed,   grant,  bargain, 
sale  or  gift,  made  in  contemplation  of  death,  or  made  or  intended  to  take  effect 
in  possession  or  enjoyment  at  or  after  the  death  of  the  grantor  or  donor,  or  has 
possession  or  control  of  property  so  transferred,  may  require  such  person  or  any 
officer   of   such   corporation  to   appear   at  the   office   of   the  Auditor   of   Public 
Accounts,  at  such  time  as  the  Auditor  of  Public  Accounts  may  designate  and 
then  and  there  to   produce  for  the  use  of  the  Auditor  of  Public  Accounts   all 
books,  papers  or  securities  which  may  be  in  the  possession  or  control  of  such 
person  or  corporation  relating  to  such  property  or  transfer  and  to  furnish  such 
other  information  relating  to  the  same  as  he  may  be  able  and  the  Auditor  of 
Public  Accounts  may  require.     Whenever  the  Auditor  of  Public  Accounts  shall 
require  the  attendance  of  any  person,  as  herein  provided,  he  shall  issue  a  notice 
stating  the  time  when  such  attendance  is  required,  and  shall  transmit  the  same 
by  registered  mail,  or  cause  a  copy  of  the  same  to  be  given  in  hand,  to  such 
person  fourteen  (14)  days  at  least  before  the  date  when  such  person  is  required 
to  appear.    If  any  person  receiving  such  notice  shall  neglect  to  attend  or  to  give 
attendance  so  long  as  may  be  necessary,  for  the  purpose  for  which  the  notice 
was  issued,  or  refuses  to  furnish  such  books  or  papers  or  give  such  information, 
or  if  a  corporation  whose  officer  is  thus  summoned  refuses  to  permit  him  to  produce 
such  books,  papers  or  securities  as  are  called  for  and  are  within  the  control  of 
the  corporation  such  person  or  corporation  shall  be  liable  to  a  penalty  of  twenty- 
five   (25)   dollars  for  each  offense,  which  may  be  recovered  by  the  Auditor  of 
Public  Accounts  for  the  use  of  the  State.     Any  person  attending  in  response  to 
summons  as  herein  provided,  shall  thereafter  be  entitled  to  the  same  travel  and 
witness  fees  as  are  allowed  to  witnesses  summoned  to  testify  on  behalf  of  the 
Commonwealth  in  other  cases.     The  Auditor  of  Public  Accounts  may  commence 
an  action  for  the  recovery  of  any  taxes  at  any  time  after  the  same  may  become 
payable. 

(11)  The  Auditor  of  Public  Accounts  shall  provide  such  books  and  blanks  as 
are  requisite  for  the  execution  of  this  act. 

(12)  The  counsel  for  the  State  Tax  Board  shall  conduct  all  litigation  and  shall 
advise  the  Auditor  of  Public  Accounts  upon  all  questions  of  law  arising  in  the 
administration  of  this  act. 

(13)  The  expenses  of  the  execution  of  this  act  shall  be  paid  by  the  Auditor 
of  Public  Accounts  out  of  the  funds  in  the  treasury  not  otherwise  appropriated, 
and  he  may  employ  such  clerical  assistance  as  may  be  necessary  for  the  proper 
execution  of  this  act. 


1126 


THE  STATE  STATUTES 


WASHINGTON. 

Taxes  all  property  of  nonresidents  within  the  State,  including  stock  in  domestic 
corporations. 


On  all  sums 

On  all  sums 

in  excess 

Classification 

On  all 
sums  not 

in  excess  of 
$50,000  and 

of  $100,000 
and 

On  all  sume 

exceeding 

Hot  exceed- 

not exceed- 

in excess 

first  $50,000 

ing  $100,00"! 

ing  $250,000 

of  $C50,OJO 

Father,     mother,     husband,     wife,     lineal 

•1% 

•1% 

3% 

5% 

descendant,     adopted     child     or     lineal 

descendant  of  adopted  child. 

Brother,      sister,      aunt,      uncle,      niece, 

3% 

5% 

1% 

9% 

nephew. 

Collateral     relatives     beyond     the     third 

e% 

9% 

12% 

15% 

degree  and  strangers  to  the  blood. 

Bequests  for  Ihe  relief  of  aged,  indigent 

No  tax 

and    poor   people,    maintenance   of   sick 

or    maimed;    support    or    education    of 

orphans  or  indigent  children. 

*  First  $1 0,000  exempt. 

Note:  The  Amendment  of  1921  makes  no  change  except  to  exempt  from  the 
tax  colleges  and  schools  within  the  State. 

LAWS  OF  19Q1.  CHAPTER  55.  AS  AMENDED  BY  LAWS  OF  1905,  CHAPTERS 
93.  114  AND  115;  LAWS  OF  1907.  CHAPTER  217;  LAWS  OF  1911.  PAGE 
60,  AND  LAWS  OF  1917,  CHAPTER  146. 

Section  1.  (Code,  §  9182.)  All  property  within  the  jurisdiction  of  this  State, 
and  any  interest  therein,  whether  belonging  to  the  inhabitants  of  this  State  or 
not,  and  whether  tangible  or  intangible,  which  shall  pass  by  will  or  by  the 
statutes  of  inheritances  of  this  or  any  other  State,  or  by  deed,  grant,  sale  or 
gift  made  in  contemplation  of  the  death  of  the  grantor  or  donor,  or  by  deed, 
grant  or  sale  made  or  intended  to  take  effect  in  possession  or  in  enjoyment  after 
the  death  of  the  grantor  or  donor  to  any  person  in  trust  or  otherwise,  shall,  for 
the  use  of  the  State,  be  subject  to  a  tax  as  provided  for  in  section  9183,  after 
the  payment  of  all  debts  owing  by  the  decedent  at  the  time  of  his  death,  the 
local  and  State  taxes  due  from  the  estate  prior  to  his  death,  and  a  reasonable 
sum  for  funeral  expenses,  monument  or  crypt,  court  costs,  including  cost  of  ap- 
praisement made  for  the  purpose  of  assessing  the  inheritance  tax,  the  fees  of 
executors,  administrators  or  trustees,  reasonable  attorney's  fees,  and  family 
allowance  not  to  exceed  $1,000,  and  no  other  sum,  but  said  debts  shall  not  be 
deducted  unless  the  same  are  allowed  or  established  within  the  time  provided  by 
law,  unless  otherwise  ordered  by  the  judge  or  court  of  the  proper  county,  and 
all  administrators,  executors,  and  trustees,  and  any  such  grantee  under  a  con- 
veyance, and  any  such  donee  under  a  gift,  made  during  the  grantor's  or  donor's 
life,  shall  be  respectively  liable  for  all  such  taxes  to  be  paid  by  them,  with 
lawful  interest  until  the  same  shall  have  been  paid.  The  inheritance  tax  shall  be 
and  remain  a  lien  on  such  estate  from  the  death  of  the  decedent  until  paid. 

§  2.  Bate  of  Levy.  The  inheritance  tax  shall  be  imposed  on  all  estates  subject 
to  the  operation  of  this  act  at  the  following  rate: 

If  passing  to  or  for  the  use  of  a  father,  mother,  husband,  wife,  lineal  descendant, 
adopted  child,  the  tax  shall  be  one  per  centum  of  any  value  not  exceeding  fifty 
thousand  dollars;  two  per  centum  of  any  value  in  excess  of  fifty  thousand  dol- 
lars and  not  exceeding  one  hundred  thousand  dollars;  three  per  centum  of  any 
value  in  excess  of  one  hundred  thousand  dollars  and  not  exceeding  two  hundred 
fifty  thousand  dollars ;  five  per  centum  of  any  value  in  excess  of  two  hundred 
fifty  thousand  dollars:  Provided,  however,  That  in  the  above  cases,  ten  thousand 
dollars  of  the  net  value  of  any  estate  shall  be  exempt  from  such  duty  or  tax. 


WASHINGTON  ;Q27 

If  passing  to  or  for  the  use  of  a  sister,  brother,  uncle,  aunt,  nephew  or  niece, 
the  tax  shall  be  three  per  centum  of  any  value  not  exceeding  fifty  thousand 
dollars;  five  per  centum  of  any  value  in  excess  of  fifty  thousand  dollars  and 
not  exceeding  one  hundred  thousand  dollars;  seven  per  centum  of  any  value  in 
excess  of  one  hundred  thousand  dollars  and  not  exceeding  two  hundred  fifty 
thousand  dollars;  nine  per  centum  of  any  value  in  excess  of  two  hundred  fifty 
thousand  dollars. 

If  passing  to  or  for  the  use  of  collateral  heirs  beyond  the  third  degree  of 
relationship  or  to  strangers  to  the  blood,  the  tax  shall  be  six  per  centum  of 
any  value  not  exceeding  fifty  thousand  dollars;  nine  per  centum  of  any  value  in 
excess  of  fifty  thousand  dollars  and  not  exceeding  one  hundred  thousand  dollars; 
twelve  per  centum  of  any  value  in  excess  of  one  hundred  thousand  dollars  and 
not  exceeding  two  hundred  fifty  thousand  dollars;  fifteen  per  centum  of  any  value 
in  excess  of  two  hundred  fifty  thousand  dollars.  (L.  '07,  §  2,  p.  500;  L.  '11,  §  2, 
p.  60;  L.  '17,  §  1,  p.  196;  Bern.  &  Bal.,  §  9183.) 

§  3.  (Code,  §  9184.)  Except  as  to  the  limitations  prescribed  in  section  two 
from  the  inheritance  tax  and  real  property  located  outside  the  State  passing  in 
fee  from  the  decedent  owner,  the  tax  imposed  under  section  two  shall  hereafter 
be  assessed  against  and  be  collected  from  property  of  every  kind,  which  at  the 
death  of  the  decedent  owner  is  subject  to,  or  thereafter,  for  the  purpose  of  dis- 
tribution, is  brought  into  this  State  and  becomes  subject  to  the  jurisdiction  of 
the  courts  of  this  State  for  distribution  purposes,  or  which  was  owned  by  any 
decedent  domiciled  within  the  State  at  the  time  of  the  death  of  such  decedent, 
even  though  the  property  of  said  decedent  so  domiciled  was  situated  outside  of  the 
State. 

§  4.  (Code,  §  9185.)  In  case  of  any  property  belonging  to  a  foreign  estate, 
which  estate,  in  whole  or  in  part,  is  liable  to  pay  a  collateral  inheritance  tax 
in  this  State,  the  said  tax  shall  be  assessed  upon  the  market  value  of  said  property 
remaining  after  the  payment  of  such  debts  and  expenses  as  are  chargeable  to  the 
property  under  the  laws  of  this  State.  In  the  event  that  the  executor,  administra- 
tor or  trustee  of  such  foreign  estate  files  with  the  clerk  of  the  court  having 
ancillary  jurisdiction  and  with  the  State  board  of  tax  commissioners  duly  certified 
statements  exhibiting  the  true  market  value  of  the  entire  estate  of  the  decedent 
owner,  and  the  indebtedness  for  which  the  said  estate  has  been  adjudged  liable, 
which  statements  shall  be  duly  attested  by  the  judge  of  the  court  having  original 
jurisdiction,  the  beneficiaries  of  said  estate  shall  then  be  entitled  to  have  deducted 
such  proportion  of  the  said  indebtedness  of  the  decedent  from  the  value  of  the 
property,  as  the  value  of  the  property  within  this  State  bears  to  the  value  of 
the  entire  estate. 

§§  5,  6.   (Code,  §§  9186,  9187.)  Are  repealed  by  chapter  146,  Laws  1917. 

7.  (Code,  §  9188.)  Provides  for  the  valuation  of  life  estates  and  re- 
mainders on  the  basis  of  the  Combined  Actuaries'  Mortality  Tables  at  4%. 
It  further  provides  that  remaindermen  may  defer  payment  of  the  tax  until 
they  come  into  possession  by  filing  a  bond  in  the  amount  of  the  tax  conditioned 
for  its  payment  within  60  days  after  coming  into  possession  of  the  property. 

Code,  §§  9188-1  (added  by  L.  1917).  Provides  for  the  present  taxation  of 
contingent  remainders  at  the  lowest  possible  rate,  requiring  the  transferee  Co 
pay  the  difference  if  a  higher  rate  proves  to  be  due  when  the  remander  falls  in. 

§  8.  (Code,  §  9189.)  Taxes  bequests  to  executors  in  lieu  of  commissions  above 
reasonable  compensation. 

§  9.  (Code,  §  9190.)  Requires  the  heir  to  deduct  the  tax  where  a  legacy  is 
charged  upon  real  estate,  makes  the  tax  a  lien  and  may  be  enforced  in  the  same 
way  as  the  legacy. 

§  10.  (Code,  §  9191.)  Requires  the  executor  or  administrator  to  deduct  the 
tax  or  collect  it  from  the  beneficiary  and  may  not  deliver  property  unless  the  tax 
is  paid. 

§  11.  (Code,  §  9192.)  All  taxes  imposed  by  this  act  shall  take  effect  and  accrue 
upon  the  death  of  the  decedent  or  donor.  If  such  tax  is  not  paid  within  fifteen 
months  from  the  accruing  thereof,  interest  shall  be  charged  and  collected  at  the 
rate  of  eight  per  centum  per  annum  unless  by  reason  of  necessary  litigation  such 
tax  cannot  be  determined  and  paid  as  herein  provided,  in  which  case  interest  at 
the  rate  of  eight  per  centum  per  annum  shall  be  charged  upon  such  tax  from 
and  after  the  time  the  cause  of  such  delay  is  removed.  In  all  cases  where  a  bond 
shall  be  given  under  the  provisions  of  section  9198  interest  shall  be  charged  at 


1128  THE  STATE  STATUTES 

the  rate  of  eight  per  centum  per  annum  from  and  after  a  period  of  sixty  days 
from  the  time  that  the  person  or  persons  owning  the  beneficial  interest  come  into 
the  possession  of  same  until  the  payment  thereof.  [As  amended  by  L.  1917.] 

§  12.  (Code,  §  9193.)  Provides  for  the  appointment  of  appraisers  and  the 
usual  proceedings  before  them. 

§  13.  (Code,  §  9194.)  If  a  foreign  executor,  administrator  or  trustee  shall 
assign  any  corporate  stock,  or  obligations  in  this  State  standing  in  the  name 
of  a  decedent,  or  in  trust  for  a  decedent,  liable  to  such  tax,  the  tax  shall  be 
paid  to  the  State  Treasurer  on  or  before  the  transfer  thereof,  otherwise,  the 
corporation  permitting  its  stock  to  be  so  transferred  on  its  books  shall  be  liable 
to  pay  such  tax.  No  safe  deposit  company,  bank  or  other  institution,  person  or 
persons,  holding  any  securities,  property  or  assets  of  any  non-resident  decedent, 
shall  deliver  or  transfer  the  same  to  any  nonresident  executor,  administrator  or 
representative  of  such  decedent,  until  after  a  notice  in  writing  of  the  time  and 
place  of  such  transfer  shall  have  been  duly  given  the  State  board  of  tax  com- 
missioners at  least  ten  (10)  days  prior  thereto,  and  the  tax  imposed  by  this  act 
paid  thereon,  and  every  such  safe  deposit  company,  bank  or  other  institution, 
person  or  persons,  shall  be  liable  for  the  payment  of  such  tax. 

§  14.  (Code,  §  9195.)  Eequires  the  petitioner  in  all  probate  proceeding's  to 
furnish  a  list  of  heirs  or  beneficiaries  together  with  an  inventory. 

§  15.  (Code,  §  9196.)  Authorizes  the  court  to  extend  the  time  for  filing  the 
inventory. 

§  16.   (Code,  §  9197.)   Provides  for  the  compounding  of  doubtful  tax  claims. 

§  9197-1.  When  any  person  dies  leaving  property  within  the  jurisdiction  of 
the  State  of  Washington,  which  shall  pass  by  the  statutes  of  inheritance  of 
this  or  any  other  State,  or  by  deed,  grant,  sale  or  gift  made  in  contemplation 
of  the  death  of  the  grantor  or  donor,  or  by  deed,  grant,  sale  or  gift  made  or 
intended  to  take  effect  in  possession  or  in  enjoyment  after  the  death  of  the 
grantor  or  donor,  to  any  person  in  trust  or  otherwise,  and  there  has  been  no 
application  for  letters  of  administration  of  the  estate  of  such  deceased  person, 
or  when  administration  of  any  estate  has  been  completed  without  an  adjudica- 
tion of  the  inheritance  tax,  the  liability  of  such  property  for  the  payment  of 
an  inheritance  tax  may  be  determined  without  administration  in  the  manner 
hereinafter  provided. 

When  any  person  interested  in  such  property  shall  deem  the  same  not  subject 
to  an  inheritance  tax,  or  when  he  admits  the  liability  for  such  tax  but  desires 
to  adjust  the  same,  he  may  file  a  petition  in  the  Superior  Court  of  the  proper 
county  to  determine  the  questions  arising  under  the  inheritance  tax  statutes. 
Such  petition  shall  contain  the  name  and  date  of  death  of  decedent,  the  descrip- 
tion and  estimated  value  of  all  property  involved,  the  names  and  places  of  resi- 
dence of  all  persons  interested  in  the  same,  and  such  other  facts  as  are  necessary 
to  give  the  court  jurisdiction.  The  court  shall  thereupon  set  a  day  for  hearing 
said  petition  and  a  copy  thereof,  together  with  a  notice  of  the  time  and  place 
of  such  hearing,  shall  be  served  by  the  petitioner  or  his  attorney  upon  the  State 
board  of  tax  commissioners  and  on  each  person  interested  in  said  property,  at 
least  twenty  days  before  the  date  of  hearing,  if  served  personally,  and  if  served 
by  publication  in  civil  actions. 

The  court  shall  hear  said  matter  upon  the  relation  of  the  parties,  the  testi- 
mony of  witnesses  and  evidence  produced  in  open  court,  and,  if  it  shall  be 
found  that  the  property  is  not  subject  to  any  tax,  the  court  shall  make  and 
enter  an  order  determining  that  fact;  but,  if  it  shall  appear  that  the  whole 
or  any  part  of  said  property  is  subject  to  a  tax,  the  same  shall  be  appraised 
and  the  tax  levied  and  collected  as  in  other  cases.  An  adjudication  by  the 
Superior  Court,  as  herein  provided,  shall  be  conclusive  as  to  the  lien  of  said 
tax,  subject  to  the  right  of  appeal  to  the  Supreme  Court  allowed  by  the  laws  of 
the  State.  [Added  by  chap.  146,  L.  1917.] 

§  17.  (Code,  §  9198.)  Requires  the  State  board  of  tax  commissioners  to  take 
general  supervision  over  the  collection  of  tax  claims. 

§  18.  (Code,  §  9199.)  Prescribes  the  charitable  exemptions  shown  in  the  table 
of  rates. 


WEST  VIRGINIA 


1129 


WEST  VIRGINIA. 

Taxes  all  property  of  nonresidents  within  the  State,  including  stock  in  domestic 
corporations. 

TABLE  OF  BATES  AND  EXEMPTIONS— 1913  to  1921. 


Graded  rates 

CLASS  on  RELATIONSHIP 

Amount  of 
exemption 

Above 
exemp- 
tion 

$25,000 
to 

$50,000 
to 

$100,000 
to 

In 

excess 

up  to 
$25,000 

$50,000 

$100,000 

$500,000 

$500,000 

Wife,    husband,    child,    lineal 

Widow,  $15,000; 

1% 

U% 

2% 

2}% 

3% 

descendant  or  lineal  ances- 

others, 810,000 

tor. 

Brother  or  sister  of  the  whole 

None  

3% 

4i% 

6 

1\% 

9% 

blood. 

5% 

71% 

10% 

12J% 

15% 

bequests. 

All  

No  tax. 

state  for  education,  literary, 

scientific,  religious  or  chari- 

table purposes  or  to  state, 

county    or    municipal    cor- 

porations   for    public    pur- 

posee. 

1130 


THE  STATE  STATUTES 


65 


6S 


- 


l- 


£ 


fiS 


65 


pJ    i-i 

•S-J 


WEST  VIRGINIA 

LAWS  OF  1904,  CHAPTER  6,  AS  AMENDED  BY  LAWS  OF  1907,  CHAPTER 

55;  LAWS  OF  1909,  CHAPTER  63,  AND  LAWS  OF  1913,  CHAPTER  25. 

(See  Amendments  of  1921,  page  1133.) 

Section  1.  A  tax,  payable  into  the  treasury  of  the  State,  shall  be  imposed 
upon  the  transfer,  in  trust  or  otherwise,  of  any  property,  or  interest  therein, 
real,  personal  or  mixed,  if  such  transfer  be, 

(a)  By  will  or  by  the  laws  of  this  State  regulating  descents   and   distribu- 
tions from  any  person  who  is  a  resident  of  the  State  at  the  time  of  his  death 
and  who  shall  die  seized  or  possessed  of  the  property; 

(b)  By  will   or   by   laws   regulating   descents   and    distributions,    of   property 
within  the  State,  or  within  its  jurisdiction,  and  the  decedent  was  a  nonresident 
of  the  State  at  the  time  of  his  death; 

(c)  By  a  resident,  or  be  of  property  within  the  State,   or  within  its  juris- 
diction, by  a  nonresident,  by  deed,   grant,  bargain,   sale  or  gift  made  in  con- 
templation of  the  death  of  the  grantor,  vendor,  bargainor  or  donor,  or  intended 
to  take  effect  in  possession  or  enjoyment  at  or  after  such  death. 

(d)  If  any  person  shall  transfer  any  property  which  he  owns  or  shall  cause 
any  property,  to  which  he  is  absolutely  entitled  to  be  transferred  to,  or  vested 
in,  himself  and  any  other  person  jointly,  so  that  the  title  therein,  or  in  some 
part   thereof,   vested  no   survivorship   in   such   other   person,   a   transfer   shall   be 
deemed  to  occur  and  to  be  taxable  under  the  provisions  of  this  act  upon  the 
vesting  of  such  title. 

(e)  Whenever  a  person  shall  exercise  by  will  a  power  of  appointment  derived 
from    any    disposition    of    property,    such    appointment,    when    made,    shall    be 
deemed  a  transfer  taxable  under  the  provisions  hereof. 

§  2.  Prescribes  the  rates  and  exemptions  shown  in  the  foregoing  table. 

§  3.  Provides  for  the  deduction  from  market  value  of  estate  of  debts  and 
incumbrances  created  by  the  deceased  on  good  faith  and  for  which  no  reimburse- 
ments can  be  obtained. 

§  4.  Taxes  bequests  ostensibly  in  payment  of  a  debt  over  and  above  the 
true  value  of  the  debt  and  bequests  to  executors  in  lieu  of  commissions  in  excess 
of  reasonable  value  of  their  services. 

§  5.  Provides  for  the  apportionment  of  the  tax  between  life  tenant  and 
remainderman  by  the  State  tax  commissioners  and  remaindermen  must  pay 
at  the  same  time  and  manner  as  though  vested  in  possession. 

§  6.  A  transfer  of  personal  property  of  a  resident  of  the  State  which  is 
not  therein  or  within  the  jurisdiction  thereof,  at  the  time  of  his  death,  shall 
not  be  taxable,  under  the  provisions  of  this  act  if  such  transfer  or  the  prop- 
erty be  legally  subject  in  another  State  or  country  to  a  tax  of  a  like  character 
and  amount  to  that  hereby  imposed,  and  if  such  tax  be  actually  paid  or  guaranteed 
or  secured,  in  accordance  with  the  law  in  such  other  State  or  country,  if  legally 
subject  to  another  State  or  country  to  a  tax  of  like  character,  but  of  less 
amount  than  that  hereby  imposed  and  such  tax  be  actually  paid  or  guaranteed 
or  secured,  as  aforesaid,  the  transfer  of  such  property  shall  be  taxable  under  this 
act  to  the  extent  of  the  difference  between  the  tax  thus  actually  paid,  guaranteed 
or  secured,  and  the  amount  for  which  such  transfer  would  otherwise  be  liable 
hereunder,  or  within  the  jurisdiction  thereof. 

The  provisions  of  this  act  shall  apply  to  the  transfer  of  the  following  prop- 
erty belonging  to  deceased  persons,  nonresidents  of  this  State  which  shall 
pass  by  will  or  inheritance  under  the  law  of  any  other  State  or  country,  and 
such  property  shall  be  subject  to  the  tax  imposed  by  this  section,  to-wit: 

(a)  The  transfer  of  all  real  estate  and  tangible  personal  property,  including 
money  on  deposit  in  this  State; 

(b)  The   transfer   of    all   intangible   personal    property,    including   bonds,    se- 
curities, shares  of  stock  and  choses  in  action,  the  evidence  of  ownership  to  whici 
shall  be  actually  within  this  State;  and 

(c)  The  transfer  of  the  shares  of  capital  stock  of  all  corporations  organized 
and  existing  under  the  laws  of  this  State,  the  certificates  of  which  shares  of 
stock  shall  be  within  or  without  this  State. 

The  transfer  of  any  property  mentioned  in  subdivisions  (a)  and  (b)  and 
the  transfer  of  the  shares  of  stock  mentioned  in  subdivision  (c)  of  this  section, 
after  the  decease  of  the  person  owning  the  same,  shall  not  be  legal  until  the 
inheritance  or  transfer  tax  has  been  paid  into  the  State  treasury  and  a  certificate 


1132  THE  STATE  STATUTES 

of  release  to  that  effect  executed  by  the  State  tax  commissioner.  No  corporation 
organized  or  existing  under  the  laws  of  this  State  shall  transfer  any  such 
shares  of  stock,  unless  notice  of  the  time  of  such  intended  transfer  is  served 
upon  the  State  tax  commissioner  at  least  fifteen  days  prior  to  such  transfer  or 
until  the  State  tax  commissioner  shall  consent  in  writing  thereto.  Any  such 
corporation  making  the  transfer  of  any  such  shares  of  stock  before  the  inheritance 
tax  is  paid,  or  before  obtaining  the  consent  of  the  State  tax  commissioner 
thereto,  shall  be  liable  to  the  State  of  West  Virginia  for  said  tax,  together  with 
any  interest  that  may  accrue  thereon,  and  in  addition  thereto  a  penalty  of  five 
hundred  dollars;  which  liability  for  such  tax  and  interest  and  penalty  may  be 
enforced  by  a  proper  action  in  the  name  of  the  State  of  West  Virginia. 

§  7.  Makes  the  tax  a  lien,  forbids  transfer  of  property  without  its  payment, 
and  if  so  transferred  makes  executors,  administrators  and  beneficiaries  personally 
liable  and  declares  that  no  statute  of  limitations  shall  be  a  defense  to  recovery. 

§  8.  Provides  for  suspending  the  whole  or  a  proportionate  part  of  the  tax 
pending  litigation  or  settlement  of  a  doubtful  claim. 

§  9.  Makes  the  tax  due  on  assessment  and  charges  interest  at  4%  from  time 
when  due. 

§  10.  Provides  for  payment  of  the  tax  and  sale  of  property  in  the  same 
manner  as  debts. 

§  11.  Whenever  any  foreign  executor,  administrator  or  trustee  shall  assign 
or  transfer  in  this  State  any  stock,  bond  or  other  security  liable  to  any  such 
tax,  standing  in  the  name  of,  or  in  trust  for  a  decedent,  he  shall  have  the  tax 
assessed  on  such  transfer  by  the  State  tax  commissioner,  and  shall  pay  the  tax 
into  the  State  treasury  on  the  transfer  thereof;  otherwise  any  person  having 
authority  to  make  or  permit  such  transfer,  who  shall  make  or  permit  it,  shall 
be  liable  to  pay  the  tax  if  he  then  had  knowledge,  or  reasonable  cause  to  believe, 
that  the  property  was  liable  to  tax. 

§  12.  Provides  for  reports  by  clerks  of  County  Court  regarding  transfers  subject 
to  tax. 

§  13.  Requires  executors,  administrators  and  trustees  to  file  with  their  in- 
ventory a  statement  as  to  any  of  the  property  they  believe  to  be  subject  to  tax. 

§  14.  The  State  tax  commissioner  shall  as  soon  as  may  be,  from  the  state- 
ments and  reports  made  by  the  clerk  and  the  personal  representative  or  trustee 
or  other  person  as  aforesaid,  from  the  inventory  of  the  estate,  if  there  be  one, 
and  from  such  other  information  as  he  may  be  able  to  procure,  ascertain 
whether  any  transfer  of  any  property  be  subject  to  a  tax  under  the  provisions 
of  this  chapter,  and,  if  it  be  subject  to  tax,  shall  ascertain  and  assess  the 
amount  of  the  tax  to  which  it  is  subject.  If  in  his  opinion  the  transfer  of  any 
of  the  property  so  transferred  is  taxable  under  the  provisions  of  this  act,  he 
shall  make  his  certificate  to  that  effect,  setting  out: 

(a)  The  amount  of  such  property  liable  to  such  tax: 

(b)  The  rate  of  tax  thereon. 

(e)  The  names  of  the  beneficiaries  thereof. 

(d)  Their  degree  of  relationship  to  the  decedent. 

(e)  The  amount  of  tax;   and  it  shall  be  the  duty  of  the  county  clerk  and 
personal  representative  of  every  such  estate,  and  if  there  be  no  personal  repre- 
sentative the  beneficiaries  thereof  to  show  in  their  report  to  the  State  tax  com- 
missioner,   the    information    upon    which    to    base    such    assessment.      The    tax 
commissioner  shall  make  duplicate  certificates  of  his  assessment,  one  of  which 
he   shall  forward  to   such   personal   representative,   trustee,    grantee,   vendee    or 
bargainee. 

If  the  tax  is  not  paid  within  thirty  days  after  the  assessment  thereof,  the 
State  tax  commissioner  may  forward  the  other  certificate  to  the  clerk  of  the 
County  Court  of  the  county  wherein  the  property  or  the  greater  part  thereof  in 
value  is  located,  which  certificate  shall  be  recorded  by  the  clerk  in  the  trust 
deed  book  in  his  office.  For  recording  such  certificate  of  assessment  the  clerk 
shall  charge  a  fee  of  fifty  cents  to  be  paid  out  of  the  estate. 

§  16.  Provides  for  the  appointment  of  appraisers  and  the  proceedings  before 
them,  and  the  remaining  sections  17  to  26  provide  for  reports,  compounding 
of  uncertain  tax  claims,  fees,  records  and  proceedings  for  the  collection  of 
delinquent  taxes. 


WEST  VIRGINIA  H33 

AMENDMENTS  OF  1921. 
Passed  May  3,  1921.    In  effect  90  days  from  passage.    Approved  by  the  Governor 

May  3,  1921. 

Section  1.  A  tax  payable  into  the  treasury  of  the  state,  shall  be  imposed  upon 
the  transfer,  in  trust,  or  otherwise,  of  any  property,  or  interest  therein,  real, 
personal,  or  mixed,  of  five  hundred  dollars  or  more  if  such  transfer  be 

(a)  By  will  or  by  laws  of  this  state  regulating  descents  and  distributions  from 
any  person  who  is  a  resident  of  the  state  at  the  time  of  his  death,  and  who 
shall  die  seized  or  possessed  of  property; 

(b)  By  will  or  by  laws  regulating  descents  and  distributions,  or  property  within 
the  state,  or  within  its  jurisdiction,  and  the  decedent  was  a  non-resident  of  the 
state  at  the  time  of  his  death; 

(c)  By  a  resident,  or  be  of  property  within  the  state,  or  within  its  jurisdic- 
tion, by  a  non-resident,  by  deed,  grant,  bargain,  sale  or  gift,  made  in  contempla- 
tion of  the  death  of  the  grantor,  bargainer  or  donor,  or  intended  to  take  effect 
in  possession  or  enjoyment  at   or  after   such  death.     Every  transfer  by  deed, 
grant,  bargain,  sale  or  gift,  made  within  three  years  prior  to  the  death  of  the 
grantor,   bargainer,  vendor,   or   donor,   of  value  of   five  hundred   dollars,   or   in 
excess  thereof,  at  the  time  of  such  transfer  in  the  nature  of  final  disposition  of 
an  estate,  and  without   adequate  valuable   consideration,   shall  be   construed  to 
have  been  made  in  contemplation  of  death  within  the  meaning  of  this  chapter. 
This  provision  shall  apply  to  all  transfers  heretofore  made  with  the  period  of 
three  years  from  the  time  this  act  becomes  effective; 

(d)  If  any  person  shall  transfer  any  property  which  he  owns  or  shall  cause 
any  property,  to  which  he  is  absolutely  entitled,  to  be  transferred  to,  or  vested 
in  himself  and  any  other  person  jointly  so  that  the  title  therein,  or  in  some  part 
thereof,  vest  no  survivorship  in  such  other  person,  a  transfer  shall  be  deemed  to 
occur  and  to  be  taxable  under  the  provisions  of  this  act  upon  the  vesting  of 
such  title; 

(e)  Whenever  any  person  shall  exercise  a  power  of  appointment  derived  from 
any  disposition  of  property  made,  whether  before  or  after  the  passage  of  this  act, 
such  appointment  when  made  shall  be  deemed  a  transfer  taxable  under  the  pro- 
visions of  this  act  in  the  same  manner  as  though  the  property  to  which   such 
appointment  relates  belonged   absolutely  to   the  donee  of  such  power   and  had 
been  bequeathed  or  devised  by  such  donee  by  will;    and  whenever  any  person 
possessing  such  a  power  of  appointment  so  derived  shall  omit  or  fail  to  exercise 
the  same  within  the  time  provided  therefor,  in  whole  or  in  part,  a  transfer  taxable 
under  the  provisions  of  this  act  shall  be  deemed  to  take  place  to  the  extent  of 
such  omission  or  failure,  in  the  same  manner  as  though  the  person  thereby  be- 
coming entitled  to  the  possession  or  enjoyment  of  the  property  to  which  such 
power  related  had  succeeded  thereto  by  a  will  of  the  donee  of  the  power  failing 
to  exercise  such  power,  and  shall  take  effect  at  the  time  of  such  omission   or 
failure. 

§  2.  When  the  property  or  any  beneficial  interest  therein  passes  by  any  such 
transfer  where  the  amount  of  the  property  shall  exceed  in  value  the  exemption 
hereinafter  specified,  and  shall  not  exceed  in  value  fifty  thousand  dollars,  the 
tax  hereby  imposed  shall  be 

(a)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in   such 
property  shall  be  the  wife,  husband,  child,  or  the  children  of  a  deceased  child,  or 
father  or  mother  of  the  decedent,  at  the  rate  of  two  per  centum  of  the  market 
value  of  such  interest  in  such  property; 

(b)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  the  brother  or  sister  of  the  decedent  (and  the  term  brother  or 
sister  shall  not  include  a  brother  or  sister  of  the  half  blood)    at  the  rate  of 
four  per  centum  of  the  market  value  of  such  interest  in  such  property; 

(c)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  further  removed  in  relationship  from  the  decedent  than  brother 
or  sister,  the  rate  of  six  per  centum  of  the  market  value  of  such  interest  in  such 
property;  , 

(d)  Where  the  person  or  persons  entitled  to  any  beneficial  interest  in  such 
property  shall  be  of  no  blood  relation  or  strangers  to  the  decedent,  or  institutions, 
corporate  or  otherwise,  except  such  eleemosynary  institutions  as  are  hereunder 
exempt,  the  rate  of  ten  per  centum  of  the  market  value  of  such  interest  in  such 
property. 


1134  THE  STATE  STATUTES 

§  2a.  The  foregoing  rates  in  section  two,  are,  for  convenience,  termed 
primary  rates.  When  the  market  value  of  any  such  property  exceeds  fifty 
thousand  dollars,  the  rate  of  tax  upon  such  excess  shall  be  as  follows: 

(a)  Upon  all  in  excess  of  fifty  thousand  dollars  up  to  and  not  exceeding  one 
hundred  thousand  dollars,  two  times  the  primary  rate. 

(b)  Upon  all  in  excess  of  one  hundred  thousand  dollars  up  to  and  not  exceeding 
one  hundred  and  fifty  thousand  dollars,  two  and  one-fourth  times  the  primary  rate. 

(c)  Upon  all  in  excess  of  one  hundred  and  fifty  thousand  dollars  up  to  and  not 
exceeding  two  hundred  thousand  dollars,  two  and  one-half  times  the  primary  rate. 

(d)  Upon  all  in  excess  of  two  hundred  thousand  dollars  up  to  and  not  exceeding 
three  hundred  thousand  dollars,   two   and   three-fourths  times   the   primary   rate. 

(e)  Upon   all    in   excess    of   three   hundred   thousand    dollars   up   to    and   not 
exceeding  four  hundred  thousand  dollars,  three  times  the  primary  rate. 

(f)  Upon    all   in   excess    of    four   hundred   thousand    dollars    up    to    and   not 
exceeding  five  hundred  thousand  dollars,  three  and  one-fourth  times  the  primary 
rate. 

(g)  Upon  all  in  excess  of  five  hundred  thousand  dollars,  three  and  one-half 
times  the  primary  rate. 

§  2b.  The  following  exemptions  from  taxes  under  this  chapter  are  hereby 
allowed : 

(a)  All   property   transferred    to    a    person,    or    corporation,    in    trust,    or    use 
solely   for   educational,    literary,   scientific,    religious,    or    charitable    purposes,    or 
to   the  state,    or   to   any   county,    or   municipal   corporation   thereof,    for   public 
purposes,  provided  the  property  so  transferred  for  purposes  herein  mentioned,  is 
used  exclusively  in  this  state,  shall  be  exempt  from  all  taxes  under  this  chapter. 

(b)  Property  of  the  market  value  of  fifteen  thousand  dollars  to  a  widow  of 
a  deceased  person,  and  ten  thousand  dollars   transferred  to   each  of  the  other 
persons  described  in  sub-division   (a),  of  section  two,  shall  be  exempt  from  all 
taxes  under  this  chapter,  a  tax  upon  the  excess  of  the  exemptions  up  to  fifty 
thousand   dollars,   shall  be   computed   at   the   primary  rates;    provided,   however, 
that  the  descendants  of  any  child  referred  to  in  said  sub-division  (a)  of  section 
two  shall  be  allowed  the  exemption  of  the  person  they  represent,  per  stirpes,  and 
not  per  capita. 

§  6.  The  provisions  of  this  act  shall  apply  to  the  transfer  of  the  following 
property  belonging  to  deceased  persons,  nonresidents  of  this  state,  which  shall 
pass  by  will  or  inheritance  under  the  law  of  any  other  state,  or  country,  and 
such  property  shall  be  subject  to  the  tax  imposed  by  this  chapter,  to-wit: 

(a)  The  transfer  of  all  real  estate  and  tangible  personal  property  including 
money  on  deposit  in  this  state; 

(b)  The  transfers   of  all    intangible  personal   property,    including  bonds,    se- 
curities, shares  of  stock  and  choses  in  action  kept  within  this  state  for  investment, 
safe  keeping,  or  otherwise; 

(c)  The  transfer  of  shares  of  capital  stock  of  all  corporations  organized  and 
existing  under  the  laws  of  this  state,  the  certificates  of  which  shares  of  stock 
shall  be  within  or  without  this  state. 

(d)  The  transfer  of  shares  of  capital  stock  of  all  corporations  organized  and 
existing  under  the  laws  of  any  other  state  or  country  and  regularly  admitted  to 
transact  business  in  this  state  to  the  extent  of  the  value  of  such  snares  of  stock 
represented  by  property  actually  situated  in  this  state. 

The  transfers  of  property  mentioned  in  sub-divisions  (a)  and  (b)  and  the 
transfer  of  shares  of  stock  mentioned  in  sub-division  (c)  of  this  section,  after 
the  decease  of  the  person  owning  the  same,  shall  not  be  legal  until  the  in- 
heritance tax,  or  transfer  tax,  has  been  paid  into  the  state  treasury  and  certificates 
of  release  to  that  effect  executed  by  the  state  tax  commissioner.  No  corporation 
organized  or  existing  under  the  laws  of  this  state,  bank  or  trust  company,  having 
money  on  deposit,  or  other  person  having  in  his  possession  property  mentioned  in 
said  sub-division  (a),  (b)  and  (c)  shall  make  transfer  thereof,  unless  notice  of 
the  time  of  such  intended  transfer  is  served  upon  the  state  tax  commissioner  at 
least  fifteen  days  prior  to  such  transfer,  or  until  the  state  tax  commissioner  shall 
consent,  in  writing,  thereto.  Any  such  corporation,  bank,  or  trust  company,  or 
other  person  having  in  his  possession  such  property,  before  the  inheritance  tax 
is  paid,  or  before  official  consent  of  the  state  tax  commissioner  thereto  is  ob- 
tained, shall  be  liable  to  the  state  of  West  Virginia  for  such  amount  of  in- 
heritance tax  as  may  be  collectible  upon  the  transfer,  together  with  any  interest 


WEST  VIRGINIA  1135 

that  may  accrue  thereon  and  in  addition  thereto,  a  penalty  of  five  hundred  dollars, 
which  liability  for  such  tax  and  interest  and  penalty  may  be  enforced  by  a  proper 
action  in  the  name  of  the  state  of  West  Virginia. 

No  corporation  whose  stock  is  subject  to  an  inheritance  or  transfer  tax  under 
sub-division  (d)  of  this  section  shall  permit  such  stock  to  be  transferred  upon 
its  books,  after  being  notified  by  the  state  tax  commissioner  that  such  stock  is 
liable  to  a  transfer  or  inheritance  tax,  until  furnished  with  proper  evidence  show- 
ing the  payment  of  any  such  tax,  or  that  the  same  is  not  liable  to  a  tax,  and  any 
corporation  violating  the  provisions  of  this  section  shall  be  liable  for  the  amount 
of  any  tax  involved  and  in  addition  thereto  a  penalty  of  five  hundred  dollars 
(500.00),  and  may  be  denied  authority  to  further  transact  business  in  this  state. 
The  circuit  court  of  the  county  in  which  the  seat  of  government  is  located  shall 
have  jurisdiction  to  enforce  the  provisions  of  subsection  (d). 

Where  a  deceased  person  was  a  non-resident  at  the  time  of  death,  and  owned 
property  within  this  state,  or  within  its  jurisdiction,  and  also  in  other  states, 
or  countries,  the  exemptions  provided  for  in  section  two-b,  shall  be  prorated 
according  to  the  value  of  the  property  in  this  state,  or  within  its  jurisdiction,  and 
the  property  in  other  states,  or  countries,  and  the  person  whose  duty  it  is  under 
this  chapter  to  file  with  the  state  commissioner  a  report  of  the  value  and  dis- 
tribution of  the  property  taxable  hereunder,  shall  also  include  in  said  report  the 
total  value  of  the  property  owned  by  the  deceased  at  the  time  of  his  death. 

§  9.  All  taxes  imposed  by  this  act,  unless  otherwise  provided,  shall  be  due 
and  payable  ninety  days  after  the  first  appointed  executor  or  administrator  liable 
therefor  shall  qualify,  or  within  four  months  after  the  death  of  the  decedent  in 
case  letters  testamentary  are  not  issued,  and  if  not  paid  within  six  months  after 
the  death  of  the  decedent,  a  penalty  of  ten  per  centum  per  annum  of 
the  amount  of  the  taxes  shall  be  added,  in  addition  to  the  statutory  interest  of 
ten  per  centum  which  shall  accrue  and  be  determined  as  of  and  from  the  date  of 
the  death  of  the  decedent;  provided,  however,  that  the  payment  of  such  taxes  may 
be  suspended  by  the  state  tax  commissioner  if  there  be  necessary  litigation 
pending  at  the  time  such  taxes  are  due  and  payable,  involving  the  estate,  or 
for  other  good  and  sufficient  cause;  and  in  case  of  any  such  suspension  the 
payment  of  the  penalties  hereinbefore  provided  shall  likewise  be  suspended;  and, 
provided,  further,  that  suits  and  actions  brought  for  the  purpose  of  defeating 
the  payment  of  any  such  taxes,  penalty  and  interest,  shall  not  be  deemed  neces- 
sary litigation  within  the  meaning  of  this  act.  In  case  of  such  suspension,  the 
taxes  shall  be  payable  at  the  time  of  the  expiration  of  the  suspension.  In  all 
other  cases,  the  taxes  shall  be  paid  as  herebefore  provided.  Interest  at  the  rate 
of  ten  per  centum  per  annum  shall  be  charged  and  collected  upon  all  taxes  and 
penalty  imposed  after  the  expiration  of  the  six  months  aforesaid,  and  in  fixing 
said  tax  the  state  tax  commissioner  shall,  in  his  discretion,  determine  proper 
deductions. 

§  16.  If  within  sixty  days  from  the  death  of  any  person  whose  estate  is  liable 
to  an  inheritance  tax  under  this  chapter,  the  appraisement  of  any  such  estate  is 
not  completed  and  filed  in  the  manner  now  provided  by  law  for  the  appraisement 
of  estates,  then  the  state  tax  commissioner  shall  have  authority  to  appoint  an 
appraiser  for  the  purpose  of  appraising  any  such  estate:  provided,  however,  that 
the  state  tax  commissioner  shall  have  the  right  of  appeal  to  the  circuit  court  of 
the  county  in  which  the  estate  is  located  where  an  appraisement  is  made  by  the 
appraisers  appointed  by  the  county  court  of  said  county  for  such  purposes,  and 
the  valuation  of  any  such  estate  as  fixed  by  the  circuit  court  upon  appeal  shall  be 
the  value  upon  which  the  tax  commissioner  shall  assess  the  taxes  under  this 
chapter.  It  shall  be  the  duty  of  said  appraiser,  and  he  shall  have  the  power,  to 
appraise  and  fix  a  value  upon  all  property  subject  to  the  tax  provided  in  this 
act,  which  shall  be  the  market  value  of  the  property  appraised.  Such  appraiser 
shall  give  notice  to  the  executor,  administrator,  trustee,  or  other  person,  whose 
duty  it  is  under  this  act  to  pay  the  tax  due  and  collectible  hereunder,  of  the 
time  and  place  of  any  appraisement  to  be  made  by  him;  and  the  posting  of  any 
such  notice  to  any  such  person  in  due  course  of  mail,  at  last  known  postoflice 
address,  stating  the  time  and  place  he  will  sit  to  appraise  any  such  property, 
shall  be  sufficient.  He  shall  at  such  time  and  place,  unless  a  different  time  and 
place  be  agreed  upon,  appraise  the  property  in  the  manner  herein  prescribed; 
and  for  the  purpose  of  obtaining  information  concerning  the  quantity  and  the 
amount  of  any  estate,  or  touching  the  value  of  any  property  to  be  appraised, 


1136  THE  STATE  STATUTES 

said  appraiser  is  authorized  to  take  evidence  and  to  issue  subpoenas  for  and  to 
compel  the  attendance  of  witnesses  before  him,  to  administer  oaths,  and  to  take 
the  testimony  of  witnesses  under  oath  concerning  the  quantity  and  amount  of 
such  property,  and  the  value  thereof.  Such  appraiser  shall  make  report  of  his 
findings  and  the  values  fixed  by  him,  in  writing  to  the  tax  commissioner,  together 
with  the  depositions  of  any  witnesses  examined  by  him;  and  such  other  facts 
in  relation  thereto  as  the  state  tax  commissioner  may  require.  The  value  of 
the  property  thus  appraised,  except  as  hereinafter  provided,  shall  be  the  value 
upon  which  the  inheritance  tax  under  this  act  shall  be  collected;  but  before  the 
fixing  of  the  tax,  as  provided  in  this  act,  shall  be  made,  the  value  so  fixed  by 
the  appraiser  shall  be  approved  by  the  state  tax  commissioner,  who  shall 
thereupon  furnish  his  certificate  in  writing  to  the  executor,  administrator,  or 
other  person  whose  duty  it  is  to  pay  the  taxes  under  this  act,  by  mailing  same 
to  his  last  know  postoffice  address,  of  the  appraised  value  of  such  property,  the 
taxes  assessed  thereon,  as  fixed  and  approved  by  him.  If  the  owner  or  personal 
representative  of  the  estate  appraised  desires  to  take  an  appeal  from  the  value 
fixed  by  the  appraiser  and  approved  by  the  state  tax  commissioner,  as  hereinafter 
provided,  he  may  have  the  evidence  taken  at  any  hearing  before  the  appraiser 
transcribed  and  certified  by  him  to  the  circuit  court  of  the  county  in  which 
the  seat  of  government  is  located  which  court  shall  have  jurisdiction  to  hear 
and  determine  such  appeal  upon  the  record  so  certified.  Either  party  shall  then 
have  the  right  of  an  appeal  to  the  supreme  court  of  appeals. 

The  appraiser  shall  receive  a  reasonable  compensation  for  his  services,  which 
shall  be  fixed  by  the  state  tax  commissioner  and  paid  out  of  the  taxes  collected 
under  this  act.  He  shall  in  addition  thereto  be  allowed  his  actual  necessary 
travelling  expenses  incurred  while  engaged  in  the  performance  of  his  duties 
hereunder.  He  shall  also  have  necessary  stenographic  and  clerical  help,  the  same 
to  be  employed  by  the  state  tax  commissioner  and  paid  out  of  taxes  collected 
under  this  act.  Every  executor,  administrator  or  trustee  of  any  estate  subject  to 
the  payment  of  the  transfer  tax  hereunder,  shall,  within  sixty  days  after  the 
death  of  the  decedent,  file  with  the  state  tax  commissioner,  under  oath,  a  complete 
inventory  or  statement,  listing  and  showing  all  of  the  property,  both  real  and 
personal,  belonging  to  any  such  estate,  and  the  full,  true  and  actual  cash  value 
thereof,  together  with  the  names  and  addresses  of  all  the  beneficiaries  of  any 
such  estate,  and  the  degree  of  relationship  each  bears  to  the  decedent.  Any 
person  failing  to  comply  with  the  provisions  of  this  chapter  shall  be  guilty  of  a 
misdemeanor  and  upon  conviction  thereof  shall  be  imprisoned  for  not  exceeding 
six  months  or  fined  not  less  than  ten  dollars,  and  not  to  exceed  five  hundred 
dollars,  or  may  be  both  fined  and  imprisoned  within  the  limits  herein  prescribed. 

All  acts  and  parts  of  acts  coming  under  the  purview  of  this  act  and  inconsistent 
herewith  are  hereby  repealed. 


WISCONSIN 


1137 


WISCONSIN. 

Taxes    all    property    of    nonresidents    within    the    State,    including    stock    in 
domestic  corporations. 

TABLE  NO.  1.— TABLE  OF  RATES  AS  FIXED  BY  CHAPTER  568,  LAWS  1921,  IN  EFFECT 

JULY  20,  1921. 


In 

CLASS  OR  RELATIONSHIP 

Amount 
of 

exemption 
to 

$25,000 
to 

$50,000 
to 

$100,000 
to 

excess 
of 

exemption 

$25,000 

$50,000 

$100,000 

$500,000 

$500,000 

Husband,   wife,   lineal  issue, 

Widow  (in- 

lineal ancestor,  adopted  or 

cluding  all 

mutually         acknowledged 

statutory- 

child. 

allowances) 

$25,000 

Others, 

$2,000 

2% 

6% 

6% 

8% 

10% 

Brother   or  sister   and   their 

descendants,  son-in-law  and 

daughter-in-law. 

500 

4% 

8% 

12% 

16% 

20% 

Aunt  or  uncle  and  their  de- 

scendants. 

250 

6% 

12% 

18% 

24% 

30% 

All  others  except  charitable 

and     public     bequests     as 

shown  in  table  3. 

100 

8% 

16% 

24% 

32% 

40% 

NOTE  A. — The  limitation  that  no  bequest  to  any  beneficiary  should  be  taxed  more  than  15  per 
cent  provided  by  Chapter  320,  Laws  1917,  is  repealed  by  Chapter  568,  Laws  1921. 

NOTE  B. — "Any  child  of  the  decedent  shall  be  entitled  to  credit  for  so  much  of  the  tax  paid  by 
the  widow  as  applied  to  any  property  which  shall  thereafter  be  transferred  by  or  from  such  widow 
to  any  such  child,  provided  the  widow  does  not  survive  said  decedent  to  exceed  ten  years." — Chapter 
568,  Laws  1921. 


TABLE  NO.  2.— TABLE  OF  RATES  AS  FIXED  BY  CHAPTER  320,  LAWS  1917.  IN 

EFFECT  JUNE  1 


CLASS  OR  RELATIONSHIP 

Amount 
of 
exemption 

Above 
exemp- 
tion to 
$25,000 

$25,000 
to 
$50,000 

$50,000 
to 
$100,000 

$100,000 
to 
$500,000 

in 
excess 
of 
$500,000 

Husband,  wife,  lineal  issue, 
lineal  ancestor,  adopted  or 
mutually  acknowledged 
child,  or  its  issue. 

Widow, 
$10,000 
Others  , 
$2,000 

1% 

2% 

3% 

4% 

5% 

Brother,  sister,  or  their  de- 
scendants,       son-in-law, 
daughter-in-law. 

500 

2% 

4% 

6% 

8% 

10% 

Aunt  or  uncle  and  their  de- 
scendants. 

250 

3% 

6% 

9% 

12% 

15% 

Brother  or  sister  of  grand  par- 
ents and  their  descendants. 

150 

4% 

8% 

12% 

16% 

20% 

All  others  except  exempt 
charitable  and  public  be- 
quests as  shown  in  table  3. 

100 

5% 

10% 

15% 

20% 

25% 

72 


1138 


THE  STATE  STATUTES 


'TABLE  No.   3.— TABLE  OF  RATES  AND   EXEMPTIONS 
In  effect  prior  to  June,  1917 


Graded  rates 

CLASS  OB  RELATIONSHIP 

Amount  of 
exemption 

Above 
exemp- 

$25,000 

$50,000 

$100,000 

In 

tion 

to 

to 

to 

ciCcSo 

up  to 
$25,000 

$50,000 

$100,000 

$500,000 

$500,000 

Husband,    wife,    lineal    issue, 

Widow,  $10,000; 

1% 

11% 

2% 

21% 

3% 

lineal  ancestor,   adopted  or 

others,  $2,000. 

mutually          acknowledged 

child  or  its  issue. 

Brother,    sister    or   their    de- 

$500 

11% 

2J% 

3% 

31% 

41% 

scendants,             son-in-law, 

daughter-in-law. 

w 

Aunt,  or  uncle  and  their  de- 

$250 

3% 

41% 

6% 

7i% 

9% 

scendants. 

Brother   or   sister   of    grand- 

$150 

4% 

6% 

8% 

10% 

12% 

parents  and  their  descend- 

ants. 

All    others   except    charitable 

$100 

5% 

71% 

10% 

121% 

15% 

and  public  bequests. 

Municipal     corporations     for 
strictly    town,    county    or 

All  

No  tax. 

municipal     purposes,     cor- 

porations   organized    under 

laws  of  the  state,  solely  for 

religious,  charitable  or  edu- 

cational    purposes,     which 

shall  use  the  property  solely 

for  those  purposes. 

THE   STATUTE. 

Note. — Chapter  7,  L.  1921  renumbers  the  sections.  Heretofore  the  sections  of 
the  inheritance  tax  law  were  1087-1,  to  1087-24,  inclusive.  Under  the  provisions 
for  renumbering  the  sections  are  72-01  to  72-24,  inclusive.  The  subsections  remain 
as  heretofore.  Chapter  7  makes  a  few  other  minor  changes  intended  merely  to 
make  the  text  correspond  with  the  renumbering. 

Chapter  407,  Laws  1921,  repeals  Sec.  1087-11  (8)  which  provided  that  certain 
sections  of  the  act  take  effect  after  July  1,  1914. 

Chapter  568,  Laws  1921,  substantially  doubles  former  rates.  Of  course,  it  applies 
only  to  cases  where  death  occurs  after  its  enactment  and  publication,  to-wit: 
July  20,  1921.  This  act  increases  the  widow's  exemption  from  $10,000  to 
$25,000.  Other  exemptions  remain  as  heretofore. 

Preserving  the  old  numbering  the  act,  as  amended,  is  as  follows : 

Section  1087.  A  tax  shall  be  and  is  hereby  imposed  upon  any  transfer  of 
property,  real,  personal  or  mixed,  or  any  interest  therein,  or  income  therefrom  in 
trust  or  otherwise,  to  any  person,  association  or  corporation,  except  county, 
town  or  municipal  corporations  within  the  State,  for  strictly  county,  town  or 
municipal  purposes,  and  corporations  of  this  State  organized  under  its  laws 
solely  for  religious,  charitable  or  educational  purposes,  which  shall  use  the 
property  so  transferred  exclusively  for  the  purposes  of  their  organization, 
within  the  State,  in  the  following  cases,  except  as  hereinafter  provided: 

1.  When  the  transfer  is  by  will  or  by  the  intestate  laws  of  this  State  from 
any  person  dying  possessed  of  the  property  while  a  resident  of  the  State. 

2.  When  a  transfer  is  by  will  or  intestate  law,  of  property  within  the  State  or 
within  its  jurisdiction  and  the  decedent  was  a  nonresident  of  the  State  at  the 
time  of  his  death. 

3.  When  the  transfer  is  of  property  made  by  a  resident  or  by  a  nonresident 
when   such   nonresident's   property   is   within   this   State,   or   within   its   jurisdic- 


WISCONSIN  1139 

tion,  by  deed,  grant,  bargain,  sale  or  gift,  made  in  contemplation  of  the  death 
of  the  grantor,  vendor  or  donor,  or  intended  to  take  effect  in  possession  or 
enjoyment  at  or  after  such  death.  Every  transfer  by  deed,  grant,  bargain,  sale 
or  gift,  made  within  six  years  prior  to  the  death  of  the  grantor,  vendor  or 
donor,  of  a  material  part  of  his  estate,  or  in  the  nature  of  a  final  disposition 
or  distribution  thereof,  and  without  an  adequate  consideration,  shall  be  con- 
strued to  have  been  made  in  contemplation  of  death  within  the  meaning  of  this 
section. 

4.  Such  tax  shall  be  imposed  when  any  such  person   or  corporation  becomes 
beneficially  entitled,  in  possession  or  expectancy,  to  any  property  or  the  income 
thereof,  by  any  such  transfer  whether  made  before  or  after  the  passage  of  this 
act;   provided,  that  property  or  estates  which  have   vested   in   such  persons   or 
corporations  before  this  act  shall  take  effect,  shall  not  be  subject  to  a  tax;  and 
provided,   further,   that   contingent  interests  created   by   the  will   of   any  person 
who  died  prior  to  the  passage  of  this  act  shall  not  be  taxed. 

5.  Whenever  any  person  or  corporation  shall  exercise  a  power  of  appointment 
derived  from  any  disposition  of  property,  made  either  before  or  after  the  passage 
of  sections  1087 — 1  to  1087 — 24,   inclusive,  such  appointment,  when  made,   shall 
be  deemed  a  transfer  taxable  under  the  provisions  of  sections  1087 — 1  to  1087 — 24, 
inclusive,  in  the  same  manner  as  though  the  property  to  which  such  appointment 
relates  belonged  absolutely  to  the  donee  of  such  power,  and  had  been  bequeathed 
or   devised  by  such   donee   by  will;    and   whenever   any   person    or    corporation 
possessing  such  a  power  of  appointment  so  derived  shall  omit  or  fail  to  exercise 
the  same  within  the  time  provided  therefor,  in  whole  or  in  part,  a  transfer  taxable 
under  the  provisions  of  sections  1087 — 1  to  1087 — 24,  inclusive,  shall  be  deemed 
to  take  place  to  the  extent  of  such  omission  or  failure,  in  the  same  manner  as 
though  the  persons  or  corporations  thereby  becoming  entitled  to  the  possession 
or  enjoyment  of  the  property  to  which  such  power  related  had  succeeded  thereto 
by  a  will  of  the  donee  of  the  power  failing  to  exercise  such  power,  taking  effect 
at  the  time  of  such  omission  or  failure. 

6.  Whenever   any  property,  real   or  personal,   is  held  in   the   joint  names   of 
two  or  more  persons,  or  as  tenants  by  the  entirety,  or  is  deposited  in  banks  or 
other  institutions   or   depositories  in   the  joint  names   of   two   or   more   persons 
and  payable  to  either  or  the  survivor,  upon  the  death  of  one  of  such  persons 
the  right  of  the  surviving  tenant  by  the  entirety,  joint-tenant  or  joint  tenants, 
person  or  persons,  to  the  immediate  ownership  or  possession  and  enjoyment  of 
such  property  shall  be  deemed  a  transfer  of  one-half  or  other  proper  fraction 
thereof  taxable  under   the  provisions   of   this   chapter   in   the   same  manner    as 
though  the  property  to  which  such  transfer  relates  belonged  to  the  tenants  by 
the  entirety,  joint  tenants  or  joint  depositors  as  tenants  in  common,   and  had 
been  bequeathed  or  devised  to  the  surviving  tenant  by  the  entirety,  joint  tenant 
or  joint  tenants,  person   or  persons,   by  such  deceased   tenant  by  the   entirety, 
joint  tenant  or  joint  depositor,  by  will.      [This  subd.   added  by  chap.   322,  L. 
1917.] 

7.  The  tax  so  imposed  shall  be  upon  the  clear  market  value  of  such  property 
at  the  rates  hereinafter  prescribed  and  only  upon  the  excess  of  the  exemptions 
hereinafter  granted. 

§  1087.  (Subdivisions  2,  3  and  4  as  amended.)  Prescribe  the  rates  and 
exemptions  set  forth  in  the  foregoing  tables  (No.  1,  No.  2  and  No.  3). 

§  1087  (5).  Provides  that  the  tax  shall  be  a  lien  upon  the  property  trans- 
ferred, and  holds  executors  and  administrators  personally  liable  until  it  is 
paid.  It  provides  for  receipts  which  must  be  produced  on  final  accounting,  and 
there  can  be  no  settlement  of  the  account  unless  such  a  receipt  is  produced  or 
a  bond  has  been  filed. 

§  1087  (6).  Allows  a  discount  of  5%  if  the  tax  is  paid  within  one  year. 
After  eighteen  months  10%  interest  is  charged  from  the  date  of  accrual,  which 
may  be  reduced  to  six  in  case  of  unavoidable  delay.  When  a  bond  is  filed  the 
interest  is  at  the  rate  of  6%  from  the  date  of  accrual  to  the  date  of  payment. 

§  1087  (7).  Gives  executors  and  administrators  power  of  sale  to  pay  the  tax 
in  the  same  way  as  to  pay  debts,  requires  them  to  deduct  the  tax  if  the  property 
is  in  money;  if  not,  to  collect  it  from  the  beneficiary,  to  whom  no  delivery  may  be 
made  until  the  tax  has  been  paid.  If  the  legacy  is  charged  on  real  estate  the 
heir  must  deduct  the  tax  which  remains  a  lien  until  paid,  and  may  be  enforced 
in  the  same  manner  as  the  legacy  or  by  the  district  attorney.  If  the  legacy  is 


1140  THE  STATE  STATUTES 

given  for  a  limited  period  and  is  in  money  the  tax  shall  be  deducted  from  the 
whole  amount,  but  if  in  property  an  application  must  be  made  to  the  court  for  an 
apportionment  of  the  tax  among  the  beneficiaries. 

§  1087  (8).  Provides  for  proportionate  refund  where  debts  have  been  proved 
against  the  estate  after  distribution  and  refunds  of  erroneous  or  excess  payments. 

§  1087  (9).  Provides  that  remaindermen  may  elect  within  one  year  to  defer 
payment  until  they  come  into  possession  by  filing  a  bond  in  three  times  the 
amount  of  the  tax,  with  a  sworn  inventory  of  the  property,  and  renewing  the 
bond  every  five  years. 

§  1087  (10).  Taxes  bequests  to  executors  in  lieu  of  commissions  in  excess  of 
reasonable  compensation. 

§  1087  (11).  1.  If  a  foreign  executor,  administrator,  or  trustee  shall  assign 
or  transfer  any  stock  or  obligation  in  this  State  standing  in  the  name  of  a 
decedent  or  in  trust  for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be 
paid  to  the  treasurer  of  the  proper  county  or  the  State  Treasurer  on  the  transfer 
thereof.  2.  No  safe  deposit  company,  bank,  or  other  institution,  person  or 
persons,  holding  securities  or  assets  of  a  nonresident  decedent,  nor  any  foreign 
or  domestic  corporation  doing  business  within  this  State  in  which  a  non- 
resident decedent  held  stock  at  his  decease,  shall  deliver  or  transfer  the  same 
to  the  executors,  administrators  or  legal  representatives  of  said  decedent,  or 
upon  their  order  or  request,  unless  notice  of  the  time  and  place  of  such  in- 
tended transfer  be  served  upon  the  tax  commission  and  public  administrator  at 
least  ten  days  prior  to  the  said  transfer;  nor  shall  such  safe  deposit  com- 
pany, bank,  or  other  institution,  person  or  persons,  nor  any  foreign  or  domestic 
corporation,  deliver  or  transfer  any  securities  or  assets  of  the  estate  of  a  non- 
resident decedent  without  retaining  a  sufficient  portion  or  amount  thereof  to 
pay  any  tax  which  may  thereafter  be  assessed  on  account  of  the  transfer  of 
such  securities  or  assets  under  the  provisions  of  the  inheritance  tax  laws,  with- 
out an  order  from  the  proper  court  authorizing  such  transfer;  and  it  shall  be 
lawful  for  the  tax  commission  or  public  administrator,  personally  or  by  repre- 
sentative, to  examine  said  securities  or  assets  at  any  time  before  such  delivery 
or  transfer.  Failure  to  serve  such  notice  or  to  allow  such  examination  or 
to  retain  a  sufficient  portion  or  amount  to  pay  such  tax  as  herein  provided, 
shall  render  said  safe  deposit  company,  trust  company,  bank,  or  other  institu- 
tion, person  or  persons,  or  such  foreign  or  domestic  corporation,  liable  to  the 
payment  of  the  tax  due  upon  said  securities  or  assets  in  pursuance  of  the 
provisions  of  the  inheritance  tax  laws.  The  tax  commission  may  issue  a  certifi- 
cate authorizing  the  transfer  of  any  such  stock,  securities  or  assets  whenever  it 
appears  to  the  satisfaction  of  the  commission  that  no  tax  is  due  thereon.  3.  Where 
stocks,  bonds,  mortgages,  or  other  securities  of  corporations  organized  under  the 
laws  of  this  State  or  of  foreign  corporations  owning  property  or  doing  business 
in  this  State  shall  have  been  transferred  by  a  nonresident  decedent,  the  tax  shall 
be  upon  such  proportion  of  the  value  thereof  as  the  property  of  such  corporation 
in  this  State  bears  to  the  total  property  of  the  corporation  issuing  such  stocks, 
bonds,  mortgages,  or  other  securities.  4.  If  any  stocks,  bonds,  mortgages,  or 
other  securities  of  a  holding  company  or  other  corporation  are  based  upon  or 
represent  in  whole  or  in  part  the  value  of  any  stocks,  bonds,  mortgages,  or  other 
securities  of  a  Wisconsin  corporation  or  a  corporation  owning  property  in  this 
State,  either  directly  or  indirectly,  the  transfer  of  the  stocks,  bonds,  mortgages, 
or  other  securities  of  such  holding  company  or  other  corporation  shall  be  subject 
to  the  inheritance  tax  in  the  proportion  which  the  Wisconsin  property  bears  to 
the  total  property  represented  by  or  subject  to  the  total  stocks,  bonds,  mortgages, 
or  other  securities  of  which  those  so  transferred  are  a  part.  5.  Whenever  a  tax 
may  be  due  from  the  estate  or  the  beneficiaries  therein  of  any  resident  or  non- 
resident decedent  upon  the  transfer  of  any  property,  when  the  property  or  estate 
left  by  such  decedent  is  partly  within  and  partly  without  this  State,  or  upon  any 
stocks,  bonds,  mortgages  or  other  securities  representing  property  or  estate 
partly  within  and  partly  without  this  State,  any  beneficiary  of  such  estate  shall 
be  entitled  to  deduct  only  a  proportion  of  his  share  of  the  debts,  expenses  of 
administration,  and  of  his  Wisconsin  exemption,  equal  to  the  proportion  which  his 
interest  in  the  property  within  the  State  or  within  its  jurisdiction  bears  to  his 
entire  interest  in  such  estate.  (As  amended  Chapter  169,  L.  1919.)  6.  The  tax 
commission  shall  require  such  reports  and  information,  and  shall  make  such 


WISCONSIN  H41 

orders,  rules,  and  regulations  as  it  may  deem  necessary  to  enable  the  commis- 
sion to  secure  the  necessary  information  from  corporations,  domestic  and  foreign, 
and  to  ascertain  the  amount  of  and  collect  such  tax;  and  no  holding  company  or 
other  corporation  subject  to  the  provisions  of  this  section  shall  deliver  or  transfer 
any  such  stocks,  bonds,  mortgages,  or  other  securities  of  a  nonresident  decedent 
based  upon  or  representing  in  whole  or  in  part,  directly  or  indirectly,  the  value 
of  Wisconsin  property,  or  stocks,  bonds,  mortgages,  or  other  securities  of  a  Wis- 
consin corporation  or  a  corporation  owning  property  in  this  State,  without  re- 
taining a  sufficient  portion  or  amount  thereof  to  pay  any  tax  which  may  thereafter 
be  assessed  on  account  of  such  transfer,  except  upon  order  of  the  proper  court 
or  a  certificate  of  the  tax  commission.  7.  Any  corporation  or  holding  company 
violating  the  provisions  of  this  section  shall  be  liable  to  the  State  for  the  amount 
of  the  tax;  and  for  wilful  violation  of  its  provisions  shall  forfeit  its  charter  or 
its  license  to  do  business  within  this  State  upon  complaint  of  the  tax  commission, 
and  conviction  thereunder. 

§  1087  (12).  Gives  the  court  granting  letters  jurisdiction  of  all  transfer  tax 
matters,  and  makes  regulations  for  the  filing  of  ancillary  letters  requiring  notice 
to  the  public  administrator  and  a  full  inventory. 

§  1087  (13).  Provides  for  the  appointment  of  appraisers  and  hearings  before 
them,  and  for  the  computation  of  life  estates  and  remainders  by  the  commissioner 
of  insurance  on  mortality  tables  on  the  basis  of  5%.  No  allowance  is  made  in 
valuing  estates  that  may  be  defeated  or  abridged  by  a  contingency,  but  a  pro- 
portionate refund  is  provided  if  the  contingency  happens.  In  case  of  con- 
tingent remainders  the  tax  is  fixed  at  the  lowest  possible  rate,  the  ultimate 
beneficiary  being  required  to  pay  the  difference  if  it  turns  out  that  he  is  liable  to 
pay  a  higher  rate.  Where  taxation  has  been  postponed  remainders  are  valued 
without  any  deduction  for  the  intermediate  life  estate.  Where  an  estate  for  life 
or  years  can  be  divested  by  the  act  or  omission  of  the  legatee  it  is  taxed  as  though 
there  were  no  possibility  of  such  divesting.  The  section  makes  the  usual  pro- 
visions for  appeal  and  rehearing  before  the  County  Court. 

The  rest  of  the  statute  is  concerned  with  reports  of  public  officers  and  pro- 
ceedings for  the  collection  of  delinquent  taxes. 


WISCONSIN  FORMS. 

STATE    OP    WISCONSIN. 

JOHN  HARRINGTON,  Inheritance  Tax  Counsel. 

IN  THE  MATTER  OF  THE  ESTATE   OF   "1 

I     Transfer  Certificate. 

Deceased. 

THE  WISCONSIN  TAX  COMMISSION  hereby  certifies  that  it  has  examined  the 

verified  petition  of ,  of  the 

of  ,  deceased,  late  a  resident  of  

and  a  nonresident  of  the  State  of  Wisconsin;  and 

CONSENT  is  HEREBY  GIVEN:  To  the  transfer  of  the  following  described  prop- 
erty upon  the  books  of  the  respective  corporations  mentioned,  from  the  name 

of  said  deceased  to  the  name  of  or 

.as  he  may  direct,  without  incurring  any  liability  to  this  State  by  such  transfer : 


Dated  at  the  Capital  at  Madison  this day  of   

WISCONSIN  TAX  COMMISSION, 

By   

Inheritance  Tax  Counsel. 


1142 


THE  STATE  STATUTES 


NONRESIDENT   INHERITANCE   TAX. —  (1)    Petition   for   Special   Administration   to 
Adjust  Tax— 1087— 12,  subd.  3. 

STATE  OP  WISCONSIN,  COUNTY  COURT,  DANE  COUNTY. 

In  Ee  Inheritance  or  Transfer  Tax  on  Property 
in  the  State  of  Wisconsin,  on  the  Estate  of 


late    of 


Deceased. 


To   said  Court   at   Madison,   Wisconson,   the  seat   of   government,    and   to    Hon. 
A.  G.  Zimmerman,  Judge  of  said  Court: 

The  petition  of    respectfully  represents 

and  shows :     That  he  is of  the  estate 

(Exr.  Adm.  Heir  or  Legatee) 

of    who    died   testate    (or,   intestate)    on   or 

about  the   day  of   ,  192. . .,  being  at  the  time  a 

NONRESIDENT  of  the  State   of   Wisconsin,  but   a  resident   of   and   domiciled   at 
in  the  State  of  

That  at  the  time  of  his  decease  said  decedent  was  possessed  of  certain  property 
which  appears  to  be  under  the  jurisdiction  of  the  State  of  Wisconsin  for  in- 
heritance tax  purposes.  That  the  certificate  numbers  of  all  shares  of  stocks  and 
bonds  in  corporations  having  property  within  the  State  of  Wisconsin,  and  a 
description  of  all  other  property  subject  to  said  tax,  together  with  an  estimated 
full  and  fair  market  value  of  the  same  at  the  time  of  decedent's  death,  at  which 
value  your  petitioner  consents  that  the  same  be  appraised,  is  as  follows,  to-wit: 

No.  of  Shares 

of  Stock  and  Certificate        Estimated  Value 

Amount  of  Bonds          Xame  of  Corporation  Numbers        at  Date  of  Death 


That  said  decedent  was  possessed  of  no  other  property  of  any  kind,  real, 
personal,  or  mixed,  or  any  interest  in  other  property  at  the  time  of  his  death, 
which  was  situate  in  or  which  may  be  construed  as  an  interest  in  such  property 
in  the  State  of  Wisconsin,  of  which  your  petitioner  has  any  knowledge  or 
information. 

That  said  property  passes  by  will  (or,  under  the  intestate  laws)  in  the  pro- 
portions and  amounts  and  to  the  persons  and  corporations  designated,  with  the 
relationship  of  the  persons,  as  follows: 

Amount  in  Wis- 
Name  Residence         Relationship         consin  Property 


Note — Indicate  life  estates,  giving  age  of  life  beneficiary  at  date  of  decedent's 
demise. 

That  the  total  appraised  value  of  decedent's  estate  is  the  sum  of  $ 

That  the  amount  of  debts  and  expenses  of  administration  (not  including 
trustee's  commissions  nor  inheritance  taxes  paid)  is  the  sum  of  $ 

That  the  principal  administration  of  said  estate.,  is  now  pending  in  the 

Court  for  the  County  of  State  of  

That  no  administration  has  been  had  in  the  State  of  Wisconsin  and  that  no 
reason  or  necessity  exists  for  ancillary  or  special  administration  on  said  estate 
in  Wisconsin  except  for  the  purpose  of  the  adjustment,  determination  and  pay- 
ment of  the  inheritance  or  transfer  tax  due  said  State  thereon. 


WISCONSIN  1143 

WHEREFORE,  your  petitioner  prays  that  summary  administration,  ancillary  or 
special,  be  had  in  said  court,  at  the  seat  of  government  of  the  State  of 
Wisconsin,  solely  for  the  purpose  of  adjustment,  determination  and  payment  of 
the  inheritance  or  transfer  tax  due  the  State  of  Wisconsin  on  the  property  of 
said  decedent  hereinbefore  described,  and  that  J.  C.  HARPER,  the  Public  Ad- 
ministrator of  said  Dane  County,  be  appointed  SPECIAL  ADMINISTRATOR  of  said 
estate  for  the  purpose  of  such  adjustment,  determination  and  payment  of  the 
inheritance  or  transfer  tax  due  to  the  State  of  Wisconsin  on  said  estate,  it  being 
understood  that  there  will  be  no  fees  charged  against  said  estate  for  such 
administration.  (Provided,  however,  where  property  subject  to  the  jurisdiction 
of  this  State  is  omitted  and  supplementary  administration  is  afterwards  re- 
quired, a  charge  of  $5.00  to  cover  the  expense  in  such  application  may  be  made.) 

And  your  petitioner,  for  himself  and  on  behalf  of  all  the  heirs,  legatees  and 
persons  interested,  hereby  expressly  waives  all  notices  which  otherwise  would  by 
law  be  required  to  be  gi,ven  and  consents  that  said  court  may  determine  the 
inheritance  or  transfer  tax  on  said  property  forthwith  on  the  presentation  and 
filing  of  this  petition,  it  being  understood,  however,  that  there  shall  be  a  just 
and  fair  appraisal,  and  that  said  tax  shall  be  determined  at  the  lowest  lawful 
rate  applicable  thereto  under  the  laws  of  the  State  of  Wisconsin. 

Dated    ,  192... 


'(     ss. 


Petitioner. 

STATE  OF 
County  of 

the  above  named  petitioner,  being  duly 
sworn,  on  oath,  says  that  he  has  heard  read  the  foregoing  petition  by  him 
subscribed,  and  knows  the  contents  thereof,  and  that  the  same  is  true  to  his 
own  knowledge  except  as  to  those  matters  therein  stated  on  information  and 
belief,  and  as  to  those  matters  he  believes  it  to  be  true. 


Subscribed  and  sworn  to  before  me  this 
day  of  ,  192. 

Notary  Public,  County  of 

State  of   


Sec.  1087 — 15  and  1087 — 18,  subsec.  7 — Notice  of  Final  Account  and  to  Deter- 
mine Inheritance  Tax — Prescribed  by  Tax  Commission. 

COUNTY  COURT — COUNTY,  WISCONSIN — IN  PROBATE 

In  the  Matter  of  the  . ,  .of 


. ,  Deceased. 


NOTICE  is  HEREBY  GIVEN,  that  at  a   term  of  the  County  Court 

to  be  held  in  and  for  said  county  at  the  court  house  in  the  city  of   

in  said  county  on  the Tuesday  (being  the day)  of , 

A.  D.  19 . . . ,  at  the  opening  of  the  court  on  that  day  the  following  matter  will  be 
heard  and  considered: 

The  application  of   ,  executor   (or  adminis- 
trator)  of  the  will   (or  estate)   of   ,  deceased, 

late  of  in  said  county,  for  the  examination  and 

allowance  of  his  final  account,  and  for  the  assignment  of  the  residue  of  the 
estate  of  said  deceased  to  such  persons  as  are  by  law  entitled  thereto;  and  for 
the  determination  and  adjudication  of  the  inheritance  tax,  if  any,  payable  in 
said  estate. 

Dated ,  A.  D.  192. . . 

BY  THE  COURT: 


County  Judge. 


1144 


THE  STATE  STATUTES 


INFORMATION   REQUIRED   BY   TAX   COMMISSION   AND   PUBLIC   ADMINISTRATOR. 

1.  Name  and  residence  of  deceased , 

2.  Date  of  death   

3.  Executor   or   administrator    P.  O 

4.  Attorney  for  Exr.  or  Adm'r P.  O 

5.  Appraised  value  of  estate,  Real  $ Personal  $ Total  $ 

6.  Estimated  debts  $ ....  Funeral  and  administration  $ ....   Total  $ 


7.  Amount  of  life  insurance,  if  any,  $ 

8.  Net  estate  to  be  distributed   $ 

9.  Is  the  property  appraised  fully  at  clear  market  value  ? 

10.  Was  interest  to  date  of  death  on  notes,  mortgages,  etc.,  included  ?  

11.  Is  any  property  of  decedent  not  included  in  inventory  known  to  exist? 

Amount  $ 

12.  Did  decedent  convey  any  property  before  death  to  relatives  or  others  with- 

out full  consideration  ?    

13.  Give  the  names  and  ages  of  life  tenants,  if  any 

14.  State  the  names  of  the  heirs  or  legatees,  relationship  to  deceased,  if  any, 

estimated  distributive  shares  to  each,  exemption  to  which  each  is  entitled, 
rate  and  amount  of  tax  due  from  each 

Names  of  Heirs       Relationship       Distributive       Exemp-       Bate  of       Amount- of 
or  Legatees  if  any  shares  tions  tax  tax 


Total, 


Attorney  for 


Dated ,  A.  D.  192. 


STATE  OF  WISCONSIN, 


County. 


ss. 


being  first  duly  sworn,  says  that  on 

the day  of ,  192 . . . ,  he  deposited  in 

the  post  office  at  ,  Wisconsin,  a  true  copy  of  the  within 

notice,  securely  enclosed  in  an  envelope,  the  postage  prepaid  thereon,  to  each 

of  the  following  named  at  the  addresses  stated,  respectively,  to-wit : 

,  Public  Administrator,  ,  Wisconsin ;  and 

Wisconsin  Tax  Commission,  Madison,  Wisconsin,  one  copy  of  said  notice  to 
each. 

Subscribed  and  sworn  to  before  me  this   .  .    day  of    . 


Notary  Public,  Wisconsin. 


Sec.  1087 — 15,  subsec.  10. — Order  Determining  Inheritance   Tax — Prescribed  by 
Tax  Commission. 

COUNTY  COURT — COUNTY,  WISCONSIN — IN  PROBATE 

In  the  Matter  of  the  .  .   of 


Deceased. 


At  the   term  held   A.  D.  19 ... 

The  matter  of  determining  the  cash  value  of  said  estate  and  the  amount  of 
inheritance  tax  to  which  the  same  is  liable  coming  on  to  be  heard  pursuant  to 

an  order  entered  hereon  on  the day  of  

19..;  and  it  appearing  that  due  notice  of  said  hearing  was  given  as  provided 


WISCONSIN 


1145 


by  law,  and  that  notice  in  writing  of  such  hearing  was  mailed  to  the  public 
administrator  of  said  county  and  to  the  Wisconsin  Tax  Commission  not  less 
than  twenty  days  before  such  hearing;  and  due  proof  of  mailing  said  notices 
having  been  filed  herein; 

And    ,  public  administrator,   appearing  for 

said  county  and  for  the  State  of  Wisconsin,  and  other  appearances  being  as 
follows : 

And  it   appearing   that  the   final   account   of    , 

executor    (or    administrator)    was    duly    filed    herein;    and    the    court    (having 

appointed    as   third   appraiser   to   represent 

the  county  and  the  State  in  determining  the  value  of  said  estate,  and)  having 
taken  testimony  and  considered  the  inventory  and  the  report  of  the  appraisers 
(and  of  said  third  appraiser),  and  having  heard  all  parties  desiring  a  hearing, 
and  upon  the  whole  record  herein,  and  being  fully  advised: 

THE  COURT  FINDS  AND  DETERMINES  THAT  said  deceased  died  on  the  

day  of  ,  192...; 

That  the  gross  value  of  the  property  and  estate  of  said  deceased,  both  real 
and  personal,  transferred  herein,  is  as  follows: 

Cash    $ 

Notes  and  securities $ 

Corporate  stocks  and  bonds $ 

Other  personal  property $ 

Eeal   estate    $ 

Gross   value   of   estate $ 

THAT  the  following  deductions  are  allowed: 

r 

Debts $ 

Funeral  expenses   $ 

Expenses  of  administration  $ 

Total   deductions    $ 

Clear    market    value $ 


THAT  the  names  of  the  heirs,  legatees  and  devisees,  relationship  to  deceased, 
distributive  share  of  each,  exemption  to  which  each  is  entitled,  rate,  and  amount 
of  tax  due  from  each,  are  as  follows: 

Names  of  Heirs       Relationship       Distributive       Exemp-       Kate  of       Amount  of 
or  Legatees  if  any  shares  tions  tax  tax 


Total, 


WHEREFORE  IT  is  ORDERED  that  the  executor  (or  administrator)  be  and  he  is 
hereby  authorized  and  directed  to  pay  and  deliver  forthwith  to  the  county 

treasurer  the  sum  of   Dollars  as  and  for 

inheritance  tax  to  which  said  heirs,  legatees  or  devisees  are  liable,  and  to  take 
proper  receipt  or  receipts  therefor,  and  to  charge  the  same  to  the  respective 
shares  as  taxed  herein. 

IT  is  FURTHER  ORDERED  that  a  discount  of  five  per  centum  of  said  tax  be 
allowed  and  deducted  therefrom  by  the  county  treasurer,  provided  the  same 
is  paid  within  one  year  from  the  date  of  death  of  said  deceased;  and  that 
if  such  tax  is  not  paid  within  eighteen  months  from  said  date  of  death,  interest 


1146  THE  STATE  STATUTES 

shall  be  charged  and  collected  thereon  at  the  rate  of  ten  per  centum  per  annum 
from  said  date  of  death. 

IT  is  FURTHER  ORDERED  that  a  copy  of  this  letter  be  forthwith  delivered  or 
mailed  to  each  the  county  treasurer,  the  State  Treasurer,  and  the  Wisconsin 
Tax  Commission,  and  due  proof  of  such  delivery  or  mailing  be  filed  herein. 

Dated  ,  192. .. 

BY  THE  COURT: 


Judge. 

STATE  OF  WISCONSIN, 
County. 


being  first  duly  sworn,  says  that  on  the 

day  of  ,  192 . .  . ,  he  deposited  in  the  post  office 

at  ,  Wisconsin,  a  true  copy  of  the  within  order, 

securely  enclosed  in  an  envelope,  the  postage  prepaid  thereon,  to  each  of  the 

following  named  at  the  addresses  stated  respectively,  to-wit :  

,  County  Treasurer,  ,  Wis- 
consin; State  Treasurer,  Madison,  Wisconsin;  and  Wisconsin  Tax  Commis- 
sion, Madison,  Wisconsin,  one  copy  of  said  order  to  each. 

Subscribed  and  sworn  to  before  me  this  day  of  , 

192... 


Notary  Public,  Wisconsin. 


WYOMING 


1147 


WYOMING. 
TABLE  OF  BATES  AND  EXEMPTIONS— 1910  TO  1921 


CLASS  OB  RELATIONSHIP 

Amount  of  exemption 

Rate  of  tax 

Father,  mother,  husband,  wife,  child,  brother, 
sister,  son-in-law,  daughter-in-law,  adopted  or 
mutually  acknowledged  child  or  lawful  lineal 
descendant. 

$10,000  and  any  life 
estate  where  the  re- 
mainder goes  to  col- 
laterals or  strangers 

2%  on  all  in  excess  of 
exemption. 

$500 

emption. 

CHAPTER   126,  LAWS   1921. 

Inheritance  Tax  Commissioner. 

Section  1.  There  is  hereby  created  and  established  the  office  of  Inheritance 
Tax  Commissioner  of  the  State  of  Wyoming,  and  the  Insurance  Commissioner 
of  the  State  of  Wyoming  shall  be  the  ex-officio  Inheritance  Tax  Commissioner. 
He  shall  have  an  official  seal,  bearing  the  words  "Inheritance  Tax  Commissioner 
of  the  State  of  Wyoming"  of  which  the  courts  of  this  State  shall  take  judicial 
notice. 

Subjects  and  rates  of  taxation. 

§  2.  All  property  within  the  jurisdiction  of  the  State  of  Wyoming,  corporeal 
or  incorporeal,  and  any  interest  therein,  whether  belonging  to  inhabitants  of  the 
State  of  Wyoming  or  not,  which  shall  pass  by  will,  or  by  laws  regulating  intestate 
succession,  or  by  deed,  grant  or  gift,  except  in  cases  of  bona  fide  purchase  for 
full  consideration  in  money  or  money's  worth;  made  in  contemplation  of  the 
death  of  the  grantor  or  donor  or  made  or  intended  to  take  effect  in  possession  or 
enjoyment  after  his  death,  and  any  beneficial  interest  therein  which  shall  arise 
or  accrue  by  survivorship  in  any  form  of  joint  ownership  in  which  the  decedent 
joint  owner  contributed  during  his  life  any  part  of  the  property  held  in  such 
joint  ownership  or  of  the  purchase  price  thereof,  to  any  person,  absolutely  or  in 
trust,  except  to  or  for  the  use  of  charitable,  educational  or  religious  societies  or 
institutions,  the  property  of  which  is  by  the  laws  of  the  State  of  Wyoming 
exempt  from  taxation,  or  for  or  upon  trust  for  any  charitable  purposes  to  be 
carried  out  within  the  State  of  Wyoming,  or  to  or  for  the  use  of  the  State  of 
Wyoming  or  any  town  therein  for  public  purposes,  shall  be  subject  as  to  the 
estate  passing  to  each  of  the  following  beneficiaries,  to  a  tax  at  the  percentage 
rates  fixed  by  the  following  table: 


BENEFICIARY 


Class    A. 

Father,  mother,  husband 
wife,  child,  brother,  sis- 
ter, wife  or  widow  of 
son,  husband  of  daughter, 
adopted  child,  mutually 
acknowledged  child,  lin- 
eal descendant 

Class  B. 
All  others 


EXEMPTION 


$10,000 

$500  only  if  estate 
is  under  that 
amount 


BATE 

Entire  amount 
Over  Exemption 


2% 

5%  on  entire  amount 
if  estate  is  more  than 
$500.00. 


THE  STATE  STATUTES 

Gifts,  etc.,  in  contemplation  of  death. 

§  3.  Any  deed,  grant  or  gift  completed  inter  vivos,  except  in  case  of  bona 
fide  purchase  for  full  consideration  in  money  or  money's  worth,  made  not  more 
than  six  months  prior  to  the  death  of  the  grantor  tr  donor,  shall,  prima  facie,  be 
deemed  to  have  been  made  in  contemplation  of  the  death  of  the  grantor  or  donor. 
Notwithstanding  any  provision  of  section  one,  no  tax  shall  be  payable  thereunder 
on  account  of  any  deed,  grant  or  gift  in  contemplation  of  death  made  more  than 
two  years  prior  to  the  death  of  the  grantor  or  donor,  unless  made  or  intended  to 
take  effect  in  possession  or  enjoyment  after  such  death. 

Tax  on  shares  of  certain  corporations  in  estates  of  non-residents. 

§  4.  When  the  personal  estate  passing  under  section  one,  from  persons  not 
inhabitants  of  the  State  of  Wyoming  consists  in  whole  or  in  part  of  shares  of 
any  railroad  company  or  street  railway  company  or  telegraph  or  telephone  com- 
pany incorporated  under  the  laws  of  the  State  of  Wyoming  and  also  of  some 
other  state  or  country,  so  much  only  of  each  share  as  is  proportional  to  the  part 
of  such  company's  lien  lying  within  the  State  of  Wyoming  shall  be  considered  as 
property  of  such  persons  within  the  jurisdiction  of  the  State  of  Wyoming  for 
the  purposes  of  this  chapter. 

Reciprocal  exemption  to  non-resident  estates. 

§  5.  Property  of  a  non-resident  decedent  which  is  within  the  jurisdiction  of 
the  State  of  Wyoming  at  the  time  of  his  death,  if  subject  to  a  tax  of  like 
character  with  that  imposed  by  this  chapter  by  the  law  of  the  state  or  country 
of  his  residence,  shall  be  subject  only  to  such  part  of  the  tax  hereby  imposed  as 
may  be  in  excess  of  the  tax  imposed  by  the  laws  of  such  other  state  or  country, 
provided  that  a  like  exemption  is  made  by  the  laws  of  such  other  state  or 
country  in  favor  of  estates  of  residents  of  the  State  of  Wyoming;  but  no  such 
exemption  shall  be  allowed  until  the  tax  provided  for  by  the  law  of  such  other 
state  or  country  shall  be  actually  paid,  guaranteed,  or  secured  in  accordance 
with  law. 

Tax — when  it  accrues  and  is  payable. 

§  6.  All  taxes  imposed  by  this  Act  shall  take  effect  at  and  accrue  upon  the  death 
of  the  decedent,  or  donor,  and  shall  be  due  and  payable  at  the  expiration  of  one 
year  from  such  death,  except  as  otherwise  provided  in  this  Act;  provided,  how- 
ever, that  taxes  upon  any  devise,  bequest,  legacy  or  gift,  limited,  conditioned, 
dependent,  or  determinable  upon  the  happening  of  any  contingency  or  future 
event,  by  reason  of  which  the  full  and  true  value  thereof  can  be  ascertained  at 
or  before  the  time  when  the  taxes  become  due  and  payable  as  aforesaid,  shall 
accrue  and  become  due  and  payable  when  the  person  or  corporation  beneficially 
entitled  thereto  shall  be  entitled  to  come  into  actual  possession  or  enjoyment 
thereof. 

Payment — when  made. 

§  7.  Any  administrator,  executor  or  trustee  having  in  charge  or  in  trust  any 
property  for  distribution,  embraced  in  or  belonging  to  any  inheritance,  devise, 
bequest,  legacy  or  gift,  subject  to  the  tax  thereon  as  imposed  by  this  Act, 
shall  deduct  the  tax  therefrom,  and  within  thirty  days  thereafter  he  shall  pay 
over  the  same  to  the  Inheritance  Tax  Commissioner  as  herein  provided.  If  such 
property  be  not  in  money,  he  shall  collect  the  tax  on  such  inheritance,  devise, 
bequest,  legacy  or  gift  upon  the  appraised  value  thereof  from  the  person  entitled 
thereto.  He  shall  not  deliver  or  be  compelled  to  deliver  any  property  embraced  in 
any  inheritance,  devise,  bequest,  legacy  or  gift,  subject  to  tax  under  this  Act,  to 
any  person  until  he  shall  have  collected  the  tax  thereon. 

Tax  to  whom  paid — duplicate  receipts. 

§  8.  The  tax  imposed  by  this  Act  upon  inheritances,  devises,  bequests  or  legacies, 
shall  be  payable  to  the  Inheritance  Tax  Commissioner  and  the  Inheritance  Tax 
Commissioner  shall  give  the  executor,  administrator,  or  trustee,  or  person  paying 
such  tax,  a  receipt  which  shall  become  a  proper  voucher  in  the  settlement  of  his 


WYOMING 

accounts.  No  executor  or  administrator  or  trustee  shall  be  entitled  to  a  final 
accounting  of  an  estate  in  the  settlement  of  which  a  tax  may  become  due  under 
the  provisions  of  this  Act,  unless  he  shall  produce  a  receipt  so  sealed  and 
countersigned,  or  a  copy  thereof,  certified  by  the  said  Inheritance  Tax  Com- 
missioner or  unless  a  bond  shall  have  been  filed,  as  prescribed  in  section  15.  All 
taxes  paid  into  the  State  Treasury  under  the  provisions  of  this  Act  shall  belong 
to  and  be  a  part  of  the  Inheritance  Tax  Fund  of  the  State;  provided,  whenever 
the  amount  of  money  in  this  fund  exceeds  $10,000.00,  then  all  moneys  in  excess 
of  $5,000.00  shall  be  transferred  to  the  general  fund. 

The  tax  a  lien — limitations. 

§  9.  Every  tax  imposed  by  this  Act  shall  be  a  lien  upon  the  property  em- 
braced in  any  inheritance,  devise,  bequest,  legacy  or  gift,  until  paid,  and  the 
person  to  whom  such  property  is  transferred,  and  the  administrators,  executors 
and  trustees  of  every  estate  embracing  such  property  shall  be  personally  liable 
for  such  tax  until  its  payment,  to  the  extent  of  the  value  of  such  property; 
provided,  however,  that  in  all  estates,  excepting  those  of  non-resident  deceased, 
all  inheritance  taxes  shall  be  sued  for  within  five  years  after  they  have  become 
due  and  legally  demandable,  otherwise  they  shall  be  conclusively  presumed  to  be 
paid  and  cease  to  be  a  lien  as  against  the  estate,  or  any  part  thereof,  of  the 
decedent;  provided  further,  that  in  estates  of  non-resident  deceased,  such  limi- 
tation period  shall  not  apply  until  at  least  one  year  shall  have  elapsed  after 
official  notice  of  the  death  of  non-resident  deceased,  with  description  and  probable 
value  of  the  estate,  shall  have  been  filed  with  the  Inheritance  Tax  Commissioner. 

Discount — interest  and  penalty. 

§  10.  If  such  tax  is  paid  within  one  year  from  the  accruing  thereof,  a  discount 
of  five  per  centum  shall  be  allowed  and  deducted  therefrom.  If  such  tax  is  not  paid 
within  one  year  from  the  accruing  thereof,  interest  shall  be  charged  and  collected 
thereon  at  the  rate  of  eight  per  centum  per  annum  from  the  time  the  tax  is 
due  and  payable,  unless  by  reason  of  claims  upon  the  estate,  necessary  litigation 
or  other  unavoidable  delay,  such  tax  can  not  be  determined  and  paid  as  herein 
provided,  in  which  case,  interest  at  the  rate  of  six  per  centum  per  annum  shall 
be  charged  upon  such  tax  from  the  time  from  the  accruing  thereof  until  the 
cause  of  the  delay  is  removed,  after  which  eight  per  centum  shall  be  charged. 
In  all  cases  when  a  bond  shall  be  given  under  the  provisions  of  section  15  shall 
be  charged  at  the  rate  of  six  per  centum  from  the  accrual  of  the  tax  until  the 
date  of  payment  thereof. 

Power  to  sell  for  payment  of  tax. 

§  11.  Every  executor,  administrator  or  trustee  shall  have  full  power  to  sell 
so  much  of  the  property  embraced  in  the  inheritance,  devise,  bequest  or  legacy, 
as  will  enable  him  to  pay  the  tax  imposed  by  this  act,  in  the  same  manner  as  he 
might  be  entitled  by  law  to  do  for  the  payment  of  the  debts  of  a  testator 
intestate. 

Duty  of  heir  of  devisee  when  legacy  payable  out  of  property — legacy  of  limited 

period — duty  of  administrator. 

§  12.  If  any  bequest  or  legacy  shall  be  charged  upon  or  payable  out  of  any 
property,  the  heir  or  devisee  shall  deduct  such  tax  therefrom  and  pay  such  tax  to 
the  administrator,  executor  or  trustee,  and  the  tax  shall  remain,  a  lien  or  charge 
on  such  property  until  paid;  and  the  payment  thereof  shall  be  enforced  by  the 
executor,  administrator,  or  trustee  in  the  same  manner  that  payment  of  the 
bequest  or  legacy  might  be  enforced;  If  any  bequest  or  legacy  shall  be  given  in 
money  for  a  limited  period,  the  administrator,  executor,  or  trustee  shall  retain 
the  tax  upon  the  whole  amount ;  but,  if  it  is  not  in  money,  he  shall  make  applica- 
tion to  the  court  having  jurisdiction,  for  an  accounting  by  him  to  make  an 
apportionment,  if  the  case  requires,  of  the  sum  to  be  paid  into  his  hands  by  such 
legatee  or  beneficiary,  and  for  such  further  order  relative  thereto  as  the  case 
may  require. 


1150  THE  STATE  STATUTES 

Refund  of  tax  erroneously  paid. 

§  13.  When  any  tax  imposed  by  this  Act  shall  have  been  erroneously  paid, 
wholly  or  in  part,  the  person  paying  the  same  shall  be  entitled  to  a  refundment 
of  the  amount  so  erroneously  paid,  and  the  Inheritance  Tax  Commissioner  shall, 
upon  satisfactory  proofs  presented  to  him  of  the  facts  relating  thereto,  prepare 
and  present  a  voucher  therefor  to  the  State  Auditor  who  shall  thereupon  draw  his 
warrant  on  the  State  Treasurer  against  the  Inheritance  Tax  Fund  in  the  State 
Treasury,  in  favor  of  the  person  entitled  thereto ;  provided,  however,  that  all 
application  for  such  refunding  of  erroneous  taxes  shall  be  made  within  two 
years  from  the  payment  thereof. 

Tax  when  foreign  executor  assigns  stocks,  etc. 

§  14.  If  a  foreign  executor,  administrator  or  trustee  shall  assign  or  transfer  any 
stock  or  obligation  in  this  State  standing  in  the  name  of  the  decedent,  or  in  trust 
for  a  decedent,  liable  to  any  such  tax,  the  tax  shall  be  paid  to  the  Inheritance 
Tax  Commissioner  on  or  before  the  transfer  thereof,  and  no  such  assignment  or 
transfer  shall  be  valid  unless  such  tax  is  paid,  and  no  corporation  or  trustee  shall 
transfer  such  stock  until  provided  with  a  certificate  executed  by  the  Inheritance 
Tax  Commissioner  to  the  effect  that  the  inheritance  tax  has  been  paid. 

Depositaries  of  securities  not  to  deliver  same  until  notice  given  to  Inheritance 
Tax  Commissioner — penalty. 

§  15.  No  safe  deposit  company,  trust  company,  trustee,  bank,  corporation  or 
other  institution,  person  or  persons,  holding  securities  or  assets  of  a  decedent  or 
corporation  in  which  said  decedent,  at  the  time  of  his  death,  owned  any  stock, 
shall  deliver  the  same  to  the  executor,  administrators  or  legal  representatives  of 
said  decedent,  or  upon  their  order  or  request,  unless  notice  of  the  same  time  and 
place  of  such  intended  transfer  be  served  upon  the  Inheritance  Tax  Commissioner 
in  writing  at  least  ten  days  prior  to  the  said  transfer;  and  it  shall  be  lawful 
for  the  said  Inheritance  Tax  Commissioner,  personally  or  by  representative,  to 
examine  said  securities  prior  to  the  time  of  such  delivery  or  transfer.  If  upon 
such  examination  the  Inheritance  Tax  Commissioner  or  his  said  representative 
shall  for  any  cause  deem  it  advisable  that  such  securities  or  assets  shall  not  be 
immediately  delivered  or  transferred,  he  may  forthwith  notify,  in  writing,  such 
company,  bank,  institution,  or  person  to  defer  delivery  or  transfer  thereof  for  a 
period  of  not  to  exceed  ten  days  from  the  date  of  such  notice,  and  thereupon  it 
shall  be  the  duty  of  the  party  notified  to  defer  such  delivery  until  the  time 
stated  in  such  notice  or  until  the  revocation  thereof  within  such  ten  days,  failure 
to  serve  the  notice  first  above  mentioned  or  allow  such  examination,  or  to  defer 
the  delivery  of  such  securities  or  assets  for  the  time  stated  in  the  second  of  said 
notices,  or  transfer  of  any  stock  or  securities  by  any  corporation  or  trustee,  con- 
trary to  the  provisions  of  this  act,  shall  render  said  safe  deposit  company,  trust 
company,  trustee,  corporation,  bank,  or  other  institution,  person  or  persons, 
liable  to  the  payment  of  the  tax  due  in  said  securities  or  assets  pursuant  to  the 
provisions  of  this  Act. 

Deferred  payment   bond. 

§  16.  Any  person  or  corporation  beneficially  interested  in  any  property  charge- 
able with  a  tax  under  section  1,  and  executors  and  administrators,  and  trustees 
thereof,  may  elect,  within  six  months  from  the  death  of  decedent,  not  to  pay 
such  tax  until  the  person  or  persons  beneficially  interested  therein  shall  come  into 
actual  possession  or  enjoyment  thereof.  If  it  be  personal  property,  the  persons 
or  person  so  electing  shall  give  a  bond  to  the  state  in  the  penalty  of  three  times 
the  amount  of  tax,  with  such  sureties  as  the  district  judge  of  the  proper  district 
may  approve,  conditioned  for  the  payment  of  such  tax  and  interest  thereon,  at 
such  time  and  period  as  the  person  or  persons  beneficially  interested  therein  may 
come  into  actual  possession  or  enjoyment  of  such  property,  which  bond  shall  be 
executed  and  filed,  and  a  full  return  of  such  property  upon  oath  made  to  the 
district  court  within  six  months  from  the  date  of  transfer  thereof,  and  within 
the  same  period  a  certified  copy  of  such  return  and  bond  shall  be  filed  in  office  of 
Inheritance  Tax  Commissioner,  as  herein  provided,  and  such  bond  must  be 
renewed  every  five  years. 


WYOMING 

Taxes  upon  devises  and  bequests  in  lieu  of  compensation. 

§  17.  Whenever  a  decedent  appoints  one  or  more  executors  or  trustees,  and, 
in  lieu  of  their  allowance  or  commission,  makes  a  bequest  or  devise  of  property 
to  them,  which  would  otherwise  be  liable  to  said  tax,  or  appoints  them  his  residuary 
legatees,  and  said  bequests,  devises  or  residuary  legacies  exceed  what  would  be 
a  reasonable  compensation  for  their  services,  such  excess  shall  be  liable  to  such 
tax,  and  the  court  having  jurisdiction  of  their  accounts,  upon  its  own  motion,  or 
on  the  application  of  the  Inheritance  Tax  Commissioner,  shall  fix  such  compensa- 
tion. 

Jurisdiction  of  the  District  Court. 

§  18.  The  district  court  of  every  judicial  district  in  this  state  having  jurisdic- 
tion to  grant  letters  testamentary  or  of  administration  upon  the  estate  of  a 
decedent  whose  property  is  chargeable  with  any  tax  under  this  act,  or  to  give 
ancillary  letters  thereon  or  to  appoint  a  trustee  of  such  estate,  or  any  part 
thereof  shall  have  jurisdiction  to  hear  and  determine  all  questions  arising  under 
the  provisions  of  this  Act,  and  to  do  any  act  in  relation  thereto  authorized  by 
law  to  be  done  by  such  court  in  other  matters  or  proceedings  coming  within  this 
jurisdiction;  and  if  two  or  more  district  courts  shall  be  entitled  to  exercise  any 
such  jurisdiction,  the  district  court  first  acquiring  jurisdiction  hereunder  shall 
retain  the  same  to  the  exclusion  of  every  other  district  court. 

Duty  of  district  judge — notice  to  Inheritance  Tax  Commissioner. 

§  19.  The  judge  of  the  district  court  having  jurisdiction  of  the  estate  of  any 
decedent  shall,  within  thirty  days  after  the  filing  of  a  will  or  the  application  of 
letters  of  administration,  or  the  granting  of  letters  testamentary  or  of  letters  of 
administration,  if  in  his  opinion  said  estate  is  subject  to  a  tax  under  the  pro- 
visions of  this  Act,  cause  the  clerk  of  the  court  to  send  to  the  Inheritance  Tax 
Commissioner  a  certificate  of  the  filing  of  such  will  or  application  or  the  granting 
of  such  letters  of  administration.  The  court  shall  thereupon,  and  as  soon  as 
practicable  after  the  granting  of  any  such  letters,  proceed  to  ascertain  and 
determine  the  value  of  every  inheritance,  devise,  bequest  or  legacy  embraced  in 
or  payable  out  of  the  estate  in  which  such  letters  are  granted  and  the  tax  due 
thereon.  The  Inheritance  Tax  Commissioner  shall  have  the  same  right  to  apply 
for  letters  of  administration  as  that  conferred  by  law  upon  creditors. 

Duty  of  executives  filing  inventory  appraisement. 

j  20.  It  shall  be  the  duty  of  the  executor,  administrator  or  trustee  of  every 
estate  within  two  months  from  the  date  of  his  appointment,  or,  if  a  trustee,  from 
the  acceptance  of  his  trust,  or,  if  necessary,  such  further  time  as  the  clerk  or 
judge  of  the  district  court  may  allow,  make  an  inventory,  verified  by  his  own  oath, 
of  all  the  real  and  personal  property  of  the  deceased  which  shall  come  to  his 
possession  or  knowledge,  any  will  or  direction  of  the  decedent  to  the  contrary  not- 
withstanding, and  to  cause  the  same  to  be  appraised,  as  by  law  required,  and 
filed  with  the  clerk  of  the  court  having  jursidiction  of  said  estate. 

Extension  of  time  to  file  appraisement. 

§  21.  Whenever,  by  reason  of  the  complicated  nature  of  an  estate,  or  by  reason 
of  the  confused  condition  of  the  decedent's  affairs,  it  is  impracticable  for  the 
executor,  administrator,  trustee  or  beneficiary  of  said  estate  to  file  with  the  clerk 
of  the  court  a  full,  complete  and  itemized  inventory  of  the  personal  assets  belong- 
ing to  the  estate  within  the  time  required  by  statute  for  filing  inventories  of 
estates  of  decedents,  the  court  may,  upon  the  application  of  such  representatives 
or  parties  in  interest,  extend  the  time  for  filing  the  appraisement  for  a  period  not 
to  exceed  three  months  beyond  the  time  fixed  by  law,  or  such  further  time  as  may 
be  necessary  upon  good  cause  shown. 

Duty  of  administrator,  etc.,  to  send  inventory  and  appraisement  to  Inheritance 
Tax  Commissioner. 

§  22.  Every  executor  or  administrator,  or  trustee  of  any  estate  subject  to  the  tax 
herein  provided,  shall,  at  least  ten  days  prior  to  the  first  appraisement  thereof,  as 
provided  by  law,  notify  the  Inheritance  Tax  Commissioner,  by  registered  mail  of 


1152  THE  STATE  STATUTES 

the  time  and  place  of  such  appraisement,  and  shall  file  due  proof  of  such  notice 
with  a  copy  thereof  with  the  clerk  of  the  court  having  jurisdiction  of  such  estate 
or  trust.  Every  executor,  administrator,  or  trustee,  within  ten  days  after  such 
appraisement,  or  appraisement  of  any  beneficial  interest  or  reappraisement 
thereof,  and  before  payment  and  distribution  to  the  legatees  or  any  parties  en- 
titled to  beneficiary  interest  therein,  shall  make  and  render  to  the  said  In- 
heritance Tax  Commissioner  a  copy  of  the  said  inventory  and  appraisement,  duly 
certified  as  such  by  the  clerk  of  the  court  having  jurisdiction  of  said  estate,  and 
shall  also  make  and  file  with  the  said  Inheritance  Tax  Commissioner  a  schedule, 
list,  or  statement,  of  the  amount  of  such  legacy  or  distributive  share,  together  with 
the  amount  of  tax  which  has  accrued  or  will  accrue  thereon,  verified  by  his  oath  of 
affirmation,  to  be  administered  and  certified  thereon  by  some  magistrate  or  officer 
having  lawful  power  to  administer  such  oaths,  in  such  form  and  manner  as  may 
be  prescribed  by  the  Inheritance  Tax  Commissioner,  which  schedule,  list,  or  state- 
ment, shall  contain  the  name  of  each  and  every  person  entitled  to  any  beneficiary 
interest  therein,  together  with  the  clear  value  of  such  interest,  as  found  and 
determined  by  the  court  having  jurisdiction  of  said  estate. 

Court  may  act  on  first  inventory. 

§  23.  In  ascertaining  and  determining  the  value  of  any  inheritance  tax, 
devise,  bequest,  or  legacy  embraced  in  or  payable  out  of  any  estate  or  trust,  and 
the  tax  due  thereon,  the  court  may  act  upon  the  inventory  and  appraisement  of 
such  estate  as  prepared  and  filed  by  the  executor,  administrator  or  trustee  thereof, 
pursuant  to  law,  or  it  may  require  an  appraisement  or  re- appraisements  as  herein 
provided,  of  the  true  and  full  value  of  the  property  embraced  in  any  inheritance, 
devise,  bequest  or  legacy,  subject  to  the  payment  of  any  tax  imposed  by  this  act. 

Appointment  of  appraisers. 

§  24.  The  district  court  may  in  any  matter  in  sections  18,  19  and  21,  or  if 
no  inventory  or  appraisement  has  been  made,  or  if  it  deem  it  for  any  cause  in- 
sufficient or  inadequate,  either  upon  its  own  motion  or  upon  the  application  of 
any  interested  party,  including  the  Inheritance  Tax  Commissioner,  and  as  often 
and  when  occasion  requires,  appoint  one  or  more  persons  as  appraisers  to  ap- 
praise the  true  and  full  value  of  the  property  embraced  in  any  inheritance,  de- 
vise, bequest  or  legacy  subject  to  the  payment  of  any  tax  imposed  by  this  Act. 

Immediate  appraisal — when. 

§  25.  Every  inheritance,  devise,  bequest,  legacy  or  gift,  upon  which  a  tax  is 
imposed  under  this  title,  shall  be  appraised  at  its  full  and  true  value  immediately 
upon  the  death  of  the  decedent,  or  as  soon  thereafter  as  may  be  practicable; 
provided,  however,  that  when  such  devise,  bequest,  legacy  or  gift  shall  be  of  such 
a  nature  that  its  full  and  true  value  can  not  be  ascertained  at  such  time,  it  shall 
be  appraised  in  like  manner  at  the  time  when  first  becomes  ascertainable.  The 
value  of  every  future  or  contingent  or  limited  estate,  income,  interest,  or  annuity 
dependent  upon  any  life  or  lives  in  being  shall  be  determined  by  the  rules  or 
standard  of  mortality,  in  use  by  the  Insurance  Commissioner  of  this  State,  and 
of  value  commonly  used  by  actuaries'  combined  experience  tables,  except  that 
the  rates  of  interest  on  computing  the  present  value  of  all  future  and  con- 
tingent interest  or  estates  shall  be  five  per  centum  per  annum  interest. 

District  court  to  fix  time  and  place  of  appraisement,  and  clerk  to  give  notice  to 

witnesses. 

§  26.  The  clerk  of  court  shall  by  order  fix  the  time  and  place  when  the  ap- 
praisers appointed  under  the  provisions  of  section  23,  shall  make  such  appraise- 
ment. The  clerk  of  the  court  shall  forthwith  give  notice  to  the  Inheritance  Tax 
Commissioner,  and  to  all  persons  known  to  have  a  claim  or  interest  in  the  prop- 
erty, inheritance,  devise,  bequest,  legacy,  or  gift  to  be  appraised,  and  to  such  per- 
sons, as  the  district  court  may  by  order  direct  of  the  time  and  place  when,  said  ap- 
praisers will  make  such  appraisal.  Such  notice  shall  be  given  by  registered  mail. 
They  shall,  at  such  time  and  place,  appraise  the  same  at  its  full  and  true  value, 
as  herein  prescribed,  and  for  that  purpose  the  said  appraisers  are  authorized  to 
issue  subpoenas  and  to  compel  the  attendance  of  witnesses  before  them,  and  to 
take  evidence  of  such  witnesses  under  oath  concerning  such  property  and  the 


WYOMING  1153 

value  thereof,  and  they  shall  make  report  thereof,  and  of  such  value  in  writing 
to  the  said  clerk  of  the  court,  together  with  the  testimony  of  the  witnesses 
examined  and  such  other  facts  in  relation  thereto,  and  to  the  said  matter  as 
said  clerk  of  the  court  may  order  or  require. 

Report  of  appraisers  to  be  filed  with  clerk  of  court. 

§  27.  The  report  of  the  appraisers  shall  be  filed  with  the  clerk  of  court  and 
from  such  report,  and  other  proof  relating  to  any  estate  from  the  district  court, 
shall  forthwith,  as  of  course,  determine  the  full  true  value  of  all  such  estates  and 
the  amount  of  tax  to  which  the  same  are  liable;  or  the  district  court  may  so 
determine  the  full  and  true  value  of  all  such  estates,  and  the  amount  of  tax 
to  which  the  same  are  liable  without  appointing  appraisers,  as  herein  provided. 

Fees  of  appraisers. 

§  28.  The  fees  of  said  appraisers  shall  be  fixed  by  the  district  court,  and  shall 
be  paid  by  the  administrator,  executor  or  trustee  of  the  estate,  if  the  property 
so  appraised  is  a  part  or  all  of  an  estate,  upon  which  letters  of  administration 
have  been  granted  within  this  State.  In  case  letters  of  administration  have  not 
been  granted,  the  fees  of  said  appraisers  when  fixed  as  aforesaid,  shall  be  paid 
from  the  inheritance  tax  fund  in  the  State  Treasury  by  presenting  a  proper 
voucher  therefor  to  the  State  Auditor,  who  shall  thereupon  draw  his  warrant  on 
the  State  Treasurer. 

District  court  to  give  notice — when. 

§  29.  The  District  Court  shall  immediately  give  notice  upon  the  determination 
of  the  value  of  any  inheritance,  devise,  bequest,  legacy  or  gift,  which  is  taxable 
under  this  act  and  of  the  tax  to  which  it  is  liable,  to  all  parties  known  to  be 
interested  therein,  including  the  Inheritance  Tax  Commissioner.  Such  notices 
shall  be  given  by  registered  mail. 

Reappraisement — when. 

§  30.  Within  thirty  days  the  assessment  and  determination  by  the  District 
Court  of  any  tax  imposed  by  this  Act,  the  Inheritance  Tax  Commissioner,  or  any 
person  interested  therein,  may  file  with  the  said  court  objections  thereto  in 
writing,  and  praying  for  a  reassessment  and  redetermination  of  such  tax.  Upon 
any  objection  being  so  filed,  the  district  court  shall  appoint  a  time  for  the 
hearing  thereof,  and  cause  notice  of  such  hearing  to  be  given  by  registered  mail 
to  the  Inheritance  Tax  Commissioner,  and  all  parties  interested,  at  least  ten  days 
before  the  hearing  thereof;  at  the  time  appointed  in  such  notice,  the  court  shall 
proceed  to  hear  such  objection,  and  any  evidence  which  may  be  offered  in  support 
thereof  or  opposition  thereto ;  and,  if  after  such  hearing,  the  said  court  finds  the 
amount  at  which  the  property  is  appraised  is  its  market  value,  and  the  appraise- 
ment was  made  fairly  and  in  good  faith,  it  shall  approve  such  appraisement;  but 
if  it  finds  that  the  appraisement  was  made  at  a  greater  or  less  sum  than  the 
market  value  of  the  property,  or  that  the  same  was  not  made  fairly  or  in  good 
faith,  it  shall,  by  order,  set  aside  the  appraisement  and  determine  such  value. 
The  Inheritance  Tax  Commissioner,  or  any  one  interested  in  the  property  ap- 
praised, may  appeal  to  the  supreme  court  from  the  judgment  order  and  decree  of 
the  district  court  in  the  premises,  in  the  same  manner  as  is  provided  by  law  for 
appeals  from  judgments  and  orders  of  the  district  court.  All  evidence  heard  on 
such  reappraisement  shall  be  reduced  to  writing  and  filed  with  the  clerk  of  the 
court.  All  appeals  taken  from  the  judgment  or  decree  of  the  court  shall  be  had 
and  tried  on  appeal  in  the  same  manner  and  with  like  effect  as  appeals  in  civil 
actions  are  now  tried. 

Tax  due  and  unpaid — duty  of  Inheritance  Tax  Commissioner. 

§  31.  If  the  Inheritance  Tax  Commissioner  shall  have  reason  to  believe  that 
any  tax  is  due  and  unpaid  under  this  act,  after  the  refusal  or  neglect  of  the 
persons  liable  therefor  to  pay  the  same,  he  shall  notify  the  attorney  general  in 
writing  of  such  failure  or  neglect,  and  the  attorney  general,  if  he  have  probable 
cause  to  believe  that  such  tax  is  due  and  unpaid,  shall  apply  to  the  district  court 
for  a  citation  citing  the  persons  liable  to  pay  such  tax  to  appear  before  the 

73 


1154  THE  STATE  STATUTES 

court  on  the  day  specified,  not  more  than  thirty  days  from  the  date  of  such 
citation,  unless  the  court,  for  good  cause  shown,  grants  a  longer  time,  and 
show  cause  why  the  tax  should  not  be  paid.  The  district  court  upon  such  applica- 
tion, and  whenever  it  shall  appear  to  him  that  any  such  tax  accruing  under  this 
Act  has  not  been  paid  as  required  by  law  shall  issue  such  citation,  and  a  service  of 
such  citation,  and  the  time,  manner,  and  proof  thereof,  and  the  hearing  and 
determination  thereon,  shall  conform  as  near  as  may  be  to  the  provisions  of  the 
district  court  practice;  provided,  that  where  no  provision  is  made  for  manner  of 
such  service  or  proof  of  same,  the  court  or  judge,  at  the  time  such  order  or 
citation  is  issued,  shall  direct  the  manner  of  giving  notice  and  proof  of  the 
same;  and  whenever  it  shall  appear  that  any  such  tax  is  due  and  payable  and 
the  payment  thereof  can  not  be  enforced  under  the  provisions  of  this  act  in  said 
district  court,  the  person  or  corporation  from  whom  the  same  is  due  is  hereby 
made  liable  to  the  State  for  the  amount  of  such  tax  to  sue  for,  in  the  name  of 
the  State,  and  enforce  the  collection  of  such  tax;  and  all  taxes  so  collected  shall 
be  forthwith  paid  into  the  inheritance  tax  fund  of  the  State.  It  shall  be  the 
duty  of  said  attorney  general  to  appear  for  and  represent  the  Inheritance  Tax 
Commissioner  on  the  hearing  of  such  citation,  or  of  any  other  hearing.  Whenever 
the  district  judge  shall  certify  that  there  was  probable  cause  for  issuing  a 
citation  and  taking  the  proceedings  specified  in  this  section,  the  Inheritance 
Tax  Commissioner  shall  file  with  the  clerk  of  the  district  court  a  duly  verified 
itemized  account  of  all  expenses  incurred  for  the  service  of  the  citation,  and 
other  lawful  disbursements  not  otherwise  paid,  and  the  Judge  of  the  district 
court  shall  approve  such  bill  of  items  therefor  and  the  said  commissioners  shall 
present  the  same  to  the  state  auditor,  who  thereupon  shall  draw  a  warrant  on  the 
state  treasurer  against  the  inheritance  tax  fund  payable  to  such  Inheritance  Tax 
Commissioner. 

Inheritance  Tax  Commissioner  to  furnish  books  and  forms  of  reports — entries  by 

courts. 

§  32.  Inheritance  Tax  Commissioner  shall  furnish  to  each  district  court  a 
book,  which  shall  be  a  public  record,  and  in  which  shall  be  entered  by  the  judge 
or  clerk  of  said  court,  under  the  direction  of  said  judge  the  name  of  every 
decedent  upon  whose  estate  an  application  has  been  made  for  the  issue  of 
letters  of  administration  or  letters  testamentary,  or  ancillary  letters ;  the  date  and 
place  of  death  of  such  decedent;  the  estimated  value  of  the  property  of  such 
decedent ;  names  and  places  of  residence  and  relationship  to  decedent  of  the 
heirs  at  law  of  such  decedent;  the  names  and  places  of  residence  of  the  legatees, 
devisees,  and  other  beneficiaries  in  any  will  of  such  decedent;  the  amount  of 
such  legacy,  and  the  estimated  value  of  any  property  devised  therein  and  to  whom 
devised.  These  entries  shall  be  made  from  data  contained  in  the  papers  filed  on 
any  such  application,  or  in  any  proceeding  relating  to  the  estate  of  the  deceased. 
The  district  judge,  or  the  clerk  of  the  court  under  his  direction,  shall  also  enter 
in  such  book  the  amount  of  the  property  of  any  such  decedent,  as  shown  by  the 
inventory  thereof,  when  made  and  filed  in  his  office,  and  the  returns  made  by  any 
appraisers  appointed  by  him  under  this  act,  and  the  value  of  all  inheritance, 
devises,  bequests,  legacies,  and  gifts  inherited  from  such  decedent,  or  given  by 
such  decedent  in  his  will,  or  otherwise,  as  fixed  by  the  district  court;  and  the 
tax  assessed  thereon,  and  the  amounts  of  any  receipts  for  payment  thereof 
filed  in  said  court.  Inheritance  Tax  Commission  shall  also  furnish  to  each  district 
court  forms  for  the  reports  to  be  made  by  such  district  judge,  which  shall 
correspond  with  the  entry  to  be  made  in  such  book.  He  shall  also  furnish,  for  the 
use  of  the  courts  and  appraisers  throughout  the  State,  tables  showing  the  average 
expectancy  of  life,  and  the  value  of  annuities  of  life  and  term  estates,  and  the 
present  worth  or  value  of  remainders  and  reversions,  as  prescribed  in  section  24. 
The  taxable  value  of  life  or  term,  deferred  or  future  estates,  shall  be  computed 
at  the  rate  of  five  per  cent  per  annum  interest. 

Reports  by  clerk  of  court. 

§  33.  Each  clerk  of  district  court  shall,  on  the  first  day  of  January,  April,  July 
and  October  of  each  year,  under  the  seal  of  the  court,  make  a  report,  upon  the 
forms  furnished  by  the  Inheritance  Tax  Commissioner,  containing  all  the  data 
and  matters  required  to  be  entered  in  such  book,  which  shall  be  immediately  trans- 
mitted to  the  Inheritance  Tax  Commissioner. 


WYOMING  H55 

Compromise  of  amount  of  tax  due. 

§  34.  Whenever  an  estate  charged,  or  sought  to  be  charged,  with  the  in- 
heritance tax,  is  of  such  nature  or  is  so  disposed  that  the  liability  of  the  estate 
is  doubtful,  or  the  value  thereof  can  not  with  reasonable  certainty  be  ascertained 
under  the  provisions  of  law,  the  Inheritance  Tax  Commissioner  may,  with  the 
written  approval  of  the  attorney  general,  which  approval  shall  set  forth  the 
reasons  therefor,  compromise  with  the  beneficiaries  or  representatives  of  such 
estates  and  compound  the  tax  thereon;  but  said  settlement  must  be  approved  by 
the  district  court  having  jurisdiction  of  the  estate,  and  after  such  approval  the 
payment  of  the  amount  of  the  taxes  so  agreed  upon  shall  discharge  the  lien 
against  the  property  of  the  estate. 

Administrators,  etc.,  to  furnish  additional  reports — when. 

§  35.  Administrators,  executors,  or  trustees  of  the  estate  subject  to  the  in- 
heritance tax  shall,  when  demanded  by  the  Inheritance  Tax  Commissioners,  send 
to  such  commissioner  certified  copies  of  such  parts  of  their  reports  as  may  be 
demanded  by  him,  and,  upon  refusal  of  said  parties  to  comply  with  the  com- 
missioner's demand,  it  is  the  duty  of  the  clerk  of  the  court  to  comply  with  such 
demand,  and  the  expense  of  making  such  copies  and  transcripts  shall  be  charged 
against  the  administrator,  executor,  or  trustee  failing  to  comply  with  such 
demand. 

Appeals. 

§  36.  Appeals  may  be  taken  to  the  supreme  court  from  all  final  orders,  judg- 
ments  and  decrees,  entered  under  the  provisions  of  this  Act,  in  the  same  manner 
and  with  the  same  effect  as  other  appeals  are  taken  from  final  orders  and  judg- 
ments made  or  rendered  by  the  district  court. 

Penalty  of  secreting  or  wilful  failure  to  produce  will. 

§  37.  Any  person  who  shall  wilfully  sequester  or  secrete  any  last  will  or  testa- 
ment of  a  person  then  deceased,  or  who,  having  the  custody  of  any  such  will  and 
testament  shall  wilfully  fail  or  neglect  to  produce  and  deliver  the  same  to  the 
judge  of  the  district  court  having  jurisdiction  of  its  probate,  or  to  any  executor 
named  therein,  within  a  reasonable  time  after  the  death  of  the  testator  thereof, 
with  intention  to  injure  or  defraud  any  person  interested  therein,  shall  be  punished 
by  imprisonment  in  the  county  jail  not  more  than  one  year  and  by  a  fine  not 
exceeding  $500.00. 

Penalty  for  administering  personal  estate  without  proving  will. 

§  38.  Every  person  who  shall  administer  the  personal  estate  of  any  person  dying 
after  the  passage  of  this  Act,  or  any  part  thereof,  without  proving  the  will  of  the 
deceased  or  taking  out  letters  of  administration  of  such  personal  estate  within 
six  calendar  months  after  the  death  of  the  person  so  dying,  shall  be  punished  by 
imprisonment  in  the  county  jail  not  more  than  one  year  or  by  a  fine  not  exceeding 
$500.00. 

Duty  of  administrators,  etc.,  to  notify  Inheritance  Tax  Commissioner  of  trust 

estate — when. 

§  39.  Whenever  any  of  the  real  estate  of  which  any  decedent  may  die  seized 
shall  pass  to  any  body  politic  or  corporate,  or  to  any  person,  persons,  or  in  trust 
for  them  or  some  of  them,  it  shall  be  the  duty  of  the  executor,  administrator,  or 
trustee  of  such  decedent  to  give  information  thereof  in  writing  to  the  Inheritance 
Tax  Commissioner  within  three  months  after  they  undertake  the  execution  of  their 
expected  duties,  or,  if  the  fact  be  not  known  to  them  within  that  period,  then 
within  one  month  after  the  same  shall  come  to  their  knowledge. 

Property  outside  of  the  State. 

§  40.  Except  as  to  real  property  located  outside  the  State  passing  in  fee  from 
the  decedent  owner,  the  tax  imposed  under  section  1  shall  hereafter  be  assessed 
against  and  be  collected  from  property  of  every  kind,  which,  at  the  death  of  the 
decedent  owner,  is  subject  to  or  thereafter,  for  the  purpose  of  distribution,  is 
brought  into  this  State  and  becomes  subject  to  the  jurisdiction  of  the  courts  of 


1156  THE  STATE  STATUTES 

this  State  for  distributive  purposes,  or  which  was  owned  by  any  decedent  domiciled 
within  the  State  at  the  time  of  the  death  of  such  decedent  even  though  the 
property  of  said  decedent  so  domiciled  was  situated  outside  of  the  State. 

Taxes  on  foreign  estate  where  part  of  property  is  in  State. 

§  41.  In  case  of  any  property  belonging  to  a  foreign  estate,  which  estate,  in 
whole  or  in  part  is  liable  to  pay  an  inheritance  tax  in  this  State  the  said 
tax  shall  be  assessed  upon  the  market  value  of  said  property  remaining  after  the 
payment  of  such  debts  and  expenses  as  are  chargeable  to  the  property  under  the 
laws  of  this  State.  In  the  event  that  the  executor,  administrator,  or  trustee  of 
such  foreign  estate  files  with  the  clerk  of  the  court  having  ancillary  jurisdiction, 
and,  with  the  inheritance  tax  commissioner,  duly  certified  statements,  exhibiting 
the  true  market  value  of  the  entire  estate  of  the  decedent  owner,  and  the  indebted- 
ness for  which  the  said  estate  has  been  adjudged  liable,  which  statements  shall  be 
duly  attested  by  the  judge  of  the  court  having  original  jurisdiction,  the  bene- 
ficiaries of  said  estate  shall  then  be  entitled  to  have  deducted  such  proportion  of 
the  said  indebtedness  of  the  decedent  from  the  value  of  the  property  as  the  value 
of  the  property  within  this  State  bears  to  the  value  of  the  entire  state. 

Compensation  of  officers. 

§  42.  Except  as  otherwise  provided  in  this  Act,  no  officer  shall  receive  any 
additional  compensation  to  that  now  allowed  him  by  law,  by  reason  of  any 
duties  imposed  upon  him  by  the  provisions  of  this  Act. 

Payment  of  disbursements  by  Inheritance  Tax  Commissioner. 

§  43.  The  Inheritance  Tax  Commissioner  shall  prepare  a  duly  verified  itemized 
account  of  all  expenses  incurred  and  disbursements  made  by  him  in  examining  or 
having  examined  any  securities  under  section  14,  or  any  other  expenses  actually 
incurred  by  him  in  enforcing  or  carrying  out  the  provisions  of  this  Act,  and 
present  the  same  upon  a  proper  voucher  to  the  state  auditor  who  shall  thereupon 
draw  his  warrant  on  the  state  treasurer  against  the  inheritance  tax  fund  in  the 
state  treasury. 

Penalty  for  appraiser  taking  fee  or  reward. 

§  44.  Any  appraiser  appointed  by  this  Act  who  shall  take  any  fee  or  reward 
from  any  executor,  administrator,  trustee,  legatee,  next  of  kin,  or  heir  of  any 
decedent,  or  from  any  other  person  liable  to  pay  said  tax  or  any  portion  thereof, 
shall  be  guilty  of  a  misdemeanor,  and  upon  conviction  in  any  court  having 
jurisdiction  of  misdemeanors,  he  shall  be  fined  not  less  than  $250.00  nor  more 
than  $500.00  and  imprisoned  not  exceeding  ninety  days,  and,  in  addition  thereto, 
the  district  judge  shall  dismiss  him  from  such  service. 

Repealing  clause — taxes  already  accrued. 

§  45.  All  acts  and  parts  of  acts  in  conflict  herewith  are  hereby  repealed,  pro- 
vided, however,  that  this  Act  shall  not  operate  to  release  or  waive  or  otherwise 
alter  any  tax  or  taxes  which  may  have  accrued  under  the  provisions  of  any 
prior  act. 

Approved  February  22,  1921. 


INDEX 


INDEX 


Abandonment  PAGE 

of  legacy 31,     245 

Abatement 

of  non-resident  tax 409 

claim  for,  U.  S.  Statute 665 

Abridgment 

of  estate,  tax  refunded 511 

Absentee 

presumption  of  death  after  seven  years 28,       29 

Account 

valuation  of — Federal  act 610 

Account  books 

as  evidence 449 

Accrual 

of  tax 27,  36,      37 

at  date  of  gift , 123 

Accrued  interest 

set  forth  in  inventory 423 

Acknowledgment 

of  child 223 

Active  securities 337 

Actual  value 

of  stocks 340 

life  estates 260 

Actuaries 

combined  table  of  mortality 285,     286 

[1159] 


1160 

Additional  tax,  IT.  S.  Statute  PAGE 

abatement,  claim  for 665 

deduction,  conditional,  disallowance  of 638 

determination  of 650 

discharge  from  personal  liability 650 

interest  on 658 

lien  of 660 

payment  of 655 

personal  liability  for 657 

Additional  tax 

N.  Y.  Statute 721 

Adequate  consideration 138,  152 

Adjournment 

No  new  notice  required  by  appraiser 442 

Adjustment 

of  U.  S.  tax 655 

Administration 

affidavit  on  applying  for ;  form 811 

expenses  a  deduction 372 

gains  or  losses  during 34 

inventory  of  expenses 425 

expenses  defined  (U.  S.  act) 629 

Administrator 

see  executor 413 

admissions  by 444 

commissions 379,  383,  426 

personal  liability 515 

notice  by — Federal  act 644 

duty  of  N.  Y.  Statute,  Sec.  224 745 

Admissions 

in  inventory  competent  against  executor 444 

Adopted  child  222,  716 

burden  on  to  show  adoption 428,  446 

mutual  acknowledgment 223,  428 

by  formal  act 222 

effect  of  adoption 225 

Adopted  statutes  62 

Ad  valorem 

penalty 664 


INDEX  H61 

Advance  payment  PAGE 

no  discount  because  of 655 

Advancement 

not  necessarily  taxable 618 

Affidavit 

appraiser  may  act  upon 444 

as  admissions  by  administrator 444 

forms,  for  executor 397,  398,  401 

form,  for  appraisal 429 

must  show  facts,  not  conclusions 444 

of  expert,  as  to  real  estate 331 

supplemental,  may  be  required 444 

when  prepared  by  attorney 447 

for  proportional  non-resident  tax,  form 405 

Age 

as  affecting  contemplation  of  death 119 

Agent 

delivery  of  gift  to 107 

property  held  by 311 

Agreement 

antenuptial 90 

compromise,  among  heirs 94 

compromise,  with  State 518 

partnerships 94 

to  make  a  will S7 

Alabama 

no  inheritance  tax 813 

Alaska 

included  in  U.  S.— Federal  act 596 

no  inheritance  tax 813 

Aliens 

protected  by  treaties 77 

real  estate  of 245 

Allowance 

to  widow 185 

to  family 383 

Amendments 

generally 66 

retroactive 67 

list  of  N.  Y.  Statutes 695 

recent  N.  Y.  Statutes. .               719 


1162  INDEX 

American  experience  PAGE 

tables  of  mortality 287,  288,  291 

Amount  of  property 

classification  by 43 

Ancillary  letters 

jurisdiction  under 465 

Animals 

loss  of  during  administration 632 

Animus 

as  to  domicile 211 

Annuity 

charged  on  life  estate 259 

computation  of  value 277 

payment  of  tax  on 254,  255 

created  in  connection  with  a  transfer 620 

included  in  gross  estate 604 

valuation  of 613 

Annuity  insurance 

valuation  of 627 

Ante-nuptial  agreements 90 

in  lieu  of  dower 92 

Appeal 

costs 497 

does  not  lie  from  order  remitting  report 469 

form  of  notice 477 

grounds  must  be  stated  on  appeal  to  surrogate 475 

notice  of  appeal 475,  489,  802 

order  appealed  from 494 

papers 496 

payment  of  tax  does  not  estop 474 

proceedings  on 460 

service  of  notice 496 

status  of  executor 493 

stipulation,  form  for 496 

to  Appellate  Division,  form 491 

to  Court  of  Appeals 498 

to  Supreme  Court  of  the  United  States 498 

to  surrogate,  form 478,  801 

to  surrogate,  hearings  on 481 

to  surrogate,  New  York  Statute,  §  232 755 

who  may  appeal 492 


INDEX  H63 

Appellate  courts  PAGE 

appeals  to 492 

Appellate  Division 

appeals  to 491 

notice  of  appeal 491 

Appendix 769 

Application 

to  remit  penalty 509 

of  tax  money 519 

Appointment 

of  appraiser 436 

Appointment,  power  of 

under  U.   S.  Statute 624 

see  power  of  appointment 171 

statutes  affecting 523 

remainders 273 

Apportionment 

of  corporate  property 345 

Appraisal 

ends  with  death  or  removal  of  appraiser 443 

petition  for,  form 414 

under  Federal  act 606 

Appraiser 

appointment 436 

appointment  of,  New  York  Statute,  §  229 750 

cannot  remit  penalty 511 

fees  and  expenses 750 

Federal  act 629,  631 

forms  of  report 455 

jurisdiction 440 

may  act  on  affidavit 444 

may  construe  will 457,  501 

may  not  write  legal  opinions 438 

notice  of  hearing  before;  form 798 

oath ;  form  of 797 

order  appointing ;   form 797 

powers  and  duties 437 

proceedings  before 435 

proceedings  by,  New  York  Statute,  §  230 750 

removal 436 

subpoena  issued  by ;  form 790 

suspending  taxation 454 

what  his  report  must  contain 452 


1164  INDEX 

Appraiser — Continued 

what  it  must  show 453 

when  report  remitted 468 

Arizona 

address  of  tax  collector 771 

computation  of  tax 293 

interest,  discount,  penalty 527 

mortality  tables 279 

rates  and  exemptions 813 

statute 814 

Arkansas 

address  of  tax  collector 771 

interest,  discount,  penalty 527 

mortality   tables 279 

rates  and  exemptions 823 

statute. 824 

theory  of  the  tax 9 

Army  officer 

domicile  of 215 

Army  nurse  corps 601 

Art 

works   of    424 

Art  gallery  exempted 238 

Assessed  value 

of  real  estate   330 

should  be  shown  in  inventory 422 

Assessments  377 

Assessment  of  tax 

contingent  remainders,  form  of  order 474 

Federal  act  643,  644 

effect  of  decree 474 

forms   of  notice 800 

forma   of  order 469,  799 

judge  acts  as  taxing  officer 465 

remitting  report   468 

the  taxing  order 467 

Assets 

pro   rating    391 

marshaling 391 

foreign 387 


INDEX  H65 

Assignment  PAGE 

by  legatee   245 

of  life  insurance  policy    158,     625 

Attorney 

power   of    653 

Attorneys 

good  will    352 

fees 372,     630 

Aunt 102 

Award 

to  widow    184 


B 

Bad  faith 

ground  for  modifying  decree 506 

Bank 

forms  of  notice  by 812 

Bank  book 

delivery  of  109 

Bank  deposits 

set  forth  in  inventory Ill,  201 

situs 321 

Bavaria 

treaty  with    ^ 80 

Beneficiaries 

as  to  domicile   21J> 

interest  of  in  inventory 428 

personal  liability    517 

testimony  by  448 

where  uncertain    264 

Bequest 

of  more  than  half  estate  to  charity 230 

to    charities    generally    229,  238,  239 

to  corporation  to  be  formed 236 

in  lieu  of  dower  or  like  interest 617 

in  lieu  of  commissions 630,  747 

public  or  charitable — Federal  act 636 

conditional 63& 


1166  INDEX 

Bid  price  PAQB 

aa   to   stocks    340 

Bonds 

liability  on  mortgage  bond 388 

situs 306 

value 345 

IT.  S.  Government  bonds  taxable 21 

taxable,  whether  Federal,  State,  or  municipal,  and  whether  or  not  con- 
taining a  tax-free  covenant    605 

estates  of  nonresidents 646 

of  United  States,  payment  of  tax  with 656 

valuation  of    606 

Books 

in  inventory    424 

of  account  as  evidence 449 

of   corporation    449 

and  records,  production  of .'....  670 

valuation  of    611 

Book  value 

of  stock  342,  343 

Bric-a-brac    611 

Brokers 

fees 631 

commissions 383,  426 

good  will    352 

Brother 101 

half  blood    220 

Buildings 

to  be  described  in  inventory 422 

Bullion 306 

Burial  expenses 371,  629 

Business 

valuation  of  interest  in 609 

capital  invested  in  707 

good  will  of   352 

Burden  of  proof 

as  to  adoption   446 

as  to  consideration 156 

as  to  domicile 216 

as  to  exemptions 235 


INDEX  H67 

Burden  of  proof — Continued. .  PAGE 

as  to  gifts 105 

as  to  gifts  inter  vivos 446 

as  to  residence — N.  Y.  Statute,  §  243 766 

on  beneficiary  to  prove  exemption 446 

on  State  to  show  taxable  assets 413 

prima  facie  case  sufficient 445 

rests  on  the  Comptroller 445 

where  on  executors    446 


c 

California 

action  to  quiet  title SJ43 

address  of  tax  collector 771 

adequate  consideration   154 

burden  of  proof  156 

contemplation   of   death '. 118 

delivery  of  gift 123 

form,  for  transfer  of  nonresident  securities 845 

gifts 109,  124 

interest,  discount,  penalty 527 

joint  estates    194 

lien 826 

limitations 67 

mandamus 512 

mistake  of  fact 500 

mortality  tables    279 

nonresident  forms    847 

pro  rating  debts 387 

rates,  table  of  L.  1911 .* 828 

rates,  table  of  L.  1913 829 

rates,  table  of  L.  1915-1917 830 

rates  under  Act  of  1921 830 

repeal 67 

situs  of  stocks 310 

statute,  L.  1921 831 

theory  of  tax   9 

Capital 

invested  in  business 707 

Carlisle  table  of  mortality 289,  290 

Cash 

when  securities  may  be  deposited  instead 274 

on  hand,  to  be  inventoried 423 

to  be  set  forth  in  return,  Federal  act 610 

Cattle  .  .  305 


1168  INDEX 

PAGE 

Causa  mortis  gifts 113 

Cemetery  lot 

cost   of   deducted 371 

inventory    of    cost 425 

included  in  gross  estate 605 

Certificates  of  stock 

situs 310 

Charities 

exemption  of  bequest  to 229 

N.  Y.  statute,  §  221 740 

Federal  act 636 

California 230 

where  out  of  State 229 

Charitable  corporation 

burden  of  proof  on  to  show  exemption 446 

notice  to  443 

charter  powers  the  test 230 

must  comply  with  statute 234 

where  yet  to  be  formed 236 

Child 

adopted 222 

en  ventre  sa  mere 101 

rights  of   5,  101 

illegitimate 222 

mutually  acknowledged  223 

stepchildren 221 

China 

estates  of  U.  S.  citizens 672 

Churches 

exempt 238 

Citizenship 

not  a  test  of  residence 596 

Civil  law 

rights  of  children    5 

Civil  law  transfers 

gains  in  foreign  country 204 

gains  in  this  country 205 

where  not  taxable    204 

where  taxable    203 


INDEX  1169 

Civil  service  laws  PAGE 

not  applicable  to  appraisers 436 

Claims 

against   estate,   deduction 370,  631 

valuation  of    610 

Classifications 39 

by  domicile   41 

by  relationship   42 

by  amount  of  property 43 

by  kind  of  property 45 

tangible  and  intangible    46 

by  payment  of  other  taxes 49 

by  kind  of  transfer 50 

Closely  held  stock : 339 

Close  corporation 339,  606 

Code  Napoleon 5 

Codicil 

where  conflicting  with  will 251 

Collaterals 102 

Collector 

U.   S.,   return  by 654 

Colorado 

address  of  tax  collector 771 

interest,  discount,  penalty 527 

mortality  tables    279 

rates  and  exemptions,  Act  of  1921 848 

table  of  notes  under  Act  of  1913 849 

statute,  1921    848 

theory  of  the  tax 9 

Commercial  paper 

situs 306 

value 335,  610 

Commissions 

inventory  of    426 

on  sale  of  real  estate 383 

to  brokers    383 

to  executors    379,  630 

to  trustees    381 

74 


1170  INDEX 

Commissioner  PAGE 

U.  S.,  return  by  654 

Common  law 

husband 's    marital    right 186 

transfer  by  operation  of 182 

powers  of  appointment 171 

Community  property 203 

Commutation 

of  nonresident  tax 409 

under  N.  Y.  statute,  §  121d 744 

Composition  of  tax 

N.  Y.  statute,  §  233 755 

Federal  act    668 

generally 446 

form  for 808 

Comptroller 

burden  of  proof  upon 446 

power  to  inspect  safe  deposit  box 409 

where  mandamus  lies  against 511 

powers  transferred  to  Tax  Commission 720 

Compromise  agreements 

among  heirs  and  devisees , 94 

Computation 

of  U.  S.  tax 598 

Computations 277 

actuaries'  combined  table,  5  per  cent 285 

actuaries '  combined  table,  6  per  cent 286 

American  experience  mortality  table 291 

American  experience  table,  4  per  cent 287 

American  experience  table,  5  per  cent 288 

application  to  inheritance  taxation 292 

Carlisle  table,  5  per  cent 289 

Carlisle  table,  6  per  cent 290 

chance  of  death 282 

compound    interest    rule 280 

how  to  use  the  tables 292 

key  table   279 

law   of   discount 281 

mortality  tables  and  interest  rate 277 

N.  Y.  statute,  amended  as  to 715 

of  good  will 353 

present  value  life  estate 283 

present  worth    283 


INDEX  H71 

PARS 

Conflict  of  laws  72 

Confiscation 

by  rates  of  tax 64 

Confidential 

return,  TJ.  S.  act 653 

communications  with  deceased 448 

Congress 

power  of 6 

Connecticut 

address  of  tax  collector 771 

amendment    of    1921 867 

amendment    of    1919 865 

interest,  discount,  penalty 527 

mortality  tables    279 

rates  and   exemptions 863 

statute 863 

untaxed  property  of  deceased  persons 872 

theory  of  the  tax 10 

Consideration 

generally 113 

adequacy 152 

for  gift : 113 

burden  of  proof 156 

as  affecting  testamentary  transfers 138 

statutory  provisions   138 

where  gift  complete  inter  vivos 140 

where  contract  executory 143 

must  be  adequate   152 

burden  of  proof   156 

services 151 

seal,  importing    150 

Constitutionality 

acts  held  invalid    17 

entireties 190 

Federal  act    7,  27,  57 

"full  faith  and  credit" 74 

notice  and  hearing    61 

title  to  act  58 

who  may  attack 59 

fourteenth  amendment 59 

unconstitutional  act  void 71 

as   to   sister   States 76 

treaties  .                 77 


1172  INDEX 

Construction  PAGE 

entireties 191 

joint  tenancies    201 

contracts 22. 

life   insurance    policies 169 

wills 177 

practical 63 

retroactive  or  prospective 54 

strict   or  liberal 50 

general  rules   50 

as  to   domicile    217 

as  to  charitable  exemptions 53,  229,  234 

Contemplation  of  death 

nature   of   the   contemplation 114 

not  causa  mortis    115 

dependent   on   circumstances 116 

burden    of   proof 116 

adequacy  of  consideration  for  gift 117 

age  an  evidentiary  fact 119,  122 

statutory   time  limit 123 

accrual  of  tax    123 

under  Federal  act    618 

Contempt 

executor  may  be  punished  for 413 

witness  may  be  punished  for 448 

Contingencies 

N.  Y.  Statute,  §  230 750 

Contingent  remainder 

N.  Y.  Statute,  §  230 750 

form  of  taxing  order 473 

under  Federal  act    613 

Contracts 

executory 143 

under  seal    150 

Conversion 

equitable 249,  301 

Copartners      (see  Partnership) 324 

Copied  statutes 62 

Copyrights,  Federal  act 610 

Corporate  books 

as  evidence    449 


INDEX  1173 

Corporate  property  PAGE 

apportionment  of   345 

Corporate  stock  312 

inventory  of    424 

Corporations 

charitable 230 

foreign 314,  315 

form  of  notice  intention  to  transfer  stock 812 

stock 312 

list  of    775,  782 

real  estate  of 705 

yet  to  be  formed 236 

closely  held  stock  in 339,  606 

domestic,  taxation  of  stock  in 775,  782 

Costs 

in  Appellate  Division    497 

in  Court  of  Appeals 497 

on  appeal  497 

on  delinquent  proceedings, 497 

deduction  of    631 

Counsel  fees 

when   reasonable,   a   deduction 372 

inventory  of    , 426 

County  treasurer 

fees 761 

may  act  as  appraiser 436 

when  mandamus  lies  against 512 

Court  of  Appeals 

appeals  to    498 

Cousins  102 

Creditors 

rights  under  power  of  appointment 259 

rights  under  trust  deeds 134 

special  partners    347 

Crops 

valuation  of   growing 611 

Curtesy  185 

amendment,  taxing    704 

under  Federal  act . .                                  617 


1174  INDEX 

Custodia  legis  PAGE 

legacy  in    249 

retroactive  laws    37 

D 

Data,  supplemental 650 

Date 

of  statute 28 

for  filing  return 648,  652 

preliminary  notice  U.   S.  tax 644 

of    death    27 

Death 

chance  of,  computed 277 

contemplation    of    114,  618 

presumption  of  30 

proof  of   27 

rates  fixed  at 34 

transfer  takes  place  at 27,  327 

value  at  327,  621 

Debtor 

of  decedent,  insolvency  of 610 

Debts 

as   deductions    368 

doubtful   claims    370 

forgiven  by  will  98 

inventory  of    426 

liability  on  mortgage  bond 368 

payment  by  power  of  appointment 100 

payment  by  will    98,  369 

partnerships 389 

pro-rating 385 

report  when  pro-rated   465 

repairs  to  real  estate 368 

situs   of    322 

tax  not  a  debt 73 

Decedent 208 

value  of   services 353 

personal  transactions  with 448 

transfers  by    618 

Decree 

assessing  tax   474 

final  and  conclusive 474 

motion   to   modify 499 

of  distribution    463 

of  probate,  effect  of 460 


INDEX  H75 

PAGE 

Deductions 366 

administration  expenses    372 

commissions 379 

counsel  fees  372 

debts 368 

debts  paid  by  will 369 

discount  on   legacy 373 

doubtful  claims 370 

expenses  of  litigation 370 

family  allowance    383 

funeral  expenses  371 

income  taxes   378 

ineumbrances  on  real  estate 330 

marshaling  assets  391 

mortgages 367 

mortgage  bonds    368 

partnerships 389 

property  previously  taxed 634 

pro-rating 385 

repairs  to  real  estate 368 

set  forth  in  inventory 427 

services  to  decedent    369 

taxes 375 

Deductions,  Federal  statute  640 

net  estate  641 

claims,  expenses,  etc 641 

transfers  taxed  within  five  years 642 

charitable,  religious,  etc.,  uses 643 

determination  of  net  estate 643 

payment  of  tax 644 

Deeds 

taking  effect  at  or  after  death 126,  127,  618 

exercising  power  of  appointment 178 

with  power  to  revoke Ill,  132,  620 

Definitions 

in  U.  S.  statute 594 

of   inheritance   taxation 3 

N.  Y.  statute,  §  243 766 

Delaware 

address    of   tax   collector 771 

interest,  discount,  penalty    527 

mortality  tables    277 

rates  and  exemptions,  L.  1909 875 

rates  and  exemptions,  L.  1917 874 

statutes  1909-1913  875 

statute   1917    .                                                   874 


1176  INDEX 

Delay 

unavoidable 509 

Delinquent  taxes 

proceedings  to  collect 514 

Delivery 

of  gift 106 

re-delivery 109 

symbolical 109 

Denmark 

treaty  with    80 

Defendants 

support  of   633 

Deposits 

in  banks  Ill 

situs  of    321 

Descent 

a  creature  of  statute 4 

Devise 

to  charities  (see  Bequests) 229 

Devisees 241 

agreements  among 94 

election  by  31 

Devolution 74 

Discount 

how  calculated   281 

N.  Y.  statute,  §  223 744 

on  legacy  373 

on  taxes    527 

an  inducement  to  pay  the  tax 519 

Disease 

as  to  contemplation  of  death 114 

Distraint 

collection  of  tax  by 671 

Distribution 

decree  of    .  463 


INDEX  1177 

District  attorney  PAGE 

citation 806 

decree 807 

forms — petition 805 

order  for  citation    806 

proceeding  by  N.  Y.  statute,  §  235 759 

proceeding  to  collect  delinquent  taxes 514 

District  of  Columbia 

no  inheritance  tax   876 

included  in  term  ' '  United  States  " 596 

Dividends 

under  Federal  act    605 

Divorce 

effect  on  dower 184 

effect  on  entirety 190 

effect  on   exemptions 227 

Divorced  wife  of  son 226 

Domestic  corporations 312,  775,  782 

Domicile 

animus  with  factum 213 

animus   without   factum 212 

as  to  army  officer 215 

as  to  beneficiaries  generally 219 

as  to  married  women 214 

as  to  widow 214 

burden  of  proof   216 

classification  by 41 

definition 209 

factum  without   animus 211 

rules  as  to   210 

statutes  affecting   217 

synonymous    with    residence 209 

under  Federal  act 596 

Donee 

of  gift   105 

of  power  of  appointment 176,  624 

Donor 

of  gift    109 

of  power  of  appointment 176,  624 

Double  taxation 25 

Doubtful  claims  . .  370 


1178  INDEX 

Dower 

not    an    inheritance 182 

allowed  as  a  deduction 182 

bequests  in  lieu  of 183 

election  by  widow 183 

intent   of   testator    governs 184 

effect  of   divorce 184 

homestead  rights    185 

widow  'a  allowance   185 

should  be  claimed  in  inventory 423 

included   in   gross   estate 617 

Federal  statute  as  to 517 


£ 

Educational  bequests  (see  Charities) 229 

Election 

by  heir  or  legatee 32 

Embezzlement 

heirs  must  bear  loss 35 

Entirety 

no  change  in  rights  at  death 190 

effect   of   statute 190 

how   created    188 

how   terminated    190 

nature  of  the  estate 187 

not  of  personal  property 188 

tenancy  by    187 

under  Federal  statute 621 

unconstitutional  statute    190 

Equitable  conversion 244>  301 

as  to  partnership  property 325 

Equitable  relief 

not  granted  as  to   taxes 510 

Equity  of  redemption 330,  367 

Error 

ground  for  reappraisal 437 

of  law,  corrected  by  appeal  only 503 

Escheat  202 

Estate 

interest  in  that  of  another 249,  328 


INDEX  H79 

PAO2 

Estate  tax 590 

definition  of    596 

regulations  under   594 

Evidence 

appraiser  may  rule  on  admissibility 439 

as  to  personal  transactions  with  deceased,  competent 448 

books  of  account   449 

corporate   books    449 

circumstantial,  sufficient    445 

market  price   340 

materiality    for    surrogate 446 

may  be  taken  by  surrogate  on  appeal 482 

newly   discovered    482 

of  foreign  law    45 1 

opinion  of  experts   447 

sale  of  stock  340 

Excise 

tax  so  defined  18 

Executor 

cannot  be  forced  to  answer  without  jurisdiction 413 

commissions 379 

discretion  as  to  charitable  bequests 236 

duty  of,  N.  Y.  statute,  §  224 745 

foreign  executor  not  liable  personally 515 

foreign  executor  may  appeal 494 

form  of  affidavit  by 401 

may  be  punished  for  contempt 413 

must  file  inventory    413 

of  nonresident  need  not  testify 448 

penalty  for  refusal  to  testify 448 

personal  liability  of  515 

State  must  show  estate  taxable 413 

statutes  affecting   525 

when  he  may  appeal 493 

when  he  may  not  appeal 493 

where  he  can  marshal  assets  to  reduce  tax 391 

where  he  cannot   392 

Executors  and  administrators,  Federal  act 

commissions 630 

See  also  Nonresident  estates 641 

defined 645 

See  also   Nonresident   estates 645 

expense    of    holding   property    as   trustee,    by — not    an    administration 

expense 629 

final  accounting,  receipt  for  payment  of  tax,  entitles  him  to  credit ....  655 

foreign,  directing  transfer  of  securities 646 


1180 

Executors  and  administrators,  Federal  act — Continued  PAGE 

insurance   receivable  by 625 

legacy  to,  in  lieu  of  commissions 630 

penalties 664 

personal  liability  of    669 

reimbursement   by   certain   persons 670 

should  reserve  sufficient  assets  to  satisfy  any  additional  tax 655 

Executor's  duties,  Federal  act 

completed,   when   630 

furnish  copies   650 

give  preliminary  notice  645 

keep   records    672 

pay  the  tax  657 

See  also  Nonresident  estates 644 

render  statements 672 

reserve  sufficient  assets  to  satisfy  additional  tax 655 

retain  all  documents  and  vouchers 649 

Executory  contracts 143 

Exemptions 

bequests  held  exempt    238 

bequests  held  taxable   239 

burden  of   proof    235 

burden  of  proof  on  claimant 445 

by  general  statutes  not  effective 21 

charter  powers,  the  test 230 

constitutional    provisions     237 

construction    of    52" 

motions    for     397 

not  included  in  inventory 427 

when  not  retroactive    55 

when   retroactive    237 

personal 227 

personal,  N.  Y.  statute,  §  221 740> 

strictly  construed    52,  234 

to   charities    229' 

to  charities,  N.  Y.  statute,  §  221 740' 

under  N.  Y.  Act  of  1892 697 

under  N.  Y.  Act  of  1910 702 

under  N.  Y.  Act  of  1911 704 

under  present  N.  Y.  Act  1916 .'...• 716 

under  U.  S.  statute 601,  639 

Exempt  estates,  Federal  act 

less  than  $50,000,  in  case  of  doubt,  file  notice 644 

military,    etc.,    exemption 601,  602,  645 

exemption,  $40,000  of  life  insurance 625 

exemption  for  military,  etc.,  service,  how  claimed 602,  645 

exemption,   specific    596,  639 

none  in  nonresident  estates   596,  641 


INDEX  H81 

Extension  PAGE 

of  time  for  payment  of  U.  S.  tax 658 

Experts 

qualifications  of    447 

F 

Factum 

as  to  domicile  210 

Family  allowance 185 

a  deduction   283 

Federal  statute  (see  U.  S.) 539 

Federal  tax  (see  U.  S.) 539 

Federal  bonds 

payment  of  tax  with 656 

transfer   of   taxable 21,  605 

Fee  to  real  estate 

when  created  257 

under  powers  of  appointment 259 

Fees 

of  attorneys  372 

of  county  treasurer  (N.  Y.  statute) 761 

as  deductions  372,  629 

Financial  experts 

report  must  be  under  oath 447 

Fiduciary 

must  give  preliminary  notice  (U.  S.  act) 645 

Fires 

losses  from 632 

Florida 

no  inheritance  tax  876 

Foreclosure 

effect   of    35 

Foreign  corporations 

charitable  bequests  to    229,  238 

owning  property  within  State 314 

not   owning   such   property 315 

physical  presence  of  stock  certificates 315 

grounds  of   jurisdiction   over 314 


1182  INDEX 

Foreign  country 

citizen  of,  may  be  a  resident 596 

decedent  a  resident  of 639 

inventory  filed  in  connection  with  proceedings  in 652 

Foreign  military  force 

decedent  who  served  with 601,  602 

Foreign  law 

cannot  affect  will  of  resident 251 

devolution   controlled  by    74 

proof   of    75,  451 

treaties 77 

conflict  with 72 

U.   S.  Constitution 74 

Foreign  real  estate 

not  taxable  against  resident  decedent 300 

payment  of  mortgages  on    254 

must  be  shown  in  inventory 421 

Forms  —  New  York 787 

affidavit  on  application  for  letters  testamentary  or  of  administration..  811 

affidavit  for  commutation  of  nonresident  tax 788 

affidavit  for  appraisal,  nonresident  tax 790 

agreement  for  composition  of  tax 808 

application  for  waiver  nontaxable  resident  estate 793 

application  to  Supreme  Court  for  re-appraisal 810 

application  to  Superintendent  of  Insurance 799 

appraiser 's  report    455 

appraiser's  report,  pro-rating  debts  and  assets 459 

certificate  of  payment  of  tax  on  real  estate 809 

commutation   tax   receipt 787 

district  attorney  proceedings : 

(a)  citation 806 

(b)  decree 807 

(c)  order  for  citation 806 

(d)  petition 805 

executor 's  affidavit '. 414 

inventory 429 

maximum  and  minimum  rates 472 

motion  to  exempt  estate,  resident 397 

motion   to   exempt,    nonresident 401 

notice  by  bank  or  trust  company  of  intent  to  transfer  joint  account ....  812 

notice  of  appeal  to  Appellate  Division 491,  802 

notice  of  appeal  from  order  on  supplemental  report 488 

notice  of  appeal  to  surrogate 477,  488,  801 

notice  of  assessment  of  tax 800 

notice  of  hearing  before  appraiser 798 

notice  of  intended  delivery  of  safe  deposit  box  contents 812 

notice  of  intended  transfer  of  stock 812 


INDEX  H83 


Forms  —  New  York  —  Continued 

notice  of  motion  to  remit  interest  ..................................  803 

notice  of  transfer  of  deposits  by  bank  or  trust  company  ..............  811 

oath  of  appraiser  ................................................  797 

order  for  commutation  of  tax  ......................................  787 

order  appointing  appraiser  ........................................  797 

order  assessing  tax   ......................................  470,  488,  799 

order  assessing  tax  without  appraisal  ..............................  804 

order  of  surrogate  on  appeal  ......................................  801 

order  on  supplemental  report  ......................................  490 

order  remitting  interest   ..........................................  803 

order  remitting  report  ............................................  483 

order  returning  report  to  appraiser  .................................  799 

petition  to  remit  interest  ..........................................  802 

petition  and  order  appointing  appraiser,  resident  estate  ...............  794 

petition  and  order  appointing  appraiser,  nonresident  estate  ...........  795 

proportional  tax,  nonresident,  affidavit  for  appraisal  ..............  401,  788 

stipulation  waiving  certification  of  papers  ..........................  496 

subpoena  —  appraiser  's  ..........................................  798 

supplemental  report   ..............................................  486 

taxing   order    ....................................................  470 

taxing  order  on  second  appeal  .....................................  488 

Forms  —  California 

stock  transfers  by  nonresidents  ....................................  845 

Forms  —  Maryland 

stock  transfers  by  nonresidents  ....................................  938 

Forms  —  Massachusetts 

affidavit  by  nonresident   executor  ..................................  951 

offer  of  settlement    ..............................................  953 

request  for  tax  on  future  interests  ................................  953 

inventory  —  resident   estate   ........................................  954 

deductions,  etc.,  resident    .........................................  956 

determination  by  tax  commission  ...................................  958 

Forms  —  Missouri 

transfers   of   stock  by  nonresidents  ................................  975 

Forms  —  New  Jersey 

rules  of  department  ..............................................  1009 

affidavit   of   nonresident    executor  ..................................  1010 

instructions  for  same  ............................................  1011 

schedule  to   be   filed  ..............................................  1011 

affidavit  of  executor,  resident  decedent  .............................  1013 

schedules,   resident  decedent  .......................................  1016 


1184  INDEX 

Forms  —  Wisconsin 

consent  to  transfer  of  securities 1141 

petition   by   nonresident   executor 1142 

blank  showing  information  required 1144 

order    fixing   tax    1144 

Fourteenth  amendment 

statutes   sustained  under    59 

France 

treaty  with 80 

Fraternal  benefit  societies 

See   Charities    229 

Fraud 

ground  for  re-appraisal   437 

under  Federal  act 664 

Full  faith  and  credit 74 

Fundamental  principles 3 

Funeral  expenses 371 

inventory   of    425 

Federal  act    629 

Furniture 

situs 306 

value   of    333,  611 

G 

Gains 

after  death  not  taxable 34 

as   to    community   property 204 

Gananciales 

under  Cuban  law   204 

Georgia 

address  of  tax  collector 771 

interest,  discount,  penalty   528 

mortality  tables    279 

rates  and  exemptions,  1913  and  1921 877 

statute 877 

theory  of  tax 10 

Germany 

service  in  war  against  exempts  estate 601 


INDEX  H85 

PAGE 

Gift 104 

advanced  age ;  gift  in  contemplation  of  death * 119 

agent  of  donee  108 

agent  of  donor  107 

bank  deposits    Ill 

burden  of  proof 105 

burden  of  proof  on  donee 105 

causa  mortis    113 

consideration 113,  138 

contemplation  of  death    114 

delivery 106 

delivery  to  agent    107 

executory  contracts    143 

inter  vivos    105,  140 

intent  to  give   105 

life  use  waived   132 

nature  of  contemplation 114 

part   of  income  reserved 131 

power  of  revocation  Ill,  132 

re-delivery 109 

statutory  time  limit    123 

stock  transfer  stamps   113 

symbolical  delivery    109 

trust  deeds,  reserving  income 127 

taxing  effect  at  death  126 

tax  accrues  at  date  of  gift 123 

validity 105 

under  Federal  act   618,  621,  622 

Good  will 

a  taxable  asset   351 

personal  business  has  none 352 

elements  of    352 

of  brokers    352 

of  attorneys 352 

of  physicians   '. 352 

patent  medicines    352 

rules  for  computation  353 

services  of  deceased  353 

capital  and  profits    354 

number  of  years '  purchase 354 

selling  price  of  business 355 

of  a  jewelry  firm  359 

of  a  dry  goods  firm 364 

of  a  newspaper    360 

speculative  profits    361 

where  no  profits  are  shown 362 

under  Federal  act    609 

Grandchildren 221 

75 


1186  1NDEX 

PAGE 

Grandnephews  and  nieces 103 

Gross  estate 

U.  S.  statute  604 

property  included  605 

H 

Hawaii 

interest,  discount,  penalty   528 

mortality  tables   277 

rates  and  exemptions 881 

statute 881 

included  in  term  ''United  States" 596 

Hearings 

before  appraiser,  form  of  notice 798 

burden  of  proof  444 

corporate  books    449 

informal  upon  affidavits  444 

objections 449 

on  appeal  to  surrogate 481 

proof  of  foreign  law    451 

statute  must  provide  for 61 

witnesses 446 

Heirs 

election  by  241 

agreements  among  94 

Highest  rate  possible 

N.  Y.  Statute,  §  230 750 

Homestead 185 

Horses  —  inventory  of 424 

Household  goods 611 

Husband 

marital  right  186 

Federal  act    617 

curtesy 185 

entirety 187,  715 

I 

Idaho 

address  of  tax  collector 771 

interest,  discount,  penalty   528 


INDEX  H87 

Idaho — Continued  PAGE 

mortality  tables    279 

rates  and  exemptions    883 

statute 883 

Illegitimate  child 222 

may  be  adopted   222 

Illinois 

act  and  amendments   886 

address   of   tax    collector 771 

agreements  between  heirs  94 

aliens 78 

amendments 69 

composition  of  tax 895 

contemplation  of   death    117 

copied  statutes 62 

dower 185 

equitable  conversion 244 

escheats 202 

executors,  powers  and  duties  861 

Federal  tax — a  deduction  376 

highest  possible  rate , .  266 

interest,  discount,  penalty    528 

jurisdiction 72 

life  estates  888 

limitations 509 

marshaling  assets  391 

prior  statutes    896 

rates  of  tax  from  1909  to  1919 885 

rates  of  tax  from  July  1,  1919,  to  July  1,  1921 885 

rates  of  tax  of  July  1,  1921 886 

statute  as  amended  to  date 885 

stock,  situs  of    314 

stock — transfers  by  nonresidents   , 889 

theory  of  the  tax  10 

trust   deeds    131 

trustees — power  to  appeal   493 

Income 

reserved   in   trust   deed 127,  620 

when   part   is   reserved 131 

as   to   life   estates 253 

Income  tax 

a  deduction    378 

Federal 631 

Incompatibility 

as  to  dower   183 


1188 

Indemnity  PAGE 

set-off  against  debt ' 427 

Index 

to  U.  S.  estate  tax  regulations 590 

Indiana 

Acts,  L.  1913,  as  amended  by  L.  1915,  1917,  1919,  1921 897 

address  of  tax  collector 771 

exemptions 899,  900 

interest,  discount,  penalty 528 

mortality  tables    279 

rates 897 

statute 897 

theory  of  tax 10 

Inheritance 

includes  successions  by  will 18,  58,  84 

excludes  entireties 187 

excludes  joint  estates   193 

Inheritance  tax 

definition 3 

origin 3 

theory 4 

Federal  tax  not  on  inheritances 595 

In  pan  materia 

statutes  construed  together 71 

Insurance 

See  Life  Insurance 157 

under  Federal  act 625 

Insurance  superintendent 

form  of  application  to 799 

Intangible  property 

New  York  statute,  §  220 736 

Intangibles 

general  discussion    533 

of  nonresident    24 

classification  by    46 

Intent 

as  to  gifts  105 

as  to  dower  .  183 


INDEX  H89 

PAGE 

Interest 519 

accrued  prior  to  death 35 

New  York  statute,  §  223 744 

notice  of  motion  to  remit ;   form 803 

order  remitting ;  form 803 

petition  to  remit ;  form  802 

rate  in  computing  life  estate  values 279 

refund  may  be  compelled  by  mandamus 511 

rule  for  compounding   279 

set  forth  in  inventory 423 

under  U.  S.  statute 655 

Inter  vivos 

gifts 105 

completed    transfers    140 

Internal  revenue 

agents   in    charge,    list 774 

regulations,  estate  tax    590 

Intestacy 

real  estate 101 

personal  property 102 

transfers  by  N.  Y.  statute,  §  220 736 

Intestate  law 

transfers  by 101,  736 

Inventory 

form   of    . 429 

form  of  affidavit  by  executor 414 

must  be  filed  by  executor 413 

preparation   of   inventory    421 

under  Federal  act    649 

Investments 

additional  tax  on  repeal 721 

held  constitutional   725 

construction  of   732 

Investigation 

of  return 650 

Iowa 

address   of   tax   collector 771 

interest,  discount,  penalty   528 

mortality  tables    279 

rates  and  exemptions,  Act  1921 911 

rates  and  exemptions,  L.  1911 912 

statute 912 

theory  of  the  tax 10 


1190  INDEX 

Italy  PAGE 

treaty  with 80 

J 

Jewelry 424 

appraisal  of — Federal  act    611 

value  of 334 

set  forth  in  inventory 424 

situs   of    306 

Joint  accounts 

shown  in  inventory    423 

in  banks  generally Ill,  201 

in  bank   (U.   S.  statute) 621 

Joint  estates 

appraisal  of  Federal  act  622 

New  York  statute,  amended  as  to 714 

New  York  statute,  §  220,  subd.  7 739 

Joint  tenancy 193 

construction  of,  New  York  statute 196 

not  generally  taxable   193 

specifically  taxed  by  statute  195 

survivorship  not  taxable  as  an  inheritance 193 

not  a  partnership    350 

under  Federal  act    621 

Judge  of  probate 

as  taxing  officer  465 

Judgments 

in  favor  of  estate 610 

Judicial  functions 

of  appraiser 437 

Jurisdiction 

as  to  domicile  72 

as  to   tax  proceedings    469 

decree  vacated  where  wanting   501 

depends  on  notice   440 

effect  of  probate  decree  460 

necessary  before  executor  can  be  punished 413 

of  appraiser 437 

of  surrogate — New  York  statute,  §  228 749 

personalty  of  resident  taxable  though  in  foreign  States 6,  22 

parties 72 

subject  matter 72 


INDEX  H91 

E 


Kansas 

Act  of  1915,  as  amended,  1919  ....................................  919 

address  of  tax  collector  ...........................................  771 

amendment  of  1917  ..............................................  920 

amendment  of  1919   ..............................................  922 

collateral  tax  prior  to   1919  .......................................  917 

direct  heirs  now  taxed  ............................................  917 

exemptions  ....................................................  917 

interest,  discount,  penalty   ........................................  528 

mortality  tables    .................................................  279 

rates  under  Act  of  1909  ..........................................  917 

rates  under  act  of  1915  ..........................................  918 

rates  under  Act  of  1919  ..........................................  918 

Kentucky 

address  of  tax  collector  ............................................  771 

interest,  discount,  penalty   ........................................  528 

mortality  tables  ................................................  279 

rates  and  exemptions   ............................................  924 

statute  .........................................................  924 

theory  of  the  tax  ................................................  10 

L 

Laches 

motion  to  modify  decree  denied  ....................................  505 

Land  contracts  .....................................................  303 

situs  of  mortgage  ................................................  307 

Lapsed  legacy  ......................................................  247 

Laws 

conflict  of    ......................................................  72 

proof  of  foreign    ................................................  75 

when  in  force    ..................................................  32 

Leases 

covenant  to  pay  taxes  ............................................  22 

of  safe  deposit  box  ..............................................  30 

mineral  and  mining    .............................................  305 

Legacy 

charge  on  real  estate  .............................................  245 

discount  on    .....................................................  373 

from  what  fund  tax  payable  ......................................  250 

impressed  with  trust  .............................................  246 

in  custodia  legis  .................................................  249 

lapsed  .........................................................  247 


1192  1NDEX 

Legacy — Continued  PAGE 

legacy  duty   18 

in  lieu  of  commissions 630,  747 

estate  tax  not  concerned  with 596 

Legatees 245 

election  by  32 

of  personal  property   245 

renunciation  by  31,  245 

Legislature 

inherent  power  of    16 

successive  acts 71 

power  to  amend  or  repeal 66,  67 

limitations  of  power   7 

Letters  testamentary 

form  of  affidavit 811 

Liabilities 

see  Deductions 366 

Liability 

personal  of  executor  or  administrator 515,  669 

Library 

exempt 239 

Liberal  construction 50 

Lien 

of  tax  241 

of  tax,  New  York  statute,  §  224 745 

of  United  States  tax 660 

when  general  taxes  become 377 

statutory  steps  must  be  complied  with 242 

Life  estates 

generally 252 

charged  with  annuity  259 

computations  of  value    277 

fund  from  which  payable 252 

power  to  invade  principal 255 

New  York  rule  as  to  such  power 256 

theoretical  value  260 

with  power  of  appointment 259 

under  Federal  act   613 

Life  use 

waiver  of   .  132 


INDEX  H93 

Life  insurance  PAGE 

assignment   of  policy    158 

generally 157 

Federal  tax  on  157,  161 

nature  of  the  contract 160 

no  title  to  fund  in  assured 160 

insurance  company  pays  the  tax 161 

an  inheritance  where  payable  to  the  estate 162 

not  taxable  where  payable  to  beneficiary 164 

construction  of  policies    169 

statutory   provisions    171 

situs 323 

shown  in  inventory    424 

under  Federal   act   625 

taxable  insurance  625 

in  favor  of  estate 626 

in  favor  of  beneficiaries 626 

effective  date  of  statute 626 

valuation   of    627 

Limitations,  statute  of 

applied  to  inheritance  taxes 507 

claims  barred  by   427 

construed  retroactively   55 

do  not  run  against  the  State 507 

New  York  statute,  §  245 767 

under  Federal  act    666 

Litigation 

expenses  of,  when  a  deduction 379 

to  determine  tax  509 

Live  stock 

valuation   of    611 

Losses 

during  administration   35 

Louisiana 

address  of  tax  collector 771 

interest,  discount,  penalty  528 

mortality  tables    279 

rates  and  exemptions   927 

statute 927 

theory  of  the  tax 11 


M 

Maine 

address   of   tax  collector 771 

interest,  discount,  penalty  528 


1194  INDEX 

Maine — Continued  PAGF- 

mortality  tables   279 

rates  and  exemptions 930 

statute 930 

theory  of  the  tax 11 

Mandamus 

proper  remedy  to  compel  refund 511 

or  the  appointment  of  appraiser 511 

or  the  issuance  of  receipt 512 

refused  where  dispute  as  to  amount  of  tax 513 

refused  where  right  of  appeal 513 

Marine  corps 

service  in   601 

Marital  right 186 

Market  price 

of  stock    337 

Married  women 

domicile  of    216 

Marshaling  assets 391 

Maryland 

address  of  tax  collector 771 

form  for  nonresident  stock  transfers 938 

interest,  discount,  penalty   528 

mortality  tables   279 

prior  statutes    937 

rates  and  exemptions   936 

statute 936 

theory  of  the  tax 11 

Massachusetts 

acts  as  amended  to  January  1,  1916 942 

Art  of  1916  945 

amendments,  1918    947 

amendments  of  1922  949,  950 

address  of  tax  commission 772 

adequate  consideration    152 

additional  tax,  1918  948,  950 

agreement*  to  make  a  will 87 

ante-nuptial  agreement   90 

appointment,  power  of 171,  180 

charitable  bequests   232 

compromise  agreements    90 

contemplation  of  death  949,  950 

defiTery  of  gift  107 


INDEX  X195 


inserts  —  Continued 

dkmmt  OB  tax  ................................  ................  ,  178 

equitable  eoaversiaa  .......  ...........................  .  .......  844,  308 

................................................  945,  949 


affidavit  by  anaiMJJMrt  exeeator  ..............................     951 


request  for  tax  oa  future  interests  .............................  953 

iBreatory  of  assets  —  resideat  ......  .  .........  .  .................  954 

fiat  of  deductions,  etc.—  resident  ...............................  956 

determination  by  tax  comausston  ..............................  958 

gifts  ..........................................................  107 

interest  ..................................................  .  .....  772 

joint  estates  ....................................................  193 

life  estates  .................................  .  ....................  259 

•ortafity  tables  .................................................  279 

aMHtgage—  s»as  ................................................  306 


power  of  appoiatBMBt  ...................................  174,  180,  942 

practical  eoastroetiom  of  statute  ...................................  63 

prior  statutes   ...................................................  950 

rates: 

prior  to  1912  ................................................  941 

after   1912   to   1916  ..........................................  940 

after  1916  to  1922  ..........................................  941 

after  May  22,  1922  ...........................................  939 

additional  tax  1918  to  1920  ...................................  ....  941 

re*J  estate  trusts  ................................................  304 

tax: 

a  "eoauMMlity"  .............................................  18 

tkeory  of  ...................................................  11 

trust  deeds  ......                                    ..............................  135 

Masonic  lodge 

exempt  ..............................  .  .........................  239 

mmd  aiiii»iBi  rates  .....................................  271 


act  as  ameaded   .................................................  959 

address  of  tax  eoOeetor  ...........................................  772 

iaterest,  discooat,  penalty  ........................................  5*8 

atortalirr  tables  .................................................  *W 

rates  aad  exemptions  prior  to  1919  ................................  •» 

rates  snbseqneat  to  1919  ameadneat  ..............................  9» 

statute  ........................................................  »9 

taeory  of  tae  tax  ................................................  1* 

Military  exemption  claiai  ..........................................  645 


1196 

PAGE 

Mining  claims 22 

Minnesota 

acts,  prior  to  1919 963 

Act  of  1919 966-967 

address  of  tax  collector 772 

exemptions 967 

interest,  discount,  penalty   529 

mortality  tables    279 

prior  statutes    967 

rates  and  exemptions 963 

real  estate  trusts    304 

recent  Minnesota  cases   967 

Mississippi 

Act  of  1918 969 

interest,  discount,  penalty 528 

nonresidents  not  taxed  as  to  intangibles 969 

rates 969 

Missionary 

residence  of 596 

Missouri 

Act  of  1917 971 

amendment  of  1919   975 

address  of  tax  collector 772 

exemptions 975 

forms — transfer   of  nonresident   stock 975 

interest,  discount,  penalty  529 

mortality  tables    279 

rates  and  exemptions   971 

rates  prior  to  1917 971 

Mistake  of  fact 

corrected  on  motion    500 

Mobilia  personam  sequuntnr 208 

Modifying  decree 499 

Money 

situs   of    321 

loaned  to  partnership   350 

set  forth  in  inventory 423 

U.  S.  statute 610 

Montana 

Act  of  1921  977 

address  of  tax  collector 772 


INDEX 

Montana — Continued  PAGE 

rates  under  Act  of  1917 977 

interest,  discount,  penalty   529 

mortality    tables    279 

rates  and  exemptions    977 

theory  of  the  tax 13 

Monument 

cost  of,  deducted    371,  629 

Mortality  tables 285 

Mortgage 

debt  as  a  deduction 367,  632 

devisee  of  land  takes  "cum  onere"  367 

habitual  presence  310 

in  inventory    422 

situs 306 

situs  at  domicile  306 

transient  presence    310 

when  will  directs  payment  out  of  personalty 331,  367 

where  physically  present 308 

where  the  land  lies 307 

valuation  of 335 

Motion 

for  mistake  of  fact 500 

form  for  397 

lack   of   jurisdiction    501 

modifying  decree   49!) 

not  granted  to  correct  error  of  law 503 

nor  where  there  is  laches 505 

or  bad  faith 506 

or  when  Statute  of  Limitation  has  run 507 

to  exempt  too  late  when  appraiser  has  been  appointed 488 

to  exempt   estate 397 

to  remit  penalty 509^ 

to  remit  appraiser 's  report   468 

Motor  cars 424 

Municipalities 

have  no  power  to  levy 21 

Mutual  acknowledgment  of  child 22? 

Mutual  mistake 

decree  modified 500 

Mutual  wills..  62- 


1198  INDEX 

N 

National  bank  PAGE 

a  domestic  corporation  when  in  State 313 

Nebraska 

address   of   tax   collector 772 

interest,  discount,  penalty   529 

land  contracts  303 

mortality  tables    277 

prior  statute    986 

rates  and  exemptions    985 

statute 985 

theory  of  the  tax 13 

Nephew 102 

Net  estate 

under  United  States  statute 641 

Nevada 

address  of  tax  collector 772 

interest,  discount,  penalty   529 

mortality  tables    279 

rates  and  exemptions    987 

statute 987 

New  Hampshire 

act  as   amended  to   1919 989 

amendment  of  1921   993 

address   of   tax   collector 772 

collaterals  only  taxed  prior  to  1919 989 

digest  of  authorities   998 

direct  heirs  taxed    989 

interest,  discount,  penalty   529 

mortality  tables    279 

prior  rates   989 

rates   under  Act   of   1919 989 

theory  of  tax   13 

New  Jersey 

act  as  amended  to  date    (1922) 1001 

address  of  tax  collector 772 

amendment,  1914    1009 

forms : 

rules  of  department    1009 

affidavit  of  nonresident  executor 1010 

instructions  for  same 1011 

schedule  to  be  filed 1011 

affidavit  of  executor,  resident  decedent 1013 

schedules,  resident  decedent    1016 


INDEX  H99 

New  Jersey — Continued  PAGB 

interest,  discount,  penalty    529 

mortality  tables   279 

rates  of  tax,  1922 1000 

theory  of  tax    13 

New  Mexico 

rates  under  Act  1921 1021 

Act  of  1919 1021 

effective  1920    1021 

New  York 

accrual   and  payment,    §   222 744 

additional   tax    on   investments 721,  743 

address  of  tax  collector 772 

amendments  1917,  1918,  1919  and  1920 719 

amendments  1921,   1922    720 

appeal  and  other  proceedings,  §  232 755 

application  of  taxes,    §   242 766 

appointment  of  appraisers,  §  229 750 

bequests  in  lieu  of  commissions,  §  226 747 

books  and  forms,  §  238 761 

bonds  secured  by  mortgages 734 

capital  invested  in  business 707 

change  in  theory  of  tax 702 

collateral  inheritance  tax   697 

commissions,  bequests  in  lieu  of 747 

commutation  of  nonresident  tax 744 

composition  of  tax,  §  233 755 

computations 715 

curtesy  taxed  704 

definitions,  §  243   766 

definitions 703 

determination  of  surrogate,  §  231 754 

direct   inheritance   tax    697 

discount 744 

district  attorney,  proceedings  by,  §  235 759 

entirety,  tenancy  by 715 

executor 's  commissions    745 

exemptions 713-734 

exemptions  and  limitations,  §  221 740 

exemptions  not  applicable,  §  244 767 

fees  of  county  treasurer,  §  237 761 

forms 787 

highest  possible  rate  700 

history  and  development    695 

interest,  discount  and  penalty 529,  744 

investment  tax 721 

joint  estates    714 

jurisdiction  of  surrogate,  §  228 749 

liability  of  corporations,  §  227 747 


1200 

New  York— Continued  PAGE 

lien  and  collection  by  executor,  §  224 74-1 

limitations  of  time,  §  245 767 

list  of  statutes   695 

maximum  and  minimum  rates 704 

mortality  tables    277 

nonresidents 743 

nonresidents,  rule  for  fixing  tax,  §  221c 743 

original  statute  of  1909 701 

partnership   assets    706 

personal  property  assessment    732 

policy  as   to   nonresidents 705 

powers   of  appointment    695 

proceedings  by  appraiser,  §  230 750 

proceedings  by  district  attorney,  §  235 759 

rates   in   1910 702 

rates   in   1911 704 

rates  and  exemptions 715 

rates  of  tax,  §  221a 741 

real  estate  first  taxed 700 

real  estate  of  corporations 705 

receipts  from  county  treasurer  or  tax  commission,  §  236 760 

refund  of  tax  erroneously  paid,  §  225 744 

payments,  refunds,  §  241 763 

report  of  county  treasurer,  §  240 762 

report  of  surrogate,  §  239 762 

resident   defined    710 

statute  as  amended 735 

surrogate  assistants,   §  234 756 

tangibles  and  intangibles 703,  713 

tax  on  investments   (secured  debts) 721 

taxable  transfers,  §  220 736 

theory  of  tax   13 

Newly  discovered  evidence 481 

Next  of  kin 102 

Niece      102 

Nonresidents 

commutation   of   tax    409 

corporations  in  States  that  tax  them 775 

corporations  in  States  that  do  not 782 

definitions 766 

executor  of,  need  not  testify 412 

intangibles  of,  within   jurisdiction 24 

interest  in  estate  of  another '.  . .  249,  324 


INDEX  1201 

Nonresidents — Continued  PAGE 

New  York  statute,  §  220 736 

policy  of  New  York  statute 705 

procedure  as  to   400 

proportional  taxation    384 

real  estate  not  taxable 300 

Nonresidents — Federal  act 

administrator  shall  pay  the  tax 644,  657 

agents  of  nonresident  decedent 645 

bankers 645 

beneficial  interest,  person  holding,  when  required  to  make  return 652 

bonds : 

interest  accrued  prior  to  death 646 

situs   of 639 

tax  free    605 

transfer  after  notice    647 

deductions 640,  643 

executor  shall  give  notice 644,  645 

executor  shall  pay  the  tax 644,  657 

information   concerning,   requirement   of 652 

insurance  in  domestic  company — not  part  of  gross  estate 639 

moneys  due  from  domestic  debtors — when  part  of  gross  estate 639 

moneys   on  deposit    639 

net  estate — how  determined    641 

notice 645 

payment  of  tax 644 

personal  property — when  included  in  gross  estate 639 

person  holding  beneficial  interest,  when  required  to  make  return 652 

possession,  persons  in  actual  or  constructive 645 

presumption 596 

property  in  the  United  States 605,  639,  645 

real  property  in  the   United   States 605,  645 

real  property  outside  the  United  States 641,  643 

return 652 

specific  exemption — none 596,  641 

stock  in  domestic  corporation 639 

tax  confined  to  estate  in  United  States 640,  641 

Nonresident  proceedings — form 

affidavit  for  appraisal    790 

affidavit  for  consent  to  transfer  property 793 

motion  to  exempt    401,  405 

order  appointing  appraiser    794 

petition 795 

commutation  of  tax   787,  788 

North  Carolina 

address  of  tax  collector 772 

interest,  discount,  penalty   529 

mortality  tables    279 

76 


1202  INDEX 

North  Carolina — Continued  PAGB 

prior  statutes    1033 

rates  and  exemptions   1026 

statute  as  amended,   1921 1026 

theory  of  the  tax 14 

North  Dakota 

amendment   of   1921 1041 

amendment    of   1919 1039 

address  of   tax   collector 772 

interest,  discount,  penalty   529 

mortality  tables    279 

prior  statutes    1041 

rates : 

in  force,  1919  1034 

1917  to  1919  1034 

1913  to  1917  1035 

Norway 

treaty   with    80 

Notes 

forgiven  by   will    100 

shown  in  inventory    423 

valuation   of 335 

of   partnership 350 

situs 306 

Notice 

appeal  to  surrogate  475 

assessment  of  tax ;  form 800 

by  mail  sufficient 442 

failure  to  give  invalidates  proceedings 440 

is  jurisdictional    440 

must  specify  the  property 465 

must  state  grounds    475 

of  hearing  before   appraiser ;    form 798 

presumption  of   444 

statute  must  provide  for 61 

under  United  States  statute 644 

where  notice  impossible    443 

Notice  of  appeal 

service  of 498 

Notice — forms 

by  bank  or  trust  company 812 

appeal  to  Appellate  Division 491,  802 

appeal  from  order,  supplemental  report 488 

appeal  to  surrogate 477,  488,  801 

assessment  of  tax 800 


INDEX  1203 

Notice — Forms — Continued  PAGE 

hearing  before  appraiser 798 

motion  to  remit  interest 803 

Notice — Federal  act 644 

when  notice  required 644 

by  executor  or  administrator 644 

by  others 645 

notice  of  exemption — military  service 645 

nonresident  estates 645 

by  transfer  agents 645 

stocks  and  bonds,  nonresidents 646 


0 

Oath 

must  be  subscribed  to  affidavit 447 

of  appraiser,  form  of 797 

Objections 

comptroller  must  take  before  appraiser 449 

failure  to  take  may  not  excuse  error 450 

Officers 

names  and  addresses  of  different  State  officials 771 

Ohio 

amendment  of  1920 1051 

act  of  1919 1042 

address  of  tax  collector 772 

consideration   of   gift 139 

constitutionality ; 62 

collateral  heirs   taxed 1042 

direct  heirs  first  taxed  1919 1042 

exemptions 228 

interest,  discount,  penalty 530 

mortality  tables 279 

notice 61 

rates 1042 

retroactive  laws 56 

saving  clauses 68 

stock  transfers  by  nonresidents  taxed * 1042 

theory  of  tax 14 

Oklahoma 

amendment  of  1921 1060 

act  of  1915 1055 

amendment  of  1919 1057 

address  of  tax  collector 772 

interest,  discount,  penalty 530 


1204  INDEX 

Oklahoma — Continued  PAGE 

rates  and  exemptions  under  act  of  1915 1055 

rates  under  amendment  of  1919 1055 

prior  statutes 1060 

Opinion  evidence 

by  experts 447 

Order 

appealed  from 494 

appointing  appraiser ;  form 747 

assessing  tax ;    form 470,  488,  799 

exempting  estate ;   form 400 

fixing  tax,  second  appeal ;  form  of 488 

not  appealable 469 

of  surrogate  on  appeal ;  form 801 

on  supplemental  report ;  form  of 488 

remitting  interest ;  form  of 803 

remitting  report 468 

remitting  report ;  form  of 483 

remitting  report  to  appraiser ;  form 799 

resettling 495 

Oregon 

amendment  of  1921 1064 

address  of  tax  collector. 772 

interest,  discount,  penalty 530 

mortality  tables 279 

rates  and  exemptions  prior  to  1917 1061 

rates  and  exemptions,  1917 1061 

rates,  1919 1062 

statutes 1062 

Origin 

of    inheritance   taxation 3 

Oriental  rags 

valuation 612 


P 

Parties 

to  the  transfer 208 

Partition 243 

Partnership 

agreement 94,  144,  352 

bequests  to 348 

inventory  of  interest 425 

good  will  of 351,  353 


INDEX  12Q5 

Partnership — Continued  PAGE 

New  York  statute,  amended  as  to 706 

nonresidents 390 

pro-rating  debts  and  assets 390 

real  estate  of 325,  350 

situs  of  assets 324 

value  of  interest 347 

Patents 

valuation  of 610 

Payment 

does  not  estop  comptroller 474 

of  tax,  New  York  Statute,  §  .222 744 

to  wrong  official  no  excuse 510 

of  debt  by  will 98,  369 

Payment  of  TJ.  S.  tax 

by  certain  bonds  or  notes  of  United  States 656 

by  uncertified  check 656 

executor  shall  make 657 

extension  of  time  for 658 

proceedings  to  enforce 671 

receipt  for 655 

settlement  of  executor 's  accounts — receipt  entitles  to  credit 655 

shown  due  by  return — effect  of 658 

time  of 655 

Penalty 527 

for  not  paying  stock  transfer  tax 721 

motion  to  remit 509 

motion  to  remit ;  forms 803 

New  York  Statute,  §  223 744 

under  United  States  statute 663 

tax  distinguished  from 16 

power  to  remit — U.  S.  Statute 668 

Pennsylvania 

act  of  1887 1065 

act  of  1917 ; .- 1068 

act  of  1919 1073 

address  of  tax  collector 772 

amendment  1921  increasing  rates 1065 

collaterals  taxed  under  act  of  1887 1065 

collection  of  tax 1078 

definitions 1080 

direct  heirs  taxed,  1917 1068 

dower 182 

equitable  conversion 244,  301 

executors,  powers 497 

Federal  tax — not  a  deduction 1074 


1206  INDEX 

Pennsylvania — Continued  PAGE 

gifts 109 

Governor 's  memorandum 1072 

interest,  discount,  penalty 530 

mortality  tables 279 

nonresident  decedents,  statute  as  to 1077 

notice 61 

payment  of  tax 1074,  1077 

rate  of  tax 1065 

renunciation 246 

repeal 1080 

retroactive  statutes 55 

revocation  of  gift 109 

stock — transfer  by  nonresident  taxed 1065 

tax- 
payment 1074 

rate 1065 

theory   of 14 

trust   deeds 131,  138 

unconstitutional  statute 57 

Personal  liability 

of  executor  or  administrator 515,  669 

of  beneficiaries 517 

release  from  United  States  act 660 

Personal  property 

follows  situs  of  domicile 22 

no  tenancy  by  entirety  in 188 

of  intestate 102 

of  partnerships 325 

under  Federal  act 606 

Philippine  Islands 

not  included  in  United  States 596 

Physician 

good  will 352 

Pictures 

inventory  of 424 

value  of 333 

Pledged  securities 

inventory  of 424 

situs 316 

value  of 345 

Power  of  appointment 171 

as  to   remainders 273 

common-law  rule 171 


INDEX  1207 

Power  of  appointment — Continued  PAGE 

construction  of  wills 177 

development  New  York  rule 176 

highest  possible  rate 700 

Massachusetts  rule 173 

New  York  rule 172 

New  York  statute  of  1896 698 

New  York  Statute,  §  220,  subd.  6 739 

question  of   residence 180 

repeal  of  clause  as  to  failure  to  appoint 698 

statutes  affecting 523 

statutory  rule 172 

transfers  by,  in  inventory 428 

United  States  statute  concerning 7,  624 

when  in  life  tenant 259 

when  power  exercised  by  deed 178 

Power  of  corporation 

under  charter 230 

Power  of  sale 383 

Power  of  revocation ill,  132,  620 

Power  to  invade  principal 255 

Power  to  revoke 132,  620 

r 

Practical  construction 63 

Present  worth 

how  calculated 281 

chance  of  death,  affecting 282 

Presumption 

of  death 29 

of  notice 443 

of  residence 710 

Presumptions — Federal  act 

assessment  of  estate  tax  correct 666 

consent  decree 628 

property  held  jointly  or  as  tenants  by  the  entirety 622 

residence 596 

taxability  of  transfers,  if  not  rebutted  (the  value  of  transfers  must  be 

returned) 618 

two  years  of  death,  transfer  within 618 

when  tax  upon  personal  property  becomes  a  personal  obligation 631 

Previously  taxed  property 634 


1208 

PAQK 

Privilege  taxed 16 

Probate  decree 

effect  of 460 

Probate  judge 

as  taxing  officer 465 

Proceedings 

as  to  nonresident ;   forms 401,  790 

before  appraiser 435 

invalidated  by  failure  to  give  notice 440 

jurisdiction 464 

on  appeal 400 

to  collect  delinquent  taxes 514 

Procedure 

generally 396 

as  to  nonresidents 400 

controlled  by  law  in  force  at  date  of  proceedings , 32 

statute  must  provide  for 396 

under  Federal  act 594 

Profits 

of  partnership 361,  362 

Pro  forma 

order  as  of  course 467 

Proof 

of  foreign  law 75 

of  notice 440 

Property 

previously  taxed 634 

classification  by 43,  45 

definitions 299 

Proportional  taxation 

nonresidents 384 

Pro-rating 

form  of  report 459 

of  debts 385 

partnerships 389 

where  both  local  and  foreign  debts  and  assets 388 

where  local  debts  paid  with  foreign  assets 387 

where  local  assets  and  no  local  debts 387 

where  local  debts  exceed  local  assets 386 


INDEX  1209 

PAGE 

Prospective  laws 54 

Public  charity 230 

Public  officers 

bequests  to 238 

Public  purpose 65 

R 

Rates  of  tax 

arbitrary  or  confiscatory 64 

fixed  by  date  of  death 33 

present  rates,  New  York :    Act  of  1916 716 

under  New  York  act  of  1892 697 

under  New  York  act  of  1910 702 

under  New  York  act  of  1911 704 

under  present  United  States  statute 597 

under  United  States  statute,  1898 541 

Re-appraisal 

application  for ;  form 597 

Real  estate 

as  to  aliens 245 

charged  with  legacy 245 

commissions  on  sale 380 

certificate  of  payment  of  tax  on ;  form 809 

description  in  inventory 421 

entireties 187 

evidence  of  expert  as  to  value 447 

equitable   conversion 244,  301 

first  taxed  in  New  York. 700 

form  of  description  in  inventory 429 

heirs  to 241 

land  contracts 303 

leases 304 

lien  of  tax 241 

not  a  legacy  tax 18 

not  taxable  in  foreign  jurisdiction 300 

of  corporations 705 

of  intestate 101 

partition , 243 

partnerships 325,  350 

repairs  to .  368 

sales  of,  to  pay  tax 245 

' '  succession ' ' — includes 18 

situs 300 

valuation  of  fractional  interest 332 

value.  .  .  .  330 


1210  INDEX 

Real  Property  Law  ^l 

New  York 134 

Real  property — Federal  act 

assessment  for  local  taxation  not  determinative  of  value 606 

devisee,    taking   directly 606 

entirety,  estate  by ' 621,  622 

jointly  owned  property 621,  622 

heirs  taking  directly 606 

life  estate 604,  613 

mortgaged,  full  value  to  be  returned 632 

mortgage  on 606,  632 

outside  the  United  States 606,  632,  641,  643 

tax  on 631 

valuation 606 

Receipts 

New  York  Statute,  §  236 760 

Reciprocal  statutes  81 

general  discussion 533 

Refunds 

of  tax,  New  York  Statute,  §  241 763 

of  tax  erroneously  paid 511 

under  United  States  act 665 

Regulations 

of  United  States  Treasury  Department 594 

index  syllabus 590 

Reimbursement 

under  United  States  act 659 

Relationship 

to  decedent 221 

classification  by 42 

Religious  exemptions 

see  Charities 229 

Federal  act 643 

Remainders 261 

beneficiary  uncertain 264 

full  undiminished  value 276 

full  undiminished  value  taxable,  New  York  Statute,  §  230 750 

law  in  force  at  date  of  death 262 

maximum  and  minimum  rate 271 

powers  of  appointment 273 

presently  taxable 263 

present  taxation,  when  contingent 470 


INDEX  1211 

Remainders — Continued  PAGE 

statutes  affecting 524 

taxation  postponed 263 

taxed  at  highest  possible  rate 266 

vested  before   statute 262 

where  amount  uncertain 272 

under  Federal  act 613 

Remitting  penalty 

motion   for 509 

Remitting  report 468 

Removal 

of  appraiser 436 

Rent 

accrued  prior  to  death 422 

Renunciation 

by  legatee 31,  245 

Repairs  to  real  estate 368 

Repeal 57 

by  implication 69 

effect  of 67 

saving  clause 67 

incidental  effects   of 70 

Report 

form  for 455 

may  be  remitted 468 

taxation  suspended 454 

what  it  must  show 453 

what  it  should  contain 452 

Resettling  order 495 

Residence 

as  to  powers  of  appointment 180 

definition 209 

of  beneficiaries 219 

synonymous  with  domicile 209 

rules  as  to  domicile 210 

Resident 

definition — Federal  act 596 

definition — New  York  statute 766 

personalty  of,  liable  to  tax 22 


1212  INDEX 

PAGE 

Ketroactive  amendments 67 

Retroactive  laws 54 

where  estate  is  in  custodia  legis 37 

intent  must  be  clear 57 

Return — Federal  act 648 

date  of  filing 648 

persons   liable   for 649 

preparation  of 649 

supplemental  date 650 

when  no  return  made 650 

nonresident  estates 652 

confidential 653 

persons  having  material  interest 653 

attorneys  must  have  authority 653 

Revenue 

exemptions 536 

produced  by  tax 537 

table  showing  tax  receipts 538 

the  rate 537 

Revocation 

of  gift 116 

power  reserved 132 

Rhode  Island 

address  of  tax  collector 772 

interest,  discount,  penalty 530 

mortality  tables 279 

rates  and  exemptions ; 1081 

statutes 1081 

Right 

to  transmit;    18, 

to  receive 

Rules 

as  to  domicile 210 

for  valuation  of  mortgages 325 

for  computation  of  good  will 353 

for  valuation  life  estates 277 

under  Federal  act . .                      590; 


s 

Safe  deposit  box 409 

comptroller  may  inspect 409 

consent  for  transfer  of  funds..  411 


INDEX  1213 

Safe  deposit  box — Continued  PAGE 

form  of  notice  of  intention  to  deliver  contents 812 

may  not  impost  arbitrary  conditions 410 

property  belonging  to  another 412 

Safe  deposit  companies 

duties  of,  New  York  Statute,  §  227 747 

Sale 

of  property  in  vicinity 331 

of  stock 337 

to  pay  tax 245 

where  in  fact  a  gift 139 

Savings  bank  book 

gift  of 108 

Saving  clauses 67 

Schedules 

form  of 414 

Seal  importing  consideration  150 

Secured  debts 

penalty  for  not  paying  tax 721 

Securities 

active 337 

inactive 339 

Services 

as   a  deduction 369 

Services  of  decedent 

value  of 353 

Sister 101 

Situs 300 

bank  deposits 321 

bonds 306 

commercial  paper 306 

corporate  stock 312 

debts 322 

domestic  corporations 312 

domicile  of  owner 306 

estate  of  another 324 

foreign  corporations 314 

land  contracts 303 

leases.  .  304 


1214  INDEX 

Situs— Continued  I>AGE 

life  insurance 323 

mortgages 306 

of  property 300 

other  choses  in  action 321 

partnership  interest 324 

pledged  securities 316 

real  estate 300 

seat  in  stock  exchange 323 

tangible  property 305 

under  Federal  act 639 

Son-in-law 226 

South  Carolina 

rates  and  exemptions 1087 

statute  1922 1087 

inheritance  tax  first  imposed 1087 

South  Dakota 

address  of  tax  collector 772 

interest,  discount,  penalty 530 

mortality  tables 279 

rates   and  exemptions 1097 

statute 1098 

theory  of  the  tax 14 

Sovereign  State 

no  action  lies  against 507 

Spain 

treaty  with 81 

Special  guardian 

not  practice  to  appoint 481 

Special  partner 348 

Stamps 

penalty  for  not  affixing  to  stock : 721 

stock  transfers 113 

Statutes,  general  review 

appraisal 5-6 

banks  and  trust  companies 531 

collaterals  and  strangers  only 532 

common-law  transfers 523 

double  taxation 534 

executors,  duties  of 525 

exemptions 536 

general  re'sume' 522 


INDEX  1215 

Statutes,  general  review — Continued  PAGE 

in  avoidance  of  tax 522 

interest,  discount,  penalty 527 

interest  taxed 531 

life  estate 524 

nonresident  decedents 532 

powers  of  appointment 523 

receipts  from  tax 535 

reciprocal  statutes 533 

remainders 524 

revenue 537 

tangibles  and  intangibles 533 

the  rate 535 

valuation 537 

where  the  statutes  differ 532 

wherein  they  agree 522 

will  and  intestacy 522 

Statutes  of  the  states 

Arizona 813 

Arkansas 823 

California 828 

Colorado 848 

Connecticut 863 

Delaware 874 

Georgia 877 

Hawaii 881 

Idaho 883 

Illinois 885 

Indiana 897 

Iowa 911 

Kansas 917 

Kentucky 924 

Louisiana 927 

Maine 930 

Maryland 936 

Massachusetts 939 

Michigan 959 

Minnesota 963 

Mississippi 969 

Missouri 971 

Montana 977 

Nebraska 985 

Nevada 987 

New  Hampshire 989 

New  Jersey. 1000 

New  Mexico 1021 

New  York 735 

North  Carolina 1026 

North  Dakota 1034 

Ohio.  .                                                                                                                   .  1042 


1216  mDEX 

Statutes  of  the  states — Continued  PAGK 

Oklahoma 1055 

Oregon 1061 

Pennsylvania •  1065 

Ehode  Island 1081 

South  Carolina 1087 

South  Dakota 1097 

Tennessee 1105 

Texas 1109 

United  States 539 

Utah 1111 

Vermont 1114 

Virginia 1117 

Washington 1126 

West  Virginia .• 1129 

Wisconsin 1137 

Wyoming 1147 

Statutes,  construction  of 50 

as  to  domicile 210 

copied  or  adopted 62 

exemptions 52 

notice  and  hearing 61 

reciprocal 81 

retroactive  or  prospective 54 

sustained  in  part  if  severable 58 

sustained  under  Fourteenth  Amendment 59 

practical 63 

where  held  invalid .57,  71 

public  purpose 65 

joint  tenancy 196 

strict  or  liberal  construction 53 

amendments 66 

successive  laws 71 

repeal 67 

Stepchildren 42,  221 

Stipulation 

waiving  certification ;   form 496 

Stock 

situs 312 

closely  held 339 

losses  on  sale  not  a  deduction 35 

transfer  stamps 113 

value  of 337 

value  under  Federal  act 606 

Stock  exchange 

seat  in 323 

taxable.  .  324 


INDEX  1217 

PAGE 

Stock  transfer  stamps 113,  721 

Stock  transfer  tax 

penalty  for  not  paying 721 

Subpoenas 

appraiser  may  issue 437 

by  appraiser ;  form 798 

Superintendent  of  Insurance 

form  of  application  to 799 

Supplemental  report 

form  of 487 

Supreme  Court 

of  United  States,  appeals  to 498 

Surrogate 

appeal  to '. 475 

appeal  to ;  form  of  notice 475,  488,  801 

as  taxing  officer 465 

cannot  assess  tax  on  guess 469 

cannot  require  Comptroller  to  refund  tax 511 

designation  of  appraiser 436 

determination  by 481 

determination  by  New  York  Statute,  §  231 754 

determines  materiality  of  evidence 446 

discretion  as  to  resettling  order 495 

duty  to  appoint  appraisers  not  discretionary 437 

hearings  on  appeal 481 

jurisdiction,  New  York  Statute,  §  228 749 

may  act  as  appraiser 437 

may  take  evidence  on  appeal 481 

motions  to  exempt 483 

no  power  to  remit  interest 509 

notice  of  appeal  from  second  taxing  order 488 

notice  of  appeal  to  Appellate  Division 401 

order  on  supplemental  report 487 

order  remitting  report 483 

power  to  vacate  decree 500 

supplemental  report  of  appraiser 486 

taxing  order  upon  second  appeal 488 

where  mandamus  lies  against - 511 

Survivorship 

in  joint   tenancy 193,  621 

in  entirety 187,  621 

77 


1218  INDEX 

Sweden 

Treaty  with 81 

Symbolical  delivery 109 


T 

Tangible  property 

as  to   value 333 

classification 46 

situs 305 

Tax 

accrual  of,  at  date  of  gift 123 

accrual  of,  New  York  Statute,  §222 744 

accrual  of,  at  death 8 

application  of  proceeds 519 

affected  by  will 84 

assessment  of  465 

assessment  of ;  form  of  notice 800 

at  highest  possible  rate 266 

at  highest  rate ;  form 470 

at  maximum  rate 271 

composition  of ;  form 808 

not  a  direct  tax 20 

not  a  debt 73 

composition  of  New  York  Statute,  §  233 755 

computations  of 277 

commutation,  nonresident 409 

decree  assessing 474 

Federal 539 

from  what  fund  payable  where  life  estate 252 

general  taxes  a  deduction 377,  631 

lien  of 241 

marshaling  assets  to  reduce 391 

other  inheritance  taxes 375 

payment  of 474 

postponed  as  to  remainders 263 

proceedings  to  collect  delinquent 514 

proportional  as  to  nonresident 384 

rates  under  New  York  Statute,  §  221a 741 

United  States  statute 560 

refund  compelled  by  mandamus 511 

refund,  New  York  Statute,  §  225 746 

sale  of  property 245 

set  forth  in  inventory 423 

suspended  where  power  to  invade  principal 255 

suspended  as  to  remainders 263 

what  property 299 


INDEX  1219 

Tax— Continued  PAGE 

when  refund  refused 510 

where  suspended 454 

Taxable  transfers 

New  York  Statute,  §  220 736 

Taxpayer 

strict  construction  in  favor  of 50 

Temporary  administration 

commissions 426 

Tenancies 

entirety 187 

curtesy 185 

joint 193 

Tennessee 

address  of  tax  collector 772 

exemptions 227 

interest,  discount,  penalty 530 

mortality  tables 279 

rates  and  exemptions 1105 

statute 1105 

theory  of  the  tax 14 

Testator 

what  he  can  do 86 

what  he  cannot  do 85 

may  affect  lien  of  tax 243 

may  direct  from  what  fund  payable 250 

Texas 

address  of  tax  collector 772 

interest,  discount,  penalty 530 

mortality  tables 279 

rates  and  exemptions 1109 

statute 1109 

theory  of  tax 3 

Time 

law  at  date  of  proceedings 32 

law  in  force  at  death  as  to  remainders 263 

signing  statute 29 

transfers 27,  37 

extension  for  payment  of  tax 658 

Tombstone 

cost  of,  deducted 371 

inventory  of  cost 425 


1220  INDEX 

PAGE 

Trade  marks 610 

Transfers 

by  will 84 

by  intestacy 101 

completed  inter  vivos 140 

taxes  place  at  death 27 

exceptions  to  this  rule 36 

classification  of 39 

Transfer  agent  645 

Transfer  tax 

definition 3 

Treasury  Department,  United  States 

regulations 594 

indexed  syllabus 590 

Treaties 77 

Trust 

bank  deposits Ill 

impressed  upon  legacy 246 

Trust  companies 

duties  of,  New  York  Statute,  §  227 747 

notice  by ;  form  for 812 

Trust  deeds 127 

Trustees 

commissions 381,  630 

personal  liability  of 515 


u 

Unavoidable  delay 509 

Uniformity 

rules  modified 20 

Uncle  102 

Unconstitutional 

as  property  tax 16 

statutes  so  held 58 

statutes  void 71 

unless  act  provides  for  notice 61 


INDEX  1221 

Undertaker's  bill 

inventory  of 425 

United  States  statute 

history  and  development -. 539 

rates  under  act  of  1898 541 

rates  under  subsequent  acts 559 

tabulation  of  rates 560 

statute  of  1918 569 

statute  of  1921 578 

regulations,  Treasury  Department 594 

indexed  syllabus 590 

Utah 

address  of  tax  collector 772 

interest,  discount,  penalty 530 

mortality  tables 279 

rates  and  exemptions 1111 

statute 1111 

theory  of  the  tax 15 

V 

Vacating  decree  499 

Valuation 

Federal  rules  for 606 

Value 327 

active  securities 337 

bonds 345 

life  estates 277 

closely  held  stock 339 

full  and  undiminished  by  life  estate 276 

furniture 333 

good  will 351 

inactive  securities 339 

jewelry 334 

mortgages 335 

number  of  years '  purchase  taken 334 

notes 335 

partnerships 347 

pledged  securities 345 

pictures 333 

rules  for  computing  good  will 353 

real  estate 330 

speculative  profits 361 

stocks 337 

tangibles 333 

theoretical  in  life  estates . .          260 


1222 

Value— Continued 

under  Federal  act 606 

value  of   services 353 

where  cannot  be  ascertained 327 

where  there  are  no  profits 362 

Vermont 

address  of  tax  collector 772 

amendment   of    1919 1116 

interest,  discount,  penalty 530 

mortality  tables 279 

rates  and  exemptions  prior  to  1917 1114 

rates  and  exemptions,  1917 1114 

statute  of  1912 1115 

statute  of  1917 1114 

theory  of  the  tax 15 

reciprocal  provision  in  act 81 

Vessel   , 305 

Vested  remainder 262 

Vested  right 

of  individual 33 

of   State 28 

when  become   vested 55 

Veteran  acts 

not  applicable  to  appraisers 436 

Virginia 

amendment  1920 1122 

amendment  1922 1123 

address  of  tax  collector 773 

interest,  discount,  penalty 530 

mortality  tables 279 

rates  and  exemptions 1117 

statute 1117 

theory  of  the  tax 15 

Void  statutes 

sustained  in  part 58 

w 

War  tax 

United  States 559 

Washington 

amendment  1921 1126 

address  of  tax  collector 773 


INDEX  1223 

Washington — Continued  PAGE 

exemptions 227 

interest,  discount,  penalty 530 

mortality  tables 279 

rates  and  exemptions 1126 

statute 1126 

theory  of  the  tax 15 

Wearing  apparel 

inventory  of 424 

Wurtemberg 

treaty  with 81 

West  Virginia 

address  of  tax  collector •? 773 

interest,  discount,  penalty 531 

mortality  tables 279 

rates  and  exemptions,  1913  to  1921 1129 

rates  after  1921 1130 

statute 1131 

amendments  1921 1133 

Widow 

domicile  of 214 

of  adopted  son 226 

Widow's  award 184 

Wife 

dower 182 

entirety 187 

Will 

agreement  to  make 87 

as  to  lien  of  tax 243 

cannot  dispense  with  inventory 413 

codicil 251 

construction  of,  as  to  remainders 177 

dower 184 

misconstrued  by  appraiser 501 

mutual  wills 92 

mortgage  to  be  paid  from  personalty 331,  367 

not  affected  by  foreign  law 251 

payment  of  debt  by 98,  369 

transfers  by 84 

transfers  by,  New  York  Statute,  §  220 736 

when  burial  expenses  are  provided  for 371 

where  agreement  is  performed 89 

where  agreement  is  violated 87 

statutes  concerning 100 

witnesses  to.   .  101 


1224  INDEX 

Wisconsin 

act,  as  amended  to  date 1138 

amendment  of  1919 1161 

address  of  tax  collector 773 

adopted  statutes 62 

contemplation  of  death 117 

Federal  tax  not  a  deduction 376 

foreign   executors 1140 

forms — 

consent  to  the  transfer  of  securities 1141 

petition  by  nonresident  executor 1142 

blank  showing  information  required 1144 

order  fixing  tax 1144 

life  estates 260 

interest,  discount,  penalty 531 

power  to  invade  principal  by  life  tenant 257 

probate  duties 64 

rates 1056 

revocation  of  gift Ill 

theory  of  the  tax 15 

trusf  deeds 130 

Witness 

affidavit  of  executor 448 

appraisal  in  another  proceeding  not  competent 448 

beneficiary  competent 448 

financial  expert 's  report 447 

interested  witness 447 

may  be  punished  for  contempt 448 

must  answer  questions  before  appraiser 446 

nonresident  executor  as 448 

opinion  evidence  as  to  value 447 

personal  transactions  with  deceased 448 

qualifications  of  expert 447 

to  a  will 101 

World  war 

service  in 601 

Wyoming 

address  of  tax  collector 773 

interest,  discount,  penalty 531 

rates  and  exemptions  prior  1921 1147 

statute 1147 

rates  under  act  1921 1147 

Y 

Yacht 306 

Years'  purchase — good  will  354 

[Total  number   of   pages    1293.] 


UC  SOUTHERN  REGIONAL  UBRARYFACIUr< 


